Contact
CoCalc Logo Icon
StoreFeaturesDocsShareSupportNewsAboutSign UpSign In
| Download

edX - TXT1x Data

Views: 8542
1
-----BEGIN PRIVACY-ENHANCED MESSAGE-----
2
Proc-Type: 2001,MIC-CLEAR
3
Originator-Name: [email protected]
4
Originator-Key-Asymmetric:
5
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
6
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
7
MIC-Info: RSA-MD5,RSA,
8
FAGV2x5tm3vp/+WtGj71vbM8rhqYQbIz78ZXsu7gi9Zd+b7R8KRprF3YVXyr/UEL
9
2L9TgfcfVM13FhCj4q/p7g==
10
11
<SEC-DOCUMENT>0000897101-03-000677.txt : 20030626
12
<SEC-HEADER>0000897101-03-000677.hdr.sgml : 20030626
13
<ACCEPTANCE-DATETIME>20030626170659
14
ACCESSION NUMBER: 0000897101-03-000677
15
CONFORMED SUBMISSION TYPE: 10-K
16
PUBLIC DOCUMENT COUNT: 6
17
CONFORMED PERIOD OF REPORT: 20030331
18
FILED AS OF DATE: 20030626
19
20
FILER:
21
22
COMPANY DATA:
23
COMPANY CONFORMED NAME: CNS INC /DE/
24
CENTRAL INDEX KEY: 0000814258
25
STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
26
IRS NUMBER: 411580270
27
STATE OF INCORPORATION: DE
28
FISCAL YEAR END: 0331
29
30
FILING VALUES:
31
FORM TYPE: 10-K
32
SEC ACT: 1934 Act
33
SEC FILE NUMBER: 000-16612
34
FILM NUMBER: 03759119
35
36
BUSINESS ADDRESS:
37
STREET 1: PO BOX 39802
38
CITY: MINNEAPOLIS
39
STATE: MN
40
ZIP: 55439
41
BUSINESS PHONE: 6128206696
42
43
MAIL ADDRESS:
44
STREET 1: PO BOX 39802
45
STREET 2: PO BOX 39802
46
CITY: MINNEAPOLIS
47
STATE: MN
48
ZIP: 55439
49
</SEC-HEADER>
50
<DOCUMENT>
51
<TYPE>10-K
52
<SEQUENCE>1
53
<FILENAME>cns032695_10-k.htm
54
<TEXT>
55
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
56
<HTML>
57
<HEAD>
58
<!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.2b) -->
59
<!-- Project: X:\JOBS\03-56131\d03-56131.eep -->
60
<!-- Control Number: 03-56131 -->
61
<!-- Rev Number: 1.0 -->
62
<!-- Client Name: CNS, Inc. -->
63
<!-- Project Name: Form Type: 10-K -->
64
<!-- Firm Name: American Financial Printing, Inc. -->
65
<TITLE>10-K</TITLE>
66
</HEAD>
67
<BODY>
68
69
70
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
71
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
72
<TR VALIGN=TOP>
73
<TD>
74
<BR>
75
76
77
<!-- MARKER FORMAT-SHEET="Head Major 10" FSL="Project" -->
78
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED STATES<BR>SECURITIES
79
AND EXCHANGE COMMISSION<BR>Washington, D.C. 20549</FONT></H1>
80
81
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
82
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM 10-K</FONT></H1>
83
84
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
85
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(MARK ONE) </FONT></P>
86
87
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
88
</TD>
89
</TR>
90
</TABLE>
91
<BR>
92
93
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
94
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
95
<TR VALIGN=TOP>
96
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
97
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
98
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> <B>|X|</B> </FONT></TD>
99
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
100
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ANNUAL
101
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B> </FONT></TD>
102
</TR>
103
</TABLE>
104
<BR>
105
106
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
107
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
108
<TR VALIGN=TOP>
109
<TD>
110
111
112
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
113
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>For the fiscal year
114
ended March 31, 2003 </FONT></P>
115
116
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
117
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OR</FONT></H1>
118
119
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
120
</TD>
121
</TR>
122
</TABLE>
123
<BR>
124
125
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
126
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
127
<TR VALIGN=TOP>
128
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
129
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
130
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> <B>|_|</B> </FONT></TD>
131
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
132
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TRANSITION
133
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B> </FONT></TD>
134
</TR>
135
</TABLE>
136
<BR>
137
138
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
139
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
140
<TR VALIGN=TOP>
141
<TD>
142
143
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
144
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>For the Transition
145
period from _________ to __________ </FONT></P>
146
147
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
148
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMMISSION FILE
149
NUMBER: 0-16612</FONT></H1>
150
151
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
152
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>CNS, INC.</B>
153
<BR>(Exact name of registrant as specified in its charter) </FONT></P>
154
155
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
156
</TD>
157
</TR>
158
</TABLE>
159
<BR>
160
161
<table border="0" cellspacing="0" cellpadding="0" width="600">
162
<tr valign="bottom" align="center">
163
<td nowrap><font face="Times New Roman, Times, serif" size="2"> <u><b>Delaware</b></u>
164
<br>
165
(State or other jurisdiction <br>
166
of incorporation or organization)<br>
167
</font></td>
168
<td width="30%"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
169
<td nowrap><font face="Times New Roman, Times, serif" size="2"> <u><b>41-1580270</b></u>
170
<br>
171
(I.R.S. Employer <br>
172
Identification No.)</font></td>
173
</tr>
174
</table>
175
<BR>
176
177
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
178
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
179
<TR VALIGN=TOP>
180
<TD>
181
182
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
183
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>7615 Smetana
184
Lane<BR>Eden Prairie, MN 55344</B><BR>(Address of principal executive offices and zip code) </FONT></P>
185
186
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
187
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s telephone number,
188
including area code: (952) 229-1500 </FONT></P>
189
190
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
191
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities registered
192
pursuant to section 12(b) of the Act:&nbsp; None<BR>Securities registered pursuant to
193
section 12(g) of the Act: </FONT></P>
194
195
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
196
</TD>
197
</TR>
198
</TABLE>
199
<BR>
200
201
<table border="0" cellspacing="0" cellpadding="0" width="600">
202
<tr>
203
<td><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
204
<td><font face="Times New Roman, Times, serif" size="2"><U>Title of each class </U>
205
<br>
206
Common Stock, par value of $.01 per share<br>
207
Preferred Stock purchase rights </font></td>
208
</tr>
209
</table>
210
<BR>
211
212
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
213
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
214
<TR VALIGN=TOP>
215
<TD>
216
217
218
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
219
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark
220
whether the registrant (1) has filed all reports required to be filed by Section
221
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
222
months (or for such shorter period that the registrant was required to file such
223
reports), and (2) has been subject to such filing requirements for the past 90
224
days. YES |X| No |_| </FONT></P>
225
226
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
227
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark if
228
disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not
229
contained herein, and will not be contained, to the best of registrant&#146;s
230
knowledge, in definitive proxy or information statements incorporated by
231
reference in Part III of this Form 10-K or any amendment to this Form 10-K. |X| </FONT></P>
232
233
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
234
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of March 31, 2003, the
235
aggregate market value of the Company&#146;s Common Stock held by non-affiliates
236
is $71,501,532, computed by reference to the closing sales price of the
237
Company&#146;s Common Stock of $5.74 on September 30, 2002, the last business
238
day of the Company&#146;s most recently completed second fiscal quarter. </FONT></P>
239
240
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
241
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicated by check mark whether the
242
registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2): Yes |_| No
243
|X| </FONT></P>
244
245
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
246
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of June 13, 2003, the
247
Company had outstanding 13,305,792 shares of Common Stock of $.01 par value per
248
share. </FONT></P>
249
250
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
251
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents Incorporated by
252
Reference: Portions of the Company&#146;s Proxy Statement for its Annual Meeting
253
of Stockholders to be held on August 27, 2003, are incorporated by reference
254
into Part III of this Form 10-K. </FONT></P>
255
256
257
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
258
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2> </FONT></P>
259
<HR SIZE=5 NOSHADE>
260
261
262
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
263
</TD>
264
</TR>
265
</TABLE>
266
<BR>
267
268
269
270
271
272
<!-- *************************************************************************** -->
273
<!-- MARKER PAGE="sheet: 2; page: 2" -->
274
275
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
276
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
277
<TR VALIGN=TOP>
278
<TD>
279
<BR>
280
281
282
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
283
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>TABLE OF
284
CONTENTS</U></FONT></H1>
285
286
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
287
</TD>
288
</TR>
289
</TABLE>
290
<BR>
291
292
293
294
<table cellpadding=0 cellspacing=0 border=0 width=600>
295
<tr valign=Bottom>
296
<th colspan=2></th>
297
<th nowrap></th>
298
<th nowrap></th>
299
</tr>
300
<tr valign=Bottom>
301
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
302
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
303
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
304
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="2"><u>Page</u></font></b></td>
305
</tr>
306
<tr valign=Bottom>
307
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
308
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
309
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
310
<td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
311
</tr>
312
<tr valign=Bottom>
313
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2"><u>PART
314
I</u></font></b></td>
315
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
316
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">
317
</font></td>
318
<td nowrap align=RIGHT><font face="Times New Roman, Times, serif" size="2">
319
</font></td>
320
</tr>
321
<tr valign=Bottom>
322
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
323
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
324
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
325
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
326
</tr>
327
<tr valign=Bottom>
328
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A001">Item 1</A></font></td>
329
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
330
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A001">Business</A></font></td>
331
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">3</font></td>
332
</tr>
333
<tr valign=Bottom>
334
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A002">Item 2</A></font></td>
335
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
336
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A002">Properties</A></font></td>
337
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">16</font></td>
338
</tr>
339
<tr valign=Bottom>
340
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A003">Item 3</A></font></td>
341
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
342
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A003">Legal
343
Proceedings</A></font></td>
344
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">16</font></td>
345
</tr>
346
<tr valign=Bottom>
347
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A004">Item 4</A></font></td>
348
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
349
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A004">Submission
350
of Matters to a Vote of Security Holders</A></font></td>
351
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">16</font></td>
352
</tr>
353
<tr valign=Bottom>
354
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
355
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
356
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
357
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
358
</tr>
359
<tr valign=Bottom>
360
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2"><u>PART
361
II</u></font></b></td>
362
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
363
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
364
</font></td>
365
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
366
</font></td>
367
</tr>
368
<tr valign=Bottom>
369
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
370
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
371
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
372
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
373
</tr>
374
<tr valign=Bottom>
375
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A005">Item 5</A></font></td>
376
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
377
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A005">Market
378
for Registrant&#146;s Common Equity and Related Stockholder Matters</A></font></td>
379
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;17</font></td>
380
</tr>
381
<tr valign=Bottom>
382
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A006">Item 6</A></font></td>
383
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
384
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A006">Selected
385
Financial Data</A></font></td>
386
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">19</font></td>
387
</tr>
388
<tr valign=Bottom>
389
<td align=LEFT valign="top"><font face="Times New Roman, Times, serif" size="2"><A HREF="#A007">Item
390
7</A> </font></td>
391
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
392
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A007">Management&#146;s
393
Discussion and Analysis of Financial Condition</A><br>
394
&nbsp;&nbsp;&nbsp;<A HREF="#A007">and Results of Operations</A></font></td>
395
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">20</font></td>
396
</tr>
397
<tr valign=Bottom>
398
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A008">Item 7A</A></font></td>
399
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
400
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A008">Quantitative
401
and Qualitative Disclosures about Market Risk</A></font></td>
402
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">31</font></td>
403
</tr>
404
<tr valign=Bottom>
405
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A009">Item 8</A></font></td>
406
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
407
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A009">Financial
408
Statements and Supplementary Data</A></font></td>
409
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">32</font></td>
410
</tr>
411
<tr valign=Bottom>
412
<td align=LEFT valign="top"><font face="Times New Roman, Times, serif" size="2"><A HREF="#A010">Item
413
9</A> </font></td>
414
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
415
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A010">Changes
416
in and Disagreements with Accountants on Accounting and</A><br>
417
&nbsp;&nbsp;&nbsp;<A HREF="#A010">Financial Disclosure</A></font></td>
418
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">32</font></td>
419
</tr>
420
<tr valign=Bottom>
421
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
422
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
423
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
424
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
425
</tr>
426
<tr valign=Bottom>
427
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2"><u>PART
428
III</u></font></b></td>
429
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
430
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
431
</font></td>
432
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
433
</font></td>
434
</tr>
435
<tr valign=Bottom>
436
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
437
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
438
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
439
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
440
</tr>
441
<tr valign=Bottom>
442
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A011">Item 10</A></font></td>
443
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
444
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A011">Directors
445
and Executive Officers of the Registrant</A></font></td>
446
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">32</font></td>
447
</tr>
448
<tr valign=Bottom>
449
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A012">Item 11</A></font></td>
450
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
451
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A012">Executive
452
Compensation</A></font></td>
453
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">33</font></td>
454
</tr>
455
<tr valign=Bottom>
456
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A013">Item 12</A></font></td>
457
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
458
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A013">Security
459
Ownership of Certain Beneficial Owners and Management</A></font></td>
460
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">33</font></td>
461
</tr>
462
<tr valign=Bottom>
463
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A014">Item 13</A></font></td>
464
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
465
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A014">Certain
466
Relationships and Related Transactions</A></font></td>
467
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">34</font></td>
468
</tr>
469
<tr valign=Bottom>
470
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A015">Item 14</A></font></td>
471
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
472
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A015">Controls
473
and Procedures</A></font></td>
474
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">34</font></td>
475
</tr>
476
<tr valign=Bottom>
477
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
478
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
479
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
480
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
481
</tr>
482
<tr valign=Bottom>
483
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2"><u>PART
484
IV</u></font></b></td>
485
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
486
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
487
</font></td>
488
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">
489
</font></td>
490
</tr>
491
<tr valign=Bottom>
492
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
493
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
494
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
495
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
496
</tr>
497
<tr valign=Bottom>
498
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A016">Item 15</A></font></td>
499
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
500
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A016">[Reserved]</A></font></td>
501
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">35</font></td>
502
</tr>
503
<tr valign=Bottom>
504
<td align=LEFT valign="top"><font face="Times New Roman, Times, serif" size="2"><A HREF="#A017">Item
505
16</A> </font></td>
506
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
507
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"><A HREF="#A017">Exhibits,
508
Financial Statement Schedules, and</A><br>
509
&nbsp;&nbsp;&nbsp;<A HREF="#A017">Reports on Form 8-K</A></font></td>
510
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">35</font></td>
511
</tr>
512
<tr valign=Bottom>
513
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
514
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
515
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
516
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
517
</tr>
518
<tr valign=Bottom>
519
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A018">SIGNATURES</A></font></td>
520
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
521
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
522
</font></td>
523
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">36</font></td>
524
</tr>
525
<tr valign=Bottom>
526
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A019">CERTIFICATIONS</A></font></td>
527
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
528
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
529
</font></td>
530
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">38,
531
39</font></td>
532
</tr>
533
<tr valign=Bottom>
534
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A020">EXHIBIT
535
INDEX</A></font></td>
536
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
537
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">
538
</font></td>
539
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">40</font></td>
540
</tr>
541
<tr valign=Bottom>
542
<td align=LEFT colspan="3"><font face="Times New Roman, Times, serif" size="2"><A HREF="#A021">INDEX
543
TO FINANCIAL STATEMENTS</A> </font></td>
544
<td align=RIGHT nowrap><font face="Times New Roman, Times, serif" size="2">F-1</font></td>
545
</tr>
546
</table>
547
<BR>
548
549
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
550
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
551
<TR VALIGN=TOP>
552
<TD>
553
554
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
555
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2 </FONT></P>
556
<HR SIZE=5 NOSHADE>
557
558
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
559
</TD>
560
</TR>
561
</TABLE>
562
<BR>
563
564
565
566
567
568
<!-- *************************************************************************** -->
569
<!-- MARKER PAGE="sheet: 3; page: 3" -->
570
571
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
572
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
573
<TR VALIGN=TOP>
574
<TD>
575
<BR>
576
577
578
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
579
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Forward-Looking
580
Statements</U> </FONT></H2>
581
582
<!-- MARKER FORMAT-SHEET="Para 10" -->
583
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
584
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
585
statements contained in this Annual Report on Form 10-K and other written and
586
oral statements made from time to time by the Company do not relate strictly to
587
historical or current facts but provide current expectations or forecasts of
588
future events. As such, they are considered &#147;forward-looking
589
statements&#148; under the Private Securities Litigation Reform Act of 1995 and
590
are subject to certain risks and uncertainties that could cause actual results
591
to differ materially from those presently anticipated or projected. Such
592
forward-looking statements can be identified by the use of terminology such as
593
&#147;may,&#148; &#147;will,&#148; &#147;expect,&#148; &#147;plan,&#148;
594
&#147;intend,&#148; &#147;anticipate,&#148; &#147;estimate,&#148; or
595
&#147;continue&#148; or similar words or expressions. It is not possible to
596
foresee or identify all factors affecting the Company&#146;s forward-looking
597
statements and investors therefore should not consider any list of factors to be
598
an exhaustive statement of all risks, uncertainties or potentially inaccurate
599
assumptions. Factors that could cause actual results to differ from the results
600
discussed in the forward-looking statements include, but are not limited to, the
601
following factors: (i) the Company&#146;s revenue and profitability is reliant
602
on sales of Breathe Right&reg; nasal strips; (ii) the Company currently has a
603
seasonal pattern of sales that is typically higher in the third and fourth
604
quarters of each fiscal year due to increased nasal strip usage during the
605
cough/cold season and its revenues and earnings may be impacted by the<B>
606
</B>severity of such season; (iii) the Company&#146;s success and future growth
607
will depend significantly on its ability to effectively market Breathe Right
608
nasal strips and upon its ability to develop and achieve markets for additional
609
products; (iv) the Company&#146;s competitive position will, to some extent, be
610
dependent on the enforceability and comprehensiveness of the patents on its
611
Breathe Right nasal strip technology which have been, and in the future may be,
612
the subject of litigation and could be narrowed as a result of the outcome of
613
the reexamination of one such patent by the United States Patent and Trademark
614
Office (see Item 1, &#147;Patents, Trademarks and Proprietary Rights&#148;); (v)
615
the Company has faced and will continue to face challenges in successfully
616
developing and introducing new products; (vi) the Company operates in
617
competitive markets where recent and potential entrants into the nasal dilator
618
segment pose competitive challenges (see Item 1, &#147;Competition&#148;); (vii)
619
the Company is dependent upon contract manufacturers for the production of
620
substantially all of its products; and (viii) the Company currently purchases
621
its nasal strip products from different contract manufacturers that obtain the
622
raw materials from a single supplier (see Item 1, &#147;Manufacturing and
623
Operations&#148;). </FONT></P>
624
625
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
626
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART I</FONT></H1>
627
628
<A NAME=A001></A>
629
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
630
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 1. BUSINESS</U> </FONT></H2>
631
632
<!-- MARKER FORMAT-SHEET="Head Minor" -->
633
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>General</FONT></H2>
634
635
<!-- MARKER FORMAT-SHEET="Para 10" -->
636
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
637
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CNS,
638
Inc. (the &#147;Company&#148;) is in the business of developing and marketing
639
consumer health care products, including Breathe Right&reg; nasal strips, Breath
640
Right Snore Relief&#153; throat spray and FiberChoice&reg; chewable fiber
641
tablets. The Company focuses on products that address important consumer needs
642
within the aging well/self care market, including better breathing and digestive
643
health. </FONT></P>
644
645
<!-- MARKER FORMAT-SHEET="Para 10" -->
646
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
647
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
648
Company&#146;s principal product, the Breathe Right nasal strip, improves
649
breathing by reducing nasal airflow resistance. It can be effective in providing
650
temporary relief for nasal congestion, reducing snoring and reducing breathing
651
difficulties due to a deviated nasal septum. In 2000, the Company expanded its
652
Breathe Right product line to include mentholated vapor strips for colds that
653
are sized for the entire family, and nasal strips for children that are
654
available in multiple colors. Breathe Right with mentholated vapor strips were
655
introduced in selected overseas markets in 2001. </FONT></P>
656
657
<!-- MARKER FORMAT-SHEET="Para 10" -->
658
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
659
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
660
Company further extended the Breathe Right brand in fiscal 2003 by launching
661
Breathe Right Snore Relief throat spray. Snore Relief spray lubricates and
662
soothes dry throats, while a natural astringent firms loose tissue to reduce the
663
vibrations that cause snoring. Breathe Right strips open nasal passages and
664
reduce mouth breathing that leads to snoring. These two products provide a
665
portfolio of solutions for snoring. In addition to expanding the Breathe
666
Right&reg; brand and introducing other new products, the Company is exploring
667
possibilities for acquiring new consumer health care products that have
668
established consumer brands, particularly those that complement the
669
Company&#146;s drug-free, better breathing platform. The Company is also
670
considering opportunities for licensing new products and technologies. </FONT></P>
671
672
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
673
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>3 </FONT></P>
674
<HR SIZE=5 NOSHADE>
675
676
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
677
</TD>
678
</TR>
679
</TABLE>
680
<BR>
681
682
683
684
685
686
<!-- *************************************************************************** -->
687
<!-- MARKER PAGE="sheet: 4; page: 4" -->
688
689
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
690
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
691
<TR VALIGN=TOP>
692
<TD>
693
<BR>
694
695
696
<!-- MARKER FORMAT-SHEET="Para 10" -->
697
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
698
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
699
Company introduced its FiberChoice&reg; chewable fiber tablets in March, 2000.
700
The FiberChoice product is an orange-flavored, chewable fiber tablet that offers
701
consumers an effective, convenient and good-tasting way to supplement their
702
daily intake of dietary fiber. </FONT></P>
703
704
<!-- MARKER FORMAT-SHEET="Para 10" -->
705
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
706
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
707
1999, the Company introduced its FLAIR&#153; equine nasal strip, a product that
708
enables horses to breathe more easily during strenuous exercise. In March 2002,
709
the Company established an exclusive, worldwide distribution relationship for
710
its FLAIR equine nasal strip product with a joint venture entity comprised of
711
Merial, LLC, an affiliate of Merck &amp; Co., Inc. and Aventis. The Company has
712
had limited sales of its FLAIR product to date. </FONT></P>
713
714
<!-- MARKER FORMAT-SHEET="Para 10" -->
715
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
716
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
717
June, 2001, the Company completed a restructuring and organizational realignment
718
plan. The Company eliminated 20 positions across all areas for a 25% work force
719
reduction. These actions enabled the Company to focus its resources on better
720
leveraging the success of the Breathe Right brand, both in the United States and
721
abroad, and operate the FiberChoice business more flexibly and efficiently. </FONT></P>
722
723
<!-- MARKER FORMAT-SHEET="Para 10" -->
724
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
725
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
726
January 23, 2002, the Company changed its fiscal year-end from December 31 of
727
each year to March 31 of each year. The change in its fiscal year-end aligns the
728
Company&#146;s financial reporting period with its business and
729
customer-planning cycle. The Company believes this change provides a clearer
730
picture of the Company&#146;s financial results by including an entire
731
cough/cold season within the same fiscal year. </FONT></P>
732
733
<!-- MARKER FORMAT-SHEET="Head Minor" -->
734
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Management</FONT></H2>
735
736
<!-- MARKER FORMAT-SHEET="Para 10" -->
737
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
738
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
739
Company&#146;s management structure is organized into strategic business teams
740
to expand the Breathe Right and Fiber-Choice brands and to develop and launch
741
new products: Breathe Right Brand Team; FiberChoice Team; International Team and
742
New Business Development Team. The Company believes that its team focus enables
743
the Company to more effectively implement its business strategies. </FONT></P>
744
745
<!-- MARKER FORMAT-SHEET="Para 10" -->
746
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
747
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
748
Right Brand Team.</I></B> The Company&#146;s Breathe Right Brand Team is
749
responsible for the strategic development and management of the domestic Breathe Right
750
nasal strip business and other products that carry the Breathe Right brand name.
751
Breathe Right nasal strip products currently represent the cornerstone of the
752
Company&#146;s business. The Company intends to exploit new markets and
753
opportunities that it believes exist for its current nasal strip products and
754
plans to commercialize potential new Breathe Right branded products. This team
755
is responsible for developing and launching additional Breathe Right products.
756
The Company introduced two new products in the United States during the fall of
757
2000 to coincide with the cough/cold season: mentholated vapor strips for colds
758
for the entire family and nasal strips with stars for children. During
759
2002, the Company launched Breathe Right Snore
760
Relief&#153; throat spray. This product leverages the Company&#146;s
761
existing position in the better breathing/snoring product category and
762
complements existing Breathe Right offerings. In the 2003 cough/cold season, the
763
Company intends to launch Breathe Right VaporShot!&#153; personal vaporizer.
764
This product builds on the existing line of Breathe Right mentholated vapor
765
strips for colds. The VaporShot! product gives consumers a
766
drug-free breathing solution that can be used in the daytime, complementing the
767
Breathe Right nasal strips, which are generally used to relieve nighttime
768
breathing conditions. VaporShot! works by dropping an effervescent tablet into
769
hot water in the VaporShot! cup with a customized lid. The VaporShot! cup
770
delivers an intense shot of mentholated vapors that instantly relieves congested
771
noses. </FONT></P>
772
773
<!-- MARKER FORMAT-SHEET="Para 10" -->
774
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
775
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>FiberChoice
776
Team.</I></B> The Company introduced FiberChoice&reg; chewable fiber
777
tablets in March, 2000. The FiberChoice Team is responsible for the strategic
778
development and management of the FiberChoice chewable fiber supplement
779
business. </FONT></P>
780
781
<!-- MARKER FORMAT-SHEET="Para 10" -->
782
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
783
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>International
784
Team.</I></B> The Company began shipping Breathe Right&reg; nasal strips to new
785
distributor partners in Europe, Australia and Japan during 2000. Breathe Right
786
mentholated vapor strips for colds were introduced in selected overseas markets
787
in 2001. In 2003, the Company introduced Breathe Right nasal strips for kids in
788
Japan and Italy and introduced Breathe Right Snore Relief&#153; throat spray in
789
the UK. The Company intends to expand the distribution of Breathe Right Snore
790
Relief throat spray into several more countries during fiscal 2004. The
791
International Team is responsible for developing and managing the Company&#146;s
792
overseas business and its relationships with distributors and representatives in
793
international markets. See Item 1, &#147;International Distribution.&#148; </FONT></P>
794
795
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
796
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>4 </FONT></P>
797
<HR SIZE=5 NOSHADE>
798
799
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
800
</TD>
801
</TR>
802
</TABLE>
803
<BR>
804
805
806
807
808
809
<!-- *************************************************************************** -->
810
<!-- MARKER PAGE="sheet: 5; page: 5" -->
811
812
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
813
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
814
<TR VALIGN=TOP>
815
<TD>
816
<BR>
817
818
819
<!-- MARKER FORMAT-SHEET="Para 10" -->
820
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
821
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>New
822
Business Development Team.</I></B> The New Business Development Team is
823
committed to the expansion of the Company&#146;s product base through the
824
development, acquisition or licensing of promising consumer health care
825
products. The New Business Development Team is responsible for identifying and
826
evaluating potential new products, inventions and other business prospects that
827
will enable the Company to achieve its long-term growth and profit objectives,
828
including opportunities for the acquisition of established product lines. </FONT></P>
829
830
<!-- MARKER FORMAT-SHEET="Head Minor" -->
831
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Products</FONT></H2>
832
833
<!-- MARKER FORMAT-SHEET="Para 10" -->
834
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
835
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
836
Right Nasal Strips.</I></B> The Breathe Right nasal strip is a
837
nonprescription, single-use disposable device that improves breathing by opening
838
the nasal passages. The Company has 510(k) clearance from the United States Food
839
and Drug Administration (&#147;FDA&#148;) to market the Breathe Right nasal
840
strip for improvement of nasal breathing, temporary relief of nasal congestion,
841
elimination or reduction of snoring and temporary relief of breathing
842
difficulties due to a deviated nasal septum. See Item 1, &#147;Government
843
Regulation.&#148; Breathe Right nasal strips come in tan, clear, mentholated and
844
stars-for-kids varieties. </FONT></P>
845
846
<!-- MARKER FORMAT-SHEET="Para 10" -->
847
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
848
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
849
Breathe Right nasal strip includes two embedded plastic strips. When folded down
850
onto the sides of the nose, the Breathe Right nasal strip lifts the side walls
851
of the nose outward to open the nasal passages. The product improves nasal
852
breathing upon application and does not include any drugs, thereby avoiding any
853
medicinal side effects. The Breathe Right nasal strip is offered in three sizes
854
(kids, small/medium and large) to accommodate the range of nose sizes. The
855
Breathe Right nasal strip is packaged for the consumer market in various
856
quantities ranging between 10 to 38 strips per box. The Company believes that
857
Breathe Right nasal strips are priced less than medicinal decongestants on a
858
daily or nightly basis at retail prices ranging between $3.99 and $11.99 per
859
box. </FONT></P>
860
861
<!-- MARKER FORMAT-SHEET="Para 10" -->
862
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
863
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
864
Company expanded the Breathe Right nasal strip line with the introduction of
865
Breathe Right nasal strips with mentholated vapors and Breathe Right nasal strip
866
for kids in 2000. In March 2000, the Company licensed the Vicks&reg; trademark
867
from The Proctor &amp; Gamble Company for use with the mentholated nasal strip
868
product. Effective July, 2003 the Vicks trademark will no longer be used. The
869
mentholated vapor strip uses traditional Breathe Right strip technology but
870
contains a soothing mentholated aroma for additional relief. The mentholated
871
vapors are released when the strip surface is rubbed. The Company believes that
872
its mentholated vapor strip product has increased the Company&#146;s customer
873
base for nasal strip products by more clearly communicating that Breathe Right
874
nasal strips can ease the congestion associated with the common cold. The
875
kids&#146; strips are sized specifically to fit children and include a
876
brightly-colored version and a mentholated version. </FONT></P>
877
878
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
879
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>5 </FONT></P>
880
<HR SIZE=5 NOSHADE>
881
882
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
883
</TD>
884
</TR>
885
</TABLE>
886
<BR>
887
888
889
890
891
892
<!-- *************************************************************************** -->
893
<!-- MARKER PAGE="sheet: 6; page: 6" -->
894
895
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
896
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
897
<TR VALIGN=TOP>
898
<TD>
899
<BR>
900
901
<!-- MARKER FORMAT-SHEET="Para 10" -->
902
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
903
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
904
Right&reg; Brand Products.</I></B> Breathe Right saline nasal spray is a
905
non-habit forming, drug-free product that restores moisture to comfort and
906
soothe dry, irritated nasal passages due to colds, allergies, dry air (low
907
humidity), air pollution and the overuse of nasal decongestants. Breathe Right
908
Snore Relief&#153; throat spray is a drug-free product that addresses a
909
different cause of snoring than nasal strips and lubricates and soothes dry
910
throats while a natural astringent firms loose tissues to reduce the vibrations
911
that produce snoring. This product leverages the Company&#146;s existing
912
position in the better breathing/snoring product category and complements
913
existing Breathe Right product offerings. The Company intends to introduce
914
additional non-nasal strip products in the future that carry the Breathe Right
915
brand name to extend the product line. For example, the Company intends to
916
launch a new product during the fall 2003 cough/cold season &#151; Breathe Right<BR>
917
VaporShot!&#153; personal vaporizer. This product builds the Company&#146;s
918
existing line of Breathe Right mentholated vapor strips for colds. Breathe Right
919
VaporShot! personal vaporizer works by dropping an effervescent tablet into hot
920
water in the customized VaporShot! cup which delivers an intense shot of
921
mentholated vapors that instantly relieves congested noses. This product
922
leverages the Company&#146;s existing position in the better breathing product
923
category and complements existing Breathe Right product offerings. </FONT></P>
924
925
<!-- MARKER FORMAT-SHEET="Para 10" -->
926
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
927
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>FiberChoice&reg;
928
Chewable Fiber Tablets.</I></B> The Company introduced its FiberChoice
929
chewable fiber tablets in March, 2000. FiberChoice is an orange-flavored,
930
chewable tablet that offers consumers an effective, convenient, good-tasting way
931
to supplement their daily intake of dietary fiber. The tablets contain four
932
grams of fiber per dose and provide more than twice the amount of fiber per dose versus
933
other convenient fiber supplements. The active ingredient in FiberChoice tablets
934
is inulin, a natural fiber source. Inulin is also a prebiotic that helps promote
935
the growth of healthy intestinal tract bacteria. FiberChoice tablets can be
936
taken without water and have been clinically proven to be as effective as powder
937
alternatives. The product is available in both regular and sugar-free varieties
938
and is packaged in 90-count and 36-count bottles and 10-count tubes. </FONT></P>
939
940
<!-- MARKER FORMAT-SHEET="Head Minor" -->
941
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Markets</FONT></H2>
942
943
<!-- MARKER FORMAT-SHEET="Para 10" -->
944
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
945
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
946
Right Brand Product Line.</I></B> The Breathe Right brand of products includes
947
Breathe Right nasal strips, Breathe Right saline nasal spray and Breathe Right
948
Snore Relief throat spray. The Company intends to expand the Breathe Right brand
949
in 2003 during the fall cough/cold season with the introduction of its Breathe
950
Right VaporShot! personal vaporizer. </FONT></P>
951
952
<!-- MARKER FORMAT-SHEET="Para 10" -->
953
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
954
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Air
955
impedance in the nose accounts for approximately one-half of the total airway
956
resistance involved in the respiratory system (i.e., one-half of the energy
957
required for breathing). If the effort to breathe through the nose during sleep
958
is excessive, the person will resort to mouth breathing, promoting snoring, dry
959
mouth, sore throat and mini-awakenings which disrupt sleep. In addition, nasal
960
breathing difficulties during sleep are often caused by nasal congestion found
961
in people who have a common cold, allergies and sinusitis and by those who
962
experience nasal obstruction due to a deviated nasal septum. The Company
963
believes that people with chronic conditions such as snoring or allergies or
964
with structural problems such as deviated septa may be more predisposed to use
965
Breathe Right products on a regular or daily basis, while seasonal sufferers are
966
likely to use Breathe Right products as needed. These chronic conditions are
967
aggravated when people have nasal congestion, thus increasing the opportunity
968
for usage and consumer trial during the cough/cold season. People suffering from
969
these conditions are currently the primary users of the Company&#146;s Breathe
970
Right products and are the main targets of its advertising. </FONT></P>
971
972
<!-- MARKER FORMAT-SHEET="Para 10" -->
973
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
974
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
975
1999, the Company began to emphasize the Breathe Right nasal strip position as a
976
product that provides instant, drug-free relief for those suffering from nasal
977
congestion and other symptoms due to the common cold, allergies and sinusitis.
978
The Company&#146;s advertising emphasizes the ability of Breathe Right nasal
979
strips to provide immediate relief from nasal congestion due to colds, and in a
980
separate campaign, it promotes both Breathe Right nasal strips and Breathe Right
981
Snore Relief throat spray as solutions for snoring. </FONT></P>
982
983
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
984
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>6 </FONT></P>
985
<HR SIZE=5 NOSHADE>
986
987
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
988
</TD>
989
</TR>
990
</TABLE>
991
<BR>
992
993
994
995
996
997
<!-- *************************************************************************** -->
998
<!-- MARKER PAGE="sheet: 7; page: 7" -->
999
1000
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1001
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1002
<TR VALIGN=TOP>
1003
<TD>
1004
<BR>
1005
1006
1007
<!-- MARKER FORMAT-SHEET="Para 10" -->
1008
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1009
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1010
Company&#146;s marketing efforts capitalize on the benefits of Breathe
1011
Right&reg; products to consumers in various, and often overlapping, consumer
1012
market segments: </FONT></P>
1013
1014
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1015
</TD>
1016
</TR>
1017
</TABLE>
1018
<BR>
1019
1020
1021
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
1022
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
1023
<TR VALIGN=TOP>
1024
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1025
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1026
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &#149;</FONT></TD>
1027
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1028
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><U>Nasal Congestion
1029
Relief</U>.</I> Most Americans suffer some nasal congestion annually as a result of the
1030
common cold. Nasal congestion as a result of allergies affects approximately 35
1031
million Americans. The Company believes that Breathe Right nasal strips are
1032
often used as either an alternative or as an adjunct to decongestant drugs
1033
(including nasal sprays and oral decongestants). This broad cough/cold/allergy
1034
market represents significant potential for the Breathe Right brand. In 1999,
1035
the Company commenced marketing efforts aimed at repositioning the Breathe Right
1036
nasal strip as a product that provides relief for the common cold. In the fall
1037
of 2000, this repositioning as a product for colds was reinforced by the
1038
introduction of Breathe Right mentholated vapor strips for colds. At the same
1039
time, the product line was extended into children&#146;s sizes, with a brightly
1040
colored &#147;stars&#148; strip and a Kid Strip with mentholated vapors. </FONT></TD>
1041
</TR>
1042
</TABLE>
1043
<BR>
1044
1045
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
1046
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
1047
<TR VALIGN=TOP>
1048
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1049
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1050
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &#149;</FONT></TD>
1051
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1052
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><U>Snoring
1053
Relief</U>.</I> Based on results from clinical trials, Breathe Right products were
1054
effective in reducing snoring loudness in approximately 85% of the participants.
1055
This market remains very important to the Company since approximately 37 million
1056
people snore regularly, while another 50 million people snore occasionally. The
1057
Company believes that snorers can be targeted effectively and directly through
1058
relationship marketing efforts as well as through broad-based
1059
advertising.</FONT></TD>
1060
</TR>
1061
</TABLE>
1062
<BR>
1063
1064
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
1065
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
1066
<TR VALIGN=TOP>
1067
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1068
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1069
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &#149;</FONT></TD>
1070
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1071
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><U>Improved
1072
Breathing for Consumers with Deviated Septum</U>.</I> Approximately 12 million people in
1073
the United States suffer from a deviated septum, a bend in the cartilage or bone
1074
that divides the nostrils. Breathe Right nasal strips were cleared by the Food
1075
and Drug Administration in 1996 to provide temporary relief from breathing
1076
difficulties associated with a deviated septum.</FONT></TD>
1077
</TR>
1078
</TABLE>
1079
<BR>
1080
1081
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
1082
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
1083
<TR VALIGN=TOP>
1084
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1085
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1086
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &#149;</FONT></TD>
1087
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
1088
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><U>Athletic
1089
Market</U>.</I> The Company believes that Breathe Right nasal strips make nasal
1090
breathing more comfortable and may improve endurance during athletic activity,
1091
particularly when a mouth guard is used. An exercise physiology study published
1092
in peer-reviewed medical literature in 1997 concluded that Breathe Right nasal
1093
strips provided physiologic advantages in ventilation and heart rate during
1094
mid-level exercise. Other exercise physiology studies have been conducted and
1095
add to the substantiation of the positive effects of Breathe Right nasal strips
1096
during exercise. The Company continues to use athletes to endorse Breathe Right
1097
nasal strips to increase the visibility of the product, which leads to greater
1098
awareness of the product and the Breathe Right brand.</FONT></TD>
1099
</TR>
1100
</TABLE>
1101
<BR>
1102
1103
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1104
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1105
<TR VALIGN=TOP>
1106
<TD>
1107
1108
<!-- MARKER FORMAT-SHEET="Para 10" -->
1109
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1110
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>FiberChoice&reg;
1111
Chewable Fiber Tablets.</I></B> Approximately 10 million U.S. households
1112
annually purchase bulk fiber products, primarily to promote regularity and
1113
improve digestive health. The bulk fiber category represents approximately $325
1114
million in U.S. retail sales. The Company believes there is a significant
1115
opportunity to expand this category due to both the aging of the baby-boomer
1116
generation and the marketing of a better consumer solution to existing dietary
1117
fiber products&#150;FiberChoice chewable fiber tablets. As people age, they
1118
frequently develop digestive problems. People over 55 years old are three times
1119
more likely to purchase a bulk fiber supplement than those younger than 55. The
1120
first year the baby-boom generation turned 55 was in 2001. This generation is
1121
generally more active and demanding than their parents. These consumers search
1122
for solutions that do not hamper their active lifestyles. Additionally, most
1123
Americans only get 10-15 grams of fiber a day, while experts recommend 25-30
1124
grams daily. The Company believes that its FiberChoice chewable fiber tablet
1125
represents such a solution in that it provides an effective, convenient and
1126
good-tasting alternative for supplementing dietary fiber intake. The tablets
1127
provide four grams of fiber per dose and can be taken anytime and anywhere, with
1128
or without water. </FONT></P>
1129
1130
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1131
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>7 </FONT></P>
1132
<HR SIZE=5 NOSHADE>
1133
1134
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1135
</TD>
1136
</TR>
1137
</TABLE>
1138
<BR>
1139
1140
1141
1142
1143
1144
<!-- *************************************************************************** -->
1145
<!-- MARKER PAGE="sheet: 8; page: 8" -->
1146
1147
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1148
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1149
<TR VALIGN=TOP>
1150
<TD>
1151
<BR>
1152
1153
1154
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1155
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Business
1156
Strategies</FONT></H2>
1157
1158
<!-- MARKER FORMAT-SHEET="Para 10" -->
1159
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1160
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1161
Company&#146;s business strategy includes attempting to increase sales of its
1162
Breathe Right&reg; nasal strip and other Breathe Right brand products through
1163
advertising, expanding its Breathe Right product line with value added line
1164
extensions like Breathe Right mentholated vapor strips for colds and
1165
children&#146;s nasal strips, maximizing the potential of recently introduced
1166
products and successfully introducing new products with an emphasis on
1167
drug-free, better breathing such as the Company&#146;s Breathe Right Snore
1168
Relief&#153; throat spray and Breathe Right VaporShot!&#153; personal vaporizer. </FONT></P>
1169
1170
<!-- MARKER FORMAT-SHEET="Para 10" -->
1171
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1172
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Increasing
1173
New Consumer Product Trial and Increasing Product Usage.</I></B> The
1174
Company uses a combination of advertising, sampling, promotions, public
1175
relations and celebrity endorsements to increase consumer awareness and to
1176
encourage consumer trial of the Breathe Right nasal strip. In 1999, the Company
1177
began to increase its emphasis on positioning the Breathe Right nasal strip as a
1178
product that provides instant, drug-free relief for those suffering from nasal
1179
congestion and other breathing conditions such as the common cold, allergies and
1180
sinusitis. The Company&#146;s advertising introduced Breathe Right mentholated
1181
vapor strips for colds, emphasizing the ability of Breathe Right nasal strips to
1182
provide instant, drug-free relief from nasal congestion. In 2001, the Company
1183
began separately advertising Breathe Right nasal strips as a product that
1184
provides drug-free relief from nasal congestion and for snoring. </FONT></P>
1185
1186
<!-- MARKER FORMAT-SHEET="Para 10" -->
1187
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1188
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Marketing
1189
New Breathe Right Brand Products.</I></B> The Company believes that the
1190
Breathe Right brand name is one of its most valuable assets. In 1998, the
1191
Company introduced Breathe Right saline nasal spray. The Company has also
1192
expanded the Breathe Right product line to include mentholated vapor strips for
1193
colds and nasal strips for children, both of which were introduced during the
1194
fall of 2000 in order to coincide with the cough/cold season. In the 2002
1195
cough/cold season the Company launched Breathe Right Snore Relief throat spray.
1196
This product leverages the Company&#146;s existing position in the better
1197
breathing/snoring product category and complements existing Breathe Right
1198
offerings. In the 2002 cough/cold season, the Company intends to launch
1199
Breathe Right VaporShot! personal vaporizer. This product also leverages the
1200
Company&#146;s existing position in the better breathing product category and
1201
complements existing Breathe Right offerings. </FONT></P>
1202
1203
<!-- MARKER FORMAT-SHEET="Para 10" -->
1204
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1205
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Expanding
1206
Company Presence in International Markets.</I></B> The Company believes that
1207
there is significant market potential for its products outside the United
1208
States. The Company is devoting significant resources to the development of its
1209
international business. The Company entered into agreements with new
1210
distributors and representatives for the distribution of the Company&#146;s
1211
nasal strip products in Japan, Australia and a number of major markets in Europe
1212
in 2000 and in Hong Kong in 2001. The Company is considering additional
1213
distributors and representatives for distribution of its nasal strip products in
1214
international markets. During 2001, the Company launched its Breathe Right
1215
mentholated vapor strips for colds in some international markets in conjunction with
1216
each market&#146;s cough/cold season. During fiscal 2003, the Company
1217
test-marketed Breathe Right nasal strips in China. The Company intends to launch
1218
Breathe Right Snore Relief throat spray in Canada, Italy and Spain in fiscal
1219
2004. The Company believes that the network that it has established for the
1220
international distribution of Breathe Right nasal strips will also enable the
1221
Company to build its international marketing and distribution capacity for other
1222
products. See Item 1, &#147;International Distribution.&#148; </FONT></P>
1223
1224
<!-- MARKER FORMAT-SHEET="Para 10" -->
1225
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1226
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Acquiring,
1227
Developing and Marketing New Products.</I></B> The Company plans to take
1228
advantage of its position as the drug-free, better breathing company and its
1229
marketing and distribution strengths by acquiring, developing or licensing the
1230
rights to new products that it believes have merit and bringing them to market.
1231
The FiberChoice&reg; chewable fiber tablet was launched in March, 2000 and the
1232
FLAIR&#153; equine nasal strip was introduced in 1999. Breathe Right Snore
1233
Relief throat spray was launched during the fall of 2002 and Breathe Right
1234
VaporShot! personal vaporizer will be launched in the second quarter of fiscal
1235
2004. See Item 1, &#147;Marketing Strategies.&#148; In addition, the Company is
1236
evaluating opportunities for licensing new products and acquiring product lines
1237
that have an established base of consumer acceptance. </FONT></P>
1238
1239
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1240
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>8 </FONT></P>
1241
<HR SIZE=5 NOSHADE>
1242
1243
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1244
</TD>
1245
</TR>
1246
</TABLE>
1247
<BR>
1248
1249
1250
1251
1252
1253
<!-- *************************************************************************** -->
1254
<!-- MARKER PAGE="sheet: 9; page: 9" -->
1255
1256
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1257
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1258
<TR VALIGN=TOP>
1259
<TD>
1260
<BR>
1261
1262
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1263
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Marketing
1264
Strategies</FONT></H2>
1265
1266
<!-- MARKER FORMAT-SHEET="Para 10" -->
1267
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1268
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
1269
Right&reg; Nasal Strips.</I></B> The Company&#146;s marketing efforts for
1270
Breathe Right products are directed to different consumer markets &#151; the
1271
nasal congestion market and the snoring market. The Company has primarily used
1272
television advertising to market its products. The Company&#146;s advertising
1273
focuses on the Breathe Right brand benefits of providing instant, drug-free
1274
relief from nasal congestion and snoring. The Company also uses product
1275
promotion programs, such as sampling, coupons and public relations activities to
1276
encourage product trial and repeat purchases. Introduction of the Breathe Right
1277
mentholated vapor strips for colds has aided in expanding the Company&#146;s
1278
penetration into this significant market. Marketing communications are generally
1279
designed to promote trial of Breathe Right brand products by increasing consumer
1280
awareness of the benefits of each product. In January 2003, the Company
1281
concluded a highly successful promotion for Breathe Right nasal strips and
1282
Breathe Right Snore Relief&#153; throat spray by having NFL wide receiver Jerry
1283
Rice select the loudest snorer in the Company&#146;s &#147;NFL&#146;s Loudest
1284
Snorer&#148; contest. </FONT></P>
1285
1286
<!-- MARKER FORMAT-SHEET="Para 10" -->
1287
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1288
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketing
1289
efforts for Breathe Right nasal strips as an aid in the prevention of snoring
1290
also included direct mail sampling and sampling through direct response
1291
television. In both programs, self-identified snorers were sent a sample of
1292
Breathe Right nasal strips along with a brochure explaining the causes of
1293
snoring and how the Company&#146;s Breathe Right products can alleviate the
1294
condition. </FONT></P>
1295
1296
<!-- MARKER FORMAT-SHEET="Para 10" -->
1297
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1298
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
1299
Breathe Right nasal strips are sold as a consumer product, sales of the product
1300
will depend in part upon the degree to which the consumer is aware of the
1301
product and is satisfied with its use, which also influences repeat usage and
1302
word of mouth referrals. The most recent research data collected by a nationally
1303
recognized consumer market research firm indicated that approximately 35% of
1304
those in the United States who had purchased Breathe Right nasal strips have
1305
purchased additional product in the same year. </FONT></P>
1306
1307
<!-- MARKER FORMAT-SHEET="Para 10" -->
1308
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1309
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>FiberChoice&reg;
1310
Chewable Fiber Tablets.</I></B> The Company&#146;s marketing efforts for
1311
FiberChoice tablets are directed toward all consumers who don&#146;t get enough
1312
fiber in their diet. In 2002, the Company tested a new advertisement in four
1313
focused markets that simply states how busy people usually don&#146;t get the
1314
fiber they need from their diets and that FiberChoice tablets offer at least
1315
twice as much fiber per dose than any other convenient fiber supplement. During
1316
fiscal 2003, the Company expanded its successful four-market advertising test to
1317
thirteen markets. The Company intends to broaden the FiberChoice brand marketing
1318
efforts to 68% of the United States in fiscal 2004. </FONT></P>
1319
1320
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1321
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>New Products
1322
Strategy</FONT></H2>
1323
1324
<!-- MARKER FORMAT-SHEET="Para 10" -->
1325
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1326
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1327
Company is committed to the future expansion of its product base through the
1328
acquisition and development of unique consumer health care products and
1329
technologies that have good market potential, particularly those that complement
1330
the Company&#146;s drug-free, better breathing platform. The Company routinely
1331
evaluates the merit of product concepts and acquisition opportunities and, from
1332
time to time, may acquire or license the rights to products which it believes
1333
could successfully be sold through the Company&#146;s established distribution
1334
channels. The Company also seeks to extend the Breathe Right brand awareness
1335
through licensing to other better breathing products in new categories. The
1336
Company intends to launch a new product during the fall 2003 cough/cold
1337
season&#150;Breathe Right VaporShot!&#153; personal vaporizer. This product will
1338
leverage the Company&#146;s existing position in the better breathing category
1339
and complement existing Breathe Right offerings. </FONT></P>
1340
1341
<!-- MARKER FORMAT-SHEET="Para 10" -->
1342
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1343
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most,
1344
if not all, of the Company&#146;s current products are regulated to varying
1345
degrees by the FDA and other regulatory bodies. See Item 1, &#147;Government
1346
Regulation.&#148; Products that the Company may acquire or develop in the future
1347
could also be subject to a variety of regulatory requirements. Some products
1348
will require extensive clinical studies and regulatory approvals prior to
1349
marketing and sale. There can be no assurance that any required regulatory
1350
approvals will be obtained or that the Company will market or sell any of these
1351
products. </FONT></P>
1352
1353
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1354
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>9 </FONT></P>
1355
<HR SIZE=5 NOSHADE>
1356
1357
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1358
</TD>
1359
</TR>
1360
</TABLE>
1361
<BR>
1362
1363
1364
1365
1366
1367
<!-- *************************************************************************** -->
1368
<!-- MARKER PAGE="sheet: 10; page: 10" -->
1369
1370
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1371
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1372
<TR VALIGN=TOP>
1373
<TD>
1374
<BR>
1375
1376
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1377
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Domestic
1378
Distribution</FONT></H2>
1379
1380
<!-- MARKER FORMAT-SHEET="Para 10" -->
1381
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1382
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Breathe
1383
Right&reg; nasal strips, Breathe Right saline nasal spray, Breathe Right Snore
1384
Relief&#153; throat spray and FiberChoice&reg; chewable fiber tablets are sold
1385
primarily as consumer products in mass merchant stores, drug stores, grocery
1386
stores, warehouse clubs and military base stores in the United States. The
1387
Company sells its products through a direct sales force that concentrates on
1388
serving certain key retail accounts as well as through a network of independent
1389
sales representatives referred to in the industry as brokers. The Company uses
1390
direct sales people and brokered sales forces who call on the mass merchant,
1391
chain drug, and grocery accounts and the wholesalers who serve primarily the
1392
independent drug stores and many of the grocery stores in the United States. </FONT></P>
1393
1394
<!-- MARKER FORMAT-SHEET="Para 10" -->
1395
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1396
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Breathe
1397
Right nasal strips are typically positioned in the cough, cold and allergy
1398
sections of stores because they provide benefits similar to those obtained with
1399
other decongestant products. Breathe Right saline nasal spray is also usually
1400
positioned in the same section of the store as Breathe Right nasal strips since
1401
the products are typically used by those suffering from congestion, allergies
1402
and colds. Breathe Right Snore Relief throat spray is also usually positioned in
1403
the cough/cold section of stores, adjacent to Breathe Right nasal strips.
1404
FiberChoice chewable tablets are positioned in the bulk fiber and laxative
1405
sections of stores. </FONT></P>
1406
1407
<!-- MARKER FORMAT-SHEET="Para 10" -->
1408
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1409
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1410
Company&#146;s retail customers include national chains of mass merchants, drug
1411
stores and grocery stores such as Wal-Mart, Kmart, Target, Eckerd, Walgreens,
1412
RiteAid, CVS, Kroger and Albertson&#146;s and warehouse clubs such as Sam&#146;s
1413
Club and Costco, as well as regional and independent stores in the same store
1414
categories. In fiscal 2003, Wal-Mart accounted for approximately 25% of sales.
1415
The loss of this customer or any other large retailer would require the Company
1416
to replace the lost sales through other retail outlets and could disrupt
1417
distribution of the Company&#146;s products. </FONT></P>
1418
1419
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1420
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>International
1421
Distribution</FONT></H2>
1422
1423
<!-- MARKER FORMAT-SHEET="Para 10" -->
1424
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1425
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
1426
August of 1995 through September of 1999, The 3M Company (&#147;3M&#148;) was
1427
the exclusive distributor of the Company&#146;s Breathe Right nasal strip
1428
products outside the United States and Canada. The contractual relationship with
1429
3M produced less than anticipated results in international markets. The Company
1430
believed that international markets required an increased level of focus,
1431
advertising and promotion to reach their potential. On September 30, 1999, the
1432
Company and 3M agreed to terminate the existing distribution agreement in a
1433
manner that enabled the Company to take a direct and immediate role in the sale,
1434
marketing and distribution of its nasal strip products in international markets.
1435
As part of the agreement, 3M also agreed not to sell any nasal dilator devices
1436
for a period of two years, which period ended on June 30, 2002. </FONT></P>
1437
1438
<!-- MARKER FORMAT-SHEET="Para 10" -->
1439
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1440
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
1441
2000, the Company established a broad-ranging international distribution system
1442
for the Breathe Right nasal strip business that consists of both sales
1443
representatives and reselling distributors. The Company has established
1444
relationships with distributors in Canada, Australia, Japan, Hong Kong, China
1445
and most of the major markets in Europe. The Company is also pursuing additional
1446
distribution opportunities. Sales are supervised by the Company from its
1447
Minnesota headquarters and by CNS International, Inc., a wholly-owned domestic
1448
subsidiary with one business manager in Europe. The business manager supervises
1449
and coordinates the activities of the distributors and sales representatives in
1450
Europe. Distributors are appointed largely on an exclusive basis, with
1451
territories consisting of one or more countries, and it is expected that this
1452
pattern will continue. The Company retains control over the packaging and
1453
advertising in all territories. Most shipments are made in bulk, either to
1454
reselling distributors who package for the local market, or to warehouse
1455
facilities abroad, where final packaging is arranged by the Company directly
1456
before shipment to retailers. </FONT></P>
1457
1458
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1459
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>10 </FONT></P>
1460
<HR SIZE=5 NOSHADE>
1461
1462
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1463
</TD>
1464
</TR>
1465
</TABLE>
1466
<BR>
1467
1468
1469
1470
1471
1472
<!-- *************************************************************************** -->
1473
<!-- MARKER PAGE="sheet: 11; page: 11" -->
1474
1475
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1476
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1477
<TR VALIGN=TOP>
1478
<TD>
1479
<BR>
1480
1481
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1482
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Manufacturing
1483
and Operations</FONT></H2>
1484
1485
<!-- MARKER FORMAT-SHEET="Para 10" -->
1486
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1487
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1488
Company currently subcontracts with multiple manufacturers to produce Breathe
1489
Right&reg; nasal strips, Breathe Right saline nasal spray, Breathe Right Snore
1490
Relief&#153; throat spray and FiberChoice&reg; chewable fiber tablets. The
1491
Company does no in-house product production. These contract manufacturers
1492
provide full turnkey service and ship product to the Company that is completely
1493
packaged ready to be sold to retailers or provide semi-finished goods to the
1494
Company that require final packaging. </FONT></P>
1495
1496
<!-- MARKER FORMAT-SHEET="Para 10" -->
1497
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1498
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
1499
of the manufacturers makes Breathe Right nasal strips to the Company&#146;s
1500
specifications using materials specified by the Company. The contract
1501
manufacturers have all entered into confidentiality agreements with the Company
1502
to protect the Company&#146;s intellectual property rights. Company quality
1503
control and operations personnel regularly inspect the contract manufacturers to
1504
observe processes and procedures in an attempt to ensure compliance with FDA
1505
Good Manufacturing Practice Standards. Finished goods are also inspected to
1506
ensure that they meet quality requirements. The Company works closely with its
1507
material vendors and contract manufacturers to reduce scrap and waste, improve
1508
efficiency and improve yields to reduce the manufacturing costs of the product.
1509
The Company has received certification that it has established and maintains a
1510
quality system which meets the requirements of ISO 9001:2000/EN 46001. </FONT></P>
1511
1512
<!-- MARKER FORMAT-SHEET="Para 10" -->
1513
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1514
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
1515
ensure consistent quality and supply, the Company has multi-year contracts with
1516
manufacturers that purchase most of the major components for the Breathe Right
1517
nasal strips directly from 3M. In 2001, the Company entered into a multi-year
1518
contract with 3M that provides for consistent supply, adherence to
1519
specifications and pricing. Although similar materials are currently available
1520
from other suppliers, the Company has historically utilized 3M components in its
1521
products. Although the Company believes that this relationship will not be
1522
disrupted or terminated, the inability to obtain sufficient quantities of these
1523
components or the need to develop alternative sources in a timely and
1524
cost-effective manner could adversely affect the Company&#146;s operations until
1525
new sources of these components become available, if at all. </FONT></P>
1526
1527
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1528
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Competition</FONT></H2>
1529
1530
<!-- MARKER FORMAT-SHEET="Para 10" -->
1531
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1532
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Breathe
1533
Right Nasal Strips.</I></B> The market for decongestant products is highly
1534
competitive. The Company&#146;s competition in the consumer market for
1535
decongestant products and other cold, allergy and sinus relief products consists
1536
primarily of pharmaceutical products sold over the counter, other nasal sprays
1537
and external nasal dilators, while competition in the snoring remedies market
1538
also consists primarily of nasal dilators, throat sprays, herbs, supplements and
1539
homeopathic remedies. Although the Company is currently the leading manufacturer
1540
of external nasal dilation products, Schering Plough Corp. entered the market in
1541
September, 1998 with an external nasal dilation device. Schering Plough Corp.
1542
recently sold its nasal strip business to Aso Corp., a subsidiary of Aso
1543
International of Japan. In May 2003, Aso Corp. announced it was acquiring the
1544
marketing, sales and distribution of Schering Plough&#146;s nasal strip device
1545
effective June 3, 2003. Other companies have also entered the nasal dilation
1546
market with private label products. Many of the companies that compete with the
1547
Breathe Right nasal strip and other Breathe Right products have significantly
1548
greater financial and operating resources than the Company. The Company has
1549
developed and implemented marketing strategies aimed at minimizing the impact of
1550
competitive products. As a result of these strategies and other steps taken by
1551
the Company, the Breathe Right nasal strip has maintained approximately 90% of
1552
the nasal dilator market despite the entry of other competitors into the market
1553
place. </FONT></P>
1554
1555
<!-- MARKER FORMAT-SHEET="Para 10" -->
1556
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1557
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1558
patents owned and licensed by the Company on the Breathe Right nasal strip will
1559
limit the ability of others to introduce competitive external nasal dilator
1560
products similar to the Breathe Right nasal strip in the United States and major
1561
international markets. The Company intends to aggressively enforce its patent
1562
rights covering the Breathe Right nasal strip and has engaged in litigation to
1563
protect its patent rights. </FONT></P>
1564
1565
<!-- MARKER FORMAT-SHEET="Para 10" -->
1566
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1567
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
1568
can be no assurance that potential competitors will not be able to develop nasal
1569
dilation products which circumvent the Company&#146;s patents. In addition,
1570
external nasal dilator products compete in the consumer markets with
1571
decongestant and sinus relief products and snoring remedies in many
1572
international markets where the Company does not yet have, and may not in the
1573
future have, patent protection on the Breathe Right&reg; nasal strip. </FONT></P>
1574
1575
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1576
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>11 </FONT></P>
1577
<HR SIZE=5 NOSHADE>
1578
1579
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1580
</TD>
1581
</TR>
1582
</TABLE>
1583
<BR>
1584
1585
1586
1587
1588
1589
<!-- *************************************************************************** -->
1590
<!-- MARKER PAGE="sheet: 12; page: 12" -->
1591
1592
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1593
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1594
<TR VALIGN=TOP>
1595
<TD>
1596
<BR>
1597
1598
1599
1600
<!-- MARKER FORMAT-SHEET="Para 10" -->
1601
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1602
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>FiberChoice&reg;
1603
Chewable Fiber Tablet.</I></B> The market for dietary fiber supplements is
1604
highly competitive and dominated by large companies with resources greater than
1605
the Company&#146;s and established brands, such as Metamucil&reg;, Citrucel&reg;
1606
and FiberCon&reg;. The Company believes that its FiberChoice chewable fiber
1607
tablet is a unique product with significant market potential that offers
1608
consumers an effective, convenient and good-tasting alternative to existing
1609
products with more fiber per dose than any other convenient fiber supplement.
1610
The technology of the FiberChoice chewable fiber tablet is currently protected
1611
by one issued U.S. patent with other U.S. and international patents pending. </FONT></P>
1612
1613
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1614
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Government
1615
Regulation</FONT></H2>
1616
1617
<!-- MARKER FORMAT-SHEET="Para 10" -->
1618
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1619
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
1620
a manufacturer and marketer of medical devices, the Company is subject to
1621
regulation by, among other governmental entities, the FDA and the corresponding
1622
agencies of the states and foreign countries in which the Company sells its
1623
products. The Company must comply with a variety of regulations, including the
1624
FDA&#146;s Good Manufacturing Practice regulations, and is subject to periodic
1625
inspections by the FDA and applicable state and foreign agencies. If the FDA
1626
believes that its regulations have not been fulfilled, it may implement
1627
extensive enforcement powers, including the ability to ban products from the
1628
market, prohibit the operation of manufacturing facilities and effect recalls of
1629
products from customer locations. The Company believes that it is currently in
1630
compliance with applicable FDA regulations. </FONT></P>
1631
1632
<!-- MARKER FORMAT-SHEET="Para 10" -->
1633
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1634
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FDA
1635
regulations classify medical devices into three categories that determine the
1636
degree of regulatory control to which the manufacturer of the device is subject.
1637
In general, Class I devices involve compliance with labeling and record keeping
1638
requirements and are subject to other general controls. Class II devices are
1639
subject to performance standards in addition to general controls. Class III
1640
devices are those devices, usually invasive, for which pre-market approval (as
1641
distinct from pre-market notification) is required before commercial marketing
1642
to assure product safety and effectiveness. </FONT></P>
1643
1644
<!-- MARKER FORMAT-SHEET="Para 10" -->
1645
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1646
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
1647
a new medical device can be introduced into the market, the manufacturer
1648
generally must obtain FDA clearance through either a 510(k) pre-market
1649
notification or a pre-market approval application (&#147;PMA&#148;). A 510(k)
1650
clearance will be granted if the submitted data establish that the proposed
1651
device is &#147;substantially equivalent&#148; to a legally marketed Class I or
1652
II medical device, or to a Class III medical device for which the FDA has not
1653
called for PMAs. The PMA process can be expensive, uncertain and lengthy,
1654
frequently requiring from one to several years from the date the PMA is
1655
accepted. In addition to requiring clearance for new products, FDA rules may
1656
require a filing and waiting period prior to marketing modifications of existing
1657
products. The Company has received 510(k) approvals to market the Breathe Right
1658
nasal strip as a device that can (i) temporarily relieve the symptoms of nasal
1659
congestion and stuffy nose, (ii) eliminate or reduce snoring, (iii) improve
1660
nasal breathing by reducing nasal airflow resistance, and (iv) temporarily
1661
relieve breathing difficulties due to a deviated nasal septum. Nasal dilators
1662
have since been classified by the FDA as Class I devices and exempt from
1663
pre-market notification. </FONT></P>
1664
1665
<!-- MARKER FORMAT-SHEET="Para 10" -->
1666
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1667
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1668
Company&#146;s FiberChoice product is considered to be a dietary supplement and
1669
is regulated under the Federal Food, Drug, and Cosmetic Act as amended by the
1670
Dietary Supplement Health and Education Act &#147;DSHEA&#148; of 1994, and under
1671
the Fair Packaging and Labeling Act. There is generally no requirement that a
1672
company obtain a license or approval from FDA before marketing dietary
1673
supplements in the United States. The FDA is developing regulations for certain
1674
provisions of the DSHEA which will be published as final rules in the Federal
1675
Register. </FONT></P>
1676
1677
<!-- MARKER FORMAT-SHEET="Para 10" -->
1678
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1679
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
1680
of the Company&#146;s products outside the United States are subject to
1681
regulatory requirements that vary widely from country to country. The Company
1682
has selected a third party to act as an &#147;Authorized Representative&#148; in
1683
the European Union. The Company believes that it has the necessary documentation
1684
to support affixing the &#147;CE&#148; mark, an international symbol of quality
1685
and compliance with applicable European medical device directives, to the
1686
Company&#146;s Breathe Right&reg; nasal strips in Europe. Regulatory approvals
1687
have also been obtained for the Breathe Right nasal strip in Australia and
1688
additional approvals in other jurisdictions will be sought by the Company as
1689
needed for all of its products. </FONT></P>
1690
1691
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1692
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>12 </FONT></P>
1693
<HR SIZE=5 NOSHADE>
1694
1695
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1696
</TD>
1697
</TR>
1698
</TABLE>
1699
<BR>
1700
1701
1702
1703
1704
1705
<!-- *************************************************************************** -->
1706
<!-- MARKER PAGE="sheet: 13; page: 13" -->
1707
1708
1709
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1710
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1711
<TR VALIGN=TOP>
1712
<TD>
1713
<BR>
1714
1715
1716
<!-- MARKER FORMAT-SHEET="Para 10" -->
1717
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1718
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
1719
assurance can be given that the FDA or state or foreign regulatory agencies will
1720
give on a timely basis, if at all, the requisite approvals or clearances for
1721
additional applications for the Breathe Right nasal strip or for any of the
1722
Company&#146;s other products. Moreover, after clearance is given, the Company
1723
is required to advise the FDA and these other regulatory agencies of
1724
modifications to its products. These agencies have the power to withdraw the
1725
clearance or require the Company to change the device or its manufacturing
1726
process or labeling, to supply additional proof of its safety and effectiveness
1727
or to recall, repair, replace or refund the cost of the medical device if it is
1728
shown to be hazardous or defective. The process of obtaining clearance to market
1729
products is costly and time-consuming and can delay the marketing and sale of
1730
the Company&#146;s products. Furthermore, federal, state and foreign regulations
1731
regarding the manufacture and sale of medical devices and other products are
1732
subject to future change. The Company cannot predict what impact, if any, such
1733
changes might have on its business. </FONT></P>
1734
1735
<!-- MARKER FORMAT-SHEET="Para 10" -->
1736
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1737
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1738
Company is also subject to substantial federal, state and local regulation
1739
regarding occupational health and safety, environmental protection, hazardous
1740
substance control, waste management and disposal, among others. </FONT></P>
1741
1742
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1743
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Patents,
1744
Trademarks and Proprietary Rights</FONT></H2>
1745
1746
<!-- MARKER FORMAT-SHEET="Para 10" -->
1747
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1748
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1749
Company has registered trademarks, owns several patents and pending patent
1750
applications, and has a number of patents through licenses which are used in
1751
connection with its business. Some of these patents and licenses cover
1752
significant product formulations, methods and designs for the Company&#146;s
1753
current and possible future products. The Company believes its trademarks are
1754
important as protection for the Company&#146;s image in the marketplace. The
1755
Company&#146;s success is and will continue to be dependent upon the existence
1756
of and ability to protect its patents, trademarks and those under its licenses
1757
and the Company intends to take such steps as are necessary to protect its
1758
intellectual property rights. </FONT></P>
1759
1760
<!-- MARKER FORMAT-SHEET="Para 10" -->
1761
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1762
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
1763
can be no assurance that the Company&#146;s technology and proprietary rights
1764
will not be challenged on the grounds that its products infringe on patents,
1765
copyrights or other proprietary information owned or claimed by others, or that
1766
others will not successfully utilize part or all of the Company&#146;s
1767
technology without compensation to the Company. Nor can there be any assurance
1768
that others will not attempt to challenge the validity or enforceability of the
1769
Company&#146;s patents and licensed patents on the basis of prior art or
1770
introduce competitive products. In addition to seeking patent protection for its
1771
products, the Company also intends to protect its proprietary technologies and
1772
proprietary information as trade secrets. </FONT></P>
1773
1774
<!-- MARKER FORMAT-SHEET="Para 10" -->
1775
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1776
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1777
Company entered into license agreements pursuant to which the Company acquired
1778
from the licensors the exclusive worldwide rights to manufacture and sell the
1779
Breathe Right nasal strip in its various versions and the FiberChoice&reg;
1780
chewable fiber tablet. Specifically, the Company has the exclusive right
1781
pursuant to those license agreements to manufacture, sell and otherwise practice
1782
any invention claimed in the licensors&#146; patents issued in any country,
1783
including those that issue on pending applications. The Company is obligated to
1784
pay royalties to the licensors based on sales of the products typically
1785
including certain minimum royalty amounts in order to maintain its exclusivity. </FONT></P>
1786
1787
<!-- MARKER FORMAT-SHEET="Para 10" -->
1788
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1789
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1790
original licensor of the Breathe Right nasal strip has filed patent applications
1791
with the U.S. Patent and Trademark Office seeking patent protection for
1792
different aspects of the Breathe Right nasal strip technology. Seven of these
1793
patent applications have resulted in issued patents in the United States,
1794
including one with claims that cover the single-body construction of the Breathe
1795
Right&reg; nasal strip. The licensor of the Breathe Right nasal strip also has
1796
one patent application which is currently pending. In addition, that licensor
1797
has obtained patent protection on the Breathe Right nasal strip in several
1798
foreign countries and has various applications pending which seek further patent
1799
protection in these and a number of additional countries. The later licensor of
1800
the Breathe Right mentholated vapor strip has filed several patent applications
1801
with the U.S. Patent and Trademark Office as well as international patent
1802
offices resulting in both issued and pending applications. The Company, in
1803
addition to the patents and patent applications pending in the U.S. mentioned
1804
above, has filed corresponding patent applications seeking protection in several
1805
foreign countries to protect certain rights to nasal dilation technology that it
1806
acquired. </FONT></P>
1807
1808
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1809
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>13 </FONT></P>
1810
<HR SIZE=5 NOSHADE>
1811
1812
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1813
</TD>
1814
</TR>
1815
</TABLE>
1816
<BR>
1817
1818
1819
1820
1821
1822
<!-- *************************************************************************** -->
1823
<!-- MARKER PAGE="sheet: 14; page: 14" -->
1824
1825
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1826
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1827
<TR VALIGN=TOP>
1828
<TD>
1829
<BR>
1830
1831
1832
<!-- MARKER FORMAT-SHEET="Para 10" -->
1833
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1834
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1835
licensor of the FiberChoice&reg; chewable fiber tablet has one issued U.S.
1836
Patent and other issued and pending international patents seeking patent
1837
protection for different aspects of this product. </FONT></P>
1838
1839
<!-- MARKER FORMAT-SHEET="Para 10" -->
1840
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1841
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
1842
the Company believes that its owned and licensed patents on nasal strips will
1843
limit the ability of others to introduce competitive external nasal dilator
1844
products in the United States, there can be no assurance that the patents on the
1845
Breathe Right nasal strip, or any additional patents on this or other products
1846
that may be issued in the future, if any, will effectively foreclose the
1847
development of competitive products or that the Company will have sufficient
1848
resources to pursue enforcement of any patents issued. The Company does,
1849
however, intend to aggressively enforce the patents covering nasal strips and
1850
its other products. In order to enforce any patents issued covering nasal
1851
strips, including the Breathe Right nasal strip, or any of its other products,
1852
the Company may have to engage in litigation which may result in substantial
1853
cost to the Company and counterclaims against the Company. Any adverse outcome
1854
of such litigation could have a negative impact on the Company&#146;s business. </FONT></P>
1855
1856
<!-- MARKER FORMAT-SHEET="Para 10" -->
1857
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1858
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1859
Company has engaged in litigation to enforce its patent rights relating to the
1860
Breathe Right nasal strip. In 1999, the Company brought a suit in federal
1861
district court to enforce one of the licensed nasal strip patents containing the
1862
broadest claims and providing the most comprehensive protection. In the course
1863
of this suit, the defendant requested reexamination in the U.S. Patent and
1864
Trademark Office (the &#147;Patent Office&#148;) of the Company&#146;s primary
1865
licensed patent. On September 29, 2000, the Patent Office issued an Office
1866
Action in Reexamination and rejected certain of the claims. Other claims that
1867
were not subject to reexamination remain in effect. The Company has joined the
1868
licensor in the exercise of its right to contest the action of the Patent Office
1869
and has provided reasons that it believes establish that the claims should not
1870
have been rejected. The Company and its licensor are also seeking to amend
1871
certain claims to provide the Company with additional protection under the
1872
patent. The final outcome of the reexamination by the Patent Office is therefore
1873
uncertain. Although an adverse ruling from the Patent Office would narrow the
1874
protection available for nasal dilators and limit the breadth of the
1875
Company&#146;s patent protection, the Company believes that its current
1876
portfolio of both pending patent applications and newly issued patents will
1877
enable it to maintain significant patent protection for its nasal strip
1878
products. </FONT></P>
1879
1880
<!-- MARKER FORMAT-SHEET="Para 10" -->
1881
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1882
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1883
Company has registered its Breathe Right and FiberChoice trademarks in the
1884
United States and in several foreign countries and is seeking further
1885
registration of those trademarks and other trademarks. </FONT></P>
1886
1887
<!-- MARKER FORMAT-SHEET="Para 10" -->
1888
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1889
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1890
Company has one patent pending for Breathe Right Snore Relief&#153;
1891
throat spray and two patents pending for the Breathe Right
1892
VaporShot!&#153; vaporizer technology. Both Snore Relief and VaporShot!
1893
are trademarks of the Company and their registrations are pending. </FONT></P>
1894
1895
<!-- MARKER FORMAT-SHEET="Head Minor" -->
1896
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Employees</FONT></H2>
1897
1898
<!-- MARKER FORMAT-SHEET="Para 10" -->
1899
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1900
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
1901
June 13, 2003, the Company had 53 full-time employees and 4 part-time employees,
1902
of whom 15 were engaged in operations, 22 in general administration, and 20 in
1903
marketing and sales. There are no unions representing Company employees.
1904
Relations with its employees are believed to be positive and there are no
1905
pending or threatened labor employment disputes or work interruptions. </FONT></P>
1906
1907
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
1908
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>14 </FONT></P>
1909
<HR SIZE=5 NOSHADE>
1910
1911
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1912
</TD>
1913
</TR>
1914
</TABLE>
1915
<BR>
1916
1917
1918
1919
1920
1921
<!-- *************************************************************************** -->
1922
<!-- MARKER PAGE="sheet: 15; page: 15" -->
1923
1924
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
1925
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
1926
<TR VALIGN=TOP>
1927
<TD>
1928
<BR>
1929
1930
1931
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
1932
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE
1933
OFFICERS OF THE COMPANY</FONT></H1>
1934
1935
<!-- MARKER FORMAT-SHEET="Para 10" -->
1936
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1937
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
1938
following table sets forth the names and ages of the Company&#146;s current
1939
Executive Officers together with all positions and offices held with the Company
1940
by such executive officers. Officers are appointed to serve until the meeting of
1941
the Board of Directors following the next Annual Meeting of Stockholders and
1942
until their successors have been elected and have qualified. </FONT></P>
1943
1944
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
1945
</TD>
1946
</TR>
1947
</TABLE>
1948
<BR>
1949
1950
1951
1952
<table cellpadding=0 cellspacing=0 border=0 width=600>
1953
<tr valign=Bottom>
1954
<th colspan=2 nowrap></th>
1955
<th nowrap></th>
1956
</tr>
1957
<tr valign=Bottom>
1958
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">Name
1959
and Age</font></td>
1960
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
1961
<td nowrap align=center><font face="Times New Roman, Times, serif" size="2">Office</font></td>
1962
</tr>
1963
<tr valign=top>
1964
<td nowrap align=LEFT>
1965
<hr size="1" noshade align="left" width="95">
1966
</td>
1967
<td align=LEFT>&nbsp;</td>
1968
<td nowrap align=center>
1969
<hr size="1" noshade align="center" width="45">
1970
</td>
1971
</tr>
1972
<tr valign=Bottom>
1973
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">Daniel
1974
E. Cohen (50)</font></td>
1975
<td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
1976
<td nowrap align=LEFT><font face="Times New Roman, Times, serif" size="2">Chairman
1977
of the Board and Director</font></td>
1978
</tr>
1979
<tr valign=Bottom>
1980
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
1981
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
1982
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
1983
</tr>
1984
<tr valign=Bottom>
1985
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Marti
1986
Morfitt (45)</font></td>
1987
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
1988
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">President,
1989
Chief Executive Officer and Director</font></td>
1990
</tr>
1991
<tr valign=Bottom>
1992
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
1993
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
1994
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
1995
</tr>
1996
<tr valign=Bottom>
1997
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Marcia
1998
O&#146;Brien (47)</font></td>
1999
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2000
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Interim
2001
Chief Financial Officer</font></td>
2002
</tr>
2003
<tr valign=Bottom>
2004
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2005
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2006
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2007
</tr>
2008
<tr valign=Bottom>
2009
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Milton
2010
Anderson, Ph.D (52)</font></td>
2011
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2012
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2013
President of Product Development</font></td>
2014
</tr>
2015
<tr valign=Bottom>
2016
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2017
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2018
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">and
2019
Regulatory</font></td>
2020
</tr>
2021
<tr valign=Bottom>
2022
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2023
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2024
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2025
</tr>
2026
<tr valign=Bottom>
2027
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">John
2028
J. Keppeler (41)</font></td>
2029
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2030
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2031
President of Worldwide Sales</font></td>
2032
</tr>
2033
<tr valign=Bottom>
2034
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2035
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2036
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2037
</tr>
2038
<tr valign=Bottom>
2039
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Linda
2040
Kollofski (50)</font></td>
2041
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2042
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2043
President of New Business Development</font></td>
2044
</tr>
2045
<tr valign=Bottom>
2046
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2047
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2048
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2049
</tr>
2050
<tr valign=Bottom>
2051
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">John
2052
Kundtz (41)</font></td>
2053
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2054
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2055
President of Marketing</font></td>
2056
</tr>
2057
<tr valign=Bottom>
2058
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2059
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2060
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2061
</tr>
2062
<tr valign=Bottom>
2063
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Larry
2064
R. Muma (52)</font></td>
2065
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2066
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2067
President of Operations</font></td>
2068
</tr>
2069
<tr valign=Bottom>
2070
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;</font></td>
2071
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2072
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
2073
</tr>
2074
<tr valign=Bottom>
2075
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Carol
2076
J. Watzke (55)</font></td>
2077
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2078
<td align=LEFT nowrap><font face="Times New Roman, Times, serif" size="2">Vice
2079
President of Consumer Strategy</font></td>
2080
</tr>
2081
</table>
2082
<BR>
2083
2084
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2085
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2086
<TR VALIGN=TOP>
2087
<TD>
2088
<BR>
2089
2090
2091
<!-- MARKER FORMAT-SHEET="Para 10" -->
2092
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2093
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Daniel
2094
E. Cohen</I> has served as the Company&#146;s Chairman of the Board since 1993,
2095
its Chief Executive Officer from 1989 to June 2001 and a director since 1982. He
2096
also served as the Company&#146;s Treasurer from 1982 to March of 1999. Mr.
2097
Cohen, a founder of the Company, is a medical doctor and board-certified
2098
neurologist. </FONT></P>
2099
2100
<!-- MARKER FORMAT-SHEET="Para 10" -->
2101
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2102
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Marti
2103
Morfitt</I> has served as the Company&#146;s President and a director since
2104
March 1998 and its Chief Executive Officer since June 2001. She also served as
2105
the Company&#146;s Chief Operating Officer from 1998 to June 2001. From
2106
September of 1982 through February of 1998, Ms. Morfitt served in a series of
2107
positions of increasing responsibility with The Pillsbury Company, a
2108
Minneapolis-based manufacturer and distributor of food products, most recently
2109
serving from May of 1997 to February of 1998 as Vice-President, Meals, and from
2110
February 1994 to May 1997 as Vice-President, Green Giant Brands. She also serves
2111
as a director of Graco, Inc., a Minneapolis-based manufacturer of fluid handling
2112
systems. </FONT></P>
2113
2114
<!-- MARKER FORMAT-SHEET="Para 10" -->
2115
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2116
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Marcia
2117
O&#146;Brien</I> has served as the Company&#146;s Interim Chief Financial
2118
Officer since March 31, 2003. From 1985 to 2002, Ms. O&#146;Brien served as
2119
Executive Vice President and Chief Financial Officer of Signal Financial
2120
Corporation, a $1.1 billion bank holding company based in Minnesota that was
2121
acquired by Associated Bank in 2002. Prior to Signal, she served as a senior
2122
manager at accounting firm KPMG, as well as a senior auditor at Deloitte &amp;
2123
Touche. Ms. O&#146;Brien is a certified public accountant. </FONT></P>
2124
2125
<!-- MARKER FORMAT-SHEET="Para 10" -->
2126
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2127
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Milton
2128
Anderson, Ph.D</I> has served as the Company&#146;s Vice President of Product
2129
Development and Regulatory since 1998, Vice President of Clinical and Regulatory
2130
Affairs from 1994 to 1998, and Vice President of Research and Development from
2131
1990 to 1994. He has served in various other capacities since joining the
2132
Company in 1984, including Director of Applications Research and Director of
2133
Research and Development. Prior to joining the Company in 1984, Dr. Anderson was
2134
an Assistant Professor at the University of Minnesota&#146;s College of
2135
Pharmacy. </FONT></P>
2136
2137
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
2138
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>15 </FONT></P>
2139
<HR SIZE=5 NOSHADE>
2140
2141
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2142
</TD>
2143
</TR>
2144
</TABLE>
2145
<BR>
2146
2147
2148
2149
2150
2151
<!-- *************************************************************************** -->
2152
<!-- MARKER PAGE="sheet: 16; page: 16" -->
2153
2154
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2155
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2156
<TR VALIGN=TOP>
2157
<TD>
2158
<BR>
2159
2160
2161
<!-- MARKER FORMAT-SHEET="Para 10" -->
2162
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2163
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John
2164
J. Keppeler</I> has served as the Company&#146;s Vice President of Worldwide
2165
Sales since August of 1999, and has served as the Company&#146;s Vice President
2166
of Sales from 1998 to 1999. From November of 1986 to June of 1998, Mr. Keppeler
2167
served in a series of sales and marketing positions of increasing responsibility
2168
with The Pillsbury Company, a Minneapolis-based manufacturer and distributor of
2169
food products, most recently serving as Director of Category &amp; Customer
2170
Development for the Green Giant and Progresso Business. </FONT></P>
2171
2172
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2173
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2174
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Linda
2175
Kollofski</I> has served as the Company&#146;s Vice President of New Business Development
2176
since November of 2002. Prior to joining the Company in 2002, Ms. Kollofski was
2177
principal of Linda K. Consulting, Inc. from October of 1994 to October of 2002. Ms.
2178
Kollofski provided marketing expertise to various Pillsbury brands including
2179
Hagen-Daz, Totino&#146;s and Green Giant as well as to Telex Communications, Hazeldon
2180
Foundation publishing business and the Company&#146;s FiberChoice business. Previously,
2181
Ms. Kollofski served in senior marketing and new business development positions with
2182
the Hazeldon Foundation, Dow Brands, Pillsbury and Munsingwear. </FONT></P>
2183
2184
<!-- MARKER FORMAT-SHEET="Para 10" -->
2185
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2186
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John
2187
Kundtz</I> has served as the Company&#146;s Vice President of Marketing since
2188
July of 2002. From 2001 to 2002, Mr. Kundtz served as Vice President, Strategic
2189
Marketing for Eagan, MN based West Group, a division of The Thompson
2190
Corporation, the nation&#146;s leading legal information company. From 1987 to
2191
2000, Mr. Kundtz served in a series of senior marketing and management positions
2192
with the Pillsbury Company, a Minneapolis-based manufacturer and distributor of
2193
food products, most recently serving as Vice President of Channel Development
2194
and Vice President of the Totinos brand. In addition, Mr. Kundtz co-founded Dogs
2195
Howling, Inc., which operates an upscale restaurant and entertainment venue. </FONT></P>
2196
2197
<!-- MARKER FORMAT-SHEET="Para 10" -->
2198
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2199
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Larry
2200
R. Muma</I> has served as the Company&#146;s Vice President of Operations since
2201
January of 2001. From May of 2000 to December of 2000, Mr. Muma served as
2202
Director of Supply Chain for Novartis, Inc., a worldwide manufacturer and
2203
distributor of health care and pharmaceutical products. From February of 1992 to
2204
April of 2000, Mr. Muma served in various operations positions of increasing
2205
responsibility with The Pillsbury Company, a Minneapolis-based manufacturer and
2206
distributor of food products, serving from February 1994 to April of 1999 as
2207
Vice President of Operations for Pillsbury North America and most recently from
2208
April of 1999 to April of 2000 as Vice President of Operations Frozen Division. </FONT></P>
2209
2210
<!-- MARKER FORMAT-SHEET="Para 10" -->
2211
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2212
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Carol
2213
J. Watzke</I> has served as the Company&#146;s Vice President of Consumer
2214
Strategy since July of 1998. Prior to joining the Company, Ms. Watzke served in
2215
a series of positions of increasing responsibility since 1974 with The Pillsbury
2216
Company, a Minneapolis-based manufacturer and distributor of food products, most
2217
recently serving as Consumer Insights Director from May of 1997 to July of 1998
2218
and as Market Research Director, Green Giant Brands, from 1994 to 1997. </FONT></P>
2219
2220
<A NAME=A002></A>
2221
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2222
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 2. PROPERTIES</U> </FONT></H2>
2223
2224
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2225
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2226
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2227
Company leases approximately 73,000 square feet of office, manufacturing and
2228
warehouse space in Eden Prairie, Minnesota. The lease expires in November of 2010 and
2229
contains a renewal option. Monthly payments on the lease are $61,766. </FONT></P>
2230
2231
<A NAME=A003></A>
2232
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2233
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 3. LEGAL
2234
PROCEEDINGS</U> </FONT></H2>
2235
2236
<!-- MARKER FORMAT-SHEET="Para 10" -->
2237
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2238
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
2239
time to time, the Company may be involved in litigation that arises through the
2240
normal course of its business. As of the date of this Annual Report on Form
2241
10-K, the Company is not a party to any litigation the Company believes could
2242
reasonably be expected to have a material adverse effect on its business or
2243
results of operations. </FONT></P>
2244
2245
<A NAME=A004></A>
2246
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2247
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 4.
2248
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</U> </FONT></H2>
2249
2250
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2251
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2252
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>
2253
2254
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
2255
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>16 </FONT></P>
2256
<HR SIZE=5 NOSHADE>
2257
2258
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2259
</TD>
2260
</TR>
2261
</TABLE>
2262
<BR>
2263
2264
2265
2266
2267
2268
<!-- *************************************************************************** -->
2269
<!-- MARKER PAGE="sheet: 17; page: 17" -->
2270
2271
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2272
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2273
<TR VALIGN=TOP>
2274
<TD>
2275
<BR>
2276
2277
2278
2279
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
2280
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II</FONT></H1>
2281
2282
<A NAME=A005></A>
2283
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2284
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 5. MARKET
2285
FOR REGISTRANT&#146;S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</U> </FONT></H2>
2286
2287
<!-- MARKER FORMAT-SHEET="Head Minor" -->
2288
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Market
2289
Information</FONT></H2>
2290
2291
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2292
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2293
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2294
Company&#146;s Common Stock has been traded on The Nasdaq Stock Market under the symbol
2295
&#147;CNXS&#148; since April 8, 1994. The following table sets forth the high and low last sale
2296
prices of the Company&#146;s Common Stock for the period indicated which cover the
2297
Company&#146;s fiscal years ending March 31, 2003 and December 31, 2001 and the transition
2298
period of January 1, 2002 to March 31, 2002. </FONT></P>
2299
2300
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2301
</TD>
2302
</TR>
2303
</TABLE>
2304
<BR>
2305
2306
2307
<table cellpadding=0 cellspacing=0 border=0 width=600>
2308
<tr valign=Bottom>
2309
<th></th>
2310
<th></th>
2311
<th colspan=2></th>
2312
<th></th>
2313
</tr>
2314
<tr valign=Bottom>
2315
<td align=LEFT><b><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2316
</font></b></td>
2317
<td align=LEFT><b><font face="Times New Roman, Times, Serif" size=2>Fiscal
2318
Year Ended March 31, 2003</font></b></td>
2319
<td align=center><b><font face="Times New Roman, Times, Serif" size="1">High</font></b></td>
2320
<td align=LEFT><b><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b></td>
2321
<td align=center><b><font face="Times New Roman, Times, Serif" size="1">Low</font></b></td>
2322
</tr>
2323
<tr valign=top>
2324
<td align=LEFT>&nbsp;</td>
2325
<td align=LEFT>&nbsp;</td>
2326
<td align=RIGHT>
2327
<hr size="1" noshade>
2328
</td>
2329
<td align=LEFT>&nbsp;</td>
2330
<td align=RIGHT>
2331
<hr size="1" noshade>
2332
</td>
2333
</tr>
2334
<tr valign=Bottom>
2335
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2336
<td align=LEFT width="100%" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Quarter
2337
Ended March 31, 2003</font></td>
2338
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">7.19</font></td>
2339
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2340
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.87</font></td>
2341
</tr>
2342
<tr valign=Bottom>
2343
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2344
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Quarter
2345
Ended December 31, 2002</font></td>
2346
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6.79</font></td>
2347
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2348
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.08</font></td>
2349
</tr>
2350
<tr valign=Bottom>
2351
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2352
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Quarter
2353
Ended September 30, 2002</font></td>
2354
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.15</font></td>
2355
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2356
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.00</font></td>
2357
</tr>
2358
<tr valign=Bottom>
2359
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2360
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Quarter
2361
Ended June 30, 2002</font></td>
2362
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7.11</font></td>
2363
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2364
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.54</font></td>
2365
</tr>
2366
<tr valign=Bottom>
2367
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2368
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2369
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2370
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2371
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2372
</tr>
2373
<tr valign=Bottom>
2374
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2375
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2">Transition
2376
Period</font></b></td>
2377
<td align=center><b><font face="Times New Roman, Times, serif" size="1">High</font></b></td>
2378
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></b></td>
2379
<td align=center><b><font face="Times New Roman, Times, serif" size="1">Low</font></b></td>
2380
</tr>
2381
<tr valign=top>
2382
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2383
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2384
<td align=RIGHT>
2385
<hr size="1" noshade>
2386
</td>
2387
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2388
<td align=RIGHT>
2389
<hr size="1" noshade>
2390
</td>
2391
</tr>
2392
<tr valign=Bottom>
2393
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2394
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Quarter
2395
Ended March 31, 2002</font></td>
2396
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.92</font></td>
2397
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2398
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.90</font></td>
2399
</tr>
2400
<tr valign=Bottom>
2401
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2402
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2403
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2404
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2405
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2406
</tr>
2407
<tr valign=Bottom>
2408
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2409
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2">Fiscal
2410
Year Ended December 31, 2001</font></b></td>
2411
<td align=center><b><font face="Times New Roman, Times, serif" size="1">High</font></b></td>
2412
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></b></td>
2413
<td align=center><b><font face="Times New Roman, Times, serif" size="1">Low</font></b></td>
2414
</tr>
2415
<tr valign=top>
2416
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2417
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2418
<td align=RIGHT>
2419
<hr size="1" noshade>
2420
</td>
2421
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2422
<td align=RIGHT>
2423
<hr size="1" noshade>
2424
</td>
2425
</tr>
2426
<tr valign=Bottom>
2427
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2428
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Quarter
2429
Ended December 31, 2001</font></td>
2430
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.95</font></td>
2431
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2432
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.66</font></td>
2433
</tr>
2434
<tr valign=Bottom>
2435
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2436
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Quarter
2437
Ended September 30, 2001</font></td>
2438
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.13</font></td>
2439
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2440
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3.15</font></td>
2441
</tr>
2442
<tr valign=Bottom>
2443
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2444
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Quarter
2445
Ended June 30, 2001</font></td>
2446
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6.08</font></td>
2447
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2448
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.25</font></td>
2449
</tr>
2450
<tr valign=Bottom>
2451
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2452
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Quarter
2453
Ended March 31, 2001</font></td>
2454
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.13</font></td>
2455
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2456
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3.50</font></td>
2457
</tr>
2458
</table>
2459
<BR>
2460
2461
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2462
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2463
<TR VALIGN=TOP>
2464
<TD>
2465
2466
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2467
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2468
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
2469
June 13, 2003, the last sale price of the Common Stock was $8.40 per share. </FONT></P>
2470
2471
<!-- MARKER FORMAT-SHEET="Head Minor" -->
2472
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Shareholders</FONT></H2>
2473
2474
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2475
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2476
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
2477
of June 13, 2003, there were approximately 700 owners of record of Common Stock and an
2478
estimated 7,000 beneficial holders whose shares were registered in the names of
2479
nominees. </FONT></P>
2480
2481
<!-- MARKER FORMAT-SHEET="Head Minor" -->
2482
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Dividends</FONT></H2>
2483
2484
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2485
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2486
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2487
Company has never paid any dividends on its Common Stock. The Company currently intends
2488
to retain any earnings for use in its operations and does not anticipate paying cash
2489
dividends in the foreseeable future. The payment of dividends, if any, in the future
2490
will be at the discretion of the Board of Directors and will depend upon, among other
2491
things, future earnings, capital requirements, restrictions in future financing
2492
agreements, the general financial condition of the Company and general business
2493
considerations. </FONT></P>
2494
2495
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
2496
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>17 </FONT></P>
2497
<HR SIZE=5 NOSHADE>
2498
2499
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2500
</TD>
2501
</TR>
2502
</TABLE>
2503
<BR>
2504
2505
2506
2507
2508
2509
<!-- *************************************************************************** -->
2510
<!-- MARKER PAGE="sheet: 18; page: 18" -->
2511
2512
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2513
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2514
<TR VALIGN=TOP>
2515
<TD>
2516
<BR>
2517
2518
2519
<!-- MARKER FORMAT-SHEET="Head Minor" -->
2520
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Information
2521
Regarding Equity Compensation Plans</FONT></H2>
2522
2523
<!-- MARKER FORMAT-SHEET="Para 10" -->
2524
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2525
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2526
following table sets forth information regarding the Company&#146;s equity
2527
compensation plans in effect as of March 31, 2003. Each of the Company&#146;s
2528
equity compensation plans is an &#147;employee benefit plan&#148; as defined by
2529
Rule 405 of Regulation C of the Securities Act of 1933. </FONT></P>
2530
2531
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
2532
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities
2533
Authorized for Issuance under Equity Compensation Plans</FONT></H1>
2534
2535
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2536
</TD>
2537
</TR>
2538
</TABLE>
2539
<BR>
2540
2541
2542
2543
2544
<table cellpadding=0 cellspacing=0 border=0 width=600>
2545
<tr valign=Bottom>
2546
<th></th>
2547
<th colspan=2></th>
2548
<th colspan=3 align="left"></th>
2549
<th></th>
2550
<th></th>
2551
</tr>
2552
<tr valign=Bottom align="center">
2553
<td align=left nowrap><b><font face="Times New Roman, Times, serif" size="1">Plan
2554
Category</font></b></td>
2555
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Number
2556
of shares <br>
2557
of common stock to <br>
2558
be issued upon <br>
2559
exercise of <br>
2560
outstanding options,<br>
2561
warrants and rights <br>
2562
</font></b></td>
2563
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2564
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">
2565
Weighted-average <br>
2566
exercise price of <br>
2567
outstanding options,<br>
2568
warrants and rights <br>
2569
</font></b></td>
2570
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2571
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Number
2572
of shares of <br>
2573
common stock remaining<br>
2574
available for future <br>
2575
issuance under equity<br>
2576
compensation plans </font></b></td>
2577
<td nowrap>&nbsp;</td>
2578
</tr>
2579
<tr valign=Bottom>
2580
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2581
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2582
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2583
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2584
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2585
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2586
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2587
<td align=RIGHT>&nbsp;</td>
2588
</tr>
2589
<tr valign=Bottom>
2590
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Equity
2591
compensation plans</font></td>
2592
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
2593
</font></td>
2594
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2595
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2596
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
2597
</font></td>
2598
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2599
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
2600
</font></td>
2601
<td align=RIGHT bgcolor="#c0c0c0">&nbsp;</td>
2602
</tr>
2603
<tr valign=Bottom>
2604
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">approved
2605
by stockholders</font></td>
2606
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,084,504</font></td>
2607
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2608
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2"></font></td>
2609
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
2610
$4.58</font></td>
2611
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2612
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">86,710</font></td>
2613
<td align=RIGHT bgcolor="#c0c0c0">&nbsp;</td>
2614
</tr>
2615
<tr valign=Bottom>
2616
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2617
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2618
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2619
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2620
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2621
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2622
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2623
<td align=RIGHT>&nbsp;</td>
2624
</tr>
2625
<tr valign=Bottom>
2626
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Equity
2627
compensation plans not</font></td>
2628
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2629
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2630
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2631
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2632
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2633
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
2634
<td align=RIGHT>&nbsp;</td>
2635
</tr>
2636
<tr valign=Bottom>
2637
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">approved
2638
by shareholders</font></td>
2639
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">-0</font></td>
2640
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">-</font></td>
2641
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2642
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">-0</font></td>
2643
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">-&nbsp;</font></td>
2644
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">-0</font></td>
2645
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">-</font></td>
2646
</tr>
2647
<tr valign=Bottom>
2648
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2649
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2650
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2651
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2652
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2653
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2654
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2655
<td align=RIGHT>&nbsp;</td>
2656
</tr>
2657
<tr valign=Bottom>
2658
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Totals</font></td>
2659
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,084,504</font></td>
2660
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2661
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2"></font></td>
2662
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
2663
$4.58</font></td>
2664
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2665
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">86,710</font></td>
2666
<td align=RIGHT bgcolor="#c0c0c0">&nbsp;</td>
2667
</tr>
2668
</table>
2669
<BR>
2670
2671
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2672
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2673
<TR VALIGN=TOP>
2674
<TD>
2675
2676
2677
<!-- MARKER FORMAT-SHEET="Para 10" -->
2678
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2679
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2680
equity compensation plans approved by CNS, Inc. shareholders are the 2000 Stock
2681
Option Plan, the 1994 Amended Stock Plan, the 1990 Stock Plan and the 1987
2682
Employee Incentive Stock Option Plan. No shares remain available for future
2683
awards under any of the 1994, 1990 or 1987 Plans. </FONT></P>
2684
2685
<!-- MARKER FORMAT-SHEET="Para 10" -->
2686
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2687
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2688
Company also maintains a 1989 Employee Stock Purchase Plan, participation in
2689
which is available to substantially all of the Company&#146;s employees.
2690
Participating employees may purchase the Company&#146;s common stock at the end
2691
of each participation period at a purchase price equal to 85% of the lower of
2692
the fair market value of the stock at the beginning or end of the period. The
2693
six-month participation period runs from January 1 to June 30 and from July 1 to
2694
December 31 each year. Employees may contribute up to 10% of their base
2695
compensation to the plan subject to certain IRS limits on stock purchases
2696
through the plan. This plan has been approved by the Company&#146;s
2697
shareholders. </FONT></P>
2698
2699
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
2700
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>18 </FONT></P>
2701
<HR SIZE=5 NOSHADE>
2702
2703
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2704
</TD>
2705
</TR>
2706
</TABLE>
2707
<BR>
2708
2709
2710
2711
2712
2713
<!-- *************************************************************************** -->
2714
<!-- MARKER PAGE="sheet: 19; page: 19" -->
2715
2716
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2717
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2718
<TR VALIGN=TOP>
2719
<TD>
2720
<BR>
2721
2722
2723
<A NAME=A006></A>
2724
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2725
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 6. SELECTED
2726
FINANCIAL DATA</U> </FONT></H2>
2727
2728
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
2729
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2730
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2731
following selected financial data should be read in conjunction with the Company&#146;s
2732
Consolidated Financial Statements and Notes thereto together with the &#147;Management&#146;s
2733
Discussion and Analysis of Financial Condition and Results of Operations,&#148; all of which
2734
are included elsewhere in this Report. The Consolidated Statements of Operations and
2735
Balance Sheet data presented below as of and for the years ended December 31, 1998
2736
through March 31, 2003 have been derived from the Company&#146;s Consolidated Financial
2737
Statements included elsewhere in this Report, which have been audited by KPMG LLP,
2738
independent certified public accountants. </FONT></P>
2739
2740
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
2741
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>FINANCIAL HIGHLIGHTS</B>
2742
<BR>(In thousands, except per share amounts) </FONT></P>
2743
2744
2745
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2746
</TD>
2747
</TR>
2748
</TABLE>
2749
<BR>
2750
2751
2752
<table cellpadding=0 cellspacing=0 border=0 width=600>
2753
<tr valign=Bottom>
2754
<th></th>
2755
<th colspan=3 align="left"></th>
2756
<th colspan=3 align="left"></th>
2757
<th colspan=3 align="left"></th>
2758
<th colspan=3 align="left"></th>
2759
<th colspan=2 align="left"></th>
2760
</tr>
2761
<tr valign=Bottom align="center">
2762
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2763
<td colspan="14"><b><font face="Times New Roman, Times, serif" size="1">Years
2764
ended</font></b></td>
2765
</tr>
2766
<tr valign=Bottom align="center">
2767
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2768
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Mar
2769
31<br>
2770
</font></b></td>
2771
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2772
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Dec
2773
31<br>
2774
</font></b></td>
2775
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2776
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Dec
2777
31<br>
2778
</font></b></td>
2779
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2780
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Dec
2781
31<br>
2782
</font></b></td>
2783
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2784
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Dec
2785
31</font></b></td>
2786
</tr>
2787
<tr valign=top>
2788
<td align=LEFT>&nbsp;</td>
2789
<td colspan="14" align=left>
2790
<hr size="1" noshade>
2791
</td>
2792
</tr>
2793
<tr valign=Bottom align="center">
2794
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2795
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2003<br>
2796
</font></b></td>
2797
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2798
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001 <br>
2799
</font></b></td>
2800
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2801
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
2802
</font></b></td>
2803
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2804
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">1999<br>
2805
</font></b></td>
2806
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
2807
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">1998</font></b></td>
2808
</tr>
2809
<tr valign=top>
2810
<td align=LEFT>&nbsp;</td>
2811
<td colspan="14" align=left>
2812
<hr size="1" noshade>
2813
</td>
2814
</tr>
2815
<tr valign=Bottom bgcolor="#c0c0c0">
2816
<td width="40%" align=LEFT><font face="Times New Roman, Times, serif" size="2">Net
2817
sales</font></td>
2818
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2819
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 79,075</font></td>
2820
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2821
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2822
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 76,242</font></td>
2823
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2824
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2825
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 61,777</font></td>
2826
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2827
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2828
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 38,409</font></td>
2829
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
2830
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2831
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 49,037</font></td>
2832
</tr>
2833
<tr valign=Bottom>
2834
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
2835
income (loss)</font></td>
2836
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2837
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,639</font></td>
2838
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2839
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2840
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1,225</font></td>
2841
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2842
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2843
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(17,843</font></td>
2844
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2845
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2846
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(18,696</font></td>
2847
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2848
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2849
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">701</font></td>
2850
</tr>
2851
<tr valign=Bottom bgcolor="#c0c0c0">
2852
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Net income
2853
(loss)</font></td>
2854
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2855
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,516</font></td>
2856
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2857
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2858
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">81</font></td>
2859
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2860
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2861
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(15,660</font></td>
2862
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2863
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2864
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(13,756</font></td>
2865
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2866
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2867
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,982</font></td>
2868
</tr>
2869
<tr valign=Bottom>
2870
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Diluted
2871
net income (loss) per share</font></td>
2872
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2873
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.46</font></td>
2874
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2875
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2876
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.01</font></td>
2877
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2878
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2879
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (1.09</font></td>
2880
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2881
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2882
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (0.89</font></td>
2883
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
2884
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2885
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.16</font></td>
2886
</tr>
2887
<tr valign=Bottom>
2888
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
2889
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2890
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2891
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2892
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2893
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2894
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2895
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2896
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2897
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2898
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2899
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2900
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
2901
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
2902
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
2903
</tr>
2904
<tr valign=Bottom bgcolor="#c0c0c0">
2905
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Working
2906
capital</font></td>
2907
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2908
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 45,266</font></td>
2909
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2910
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2911
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 32,712</font></td>
2912
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2913
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2914
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 32,507</font></td>
2915
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2916
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2917
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 50,183</font></td>
2918
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2919
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
2920
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 72,025</font></td>
2921
</tr>
2922
<tr valign=Bottom>
2923
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Total assets</font></td>
2924
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2925
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">65,375</font></td>
2926
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2927
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2928
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">50,618</font></td>
2929
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2930
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2931
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">56,344</font></td>
2932
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2933
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2934
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">65,337</font></td>
2935
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2936
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2937
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">84,963</font></td>
2938
</tr>
2939
<tr valign=Bottom bgcolor="#c0c0c0">
2940
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Stockholders&#146;
2941
equity</font></td>
2942
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2943
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">49,054</font></td>
2944
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2945
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2946
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36,612</font></td>
2947
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2948
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2949
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36,937</font></td>
2950
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2951
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2952
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">53,584</font></td>
2953
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2954
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
2955
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">75,866</font></td>
2956
</tr>
2957
</table>
2958
<BR>
2959
2960
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2961
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2962
<TR VALIGN=TOP>
2963
<TD>
2964
2965
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
2966
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>19 </FONT></P>
2967
<HR SIZE=5 NOSHADE>
2968
2969
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
2970
</TD>
2971
</TR>
2972
</TABLE>
2973
<BR>
2974
2975
2976
2977
2978
2979
<!-- *************************************************************************** -->
2980
<!-- MARKER PAGE="sheet: 20; page: 20" -->
2981
2982
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
2983
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
2984
<TR VALIGN=TOP>
2985
<TD>
2986
<BR>
2987
2988
2989
<A NAME=A007></A>
2990
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
2991
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 7.
2992
MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND</U><BR>
2993
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>RESULTS OF OPERATIONS</U> </FONT></H2>
2994
2995
<!-- MARKER FORMAT-SHEET="Para 10" -->
2996
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2997
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
2998
following discussion of the financial condition and results of operations should
2999
be read in conjunction with the Company&#146;s audited consolidated financial
3000
statements and notes thereto appearing elsewhere in this Annual Report. Fiscal
3001
2001 and 2000 amounts have been restated to give effect to the adoption on
3002
January 1, 2002 of the provisions of EITF Issue No. 01-9. These new accounting
3003
standards had no impact on the Company&#146;s net income; however, they did
3004
require reclassification of certain promotional costs. In this discussion, our
3005
fiscal years ended March 31, 2003; December 31, 2001 and 2000 are referred to as
3006
fiscal year 2003, 2001 and 2000, respectively. In the opinion of the
3007
Company&#146;s management, the quarterly unaudited information set forth below
3008
has been prepared on the same basis as the audited financial information, and
3009
includes all adjustments (consisting only of normal, recurring adjustments)
3010
necessary to present this information fairly when read in conjunction with the
3011
Company&#146;s consolidated financial statements and notes thereto. </FONT></P>
3012
3013
<!-- MARKER FORMAT-SHEET="Head Minor" -->
3014
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Overview</FONT></H2>
3015
3016
<!-- MARKER FORMAT-SHEET="Para 10" -->
3017
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3018
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
3019
Company was founded in 1982. From 1987 until 1995, the Company designed,
3020
manufactured and marketed computer-based diagnostic devices for sleep disorders.
3021
In 1995, the Company divested itself of the assets related to its sleep
3022
disorders business to focus on the Breathe Right&reg; nasal strip. </FONT></P>
3023
3024
<!-- MARKER FORMAT-SHEET="Para 10" -->
3025
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3026
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
3027
Company obtained the exclusive license to manufacture and sell the Breathe Right
3028
nasal strip in 1992 and received FDA clearance in October 1993 to market the
3029
Breathe Right nasal strip as a product that improves nasal breathing. The
3030
Company has also received FDA clearance to market the Breathe Right nasal strip
3031
for the reduction or elimination of snoring, for the temporary relief of nasal
3032
congestion and for the temporary relief of breathing difficulties due to a
3033
deviated nasal septum. </FONT></P>
3034
3035
<!-- MARKER FORMAT-SHEET="Para 10" -->
3036
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3037
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3038
August 1995, the Company signed an exclusive international distribution
3039
agreement with the 3M Company (&#147;3M&#148;) to market Breathe Right nasal
3040
strips outside the U.S. and Canada. On September 30, 1999, the Company and 3M
3041
amended the distribution agreement in a manner that enabled the Company to
3042
regain control of the marketing, sales and distribution of Breathe Right nasal
3043
strips in international markets. In exchange for the one-time contract
3044
termination fee, the international distribution agreement with 3M terminated on
3045
June 30, 2000. During 2000, the Company established an international
3046
distribution network that consists of both sales representatives and reselling
3047
distributors and reintroduced nasal strips in Europe, Japan and Australia. </FONT></P>
3048
3049
<!-- MARKER FORMAT-SHEET="Para 10" -->
3050
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3051
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3052
July 1996, U.S. Utility Patents were issued covering the basic invention of the
3053
Breathe Right nasal strip and additional elements incorporated in the product.
3054
During 1997, the Company became aware of a foreign reference to a nasal dilator,
3055
not commercially available. During 2000, the U.S. Patent and Trademark Office
3056
(&#147;Patent Office&#148;) reexamined the Company&#146;s primary licensed
3057
patent and rejected certain claims. The Company has joined its licensor in the
3058
exercise of its right to contest the action of the Patent Office. The Company
3059
and its licensor have amended and are also seeking to further amend certain
3060
claims to provide the Company with additional protection under the patent. The
3061
final outcome of the reexamination is uncertain. Although an adverse ruling
3062
could narrow the range of protection available for nasal dilators and limit the
3063
breadth of the Company&#146;s patent protection, the Company believes that its
3064
current portfolio of both pending patent applications and issued patents will
3065
enable it to maintain significant patent protection for its nasal strip
3066
products. </FONT></P>
3067
3068
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
3069
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>20 </FONT></P>
3070
<HR SIZE=5 NOSHADE>
3071
3072
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
3073
</TD>
3074
</TR>
3075
</TABLE>
3076
<BR>
3077
3078
3079
3080
3081
3082
<!-- *************************************************************************** -->
3083
<!-- MARKER PAGE="sheet: 21; page: 21" -->
3084
3085
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
3086
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
3087
<TR VALIGN=TOP>
3088
<TD>
3089
<BR>
3090
3091
3092
<!-- MARKER FORMAT-SHEET="Para 10" -->
3093
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3094
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning
3095
in 1998, the Company strengthened its management team to add consumer packaged
3096
goods and new products experience. The Company also formed teams to focus on
3097
individual product lines. The Company completed positioning research work to
3098
expand the Breathe Right&reg; brand and developed a road map for new product
3099
development. During 1999 and 2000, the Company invested aggressively in
3100
marketing, selling and product development expenses to build the Breathe Right
3101
brand and launch additional products. </FONT></P>
3102
3103
<!-- MARKER FORMAT-SHEET="Para 10" -->
3104
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3105
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3106
2000, the Company expanded its domestic Breathe Right product line to include
3107
nasal strips for colds with mentholated vapors that are sized for the entire
3108
family and nasal strips for children that are available in multiple colors.
3109
Breathe Right nasal strips for colds with mentholated vapors were introduced in
3110
selected overseas markets in 2001. </FONT></P>
3111
3112
<!-- MARKER FORMAT-SHEET="Para 10" -->
3113
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3114
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
3115
2000, the Company launched FiberChoice&reg; chewable fiber tablets. The tablets
3116
are positioned in the bulk fiber supplement market and give the Company an entry
3117
into the digestive health products market. FiberChoice chewable fiber tablets
3118
can be taken without water and have been clinically proven to be as effective as
3119
powder alternatives. </FONT></P>
3120
3121
<!-- MARKER FORMAT-SHEET="Para 10" -->
3122
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3123
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3124
2001, the Company streamlined and realigned the Company&#146;s resources to
3125
better match its strategic goals and to focus on building the core businesses.
3126
The Company recorded a special charge related to costs associated with this
3127
plan. Approximately 25% of the workforce, from throughout the organization, was
3128
eliminated. These cost-cutting actions were expected to result in annual savings
3129
of approximately $2 to $2.5 million. The cost savings relating to this plan were
3130
realized beginning in July of 2001. </FONT></P>
3131
3132
<!-- MARKER FORMAT-SHEET="Para 10" -->
3133
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3134
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3135
2002, the Company changed its fiscal year-end from December 31 to March 31. The
3136
change in its fiscal year end aligns the Company&#146;s financial reporting with
3137
its business and customer planning cycle. The Company believes this change
3138
provides a clearer picture of the Company&#146;s financial results by including
3139
an entire cough/cold season within the same fiscal year. The first period to be
3140
reported in 2002 was a three-month stub period ending March 31, 2002. Fiscal
3141
2003 is from April 1, 2002 through March 31, 2003. </FONT></P>
3142
3143
<!-- MARKER FORMAT-SHEET="Para 10" -->
3144
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3145
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3146
fiscal 2003, the Company continued to expand its Breathe Right product line by
3147
launching Breathe Right Snore Relief&#153; throat spray. Snore Relief spray
3148
lubricates and soothes dry throats, while a natural astringent firms loose
3149
tissue to reduce the vibrations that cause snoring. Breathe Right strips open
3150
nasal passages and reduce the mouth breathing that leads to snoring. These two
3151
products provide a portfolio of solutions for snoring. </FONT></P>
3152
3153
<!-- MARKER FORMAT-SHEET="Head Minor" -->
3154
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Accounting
3155
Policies</FONT></H2>
3156
3157
<!-- MARKER FORMAT-SHEET="Para 10" -->
3158
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3159
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
3160
preparing the consolidated financial statements in conformity with accounting
3161
principles generally accepted in the United States of America, management must
3162
make decisions which impact the reported amounts and the related disclosures.
3163
Such decisions include the selection of the appropriate accounting principles to
3164
be applied and the assumptions on which to base accounting estimates. In
3165
reaching such decisions, management applies judgment based on its understanding
3166
and analysis of the relevant circumstances. Note 1 to the consolidated financial
3167
statements provides a summary of the significant accounting policies followed in
3168
the preparation of the financial statements. </FONT></P>
3169
3170
<!-- MARKER FORMAT-SHEET="Para 10" -->
3171
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3172
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
3173
Company&#146;s critical accounting policies include the following: </FONT></P>
3174
3175
<!-- MARKER FORMAT-SHEET="Para 10" -->
3176
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3177
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sales
3178
Returns and Other Allowances, and Allowance for Doubtful Accounts.</I> Revenue
3179
from sales is recognized at the time products are shipped less estimated sales
3180
returns, certain promotional costs and other allowances. Management must make
3181
estimates of potential future product returns and other allowances related to
3182
current period revenue. Management analyzes historical returns, current trends,
3183
and changes in customer and consumer demand when evaluating the adequacy of the
3184
sales returns and other allowances. The Company has established a reserve of
3185
$1.4 million for future sales returns and other allowances as of March 31, 2003.
3186
Similarly, management must make estimates of the uncollectability of accounts
3187
receivables. Management specifically analyzes customer account balances,
3188
historical bad debts, current economic trends and changes in the timing of
3189
customer payments. The balance of accounts receivable was $11.0 million, net of
3190
the allowance for doubtful accounts of $330,000 as of March 31, 2003. </FONT></P>
3191
3192
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
3193
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>21 </FONT></P>
3194
<HR SIZE=5 NOSHADE>
3195
3196
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
3197
</TD>
3198
</TR>
3199
</TABLE>
3200
<BR>
3201
3202
3203
3204
3205
3206
<!-- *************************************************************************** -->
3207
<!-- MARKER PAGE="sheet: 22; page: 22" -->
3208
3209
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
3210
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
3211
<TR VALIGN=TOP>
3212
<TD>
3213
<BR>
3214
3215
3216
<!-- MARKER FORMAT-SHEET="Para 10" -->
3217
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3218
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Inventory
3219
Valuation.</I> Inventory is valued at the lower of cost, determined on a
3220
first-in, first-out basis (FIFO), or market. The Company analyzes the cost and
3221
the market value of inventory items and establishes the appropriate valuation
3222
reserves. The Company has established a reserve of $667,000 as of March 31,
3223
2003. Management believes that the inventory valuation results in carrying
3224
inventory at the lower of cost or market. </FONT></P>
3225
3226
<!-- MARKER FORMAT-SHEET="Para 10" -->
3227
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3228
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Accounting
3229
for Income Taxes.</I> As part of the process of preparing financial statements,
3230
the Company is required to estimate income taxes, both state and federal. This
3231
process involves management estimating the actual current tax exposure together
3232
with assessing temporary differences resulting from different treatment for tax
3233
and accounting purposes. These differences result in deferred tax assets and
3234
liabilities, which are included within the consolidated balance sheet.
3235
Management must then assess the likelihood that deferred tax assets will be
3236
utilized to offset future taxable income during the periods in which these
3237
temporary differences are deductible. Based on the level of historical taxable
3238
income and projections of future taxable income for the periods, in which the
3239
deferred tax assets are deductible, management believes that it is more likely
3240
than not the Company will realize the benefits of these deductible differences.
3241
Accordingly, the Company has eliminated the valuation allowance of $9.1 million
3242
against the net deferred tax assets as of March 31, 2002. </FONT></P>
3243
3244
<!-- MARKER FORMAT-SHEET="Para 10" -->
3245
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3246
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Valuation
3247
of Product Rights.</I> Management assesses the impairment of product rights
3248
whenever events or changes in circumstances indicate that the carrying value may
3249
not be recoverable. Factors that are considered important for the assessment
3250
include significant underperformance of a product line relative to projected or
3251
historical results, significant change in the market in relation to competitive
3252
products and significant negative industry or economic trends. Management
3253
currently does not believe that it is necessary to record an impairment charge
3254
at this time and that the carrying value of these assets will be recoverable. </FONT></P>
3255
3256
<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Project" -->
3257
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Operating Results</FONT></H2>
3258
3259
<!-- MARKER FORMAT-SHEET="Para 10" -->
3260
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3261
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
3262
January 23, 2002, the Company changed its fiscal year-end from December 31 to
3263
March 31. The first period to be reported in 2002 was a three-month stub period
3264
ended March 31, 2002. The change in fiscal year-end aligns the Company&#146;s
3265
financial reporting period with its business and customer-planning cycle. The
3266
Company believes this change provides a clearer picture of the Company&#146;s
3267
financial results by including an entire cough/cold season within the same
3268
fiscal year. </FONT></P>
3269
3270
<!-- MARKER FORMAT-SHEET="Para 10" -->
3271
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3272
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
3273
following discussion of historical operating results compares the fiscal year
3274
ended March 31, 2003 to the previous fiscal year ended December 31, 2001 and
3275
compares the fiscal year ended December 31, 2001 to the fiscal year ended
3276
December 31, 2000. Additionally, the three-month transition period ended March
3277
31, 2002 is compared to the same unaudited period in the prior year. </FONT></P>
3278
3279
<!-- MARKER FORMAT-SHEET="Para 10" -->
3280
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3281
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
3282
tables below set forth certain selected financial information of the Company and
3283
the percentage of net sales represented by certain items included in the
3284
Company&#146;s statements of operations for the periods indicated. </FONT></P>
3285
3286
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
3287
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>22 </FONT></P>
3288
<HR SIZE=5 NOSHADE>
3289
3290
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
3291
</TD>
3292
</TR>
3293
</TABLE>
3294
<BR>
3295
3296
3297
3298
3299
3300
<!-- *************************************************************************** -->
3301
<!-- MARKER PAGE="sheet: 23; page: 23" -->
3302
3303
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
3304
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
3305
<TR VALIGN=TOP>
3306
<TD>
3307
<BR>
3308
3309
3310
<!-- MARKER FORMAT-SHEET="Para 10" -->
3311
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3312
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
3313
prior period amounts have been reclassified to conform to the current
3314
period&#146;s presentation. These reclassifications had no impact on the
3315
operating net income (loss) or net income (loss) for 2001 and 2000. </FONT></P>
3316
3317
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
3318
</TD>
3319
</TR>
3320
</TABLE>
3321
<BR>
3322
3323
3324
<table cellpadding=0 cellspacing=0 border=0 width=600>
3325
<tr valign=Bottom align="center">
3326
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3327
<td colspan="15" nowrap><b><font face="Times New Roman, Times, serif" size="1">Three
3328
Months Ended</font></b></td>
3329
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">
3330
Year <br>
3331
Ended</font></b></td>
3332
</tr>
3333
<tr valign=Bottom align="center">
3334
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3335
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Mar
3336
31,<br>
3337
</font></b></td>
3338
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3339
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Jun
3340
30,<br>
3341
</font></b></td>
3342
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3343
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Sep
3344
30,<br>
3345
</font></b></td>
3346
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3347
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Dec
3348
31,<br>
3349
</font></b></td>
3350
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3351
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Mar
3352
31,<br>
3353
</font></b></td>
3354
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3355
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">
3356
Mar 31,<br>
3357
</font></b></td>
3358
</tr>
3359
<tr valign=Bottom align="center">
3360
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3361
<td colspan="17" nowrap>
3362
<hr NOSHADE size=1>
3363
</td>
3364
</tr>
3365
<tr valign=Bottom align="center">
3366
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3367
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
3368
</font></b></td>
3369
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3370
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
3371
</font></b></td>
3372
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3373
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
3374
</font></b></td>
3375
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3376
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
3377
</font></b></td>
3378
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3379
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003 <br>
3380
</font></b></td>
3381
<td nowrap>&nbsp;</td>
3382
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">
3383
2003 </font></b></td>
3384
</tr>
3385
<tr valign=Bottom align="center">
3386
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3387
<td colspan="17" nowrap>
3388
<hr NOSHADE size=1>
3389
</td>
3390
</tr>
3391
<tr valign=Bottom align="center">
3392
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3393
<td colspan="17" nowrap valign="top"><b><font face="Times New Roman, Times, serif" size="1">(In
3394
thousands)</font></b></td>
3395
</tr>
3396
<tr valign=Bottom bgcolor="#c0c0c0">
3397
<td width=35% align=LEFT><font face="Times New Roman, Times, serif" size="2">Domestic
3398
net sales</font></td>
3399
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3400
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 15,195</font></td>
3401
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
3402
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3403
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 12,711</font></td>
3404
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
3405
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3406
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 15,346</font></td>
3407
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
3408
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3409
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 19,088</font></td>
3410
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
3411
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3412
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 18,117</font></td>
3413
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
3414
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3415
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 65,262</font></td>
3416
</tr>
3417
<tr valign=Bottom>
3418
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">International
3419
net sales</font></td>
3420
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3421
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,940</font></td>
3422
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3423
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3424
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,812</font></td>
3425
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3426
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3427
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,040</font></td>
3428
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3429
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3430
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,826</font></td>
3431
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3432
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3433
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,135</font></td>
3434
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3435
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3436
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,813</font></td>
3437
</tr>
3438
<tr valign="top">
3439
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3440
<td colspan=2 align=left>
3441
<hr NOSHADE size=1>
3442
</td>
3443
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3444
<td colspan=2 align=left>
3445
<hr NOSHADE size=1>
3446
</td>
3447
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3448
<td colspan=2 align=left>
3449
<hr NOSHADE size=1>
3450
</td>
3451
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3452
<td colspan=2 align=left>
3453
<hr NOSHADE size=1>
3454
</td>
3455
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3456
<td colspan=2 align=left>
3457
<hr NOSHADE size=1>
3458
</td>
3459
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3460
<td colspan=2 align=left>
3461
<hr NOSHADE size=1>
3462
</td>
3463
</tr>
3464
<tr valign=Bottom bgcolor="#c0c0c0">
3465
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net
3466
sales</font></td>
3467
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3468
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19,135</font></td>
3469
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3470
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3471
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,523</font></td>
3472
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3473
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3474
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17,386</font></td>
3475
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3476
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3477
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">25,914</font></td>
3478
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3479
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3480
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">21,252</font></td>
3481
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3482
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3483
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">79,075</font></td>
3484
</tr>
3485
<tr valign=Bottom>
3486
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
3487
goods sold</font></td>
3488
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3489
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,390</font></td>
3490
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3491
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3492
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,319</font></td>
3493
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3494
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3495
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,912</font></td>
3496
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3497
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3498
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,119</font></td>
3499
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3500
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3501
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,642</font></td>
3502
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3503
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3504
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">25,992</font></td>
3505
</tr>
3506
<tr valign="top">
3507
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3508
<td colspan=2 align=left>
3509
<hr NOSHADE size=1>
3510
</td>
3511
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3512
<td colspan=2 align=left>
3513
<hr NOSHADE size=1>
3514
</td>
3515
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3516
<td colspan=2 align=left>
3517
<hr NOSHADE size=1>
3518
</td>
3519
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3520
<td colspan=2 align=left>
3521
<hr NOSHADE size=1>
3522
</td>
3523
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3524
<td colspan=2 align=left>
3525
<hr NOSHADE size=1>
3526
</td>
3527
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3528
<td colspan=2 align=left>
3529
<hr NOSHADE size=1>
3530
</td>
3531
</tr>
3532
<tr valign=Bottom bgcolor="#c0c0c0">
3533
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
3534
profit</font></td>
3535
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3536
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,745</font></td>
3537
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3538
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3539
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,204</font></td>
3540
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3541
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3542
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">11,474</font></td>
3543
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3544
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3545
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17,795</font></td>
3546
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3547
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3548
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,610</font></td>
3549
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3550
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3551
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">53,083</font></td>
3552
</tr>
3553
<tr valign="top">
3554
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3555
<td colspan=2 align=left>
3556
<hr NOSHADE size=1>
3557
</td>
3558
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3559
<td colspan=2 align=left>
3560
<hr NOSHADE size=1>
3561
</td>
3562
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3563
<td colspan=2 align=left>
3564
<hr NOSHADE size=1>
3565
</td>
3566
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3567
<td colspan=2 align=left>
3568
<hr NOSHADE size=1>
3569
</td>
3570
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3571
<td colspan=2 align=left>
3572
<hr NOSHADE size=1>
3573
</td>
3574
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3575
<td colspan=2 align=left>
3576
<hr NOSHADE size=1>
3577
</td>
3578
</tr>
3579
<tr valign=Bottom>
3580
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
3581
expenses:</font></td>
3582
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3583
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3584
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3585
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3586
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3587
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3588
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3589
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3590
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3591
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3592
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3593
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3594
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3595
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3596
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3597
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3598
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3599
</tr>
3600
<tr valign=Bottom bgcolor="#c0c0c0">
3601
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
3602
and promotion</font></td>
3603
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3604
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,796</font></td>
3605
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3606
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3607
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,115</font></td>
3608
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3609
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3610
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,881</font></td>
3611
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3612
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3613
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,407</font></td>
3614
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3615
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3616
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10,527</font></td>
3617
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3618
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3619
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">30,930</font></td>
3620
</tr>
3621
<tr valign=Bottom>
3622
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
3623
general and</font></td>
3624
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3625
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3626
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3627
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3628
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3629
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3630
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3631
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3632
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3633
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3634
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3635
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3636
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3637
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3638
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3639
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3640
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3641
</tr>
3642
<tr valign=Bottom>
3643
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;administrative</font></td>
3644
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3645
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,213</font></td>
3646
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3647
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3648
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,763</font></td>
3649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3650
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3651
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,015</font></td>
3652
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3653
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3654
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,204</font></td>
3655
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3656
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3657
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,532</font></td>
3658
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3659
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3660
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,514</font></td>
3661
</tr>
3662
<tr valign="top">
3663
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3664
<td colspan=2 align=left>
3665
<hr NOSHADE size=1>
3666
</td>
3667
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3668
<td colspan=2 align=left>
3669
<hr NOSHADE size=1>
3670
</td>
3671
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3672
<td colspan=2 align=left>
3673
<hr NOSHADE size=1>
3674
</td>
3675
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3676
<td colspan=2 align=left>
3677
<hr NOSHADE size=1>
3678
</td>
3679
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3680
<td colspan=2 align=left>
3681
<hr NOSHADE size=1>
3682
</td>
3683
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3684
<td colspan=2 align=left>
3685
<hr NOSHADE size=1>
3686
</td>
3687
</tr>
3688
<tr valign=Bottom bgcolor="#c0c0c0">
3689
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
3690
operating expenses</font></td>
3691
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3692
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,009</font></td>
3693
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3694
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3695
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,878</font></td>
3696
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3697
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3698
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,896</font></td>
3699
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3700
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3701
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16,611</font></td>
3702
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3703
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3704
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,059</font></td>
3705
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3706
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3707
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">43,444</font></td>
3708
</tr>
3709
<tr valign="top">
3710
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3711
<td colspan=2 align=left>
3712
<hr NOSHADE size=1>
3713
</td>
3714
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3715
<td colspan=2 align=left>
3716
<hr NOSHADE size=1>
3717
</td>
3718
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3719
<td colspan=2 align=left>
3720
<hr NOSHADE size=1>
3721
</td>
3722
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3723
<td colspan=2 align=left>
3724
<hr NOSHADE size=1>
3725
</td>
3726
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3727
<td colspan=2 align=left>
3728
<hr NOSHADE size=1>
3729
</td>
3730
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3731
<td colspan=2 align=left>
3732
<hr NOSHADE size=1>
3733
</td>
3734
</tr>
3735
<tr valign=Bottom>
3736
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
3737
income</font></td>
3738
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3739
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">736</font></td>
3740
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3741
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3742
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,326</font></td>
3743
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3744
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3745
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,578</font></td>
3746
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3747
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3748
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,184</font></td>
3749
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3750
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3751
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">551</font></td>
3752
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3753
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3754
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,639</font></td>
3755
</tr>
3756
<tr valign=Bottom bgcolor="#c0c0c0">
3757
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
3758
income</font></td>
3759
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3760
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">272</font></td>
3761
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3762
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3763
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">229</font></td>
3764
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3765
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3766
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">240</font></td>
3767
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3768
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3769
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">240</font></td>
3770
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3771
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3772
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">130</font></td>
3773
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3774
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3775
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">839</font></td>
3776
</tr>
3777
<tr valign="top">
3778
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3779
<td colspan=2 align=left>
3780
<hr NOSHADE size=1>
3781
</td>
3782
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3783
<td colspan=2 align=left>
3784
<hr NOSHADE size=1>
3785
</td>
3786
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3787
<td colspan=2 align=left>
3788
<hr NOSHADE size=1>
3789
</td>
3790
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3791
<td colspan=2 align=left>
3792
<hr NOSHADE size=1>
3793
</td>
3794
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3795
<td colspan=2 align=left>
3796
<hr NOSHADE size=1>
3797
</td>
3798
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3799
<td colspan=2 align=left>
3800
<hr NOSHADE size=1>
3801
</td>
3802
</tr>
3803
<tr valign=Bottom>
3804
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
3805
before income</font></td>
3806
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3807
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3808
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3809
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3810
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3811
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3812
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3813
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3814
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3815
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3816
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3817
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3818
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3819
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3820
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3821
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3822
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
3823
</tr>
3824
<tr valign=Bottom>
3825
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;taxes</font></td>
3826
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3827
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,008</font></td>
3828
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3829
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3830
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,555</font></td>
3831
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3832
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3833
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,818</font></td>
3834
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3835
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3836
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,424</font></td>
3837
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3838
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3839
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">681</font></td>
3840
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3841
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3842
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10,478</font></td>
3843
</tr>
3844
<tr valign=Bottom bgcolor="#c0c0c0">
3845
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
3846
tax expense (benefit)</font></td>
3847
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3848
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(9,126</font></td>
3849
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
3850
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3851
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,000</font></td>
3852
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3853
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3854
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,300</font></td>
3855
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3856
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3857
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">550</font></td>
3858
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3859
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3860
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">112</font></td>
3861
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3862
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3863
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,962</font></td>
3864
</tr>
3865
<tr valign="top">
3866
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3867
<td colspan=2 align=left>
3868
<hr NOSHADE size=1>
3869
</td>
3870
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3871
<td colspan=2 align=left>
3872
<hr NOSHADE size=1>
3873
</td>
3874
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3875
<td colspan=2 align=left>
3876
<hr NOSHADE size=1>
3877
</td>
3878
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3879
<td colspan=2 align=left>
3880
<hr NOSHADE size=1>
3881
</td>
3882
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3883
<td colspan=2 align=left>
3884
<hr NOSHADE size=1>
3885
</td>
3886
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3887
<td colspan=2 align=left>
3888
<hr NOSHADE size=1>
3889
</td>
3890
</tr>
3891
<tr valign=Bottom>
3892
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
3893
income</font></td>
3894
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3895
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 10,134</font></td>
3896
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3897
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3898
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 1,555</font></td>
3899
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3900
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3901
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 3,518</font></td>
3902
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3903
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3904
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 874</font></td>
3905
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3906
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3907
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 569</font></td>
3908
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
3909
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
3910
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 6,516</font></td>
3911
</tr>
3912
<tr valign="top">
3913
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3914
<td colspan=2 align=left>
3915
<hr NOSHADE size=2>
3916
</td>
3917
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3918
<td colspan=2 align=left>
3919
<hr NOSHADE size=2>
3920
</td>
3921
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3922
<td colspan=2 align=left>
3923
<hr NOSHADE size=2>
3924
</td>
3925
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3926
<td colspan=2 align=left>
3927
<hr NOSHADE size=2>
3928
</td>
3929
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3930
<td colspan=2 align=left>
3931
<hr NOSHADE size=2>
3932
</td>
3933
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
3934
<td colspan=2 align=left>
3935
<hr NOSHADE size=2>
3936
</td>
3937
</tr>
3938
</table>
3939
<BR>
3940
3941
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
3942
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
3943
<TR VALIGN=TOP>
3944
<TD>
3945
3946
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
3947
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>23 </FONT></P>
3948
<HR SIZE=5 NOSHADE>
3949
3950
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
3951
</TD>
3952
</TR>
3953
</TABLE>
3954
<BR>
3955
3956
3957
3958
3959
3960
<!-- *************************************************************************** -->
3961
<!-- MARKER PAGE="sheet: 24; page: 24" -->
3962
3963
<BR>
3964
3965
3966
<table cellpadding=0 cellspacing=0 border=0 width=600>
3967
<tr valign=Bottom>
3968
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3969
<td colspan="11" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Three
3970
Months Ended</font></b></td>
3971
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3972
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Year
3973
<br>
3974
Ended</font></b></td>
3975
</tr>
3976
<tr valign=Bottom>
3977
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3978
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
3979
31,<br>
3980
</font></b></td>
3981
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3982
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Jun
3983
30,<br>
3984
</font></b></td>
3985
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3986
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Sep
3987
30,<br>
3988
</font></b></td>
3989
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3990
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Dec
3991
31,<br>
3992
</font></b></td>
3993
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3994
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Dec 31,</font></b></td>
3995
</tr>
3996
<tr valign=Bottom align="center">
3997
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
3998
<td colspan="15">
3999
<hr NOSHADE size=1>
4000
</td>
4001
</tr>
4002
<tr valign=Bottom>
4003
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4004
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
4005
</font></b></td>
4006
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4007
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
4008
</font></b></td>
4009
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4010
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
4011
</font></b></td>
4012
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4013
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
4014
</font></b></td>
4015
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4016
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
4017
</tr>
4018
<tr valign=Bottom align="center">
4019
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4020
<td colspan="15">
4021
<hr NOSHADE size=1>
4022
</td>
4023
</tr>
4024
<tr valign=Bottom align="center">
4025
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4026
<td colspan="15" valign="top"><b><font face="Times New Roman, Times, serif" size="1">(In
4027
thousands)</font></b></td>
4028
</tr>
4029
<tr valign=Bottom>
4030
<td width=45% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Domestic
4031
net sales</font></td>
4032
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4033
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4034
18,727</font></td>
4035
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
4036
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4037
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4038
11,448</font></td>
4039
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
4040
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4041
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4042
13,709</font></td>
4043
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
4044
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4045
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4046
16,344</font></td>
4047
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
4048
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4049
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4050
60,228</font></td>
4051
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4052
</tr>
4053
<tr valign=Bottom>
4054
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">International
4055
net sales</font></td>
4056
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4057
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,741</font></td>
4058
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4059
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4060
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,922</font></td>
4061
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4062
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4063
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,340</font></td>
4064
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4065
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4066
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,011</font></td>
4067
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4068
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4069
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16,014</font></td>
4070
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4071
</tr>
4072
<tr valign="top">
4073
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4074
<td colspan=2 align=left>
4075
<hr NOSHADE size=1>
4076
</td>
4077
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4078
<td colspan=2 align=left>
4079
<hr NOSHADE size=1>
4080
</td>
4081
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4082
<td colspan=2 align=left>
4083
<hr NOSHADE size=1>
4084
</td>
4085
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4086
<td colspan=2 align=left>
4087
<hr NOSHADE size=1>
4088
</td>
4089
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4090
<td colspan=2 align=left>
4091
<hr NOSHADE size=1>
4092
</td>
4093
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4094
</tr>
4095
<tr valign=Bottom>
4096
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net
4097
sales</font></td>
4098
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4099
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">23,468</font></td>
4100
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4101
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4102
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,370</font></td>
4103
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4104
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4105
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">17,049</font></td>
4106
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4107
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4108
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">21,355</font></td>
4109
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4110
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4111
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">76,242</font></td>
4112
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4113
</tr>
4114
<tr valign=Bottom>
4115
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
4116
goods sold</font></td>
4117
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4118
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,706</font></td>
4119
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4120
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4121
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,557</font></td>
4122
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4123
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4124
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,059</font></td>
4125
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4126
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4127
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7,376</font></td>
4128
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4129
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4130
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">27,698</font></td>
4131
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4132
</tr>
4133
<tr valign="top">
4134
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4135
<td colspan=2 align=left>
4136
<hr NOSHADE size=1>
4137
</td>
4138
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4139
<td colspan=2 align=left>
4140
<hr NOSHADE size=1>
4141
</td>
4142
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4143
<td colspan=2 align=left>
4144
<hr NOSHADE size=1>
4145
</td>
4146
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4147
<td colspan=2 align=left>
4148
<hr NOSHADE size=1>
4149
</td>
4150
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4151
<td colspan=2 align=left>
4152
<hr NOSHADE size=1>
4153
</td>
4154
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4155
</tr>
4156
<tr valign=Bottom>
4157
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
4158
profit</font></td>
4159
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4160
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,762</font></td>
4161
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4162
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4163
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">8,813</font></td>
4164
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4165
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4166
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">10,990</font></td>
4167
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4168
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4169
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">13,979</font></td>
4170
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4171
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4172
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">48,544</font></td>
4173
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4174
</tr>
4175
<tr valign="top">
4176
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4177
<td colspan=2 align=left>
4178
<hr NOSHADE size=1>
4179
</td>
4180
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4181
<td colspan=2 align=left>
4182
<hr NOSHADE size=1>
4183
</td>
4184
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4185
<td colspan=2 align=left>
4186
<hr NOSHADE size=1>
4187
</td>
4188
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4189
<td colspan=2 align=left>
4190
<hr NOSHADE size=1>
4191
</td>
4192
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4193
<td colspan=2 align=left>
4194
<hr NOSHADE size=1>
4195
</td>
4196
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4197
</tr>
4198
<tr valign=Bottom>
4199
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
4200
expenses:</font></td>
4201
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4202
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4203
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4204
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4205
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4206
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4207
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4208
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4209
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4210
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4211
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4212
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4213
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4214
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4215
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4216
</tr>
4217
<tr valign=Bottom>
4218
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
4219
and promotion</font></td>
4220
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4221
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,935</font></td>
4222
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4223
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4224
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7,529</font></td>
4225
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4226
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4227
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,175</font></td>
4228
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4229
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4230
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,617</font></td>
4231
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4232
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4233
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">34,256</font></td>
4234
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4235
</tr>
4236
<tr valign=Bottom>
4237
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
4238
general and administrative</font></td>
4239
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4240
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4,766</font></td>
4241
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4242
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4243
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,519</font></td>
4244
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4245
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4246
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,247</font></td>
4247
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4248
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4249
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,051</font></td>
4250
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4251
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4252
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,583</font></td>
4253
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4254
</tr>
4255
<tr valign=Bottom>
4256
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Special
4257
charges</font></td>
4258
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4259
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4260
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4261
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4262
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,100</font></td>
4263
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4264
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4265
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4266
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4267
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4268
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(170</font></td>
4269
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4270
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4271
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">930</font></td>
4272
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4273
</tr>
4274
<tr valign="top">
4275
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4276
<td colspan=2 align=left>
4277
<hr NOSHADE size=1>
4278
</td>
4279
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4280
<td colspan=2 align=left>
4281
<hr NOSHADE size=1>
4282
</td>
4283
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4284
<td colspan=2 align=left>
4285
<hr NOSHADE size=1>
4286
</td>
4287
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4288
<td colspan=2 align=left>
4289
<hr NOSHADE size=1>
4290
</td>
4291
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4292
<td colspan=2 align=left>
4293
<hr NOSHADE size=1>
4294
</td>
4295
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4296
</tr>
4297
<tr valign=Bottom>
4298
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
4299
operating expenses</font></td>
4300
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4301
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">18,701</font></td>
4302
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4303
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4304
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">12,148</font></td>
4305
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4306
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4307
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6,422</font></td>
4308
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4309
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4310
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">12,498</font></td>
4311
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4312
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4313
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">49,769</font></td>
4314
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4315
</tr>
4316
<tr valign="top">
4317
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4318
<td colspan=2 align=left>
4319
<hr NOSHADE size=1>
4320
</td>
4321
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4322
<td colspan=2 align=left>
4323
<hr NOSHADE size=1>
4324
</td>
4325
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4326
<td colspan=2 align=left>
4327
<hr NOSHADE size=1>
4328
</td>
4329
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4330
<td colspan=2 align=left>
4331
<hr NOSHADE size=1>
4332
</td>
4333
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4334
<td colspan=2 align=left>
4335
<hr NOSHADE size=1>
4336
</td>
4337
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4338
</tr>
4339
<tr valign=Bottom>
4340
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
4341
income (loss)</font></td>
4342
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4343
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(3,939</font></td>
4344
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4345
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4346
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(3,335</font></td>
4347
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4348
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4349
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,568</font></td>
4350
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4351
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4352
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,481</font></td>
4353
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4354
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4355
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1,225</font></td>
4356
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4357
</tr>
4358
<tr valign=Bottom>
4359
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Investment
4360
income</font></td>
4361
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4362
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">362</font></td>
4363
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4364
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4365
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">345</font></td>
4366
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4367
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4368
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">269</font></td>
4369
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4370
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4371
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">330</font></td>
4372
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4373
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4374
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,306</font></td>
4375
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4376
</tr>
4377
<tr valign="top">
4378
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4379
<td colspan=2 align=left>
4380
<hr NOSHADE size=1>
4381
</td>
4382
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4383
<td colspan=2 align=left>
4384
<hr NOSHADE size=1>
4385
</td>
4386
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4387
<td colspan=2 align=left>
4388
<hr NOSHADE size=1>
4389
</td>
4390
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4391
<td colspan=2 align=left>
4392
<hr NOSHADE size=1>
4393
</td>
4394
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4395
<td colspan=2 align=left>
4396
<hr NOSHADE size=1>
4397
</td>
4398
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4399
</tr>
4400
<tr valign=Bottom>
4401
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
4402
(loss) before income taxes</font></td>
4403
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4404
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(3,577</font></td>
4405
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4406
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4407
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(2,990</font></td>
4408
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4409
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4410
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,837</font></td>
4411
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4412
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4413
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,811</font></td>
4414
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4415
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4416
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">81</font></td>
4417
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4418
</tr>
4419
<tr valign=Bottom>
4420
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Income
4421
taxes</font></td>
4422
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4423
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
4424
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4425
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4426
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
4427
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4428
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4429
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
4430
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4431
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4432
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
4433
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4434
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4435
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
4436
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4437
</tr>
4438
<tr valign="top">
4439
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4440
<td colspan=2 align=left>
4441
<hr NOSHADE size=1>
4442
</td>
4443
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4444
<td colspan=2 align=left>
4445
<hr NOSHADE size=1>
4446
</td>
4447
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4448
<td colspan=2 align=left>
4449
<hr NOSHADE size=1>
4450
</td>
4451
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4452
<td colspan=2 align=left>
4453
<hr NOSHADE size=1>
4454
</td>
4455
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4456
<td colspan=2 align=left>
4457
<hr NOSHADE size=1>
4458
</td>
4459
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4460
</tr>
4461
<tr valign=Bottom>
4462
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
4463
income (loss)</font></td>
4464
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4465
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (3,577</font></td>
4466
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4467
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4468
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (2,990</font></td>
4469
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
4470
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4471
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 4,837</font></td>
4472
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4473
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4474
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 1,811</font></td>
4475
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4476
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4477
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 81</font></td>
4478
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4479
</tr>
4480
<tr valign="top">
4481
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4482
<td colspan=2 align=left>
4483
<hr NOSHADE size=2>
4484
</td>
4485
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4486
<td colspan=2 align=left>
4487
<hr NOSHADE size=2>
4488
</td>
4489
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4490
<td colspan=2 align=left>
4491
<hr NOSHADE size=2>
4492
</td>
4493
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4494
<td colspan=2 align=left>
4495
<hr NOSHADE size=2>
4496
</td>
4497
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4498
<td colspan=2 align=left>
4499
<hr NOSHADE size=2>
4500
</td>
4501
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4502
</tr>
4503
<tr valign="top">
4504
<td><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
4505
<td colspan=2 align=left>&nbsp;</td>
4506
<td></td>
4507
<td colspan=2 align=left>&nbsp;</td>
4508
<td></td>
4509
<td colspan=2 align=left>&nbsp;</td>
4510
<td></td>
4511
<td colspan=2 align=left>&nbsp;</td>
4512
<td></td>
4513
<td colspan=2 align=left>&nbsp;</td>
4514
<td></td>
4515
</tr>
4516
4517
4518
<tr valign=Bottom>
4519
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4520
<td colspan="11" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Three
4521
Months Ended</font></b></td>
4522
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4523
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Year
4524
<br>
4525
Ended</font></b></td>
4526
</tr>
4527
<tr valign=Bottom>
4528
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4529
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
4530
31,</font></b></td>
4531
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4532
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Jun
4533
30,</font></b></td>
4534
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4535
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Sep
4536
30,</font></b></td>
4537
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4538
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Dec
4539
31,</font></b></td>
4540
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4541
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Dec 31,</font></b></td>
4542
</tr>
4543
<tr valign=Bottom align="center">
4544
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4545
<td colspan="15">
4546
<hr NOSHADE size=1>
4547
</td>
4548
</tr>
4549
<tr valign=Bottom>
4550
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4551
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
4552
</font></b></td>
4553
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4554
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
4555
</font></b></td>
4556
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4557
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
4558
</font></b></td>
4559
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4560
<td colspan="2" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
4561
</font></b></td>
4562
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4563
<td colspan="2" nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
4564
</tr>
4565
<tr valign=Bottom align="center">
4566
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4567
<td colspan="15">
4568
<hr NOSHADE size=1>
4569
</td>
4570
</tr>
4571
<tr valign=Bottom align="center">
4572
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
4573
<td colspan="15" valign="top"><b><font face="Times New Roman, Times, serif" size="1">(In
4574
thousands)</font></b></td>
4575
</tr>
4576
<tr valign=Bottom>
4577
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Domestic
4578
net sales</font></td>
4579
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4580
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4581
13,210</font></td>
4582
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4583
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4584
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4585
11,210</font></td>
4586
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4587
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4588
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4589
14,899</font></td>
4590
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4591
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4592
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4593
16,408</font></td>
4594
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4595
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4596
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4597
55,727</font></td>
4598
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4599
</tr>
4600
<tr valign=Bottom>
4601
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">International
4602
net sales</font></td>
4603
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4604
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">286</font></td>
4605
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4606
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4607
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">598</font></td>
4608
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4609
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4610
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,588</font></td>
4611
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4612
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4613
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,578</font></td>
4614
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4615
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4616
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,050</font></td>
4617
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4618
</tr>
4619
<tr valign="top">
4620
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4621
<td colspan=2 align=left>
4622
<hr NOSHADE size=1>
4623
</td>
4624
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4625
<td colspan=2 align=left>
4626
<hr NOSHADE size=1>
4627
</td>
4628
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4629
<td colspan=2 align=left>
4630
<hr NOSHADE size=1>
4631
</td>
4632
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4633
<td colspan=2 align=left>
4634
<hr NOSHADE size=1>
4635
</td>
4636
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4637
<td colspan=2 align=left>
4638
<hr NOSHADE size=1>
4639
</td>
4640
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4641
</tr>
4642
<tr valign=Bottom>
4643
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net
4644
sales</font></td>
4645
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4646
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">13,496</font></td>
4647
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4648
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4649
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">11,808</font></td>
4650
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4651
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4652
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">17,487</font></td>
4653
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4654
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4655
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">18,986</font></td>
4656
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4657
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4658
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">61,777</font></td>
4659
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4660
</tr>
4661
<tr valign=Bottom>
4662
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
4663
goods sold</font></td>
4664
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4665
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,846</font></td>
4666
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4667
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4668
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,110</font></td>
4669
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4670
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4671
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,875</font></td>
4672
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4673
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4674
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,076</font></td>
4675
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4676
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4677
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">24,907</font></td>
4678
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4679
</tr>
4680
<tr valign="top">
4681
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4682
<td colspan=2 align=left>
4683
<hr NOSHADE size=1>
4684
</td>
4685
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4686
<td colspan=2 align=left>
4687
<hr NOSHADE size=1>
4688
</td>
4689
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4690
<td colspan=2 align=left>
4691
<hr NOSHADE size=1>
4692
</td>
4693
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4694
<td colspan=2 align=left>
4695
<hr NOSHADE size=1>
4696
</td>
4697
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4698
<td colspan=2 align=left>
4699
<hr NOSHADE size=1>
4700
</td>
4701
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4702
</tr>
4703
<tr valign=Bottom>
4704
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
4705
profit</font></td>
4706
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4707
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">8,650</font></td>
4708
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4709
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4710
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6,698</font></td>
4711
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4712
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4713
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">10,612</font></td>
4714
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4715
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4716
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">10,910</font></td>
4717
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4718
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4719
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">36,870</font></td>
4720
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4721
</tr>
4722
<tr valign="top">
4723
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4724
<td colspan=2 align=left>
4725
<hr NOSHADE size=1>
4726
</td>
4727
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4728
<td colspan=2 align=left>
4729
<hr NOSHADE size=1>
4730
</td>
4731
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4732
<td colspan=2 align=left>
4733
<hr NOSHADE size=1>
4734
</td>
4735
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4736
<td colspan=2 align=left>
4737
<hr NOSHADE size=1>
4738
</td>
4739
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4740
<td colspan=2 align=left>
4741
<hr NOSHADE size=1>
4742
</td>
4743
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4744
</tr>
4745
<tr valign=Bottom>
4746
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
4747
expenses:</font></td>
4748
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4749
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4750
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4751
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4752
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4753
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4754
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4755
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4756
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4757
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4758
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4759
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4760
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4761
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
4762
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4763
</tr>
4764
<tr valign=Bottom>
4765
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
4766
and promotion</font></td>
4767
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4768
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10,920</font></td>
4769
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4770
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4771
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,503</font></td>
4772
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4773
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4774
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7,756</font></td>
4775
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4776
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4777
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16,400</font></td>
4778
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4779
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4780
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">39,579</font></td>
4781
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4782
</tr>
4783
<tr valign=Bottom>
4784
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
4785
general and administrative</font></td>
4786
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4787
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,915</font></td>
4788
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4789
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4790
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,470</font></td>
4791
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4792
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4793
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,756</font></td>
4794
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4795
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4796
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,993</font></td>
4797
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4798
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4799
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">15,134</font></td>
4800
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4801
</tr>
4802
<tr valign="top">
4803
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4804
<td colspan=2 align=left>
4805
<hr NOSHADE size=1>
4806
</td>
4807
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4808
<td colspan=2 align=left>
4809
<hr NOSHADE size=1>
4810
</td>
4811
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4812
<td colspan=2 align=left>
4813
<hr NOSHADE size=1>
4814
</td>
4815
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4816
<td colspan=2 align=left>
4817
<hr NOSHADE size=1>
4818
</td>
4819
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4820
<td colspan=2 align=left>
4821
<hr NOSHADE size=1>
4822
</td>
4823
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4824
</tr>
4825
<tr valign=Bottom>
4826
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
4827
operating expenses</font></td>
4828
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4829
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,835</font></td>
4830
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4831
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4832
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7,973</font></td>
4833
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4834
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4835
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">11,512</font></td>
4836
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4837
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4838
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">20,393</font></td>
4839
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4840
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4841
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">54,713</font></td>
4842
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4843
</tr>
4844
<tr valign="top">
4845
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4846
<td colspan=2 align=left>
4847
<hr NOSHADE size=1>
4848
</td>
4849
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4850
<td colspan=2 align=left>
4851
<hr NOSHADE size=1>
4852
</td>
4853
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4854
<td colspan=2 align=left>
4855
<hr NOSHADE size=1>
4856
</td>
4857
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4858
<td colspan=2 align=left>
4859
<hr NOSHADE size=1>
4860
</td>
4861
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4862
<td colspan=2 align=left>
4863
<hr NOSHADE size=1>
4864
</td>
4865
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4866
</tr>
4867
<tr valign=Bottom>
4868
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
4869
loss</font></td>
4870
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4871
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(6,185</font></td>
4872
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4873
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4874
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(1,275</font></td>
4875
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4876
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4877
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(900</font></td>
4878
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4879
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4880
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(9,483</font></td>
4881
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4882
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4883
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(17,843</font></td>
4884
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4885
</tr>
4886
<tr valign=Bottom>
4887
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
4888
income</font></td>
4889
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4890
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">498</font></td>
4891
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4892
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4893
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">566</font></td>
4894
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4895
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4896
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">507</font></td>
4897
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4898
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4899
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">612</font></td>
4900
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4901
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4902
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,183</font></td>
4903
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4904
</tr>
4905
<tr valign="top">
4906
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4907
<td colspan=2 align=left>
4908
<hr NOSHADE size=1>
4909
</td>
4910
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4911
<td colspan=2 align=left>
4912
<hr NOSHADE size=1>
4913
</td>
4914
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4915
<td colspan=2 align=left>
4916
<hr NOSHADE size=1>
4917
</td>
4918
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4919
<td colspan=2 align=left>
4920
<hr NOSHADE size=1>
4921
</td>
4922
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4923
<td colspan=2 align=left>
4924
<hr NOSHADE size=1>
4925
</td>
4926
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4927
</tr>
4928
<tr valign=Bottom>
4929
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
4930
before income taxes</font></td>
4931
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4932
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(5,687</font></td>
4933
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4934
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4935
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(709</font></td>
4936
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4937
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4938
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(393</font></td>
4939
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4940
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4941
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(8,871</font></td>
4942
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4943
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4944
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(15,660</font></td>
4945
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4946
</tr>
4947
<tr valign=Bottom>
4948
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
4949
taxes</font></td>
4950
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4951
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4952
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4953
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4954
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4955
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4956
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4957
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4958
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4959
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4960
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4961
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4962
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4963
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
4964
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
4965
</tr>
4966
<tr valign="top">
4967
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4968
<td colspan=2 align=left>
4969
<hr NOSHADE size=1>
4970
</td>
4971
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4972
<td colspan=2 align=left>
4973
<hr NOSHADE size=1>
4974
</td>
4975
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4976
<td colspan=2 align=left>
4977
<hr NOSHADE size=1>
4978
</td>
4979
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4980
<td colspan=2 align=left>
4981
<hr NOSHADE size=1>
4982
</td>
4983
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4984
<td colspan=2 align=left>
4985
<hr NOSHADE size=1>
4986
</td>
4987
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
4988
</tr>
4989
<tr valign=Bottom>
4990
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
4991
loss</font></td>
4992
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4993
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4994
(5,687</font></td>
4995
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
4996
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
4997
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
4998
(709</font></td>
4999
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
5000
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
5001
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
5002
(393</font></td>
5003
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
5004
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
5005
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
5006
(8,871</font></td>
5007
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
5008
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
5009
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
5010
(15,660</font></td>
5011
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
5012
</tr>
5013
<tr valign="top">
5014
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5015
<td colspan=2 align=left>
5016
<hr NOSHADE size=2>
5017
</td>
5018
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5019
<td colspan=2 align=left>
5020
<hr NOSHADE size=2>
5021
</td>
5022
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5023
<td colspan=2 align=left>
5024
<hr NOSHADE size=2>
5025
</td>
5026
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5027
<td colspan=2 align=left>
5028
<hr NOSHADE size=2>
5029
</td>
5030
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5031
<td colspan=2 align=left>
5032
<hr NOSHADE size=2>
5033
</td>
5034
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5035
</tr>
5036
</table>
5037
<BR>
5038
5039
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
5040
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
5041
<TR VALIGN=TOP>
5042
<TD>
5043
5044
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
5045
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>24 </FONT></P>
5046
<HR SIZE=5 NOSHADE>
5047
5048
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
5049
</TD>
5050
</TR>
5051
</TABLE>
5052
<BR>
5053
5054
5055
5056
5057
5058
<!-- *************************************************************************** -->
5059
<!-- MARKER PAGE="sheet: 25; page: 25" -->
5060
5061
<BR>
5062
5063
5064
5065
<table cellpadding=0 cellspacing=0 border=0 width=600>
5066
<tr valign=Bottom>
5067
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5068
<td colspan="9" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Three
5069
Months Ended</font></b></td>
5070
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5071
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">
5072
Year <br>
5073
Ended</font></b></td>
5074
</tr>
5075
<tr valign=Bottom>
5076
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5077
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
5078
31,</font></b></td>
5079
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5080
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Jun
5081
30,</font></b></td>
5082
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5083
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Sep
5084
30,</font></b></td>
5085
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5086
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Dec
5087
31,</font></b></td>
5088
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5089
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
5090
31,</font></b></td>
5091
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5092
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">
5093
Mar 31,</font></b></td>
5094
</tr>
5095
<tr valign=Bottom>
5096
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5097
<td colspan="11" nowrap align="center">
5098
<hr NOSHADE size=1>
5099
</td>
5100
</tr>
5101
<tr valign=Bottom>
5102
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5103
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
5104
</font></b></td>
5105
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5106
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
5107
</font></b></td>
5108
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5109
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
5110
</font></b></td>
5111
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5112
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2002 <br>
5113
</font></b></td>
5114
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5115
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2003 <br>
5116
</font></b></td>
5117
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5118
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2003 </font></b></td>
5119
</tr>
5120
<tr valign=Bottom>
5121
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5122
<td colspan="11" nowrap align="center">
5123
<hr NOSHADE size=1>
5124
</td>
5125
</tr>
5126
<tr valign=Bottom bgcolor="#c0c0c0">
5127
<td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">Net
5128
sales</font></td>
5129
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5130
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5131
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5132
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5133
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5134
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5135
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5136
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5137
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5138
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5139
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5140
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5141
</tr>
5142
<tr valign=Bottom>
5143
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
5144
goods sold</font></td>
5145
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">33.4</font></td>
5146
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5147
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36.6</font></td>
5148
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5149
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">34.0</font></td>
5150
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5151
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">31.3</font></td>
5152
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5153
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">31.2</font></td>
5154
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5155
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">32.9</font></td>
5156
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5157
</tr>
5158
<tr valign="top">
5159
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5160
<td align=RIGHT>
5161
<hr NOSHADE size=1>
5162
</td>
5163
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5164
<td align=RIGHT>
5165
<hr NOSHADE size=1>
5166
</td>
5167
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5168
<td align=RIGHT>
5169
<hr NOSHADE size=1>
5170
</td>
5171
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5172
<td align=RIGHT>
5173
<hr NOSHADE size=1>
5174
</td>
5175
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5176
<td align=RIGHT>
5177
<hr NOSHADE size=1>
5178
</td>
5179
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5180
<td align=RIGHT>
5181
<hr NOSHADE size=1>
5182
</td>
5183
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5184
</tr>
5185
<tr valign=Bottom bgcolor="#c0c0c0">
5186
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
5187
profit</font></td>
5188
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">66.6</font></td>
5189
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5190
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">63.4</font></td>
5191
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5192
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">66.0</font></td>
5193
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5194
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">68.7</font></td>
5195
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5196
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">68.8</font></td>
5197
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5198
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">67.1</font></td>
5199
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5200
</tr>
5201
<tr valign="top">
5202
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5203
<td align=RIGHT>
5204
<hr NOSHADE size=1>
5205
</td>
5206
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5207
<td align=RIGHT>
5208
<hr NOSHADE size=1>
5209
</td>
5210
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5211
<td align=RIGHT>
5212
<hr NOSHADE size=1>
5213
</td>
5214
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5215
<td align=RIGHT>
5216
<hr NOSHADE size=1>
5217
</td>
5218
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5219
<td align=RIGHT>
5220
<hr NOSHADE size=1>
5221
</td>
5222
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5223
<td align=RIGHT>
5224
<hr NOSHADE size=1>
5225
</td>
5226
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5227
</tr>
5228
<tr valign=Bottom>
5229
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
5230
expenses:</font></td>
5231
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5232
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5233
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5234
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5235
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5236
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5237
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5238
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5239
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5240
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5241
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5242
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5243
</tr>
5244
<tr valign=Bottom>
5245
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
5246
and promotion</font></td>
5247
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">46.0</font></td>
5248
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5249
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">28.3</font></td>
5250
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5251
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16.6</font></td>
5252
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5253
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">51.7</font></td>
5254
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5255
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">49.5</font></td>
5256
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5257
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">39.1</font></td>
5258
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5259
</tr>
5260
<tr valign=Bottom bgcolor="#c0c0c0">
5261
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
5262
general and</font></td>
5263
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5264
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5265
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5266
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5267
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5268
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5269
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5270
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5271
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5272
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5273
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5274
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5275
</tr>
5276
<tr valign=Bottom bgcolor="#c0c0c0">
5277
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;administrative</font></td>
5278
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16.8</font></td>
5279
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5280
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19.0</font></td>
5281
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5282
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17.3</font></td>
5283
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5284
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12.4</font></td>
5285
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5286
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16.6</font></td>
5287
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5288
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">15.8</font></td>
5289
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5290
</tr>
5291
<tr valign="top">
5292
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5293
<td align=RIGHT>
5294
<hr NOSHADE size=1>
5295
</td>
5296
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5297
<td align=RIGHT>
5298
<hr NOSHADE size=1>
5299
</td>
5300
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5301
<td align=RIGHT>
5302
<hr NOSHADE size=1>
5303
</td>
5304
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5305
<td align=RIGHT>
5306
<hr NOSHADE size=1>
5307
</td>
5308
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5309
<td align=RIGHT>
5310
<hr NOSHADE size=1>
5311
</td>
5312
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5313
<td align=RIGHT>
5314
<hr NOSHADE size=1>
5315
</td>
5316
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5317
</tr>
5318
<tr valign=Bottom>
5319
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
5320
operating expenses</font></td>
5321
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">62.8</font></td>
5322
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5323
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">47.3</font></td>
5324
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5325
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">33.9</font></td>
5326
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5327
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">64.1</font></td>
5328
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5329
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">66.1</font></td>
5330
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5331
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">54.9</font></td>
5332
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5333
</tr>
5334
<tr valign="top">
5335
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5336
<td align=RIGHT>
5337
<hr NOSHADE size=1>
5338
</td>
5339
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5340
<td align=RIGHT>
5341
<hr NOSHADE size=1>
5342
</td>
5343
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5344
<td align=RIGHT>
5345
<hr NOSHADE size=1>
5346
</td>
5347
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5348
<td align=RIGHT>
5349
<hr NOSHADE size=1>
5350
</td>
5351
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5352
<td align=RIGHT>
5353
<hr NOSHADE size=1>
5354
</td>
5355
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5356
<td align=RIGHT>
5357
<hr NOSHADE size=1>
5358
</td>
5359
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5360
</tr>
5361
<tr valign=Bottom bgcolor="#c0c0c0">
5362
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
5363
income</font></td>
5364
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.8</font></td>
5365
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5366
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16.1</font></td>
5367
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5368
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">32.1</font></td>
5369
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5370
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.6</font></td>
5371
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5372
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.7</font></td>
5373
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5374
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12.2</font></td>
5375
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5376
</tr>
5377
<tr valign=Bottom>
5378
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
5379
income</font></td>
5380
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.4</font></td>
5381
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5382
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.6</font></td>
5383
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5384
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.4</font></td>
5385
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5386
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.9</font></td>
5387
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5388
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.6</font></td>
5389
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5390
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.1</font></td>
5391
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5392
</tr>
5393
<tr valign="top">
5394
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5395
<td align=RIGHT>
5396
<hr NOSHADE size=1>
5397
</td>
5398
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5399
<td align=RIGHT>
5400
<hr NOSHADE size=1>
5401
</td>
5402
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5403
<td align=RIGHT>
5404
<hr NOSHADE size=1>
5405
</td>
5406
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5407
<td align=RIGHT>
5408
<hr NOSHADE size=1>
5409
</td>
5410
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5411
<td align=RIGHT>
5412
<hr NOSHADE size=1>
5413
</td>
5414
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5415
<td align=RIGHT>
5416
<hr NOSHADE size=1>
5417
</td>
5418
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5419
</tr>
5420
<tr valign=Bottom bgcolor="#c0c0c0">
5421
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
5422
before income</font></td>
5423
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5424
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5425
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5426
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5427
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5428
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5429
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5430
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5431
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5432
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5433
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5434
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5435
</tr>
5436
<tr valign=Bottom bgcolor="#c0c0c0">
5437
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;taxes</font></td>
5438
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.2</font></td>
5439
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5440
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17.7</font></td>
5441
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5442
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">33.5</font></td>
5443
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5444
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.5</font></td>
5445
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5446
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.7</font></td>
5447
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5448
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13.3</font></td>
5449
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5450
</tr>
5451
<tr valign=Bottom>
5452
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
5453
tax expense (benefit)</font></td>
5454
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(47.7</font></td>
5455
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
5456
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6.9</font></td>
5457
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5458
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13.2</font></td>
5459
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5460
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.1</font></td>
5461
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5462
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.5</font></td>
5463
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5464
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.0</font></td>
5465
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5466
</tr>
5467
<tr valign="top">
5468
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5469
<td align=RIGHT>
5470
<hr NOSHADE size=1>
5471
</td>
5472
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5473
<td align=RIGHT>
5474
<hr NOSHADE size=1>
5475
</td>
5476
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5477
<td align=RIGHT>
5478
<hr NOSHADE size=1>
5479
</td>
5480
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5481
<td align=RIGHT>
5482
<hr NOSHADE size=1>
5483
</td>
5484
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5485
<td align=RIGHT>
5486
<hr NOSHADE size=1>
5487
</td>
5488
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5489
<td align=RIGHT>
5490
<hr NOSHADE size=1>
5491
</td>
5492
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5493
</tr>
5494
<tr valign=Bottom bgcolor="#c0c0c0">
5495
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
5496
income</font></td>
5497
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">52.9</font></td>
5498
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5499
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10.8</font></td>
5500
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5501
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">20.3</font></td>
5502
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5503
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.4</font></td>
5504
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5505
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.8</font></td>
5506
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5507
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8.3</font></td>
5508
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5509
</tr>
5510
<tr valign="top">
5511
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5512
<td align=RIGHT>
5513
<hr NOSHADE size=2>
5514
</td>
5515
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5516
<td align=RIGHT>
5517
<hr NOSHADE size=2>
5518
</td>
5519
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5520
<td align=RIGHT>
5521
<hr NOSHADE size=2>
5522
</td>
5523
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5524
<td align=RIGHT>
5525
<hr NOSHADE size=2>
5526
</td>
5527
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5528
<td align=RIGHT>
5529
<hr NOSHADE size=2>
5530
</td>
5531
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5532
<td align=RIGHT>
5533
<hr NOSHADE size=2>
5534
</td>
5535
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5536
</tr>
5537
</table>
5538
<BR>
5539
5540
5541
<table cellpadding=0 cellspacing=0 border=0 width=600>
5542
<tr valign=Bottom>
5543
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5544
<td colspan="7" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Three
5545
Months Ended</font></b></td>
5546
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5547
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Year
5548
<br>
5549
Ended</font></b></td>
5550
</tr>
5551
<tr valign=Bottom>
5552
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5553
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
5554
31,</font></b></td>
5555
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5556
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Jun
5557
30,</font></b></td>
5558
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5559
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Sep
5560
30,</font></b></td>
5561
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5562
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Dec
5563
31,</font></b></td>
5564
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5565
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Dec 31,</font></b></td>
5566
</tr>
5567
<tr valign=Bottom align="center">
5568
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5569
<td colspan="10">
5570
<hr NOSHADE size=1>
5571
</td>
5572
</tr>
5573
<tr valign=Bottom>
5574
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5575
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
5576
</font></b></td>
5577
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5578
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
5579
</font></b></td>
5580
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5581
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
5582
</font></b></td>
5583
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5584
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2001<br>
5585
</font></b></td>
5586
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5587
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
5588
</tr>
5589
<tr valign=Bottom align="center">
5590
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5591
<td colspan="10">
5592
<hr NOSHADE size=1>
5593
</td>
5594
</tr>
5595
<tr valign=Bottom bgcolor="#c0c0c0">
5596
<td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">Net
5597
sales</font></td>
5598
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5599
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5600
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5601
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5602
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5603
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5604
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5605
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
5606
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
5607
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5608
</tr>
5609
<tr valign=Bottom>
5610
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
5611
goods sold</font></td>
5612
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">37.1</font></td>
5613
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5614
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">38.7</font></td>
5615
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5616
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">35.5</font></td>
5617
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5618
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">34.5</font></td>
5619
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5620
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36.3</font></td>
5621
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5622
</tr>
5623
<tr valign="top">
5624
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5625
<td align=RIGHT>
5626
<hr NOSHADE size=1>
5627
</td>
5628
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5629
<td align=RIGHT>
5630
<hr NOSHADE size=1>
5631
</td>
5632
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5633
<td align=RIGHT>
5634
<hr NOSHADE size=1>
5635
</td>
5636
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5637
<td align=RIGHT>
5638
<hr NOSHADE size=1>
5639
</td>
5640
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5641
<td align=RIGHT>
5642
<hr NOSHADE size=1>
5643
</td>
5644
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5645
</tr>
5646
<tr valign=Bottom bgcolor="#c0c0c0">
5647
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
5648
profit</font></td>
5649
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">62.9</font></td>
5650
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5651
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">61.3</font></td>
5652
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5653
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">64.5</font></td>
5654
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5655
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">65.5</font></td>
5656
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5657
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">63.7</font></td>
5658
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5659
</tr>
5660
<tr valign="top">
5661
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5662
<td align=RIGHT>
5663
<hr NOSHADE size=1>
5664
</td>
5665
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5666
<td align=RIGHT>
5667
<hr NOSHADE size=1>
5668
</td>
5669
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5670
<td align=RIGHT>
5671
<hr NOSHADE size=1>
5672
</td>
5673
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5674
<td align=RIGHT>
5675
<hr NOSHADE size=1>
5676
</td>
5677
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5678
<td align=RIGHT>
5679
<hr NOSHADE size=1>
5680
</td>
5681
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5682
</tr>
5683
<tr valign=Bottom>
5684
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
5685
expenses:</font></td>
5686
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5687
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5688
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5689
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5690
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5691
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5692
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5693
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5694
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
5695
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5696
</tr>
5697
<tr valign=Bottom>
5698
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
5699
and promotion</font></td>
5700
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">59.4</font></td>
5701
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5702
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">52.4</font></td>
5703
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5704
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">18.6</font></td>
5705
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5706
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">45.0</font></td>
5707
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5708
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">44.9</font></td>
5709
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5710
</tr>
5711
<tr valign=Bottom bgcolor="#c0c0c0">
5712
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
5713
general and administrative</font></td>
5714
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">20.3</font></td>
5715
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5716
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">24.5</font></td>
5717
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5718
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19.0</font></td>
5719
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5720
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14.3</font></td>
5721
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5722
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19.1</font></td>
5723
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5724
</tr>
5725
<tr valign=Bottom>
5726
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Special
5727
charges</font></td>
5728
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5729
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5730
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7.7</font></td>
5731
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5732
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5733
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5734
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(0.8</font></td>
5735
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
5736
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.2</font></td>
5737
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5738
</tr>
5739
<tr valign="top">
5740
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5741
<td align=RIGHT>
5742
<hr NOSHADE size=1>
5743
</td>
5744
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5745
<td align=RIGHT>
5746
<hr NOSHADE size=1>
5747
</td>
5748
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5749
<td align=RIGHT>
5750
<hr NOSHADE size=1>
5751
</td>
5752
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5753
<td align=RIGHT>
5754
<hr NOSHADE size=1>
5755
</td>
5756
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5757
<td align=RIGHT>
5758
<hr NOSHADE size=1>
5759
</td>
5760
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5761
</tr>
5762
<tr valign=Bottom bgcolor="#c0c0c0">
5763
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
5764
operating expenses</font></td>
5765
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">79.7</font></td>
5766
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5767
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">84.6</font></td>
5768
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5769
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">37.6</font></td>
5770
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5771
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">58.5</font></td>
5772
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5773
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">65.2</font></td>
5774
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5775
</tr>
5776
<tr valign="top">
5777
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5778
<td align=RIGHT>
5779
<hr NOSHADE size=1>
5780
</td>
5781
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5782
<td align=RIGHT>
5783
<hr NOSHADE size=1>
5784
</td>
5785
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5786
<td align=RIGHT>
5787
<hr NOSHADE size=1>
5788
</td>
5789
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5790
<td align=RIGHT>
5791
<hr NOSHADE size=1>
5792
</td>
5793
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5794
<td align=RIGHT>
5795
<hr NOSHADE size=1>
5796
</td>
5797
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5798
</tr>
5799
<tr valign=Bottom>
5800
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
5801
income (loss)</font></td>
5802
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(16.8</font></td>
5803
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
5804
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(23.3</font></td>
5805
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
5806
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">26.9</font></td>
5807
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5808
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7.0</font></td>
5809
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5810
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1.5</font></td>
5811
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
5812
</tr>
5813
<tr valign=Bottom bgcolor="#c0c0c0">
5814
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
5815
income</font></td>
5816
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.5</font></td>
5817
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5818
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.4</font></td>
5819
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5820
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.6</font></td>
5821
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5822
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.5</font></td>
5823
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5824
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1.7</font></td>
5825
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5826
</tr>
5827
<tr valign="top">
5828
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5829
<td align=RIGHT>
5830
<hr NOSHADE size=1>
5831
</td>
5832
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5833
<td align=RIGHT>
5834
<hr NOSHADE size=1>
5835
</td>
5836
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5837
<td align=RIGHT>
5838
<hr NOSHADE size=1>
5839
</td>
5840
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5841
<td align=RIGHT>
5842
<hr NOSHADE size=1>
5843
</td>
5844
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5845
<td align=RIGHT>
5846
<hr NOSHADE size=1>
5847
</td>
5848
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5849
</tr>
5850
<tr valign=Bottom>
5851
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
5852
(loss) before income taxes</font></td>
5853
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">15.3</font></td>
5854
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5855
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">20.9</font></td>
5856
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5857
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">28.5</font></td>
5858
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5859
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8.5</font></td>
5860
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5861
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.2</font></td>
5862
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5863
</tr>
5864
<tr valign=Bottom bgcolor="#c0c0c0">
5865
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
5866
taxes</font></td>
5867
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5868
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5869
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5870
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5871
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5872
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5873
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5874
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5875
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
5876
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
5877
</tr>
5878
<tr valign="top">
5879
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5880
<td align=RIGHT>
5881
<hr NOSHADE size=1>
5882
</td>
5883
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5884
<td align=RIGHT>
5885
<hr NOSHADE size=1>
5886
</td>
5887
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5888
<td align=RIGHT>
5889
<hr NOSHADE size=1>
5890
</td>
5891
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5892
<td align=RIGHT>
5893
<hr NOSHADE size=1>
5894
</td>
5895
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5896
<td align=RIGHT>
5897
<hr NOSHADE size=1>
5898
</td>
5899
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5900
</tr>
5901
<tr valign=Bottom>
5902
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
5903
income (loss)</font></td>
5904
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(15.3</font></td>
5905
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
5906
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(20.9</font></td>
5907
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
5908
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">28.5</font></td>
5909
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5910
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8.5</font></td>
5911
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5912
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.2</font></td>
5913
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
5914
</tr>
5915
<tr valign="top">
5916
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5917
<td align=RIGHT>
5918
<hr NOSHADE size=2>
5919
</td>
5920
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5921
<td align=RIGHT>
5922
<hr NOSHADE size=2>
5923
</td>
5924
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5925
<td align=RIGHT>
5926
<hr NOSHADE size=2>
5927
</td>
5928
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5929
<td align=RIGHT>
5930
<hr NOSHADE size=2>
5931
</td>
5932
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5933
<td align=RIGHT>
5934
<hr NOSHADE size=2>
5935
</td>
5936
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
5937
</tr>
5938
</table>
5939
<BR>
5940
5941
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
5942
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
5943
<TR VALIGN=TOP>
5944
<TD>
5945
5946
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
5947
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>25 </FONT></P>
5948
<HR SIZE=5 NOSHADE>
5949
5950
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
5951
</TD>
5952
</TR>
5953
</TABLE>
5954
<BR>
5955
5956
5957
5958
5959
5960
<!-- *************************************************************************** -->
5961
<!-- MARKER PAGE="sheet: 26; page: 26" -->
5962
5963
<BR>
5964
5965
5966
<table cellpadding=0 cellspacing=0 border=0 width=600>
5967
<tr valign=Bottom>
5968
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5969
<td colspan="7" nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Three
5970
Months Ended</font></b></td>
5971
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5972
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Year
5973
<br>
5974
Ended</font></b></td>
5975
</tr>
5976
<tr valign=Bottom>
5977
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5978
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Mar
5979
31,</font></b></td>
5980
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5981
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Jun
5982
30,</font></b></td>
5983
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5984
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Sep
5985
30,</font></b></td>
5986
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5987
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">Dec
5988
31,</font></b></td>
5989
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5990
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">Dec 31,</font></b></td>
5991
</tr>
5992
<tr valign=Bottom align="center">
5993
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
5994
<td colspan="10">
5995
<hr NOSHADE size=1>
5996
</td>
5997
</tr>
5998
<tr valign=Bottom>
5999
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6000
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
6001
</font></b></td>
6002
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6003
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
6004
</font></b></td>
6005
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6006
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
6007
</font></b></td>
6008
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6009
<td nowrap align="center"><b><font face="Times New Roman, Times, serif" size="1">2000<br>
6010
</font></b></td>
6011
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6012
<td nowrap align=center><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
6013
</tr>
6014
<tr valign=Bottom align="center">
6015
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6016
<td colspan="10">
6017
<hr NOSHADE size=1>
6018
</td>
6019
</tr>
6020
<tr valign=Bottom>
6021
<td align=LEFT width="100%"><font face="Times New Roman, Times, serif" size="2">Domestic
6022
net sales</font></td>
6023
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6024
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6025
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6026
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6027
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6028
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6029
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6030
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6031
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6032
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6033
</tr>
6034
<tr valign=Bottom>
6035
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">International
6036
net sales</font></td>
6037
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6038
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6039
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6040
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6041
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6042
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6043
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6044
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6045
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6046
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6047
</tr>
6048
<tr valign=Bottom bgcolor="#c0c0c0">
6049
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net
6050
sales</font></td>
6051
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
6052
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6053
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
6054
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6055
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
6056
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6057
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
6058
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6059
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">100.0</font></td>
6060
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
6061
</tr>
6062
<tr valign=Bottom>
6063
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
6064
goods sold</font></td>
6065
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">35.9</font></td>
6066
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6067
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">43.3</font></td>
6068
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6069
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">39.3</font></td>
6070
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6071
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">42.5</font></td>
6072
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6073
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">40.3</font></td>
6074
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6075
</tr>
6076
<tr valign="top">
6077
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6078
<td align=RIGHT>
6079
<hr NOSHADE size=1>
6080
</td>
6081
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6082
<td align=RIGHT>
6083
<hr NOSHADE size=1>
6084
</td>
6085
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6086
<td align=RIGHT>
6087
<hr NOSHADE size=1>
6088
</td>
6089
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6090
<td align=RIGHT>
6091
<hr NOSHADE size=1>
6092
</td>
6093
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6094
<td align=RIGHT>
6095
<hr NOSHADE size=1>
6096
</td>
6097
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6098
</tr>
6099
<tr valign=Bottom bgcolor="#c0c0c0">
6100
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
6101
profit</font></td>
6102
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">64.1</font></td>
6103
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6104
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">56.7</font></td>
6105
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6106
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">60.7</font></td>
6107
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6108
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">57.5</font></td>
6109
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6110
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">59.7</font></td>
6111
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6112
</tr>
6113
<tr valign="top">
6114
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6115
<td align=RIGHT>
6116
<hr NOSHADE size=1>
6117
</td>
6118
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6119
<td align=RIGHT>
6120
<hr NOSHADE size=1>
6121
</td>
6122
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6123
<td align=RIGHT>
6124
<hr NOSHADE size=1>
6125
</td>
6126
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6127
<td align=RIGHT>
6128
<hr NOSHADE size=1>
6129
</td>
6130
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6131
<td align=RIGHT>
6132
<hr NOSHADE size=1>
6133
</td>
6134
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6135
</tr>
6136
<tr valign=Bottom>
6137
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
6138
expenses:</font></td>
6139
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6140
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6141
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6142
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6143
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6144
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6145
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6146
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6147
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6148
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6149
</tr>
6150
<tr valign=Bottom>
6151
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Advertising
6152
and promotion</font></td>
6153
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">80.9</font></td>
6154
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6155
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">38.1</font></td>
6156
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6157
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">44.4</font></td>
6158
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6159
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">86.4</font></td>
6160
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6161
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">64.1</font></td>
6162
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6163
</tr>
6164
<tr valign=Bottom bgcolor="#c0c0c0">
6165
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Selling,
6166
general and administrative</font></td>
6167
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">29.0</font></td>
6168
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6169
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">29.4</font></td>
6170
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6171
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">21.5</font></td>
6172
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6173
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">21.0</font></td>
6174
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6175
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">24.5</font></td>
6176
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6177
</tr>
6178
<tr valign="top">
6179
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6180
<td align=RIGHT>
6181
<hr NOSHADE size=1>
6182
</td>
6183
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6184
<td align=RIGHT>
6185
<hr NOSHADE size=1>
6186
</td>
6187
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6188
<td align=RIGHT>
6189
<hr NOSHADE size=1>
6190
</td>
6191
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6192
<td align=RIGHT>
6193
<hr NOSHADE size=1>
6194
</td>
6195
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6196
<td align=RIGHT>
6197
<hr NOSHADE size=1>
6198
</td>
6199
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6200
</tr>
6201
<tr valign=Bottom>
6202
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
6203
operating expenses</font></td>
6204
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">109.9</font></td>
6205
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6206
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">67.5</font></td>
6207
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6208
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">65.9</font></td>
6209
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6210
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">107.4</font></td>
6211
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6212
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">88.6</font></td>
6213
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6214
</tr>
6215
<tr valign="top">
6216
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6217
<td align=RIGHT>
6218
<hr NOSHADE size=1>
6219
</td>
6220
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6221
<td align=RIGHT>
6222
<hr NOSHADE size=1>
6223
</td>
6224
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6225
<td align=RIGHT>
6226
<hr NOSHADE size=1>
6227
</td>
6228
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6229
<td align=RIGHT>
6230
<hr NOSHADE size=1>
6231
</td>
6232
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6233
<td align=RIGHT>
6234
<hr NOSHADE size=1>
6235
</td>
6236
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6237
</tr>
6238
<tr valign=Bottom bgcolor="#c0c0c0">
6239
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
6240
loss</font></td>
6241
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(45.8</font></td>
6242
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6243
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(10.8</font></td>
6244
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6245
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(5.2</font></td>
6246
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6247
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(49.9</font></td>
6248
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6249
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(28.9</font></td>
6250
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6251
</tr>
6252
<tr valign=Bottom>
6253
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
6254
income</font></td>
6255
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.7</font></td>
6256
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6257
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.8</font></td>
6258
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6259
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2.9</font></td>
6260
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6261
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.2</font></td>
6262
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6263
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.5</font></td>
6264
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6265
</tr>
6266
<tr valign="top">
6267
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6268
<td align=RIGHT>
6269
<hr NOSHADE size=1>
6270
</td>
6271
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6272
<td align=RIGHT>
6273
<hr NOSHADE size=1>
6274
</td>
6275
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6276
<td align=RIGHT>
6277
<hr NOSHADE size=1>
6278
</td>
6279
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6280
<td align=RIGHT>
6281
<hr NOSHADE size=1>
6282
</td>
6283
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6284
<td align=RIGHT>
6285
<hr NOSHADE size=1>
6286
</td>
6287
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6288
</tr>
6289
<tr valign=Bottom bgcolor="#c0c0c0">
6290
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss
6291
before income taxes</font></td>
6292
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(42.1</font></td>
6293
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6294
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(6.0</font></td>
6295
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6296
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(2.3</font></td>
6297
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6298
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(46.7</font></td>
6299
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6300
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(25.4</font></td>
6301
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
6302
</tr>
6303
<tr valign=Bottom>
6304
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
6305
taxes</font></td>
6306
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
6307
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6308
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
6309
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6310
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
6311
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6312
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
6313
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6314
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.0</font></td>
6315
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6316
</tr>
6317
<tr valign="top">
6318
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6319
<td align=RIGHT>
6320
<hr NOSHADE size=1>
6321
</td>
6322
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6323
<td align=RIGHT>
6324
<hr NOSHADE size=1>
6325
</td>
6326
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6327
<td align=RIGHT>
6328
<hr NOSHADE size=1>
6329
</td>
6330
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6331
<td align=RIGHT>
6332
<hr NOSHADE size=1>
6333
</td>
6334
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6335
<td align=RIGHT>
6336
<hr NOSHADE size=1>
6337
</td>
6338
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6339
</tr>
6340
<tr valign=Bottom bgcolor="#c0c0c0">
6341
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
6342
loss</font></td>
6343
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(42.1</font></td>
6344
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
6345
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(6.0</font></td>
6346
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
6347
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(2.3</font></td>
6348
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
6349
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(46.7</font></td>
6350
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
6351
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(25.4</font></td>
6352
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)%</font></td>
6353
</tr>
6354
<tr valign="top">
6355
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6356
<td align=RIGHT>
6357
<hr NOSHADE size=2>
6358
</td>
6359
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6360
<td align=RIGHT>
6361
<hr NOSHADE size=2>
6362
</td>
6363
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6364
<td align=RIGHT>
6365
<hr NOSHADE size=2>
6366
</td>
6367
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6368
<td align=RIGHT>
6369
<hr NOSHADE size=2>
6370
</td>
6371
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6372
<td align=RIGHT>
6373
<hr NOSHADE size=2>
6374
</td>
6375
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
6376
</tr>
6377
</table>
6378
<BR>
6379
6380
6381
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6382
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6383
<TR VALIGN=TOP>
6384
<TD>
6385
6386
<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Project" -->
6387
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2003 Compared to 2001</FONT></H2>
6388
6389
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6390
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6391
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net
6392
Sales.</I> Net sales for 2003 of $79.1 million increased 3.8% over 2001 sales of $76.2
6393
million. Domestic sales of Breathe Right&reg; products grew to $57.9 million,
6394
representing an increase of 7.6% over 2001 sales of $53.8 million.
6395
FiberChoice&reg; tablet sales for 2003 grew to $7.1 million from $6.4 million for the
6396
previous year, representing an increase of 10.9%, primarily as the result of expanding
6397
the advertising support to thirteen U.S. markets. </FONT></P>
6398
6399
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6400
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6401
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International
6402
sales decreased by 13.8% to $13.8 million dollars compared to 2001 sales of $16.0
6403
million. This decrease resulted from some international partners decreasing their
6404
inventory levels. </FONT></P>
6405
6406
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6407
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6408
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6409
Company has experienced in the past, and expects that it will continue to experience in
6410
the future, quarterly fluctuations in both domestic and international sales and
6411
earnings. These fluctuations are due in part to advertising levels and seasonality
6412
of sales as described below, as well as increases and decreases in purchases by
6413
distributors and retailers in anticipation of future demand by consumers. </FONT></P>
6414
6415
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6416
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6417
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross
6418
Profit.</I> Gross profit was $53.1 million for 2003 compared to $48.5 million for 2001.
6419
Gross profit as a percentage of net sales increased to 67.1% for 2003 compared to 63.7%
6420
for 2001. The improvement in gross profit is due to lower product costs on products sold. </FONT></P>
6421
6422
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6423
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6424
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advertising
6425
and Promotion.</I> Advertising and promotion expenses were $30.9 million for 2003 compared
6426
to $34.3 million for 2001. Advertising and promotion expenses as a percentage of net
6427
sales decreased to 39.1% in 2003 from 44.9% in 2001. This decrease in spending rate was
6428
the result of a planned lower support level for FiberChoice tablets. </FONT></P>
6429
6430
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6431
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6432
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Selling,
6433
General and Administrative.</I> Selling, general and administrative expenses were
6434
$12.5 million for 2003 compared to $14.6 million for 2001. Selling, general and
6435
administrative expenses as a percentage of net sales decreased to 15.8% for 2003
6436
compared to 19.1% for 2001. This decrease was primarily the result of the corporate
6437
restructure that included a workforce reduction and that enabled the Company to
6438
streamline its resources to focus on building the core businesses. </FONT></P>
6439
6440
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6441
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6442
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investment
6443
Income.</I> Investment income was $.8 million for 2003 compared to $1.3 million for
6444
2001. The decrease in investment income was primarily due to a decrease in market
6445
interest rates. The Company also incurred $100,000 of interest expense relating to an
6446
IRS audit in 2003. </FONT></P>
6447
6448
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
6449
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>26 </FONT></P>
6450
<HR SIZE=5 NOSHADE>
6451
6452
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
6453
</TD>
6454
</TR>
6455
</TABLE>
6456
<BR>
6457
6458
6459
6460
6461
6462
<!-- *************************************************************************** -->
6463
<!-- MARKER PAGE="sheet: 27; page: 27" -->
6464
6465
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6466
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6467
<TR VALIGN=TOP>
6468
<TD>
6469
<BR>
6470
6471
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6472
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6473
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income
6474
Tax Expense (Benefit).</I>Income tax expense was $4.0 million for 2003 compared to $0
6475
for 2001. The Company did not recognize an income tax benefit in 2001 due to the
6476
increase in net income before tax, offset by changes in deferred tax assets, including
6477
utilization of net operating loss carryforwards for which a full valuation allowance
6478
had been established. </FONT></P>
6479
6480
<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Project" -->
6481
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>2001 Compared to 2000</FONT></H2>
6482
6483
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6484
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6485
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net
6486
Sales.</I> Net sales for 2001 of $76.2 million showed a 23.3% increase over 2000 sales of
6487
$61.8 million. Domestic sales of Breathe Right&reg; products grew to $53.8
6488
million, representing an increase of 8.9% over 2000 sales of $49.4 million. FiberChoice&reg; tablet
6489
sales for 2001 of $6.4 million remained flat from sales of $6.4 million in 2000. </FONT></P>
6490
6491
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6492
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6493
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International
6494
sales increased by 162.3% to $16.0 million compared to 2000 sales of $6.1 million.
6495
This increase was the result of a full year of distribution in Japan, Europe, and
6496
Australia as well as the launch of Breathe Right nasal strips for colds with mentholated
6497
vapors in selected countries. </FONT></P>
6498
6499
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6500
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6501
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross
6502
Profit.</I> Gross profit was $48.5 million for 2001 compared to $36.9 million for 2000.
6503
Gross profit as a percentage of net sales increased to 63.7% for 2001 compared to 59.7%
6504
for 2000. Gross profit in 2000 was unfavorably impacted by the lower gross profit on
6505
10-count FiberChoice chewable tablets, disposal of an excess inventory of pillow
6506
covers and higher costs associated with expediting inventory purchases and deliveries. </FONT></P>
6507
6508
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6509
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6510
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advertising
6511
and Promotion.</I> Advertising and promotion expenses were $34.3 million for 2001 compared
6512
to $39.6 million for 2000. Advertising and promotion expenses as a percentage of net
6513
sales decreased to 44.9% in 2001 from 64.1% in 2000. This decrease in spending rate
6514
was the result of a planned lower support level for FiberChoice tablets in the year
6515
following its introduction and the elimination of less effective expenditures for the
6516
Breathe Right brand. </FONT></P>
6517
6518
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6519
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6520
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Selling,
6521
General and Administrative.</I> Selling, general and administrative expenses were
6522
$14.6 million for 2001 compared to $15.1 million for 2000. Selling, general and
6523
administrative expenses as a percentage of net sales decreased to 19.1% compared to
6524
24.5% for 2000. This decrease was primarily the result of the corporate restructure
6525
that included a workforce reduction that enabled the Company to streamline its resources
6526
to focus on building the core businesses. </FONT></P>
6527
6528
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6529
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6530
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Special
6531
Charges.</I> The Company recorded a special charge of $930,000 in 2001 for the costs of
6532
implementing the Company&#146;s corporate restructuring plan to streamline and realign the
6533
Company&#146;s resources. The charge was primarily for severance benefits. </FONT></P>
6534
6535
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6536
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6537
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investment
6538
Income.</I> Investment income was $1.3 million for 2001 compared to $2.2 million for 2000.
6539
The decrease in investment income was the result of a decrease in funds invested and
6540
lower market interest rates. </FONT></P>
6541
6542
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6543
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6544
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income
6545
Tax Expense (Benefit).</I> There was no income tax benefit for 2001 and 2000 due to fully
6546
reserving for tax loss carryforwards for which a full valuation allowance had been
6547
established. </FONT></P>
6548
6549
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
6550
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>27 </FONT></P>
6551
<HR SIZE=5 NOSHADE>
6552
6553
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
6554
</TD>
6555
</TR>
6556
</TABLE>
6557
<BR>
6558
6559
6560
6561
6562
6563
<!-- *************************************************************************** -->
6564
<!-- MARKER PAGE="sheet: 28; page: 28" -->
6565
6566
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6567
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6568
<TR VALIGN=TOP>
6569
<TD>
6570
<BR>
6571
6572
6573
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
6574
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Three Months ended March
6575
31, 2002 Compared to the Three Months ended March 31, 2001 (unaudited)</B> </FONT></P>
6576
6577
<!-- MARKER FORMAT-SHEET="Para 10" -->
6578
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6579
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Sales</I>. Net sales for
6580
the March 2002 quarter were $19.1 million compared to $23.5 million (unaudited)
6581
for the 2001 quarter, representing a decrease of 18.7%. Domestic sales for the
6582
March 2002 quarter were $15.2 million compared to $18.7 million (unaudited) for
6583
the same quarter of 2001. As anticipated, sales for the 2002 March quarter were
6584
comparably lower due to the significant sales boost generated by the
6585
introduction of mentholated strips in 2001, as well as industry-wide slower
6586
sales of cough/cold products during the 2001/2002 cough/cold season. </FONT></P>
6587
6588
<!-- MARKER FORMAT-SHEET="Para 10" -->
6589
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6590
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International
6591
sales were $3.9 million for the March 2002 quarter compared to $4.7 million
6592
(unaudited) for the same quarter of 2001. Sales for the 2002 March quarter were
6593
lower due to the timing of purchases by international distributors. </FONT></P>
6594
6595
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6596
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6597
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross
6598
Profit.</I> Gross profit was $12.7 million for the March 2002 quarter compared to $14.8
6599
million (unaudited) for the same quarter of 2001. Gross profit as a percentage of
6600
net sales increased to 66.6% for the March 2002 quarter compared to 62.9% (unaudited) for
6601
the same quarter of 2001. The lower gross profit percentage in 2001 resulted primarily
6602
from higher deductions from sales for promotional expenditures in conjunction with the
6603
launch of new products. </FONT></P>
6604
6605
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6606
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6607
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advertising
6608
and Promotion.</I> Advertising and promotion expenses were $8.8 million for the March 2002
6609
quarter compared to $13.9 million (unaudited) for the same quarter in 2001. The
6610
decrease resulted primarily from elimination of less effective advertising expenditures
6611
and the planned reduction in spending for FiberChoice&reg; tablets in the year following
6612
the launch. </FONT></P>
6613
6614
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6615
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6616
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Selling,
6617
General and Administrative.</I> Selling, general and administrative expenses were $3.2
6618
million for the March 2002 quarter compared to $4.8 million (unaudited) for the same
6619
quarter of 2001. This decrease was primarily the result of the June 2001 corporate
6620
restructuring that included a workforce reduction and that has enabled the Company to
6621
streamline its resources to focus on building the core businesses. </FONT></P>
6622
6623
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6624
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6625
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investment
6626
Income.</I> Investment income was $272,000 for the March 2002 quarter compared to
6627
$362,000 (unaudited) for the same quarter of 2001. This decrease was primarily the
6628
result of a decrease in market interest rates. </FONT></P>
6629
6630
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6631
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6632
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income
6633
Tax Expense (Benefit).</I> Income tax benefit was $9.1 million for the March 2002 quarter
6634
compared to $0 (unaudited) taxes for the same quarter of 2001. The Company
6635
recognized a tax benefit of $9.1 million during the March quarter of 2002 as a result of
6636
reinstating net deferred tax assets, including the benefit of net operating loss
6637
carryforwards. Management believes, based on the level of historical taxable income and
6638
projections of future taxable income for the periods in which the deferred tax assets are
6639
deductible, that it is more likely than not the Company will realize the benefits of the
6640
deductible differences. There were no income taxes recognized for the March quarter of
6641
2001 as the Company was in a net operating loss carryforward position. </FONT></P>
6642
6643
<!-- MARKER FORMAT-SHEET="Head Minor" -->
6644
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Seasonality</FONT></H2>
6645
6646
<!-- MARKER FORMAT-SHEET="Para 10" -->
6647
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6648
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6649
Company believes that a portion of Breathe Right&reg; nasal strip use is for the
6650
temporary relief of nasal congestion and congestion-related snoring. Sales of
6651
nasal congestion remedies are higher during the fall and winter seasons because
6652
of increased use during the cough/cold season. </FONT></P>
6653
6654
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
6655
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>28 </FONT></P>
6656
<HR SIZE=5 NOSHADE>
6657
6658
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
6659
</TD>
6660
</TR>
6661
</TABLE>
6662
<BR>
6663
6664
6665
6666
6667
6668
<!-- *************************************************************************** -->
6669
<!-- MARKER PAGE="sheet: 29; page: 29" -->
6670
6671
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6672
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6673
<TR VALIGN=TOP>
6674
<TD>
6675
<BR>
6676
6677
6678
<!-- MARKER FORMAT-SHEET="Head Minor" -->
6679
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Liquidity and
6680
Capital Resources</FONT></H2>
6681
6682
<!-- MARKER FORMAT-SHEET="Para 10" -->
6683
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6684
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
6685
March 31, 2003, the Company had cash, cash equivalents and marketable securities
6686
of $41.6 million and working capital of $45.3 million. </FONT></P>
6687
6688
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6689
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6690
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Operating
6691
Activities.</I> The Company had cash provided by operations of $19.2 million in 2003
6692
primarily due to net income for the year, an increase in operating liabilities and a
6693
decrease in deferred income taxes. The Company used cash in operations of $2.8 million in
6694
2001 primarily due to a decrease in operating liabilities. The Company used cash in
6695
operations of $4.4 million in 2000 primarily due to the net loss for the year, partially
6696
offset by an increase in operating liabilities. The Company used cash in operations of
6697
$53,000 for the three months ended March 31, 2002 compared to $11.4 million (unaudited)
6698
for the same quarter in 2001. The use of cash in 2002 was the result of net income offset
6699
primarily by the non-cash deferred income tax benefit and a decrease in operating
6700
liabilities. The use of cash in the March quarter of 2001 was due to the net loss for the
6701
quarter along with a decrease in operating liabilities. </FONT></P>
6702
6703
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6704
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6705
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investing
6706
Activities.</I> Purchases of marketable securities exceeded sales and maturities by $5.9
6707
million in 2003. Marketable securities purchased consisted primarily of U.S. Government
6708
obligations. Sales and maturities of marketable securities exceeded purchases by $10.6
6709
million in 2001. Net proceeds were used primarily to fund the cash used in operations and
6710
to purchase treasury shares. Sales and maturities of marketable securities exceeded
6711
purchases by $8.8 million in 2000. Net proceeds were used to fund the cash used in
6712
operations, purchase property and equipment and purchase treasury shares. Purchases of
6713
marketable securities exceeded sales and maturities by $372,000 for the three months
6714
ended March 31, 2002. Sales and maturities of marketable securities exceeded purchases by
6715
$10.5 million (unaudited) for the March 31, 2001 quarter. Net proceeds were used
6716
primarily to fund the cash used in operations. </FONT></P>
6717
6718
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6719
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6720
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6721
Company purchased $60,000 and $394,000 of property and equipment in 2003 and 2001,
6722
respectively, primarily associated with upgrading personal computers and software. The
6723
Company purchased $2.0 million of property and equipment in 2000 primarily associated
6724
with the Company&#146;s move to different facilities. The Company purchased $8,000 and
6725
$255,000 (unaudited) of property and equipment in the March 2002 and March 2001 quarter,
6726
respectively. </FONT></P>
6727
6728
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6729
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6730
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6731
Company purchased $510,000; $357,000 and $141,000 of product rights during the years
6732
ended March 31, 2003; December 31, 2001 and 2000, respectively. The Company purchased
6733
$148,000 (unaudited) of product rights during the quarter ended March 31, 2001. </FONT></P>
6734
6735
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6736
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6737
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financing
6738
Activities.</I> The Company purchased 458,000 shares of its common stock for $2.8
6739
million in 2003 and purchased 202,000 shares for $1.0 million in 2001. The Company
6740
purchased 482,000 shares of its common stock for $2.4 million during the quarter ended
6741
March 31, 2002. These treasury shares will be used to meet the Company&#146;s obligations
6742
under its employee stock purchase plan and stock option plans, and for possible future
6743
acquisitions. The Company received $949,000 in 2003 and $288,000 in 2001 from the
6744
exercise of stock options and issuance of stock under the employee stock purchase plan.
6745
The Company received $72,000 from the exercise of stock options during the quarter ended
6746
March 31, 2002. </FONT></P>
6747
6748
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
6749
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>29 </FONT></P>
6750
<HR SIZE=5 NOSHADE>
6751
6752
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
6753
</TD>
6754
</TR>
6755
</TABLE>
6756
<BR>
6757
6758
6759
6760
6761
6762
<!-- *************************************************************************** -->
6763
<!-- MARKER PAGE="sheet: 30; page: 30" -->
6764
6765
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6766
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6767
<TR VALIGN=TOP>
6768
<TD>
6769
<BR>
6770
6771
6772
6773
<!-- MARKER FORMAT-SHEET="Para 10" -->
6774
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6775
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Significant
6776
Agreements and Lease Obligations. </I>The Company has entered into certain
6777
agreements and leases in order to secure product rights and office space. The
6778
following is a summary of significant agreements and lease obligations: </FONT></P>
6779
6780
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
6781
</TD>
6782
</TR>
6783
</TABLE>
6784
<BR>
6785
6786
6787
6788
<table cellpadding=0 cellspacing=0 border=0 width=600>
6789
<tr valign=Bottom>
6790
<td colspan="2" align=left nowrap><b><font face="Times New Roman, Times, serif" size="1">Year
6791
ending March 31,</font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6792
<td align=LEFT nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6793
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">
6794
Minimum <br>
6795
Royalties<br>
6796
</font></b></td>
6797
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6798
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">Operating<br>
6799
Leases <br>
6800
</font></b></td>
6801
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
6802
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">Total</font></b></td>
6803
</tr>
6804
<tr valign=top>
6805
<td colspan="11" align=RIGHT>
6806
<hr NOSHADE size=1>
6807
</td>
6808
</tr>
6809
<tr valign=Bottom bgcolor="#c0c0c0">
6810
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6811
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2004</font></td>
6812
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6813
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
6814
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 795</font></td>
6815
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6816
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
6817
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 766</font></td>
6818
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
6819
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
6820
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 1,561</font></td>
6821
</tr>
6822
<tr valign=Bottom>
6823
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6824
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2005</font></td>
6825
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6826
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6827
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">795</font></td>
6828
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6829
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6830
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741</font></td>
6831
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6832
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6833
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,536</font></td>
6834
</tr>
6835
<tr valign=Bottom bgcolor="#c0c0c0">
6836
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6837
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2006</font></td>
6838
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6839
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6840
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">795</font></td>
6841
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6842
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6843
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741</font></td>
6844
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6845
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6846
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,536</font></td>
6847
</tr>
6848
<tr valign=Bottom>
6849
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6850
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2007</font></td>
6851
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6852
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6853
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">795</font></td>
6854
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6855
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6856
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741</font></td>
6857
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6858
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6859
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,536</font></td>
6860
</tr>
6861
<tr valign=Bottom bgcolor="#c0c0c0">
6862
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6863
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2008</font></td>
6864
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6865
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6866
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">795</font></td>
6867
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6868
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6869
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741</font></td>
6870
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6871
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6872
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,536</font></td>
6873
</tr>
6874
<tr valign=Bottom>
6875
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6876
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">Later
6877
years</font></td>
6878
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6879
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6880
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6881
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6882
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6883
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,977</font></td>
6884
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6885
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6886
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6887
</tr>
6888
<tr valign=top>
6889
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6890
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6891
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6892
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
6893
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6894
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6895
<td align=left colspan="2">
6896
<hr NOSHADE size=1>
6897
</td>
6898
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6899
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
6900
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6901
</tr>
6902
<tr valign=Bottom bgcolor="#c0c0c0">
6903
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6904
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">Total</font></td>
6905
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6906
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6907
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6908
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6909
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
6910
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 5,707</font></td>
6911
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6912
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
6913
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
6914
</tr>
6915
<tr valign=top>
6916
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6917
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6918
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6919
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
6920
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6921
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6922
<td align=left colspan="2">
6923
<hr NOSHADE size=1>
6924
</td>
6925
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
6926
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
6927
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
6928
</tr>
6929
</table>
6930
<BR>
6931
6932
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
6933
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
6934
<TR VALIGN=TOP>
6935
<TD>
6936
6937
6938
<!-- MARKER FORMAT-SHEET="Para 10" -->
6939
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6940
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6941
Company has agreements that exclusively license intellectual property rights for
6942
certain products. Royalties due under these agreements are based on various
6943
percentages of net sales. The licensing agreements are valid for the lives of
6944
the related patents, however, they may be terminated earlier under certain
6945
conditions. Total minimum royalties are not determinable since royalties
6946
continue for the life of current and potential future patents related to the
6947
licensed intellectual property. The Company has entered into operating leases
6948
for office space and office equipment. Leases expire at various dates beginning
6949
in 2003 through 2010. Management is not aware of any significant agreements or
6950
obligations that would have a material negative impact upon the Company&#146;s
6951
short-term or long-term liquidity. </FONT></P>
6952
6953
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6954
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6955
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
6956
Company believes that its existing funds will be sufficient to support its planned
6957
operations for the foreseeable future. </FONT></P>
6958
6959
<!-- MARKER FORMAT-SHEET="Head Minor" -->
6960
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Recent
6961
Accounting Pronouncements</FONT></H2>
6962
6963
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6964
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6965
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
6966
June 2002, the Financial Accounting Standards Board (&#147;FASB&#148;) issued Statement of
6967
Financial Accounting Standards (&#147;SFAS&#148;) No. 146, &#147;Accounting for Costs Associated with
6968
Exit or Disposal Activities.&#148; This statement provides guidance on accounting for
6969
restructuring activities. This statement requires that a liability for a cost
6970
associated with an exit or disposal activity be recognized when the liability is
6971
incurred. The provisions of the statement are effective for exit or disposal
6972
activities initiated after December 31, 2002, with early adoption encouraged. The
6973
Company will apply the provisions of SFAS No. 146 for exit or disposal activities
6974
initiated after December 31, 2002, as required. </FONT></P>
6975
6976
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6977
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6978
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
6979
December 2002, the FASB issued SFAS No. 148, &#147;Accounting for Stock Based
6980
Compensation.&#148; This statement supercedes SFAS No. 123, &#147;Accounting for Stock
6981
Based Compensation&#148;. This statement provides alternative methods of transition for a
6982
voluntary change to the fair value based method of accounting for stock-based
6983
compensation. In addition, the statement amends disclosure requirements to require
6984
prominent disclosures in annual and interim financial statements about the method of
6985
accounting used for stock-based employee compensation and the effect of the method used
6986
on reported results. The interim disclosure provisions became effective for the
6987
Company for the interim period beginning January 1, 2003. The annual disclosure
6988
provisions became effective for the Company for the year ended March 31, 2003. </FONT></P>
6989
6990
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
6991
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
6992
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
6993
November 2002, the FASB issued Interpretation No. 45, &#147;Guarantor&#146;s Accounting and
6994
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
6995
of Others&#148; which requires certain guarantees to be recorded at fair value. This
6996
Interpretation also requires a guarantor to make certain disclosures about
6997
guarantees, including product warranties, even when the likelihood of making any
6998
payments under the guarantee is remote. The Company has adopted the disclosure
6999
requirements in this Interpretation as of January 1, 2003, as required. </FONT></P>
7000
7001
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7002
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>30 </FONT></P>
7003
<HR SIZE=5 NOSHADE>
7004
7005
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7006
</TD>
7007
</TR>
7008
</TABLE>
7009
<BR>
7010
7011
7012
7013
7014
7015
<!-- *************************************************************************** -->
7016
<!-- MARKER PAGE="sheet: 31; page: 31" -->
7017
7018
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7019
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7020
<TR VALIGN=TOP>
7021
<TD>
7022
<BR>
7023
7024
7025
<!-- MARKER FORMAT-SHEET="Para 10" -->
7026
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7027
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
7028
May 2003, the FASB issued SFAS No.150, &#147;Accounting for Certain Financial
7029
Instruments with Characteristics of both Liabilities and Equity&#148; which
7030
requires that certain types of financial instruments with characteristics of a
7031
liability be presented as a liability. The Company is required to implement SFAS
7032
No. 150 beginning with the quarter ending June 30, 2003. Management does not
7033
expect this statement to have a material impact on the Company&#146;s
7034
consolidated financial position. </FONT></P>
7035
7036
<!-- MARKER FORMAT-SHEET="Head Minor" -->
7037
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Forward
7038
Looking Statements</FONT></H2>
7039
7040
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7041
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7042
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
7043
statements contained in this Annual Report and other written and oral statements made
7044
from time to time by the Company do not relate strictly to historical or current facts
7045
but provide current expectations or forecasts of future events. As such, they are
7046
considered &#147;forward-looking statements&#148; under the Private Securities Litigation
7047
Reform Act of 1995 and are subject to certain risks and uncertainties that could cause
7048
actual results to differ materially from those presently anticipated or
7049
projected. Such forward-looking statements can be identified by the use of terminology
7050
such as &#147;may,&#148; &#147;will,&#148; &#147;expect,&#148; &#147;plan,&#148;
7051
&#147;intend,&#148; &#147;anticipate,&#148; &#147;estimate,&#148; or
7052
&#147;continue&#148; or similar words or expressions. It is not possible to foresee or identify
7053
all factors affecting the Company&#146;s forward-looking statements and investors
7054
therefore should not consider any list of factors to be an exhaustive statement of all
7055
risks, uncertainties or potentially inaccurate assumptions. Factors that could cause
7056
actual results to differ from the results discussed in the forward-looking statements
7057
include, but are not limited to, the following factors: (i) the Company&#146;s revenue and
7058
profitability is reliant on sales of Breathe Right&reg; nasal strips; (ii) the Company
7059
currently has a seasonal pattern of sales that is typically higher in the third and
7060
fourth quarters of each fiscal year due to increased nasal strip usage during the
7061
cough/cold season and its revenues and earnings may be impacted by the severity of such
7062
season; (iii) the Company&#146;s success and future growth will depend significantly on its
7063
ability to effectively market Breathe Right nasal strips and upon its ability to
7064
develop and achieve markets for additional products; (iv) the Company&#146;s competitive
7065
position will, to some extent, be dependent on the enforceability and
7066
comprehensiveness of the patents on its Breathe Right nasal strip technology which have
7067
been, and in the future may be, the subject of litigation and could be narrowed as a
7068
result of the outcome of the reexamination of one such patent by the United States Patent
7069
and Trademark Office; (v) the Company has faced and will continue to face challenges in
7070
successfully developing and introducing new products; (vi) the Company operates in
7071
competitive markets where recent and potential entrants into the nasal dilator segment
7072
pose competitive challenges; (vii) the Company is dependent upon contract
7073
manufacturers for the production of all of its products; and (viii) the
7074
Company currently purchases its nasal strip products from different contract
7075
manufacturers that obtain the raw materials from a single supplier. </FONT></P>
7076
7077
<A NAME=A008></A>
7078
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7079
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 7A. QUANTITATIVE
7080
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</U> </FONT></H2>
7081
7082
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7083
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7084
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
7085
Company&#146;s market risk exposure is primarily interest rate risk related to its cash and
7086
cash equivalents and investments in marketable securities. The Company has
7087
investment guidelines which limit the types of securities in which it may invest as
7088
well as the length of maturities. No investment may exceed 36 months in maturity and
7089
the weighted average life of the portfolio may not exceed 18 months. </FONT></P>
7090
7091
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7092
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7093
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
7094
table below provides information about the Company&#146;s cash and cash equivalents and
7095
marketable securities as of March 31, 2003: </FONT></P>
7096
7097
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7098
</TD>
7099
</TR>
7100
</TABLE>
7101
<BR>
7102
7103
7104
7105
<table cellpadding=0 cellspacing=0 border=0 width=500>
7106
<tr valign=Bottom align="center">
7107
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7108
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">(In
7109
Thousands)</font></b></td>
7110
</tr>
7111
<tr valign=Bottom align="center">
7112
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7113
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Cost</font></b></td>
7114
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7115
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Fair
7116
Value</font></b></td>
7117
</tr>
7118
<tr valign=Bottom align="center">
7119
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7120
<td colspan="5">
7121
<hr NOSHADE size=1>
7122
</td>
7123
</tr>
7124
<tr valign=Bottom bgcolor="#c0c0c0">
7125
<td width=70% align=LEFT><font face="Times New Roman, Times, serif" size="2">Due
7126
within one year</font></td>
7127
<td align=left width="2%"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
7128
<td align=RIGHT width="8%"><font face="Times New Roman, Times, serif" size="2"> 27,056</font></td>
7129
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
7130
<td align=left width="2%"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
7131
<td align=RIGHT width="8%"><font face="Times New Roman, Times, serif" size="2"> 27,112</font></td>
7132
</tr>
7133
<tr valign=Bottom>
7134
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Due after
7135
one year through three years</font></td>
7136
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7137
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,237</font></td>
7138
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7139
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7140
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,503</font></td>
7141
</tr>
7142
<tr valign="top">
7143
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
7144
<td colspan=2 align=left>
7145
<hr NOSHADE size=1>
7146
</td>
7147
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
7148
<td colspan=2 align=left>
7149
<hr NOSHADE size=1>
7150
</td>
7151
</tr>
7152
<tr valign=Bottom bgcolor="#c0c0c0">
7153
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7154
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
7155
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 41,293</font></td>
7156
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7157
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
7158
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 41,615</font></td>
7159
</tr>
7160
<tr valign="top">
7161
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
7162
<td colspan=2 align=left>
7163
<hr NOSHADE size=2>
7164
</td>
7165
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
7166
<td colspan=2 align=left>
7167
<hr NOSHADE size=2>
7168
</td>
7169
</tr>
7170
</table>
7171
<BR>
7172
7173
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7174
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7175
<TR VALIGN=TOP>
7176
<TD>
7177
7178
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7179
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>31 </FONT></P>
7180
<HR SIZE=5 NOSHADE>
7181
7182
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7183
</TD>
7184
</TR>
7185
</TABLE>
7186
<BR>
7187
7188
7189
7190
7191
7192
<!-- *************************************************************************** -->
7193
<!-- MARKER PAGE="sheet: 32; page: 32" -->
7194
7195
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7196
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7197
<TR VALIGN=TOP>
7198
<TD>
7199
<BR>
7200
7201
7202
<A NAME=A009></A>
7203
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7204
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 8. FINANCIAL
7205
STATEMENTS AND SUPPLEMENTARY DATA</U> </FONT></H2>
7206
7207
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7208
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7209
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
7210
Consolidated Balance Sheets of the Company as of March 31, 2003 and 2002, and the
7211
related Consolidated Statements of Operations, Stockholders&#146; Equity and Comprehensive
7212
Income (Loss), and Cash Flows for each of the years ended March 31, 2003, December
7213
31, 2001 and December 31, 2000 and for the three months ended March 31, 2002 and 2001
7214
(unaudited), the Notes to the Consolidated Financial Statements and the Report of KPMG
7215
LLP, independent certified public accountants, are listed under Item 16 of this Report. </FONT></P>
7216
7217
<A NAME=A010></A>
7218
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7219
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 9. CHANGES
7220
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND</U><BR>
7221
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>FINANCIAL DISCLOSURE</U> </FONT></H2>
7222
7223
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7224
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7225
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>
7226
7227
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
7228
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART III</FONT></H1>
7229
7230
<A NAME=A011></A>
7231
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7232
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 10.
7233
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT</U> </FONT></H2>
7234
7235
<!-- MARKER FORMAT-SHEET="Head Minor" -->
7236
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Directors</FONT></H2>
7237
7238
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7239
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7240
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
7241
following sets forth certain information with respect to the Company&#146;s directors: </FONT></P>
7242
7243
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7244
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7245
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Daniel
7246
E. Cohen</I>, 50, has served as the Company&#146;s Chairman of the Board since 1993 and has
7247
served as a director of the Company since its formation in 1982. Mr. Cohen also served
7248
as the Company&#146;s Chief Executive Officer from 1989 to June 2001 and as Treasurer
7249
from 1982 to March 1999. Mr. Cohen, a founder of the Company, is a medical doctor
7250
and board-certified neurologist. </FONT></P>
7251
7252
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7253
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7254
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Patrick
7255
Delaney</I>, 60, has served as a director of the Company since 1983 and as the Company&#146;s
7256
Secretary since 1995. In December 2002, Mr. Delaney retired as a partner in the
7257
Minneapolis-based law firm of Lindquist &amp; Vennum P.L.L.P., counsel to the Company.
7258
He was in the private practice of law since 1967. He is also a director of
7259
Community First Bankshares, Inc., a multi-bank holding company. </FONT></P>
7260
7261
<!-- MARKER FORMAT-SHEET="Para 10" -->
7262
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7263
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>R.
7264
Hunt Greene</I>, 52, has served as a director of the Company since 1985. Mr.
7265
Greene has been an investment banker for over twenty years. He is presently
7266
Managing Director and Member of Greene Holcomb &amp; Fisher LLC
7267
(&#147;GH&amp;F&#148;), a Minneapolis investment banking firm that was formed in
7268
1995. GH&amp;F has provided the Company with certain financial advisory and
7269
investment banking services from time to time since 1996. </FONT></P>
7270
7271
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7272
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7273
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Andrew
7274
J. Greenshields</I>, 65, has served as a director of the Company since 1986. Mr.
7275
Greenshields has been President of Pathfinder Ventures, Inc., Minneapolis,
7276
Minnesota, since 1980. He is also a general partner of Pathfinder Venture Capital
7277
Fund III and a general partner of Spell Capital Partners, LP, both of which are
7278
Minneapolis-based financial limited partnerships. Mr. Greenshields is also a director
7279
of Aetrium, Inc., a manufacturer of semi-conductor handling equipment. </FONT></P>
7280
7281
<!-- MARKER FORMAT-SHEET="Para 10" -->
7282
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7283
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>H.
7284
Robert Hawthorne</I>, 58, has served as a director of the Company since 1999.
7285
Mr. Hawthorne served as Chief Executive Officer of Ocean Spray Cranberries, Inc.,
7286
a Boston-based food and beverage company, from February 2000 to November 2002.
7287
From 1997 to 1999, Mr. Hawthorne served as a director, President and Chief
7288
Executive Officer of Select Comfort Corporation, a Minneapolis-based company
7289
that manufactures air beds and sleep related products. From 1986 to 1997, Mr.
7290
Hawthorne served in a series of positions of increasing responsibility with The
7291
Pillsbury Company, a Minneapolis-based manufacturer and distributor of food
7292
products, most recently serving from February 1992 to December 1997 as President
7293
of The Pillsbury Brands Group, a subsidiary of The Pillsbury Company. </FONT></P>
7294
7295
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7296
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>32 </FONT></P>
7297
<HR SIZE=5 NOSHADE>
7298
7299
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7300
</TD>
7301
</TR>
7302
</TABLE>
7303
<BR>
7304
7305
7306
7307
7308
7309
<!-- *************************************************************************** -->
7310
<!-- MARKER PAGE="sheet: 33; page: 33" -->
7311
7312
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7313
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7314
<TR VALIGN=TOP>
7315
<TD>
7316
<BR>
7317
7318
7319
7320
<!-- MARKER FORMAT-SHEET="Para 10" -->
7321
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7322
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Marti
7323
Morfitt</I>, 45, has served as the Company&#146;s President and Chief Executive
7324
Officer since June 2001, its President and Chief Operating Officer from March
7325
1998 to June 2001. Ms. Morfitt has served as a director of the Company since
7326
1998. From September 1982 to February 1998, Ms. Morfitt served in a series of
7327
positions of increasing responsibility with The Pillsbury Company, a
7328
Minneapolis-based manufacturer and distributor of food products, most recently
7329
serving from May 1997 to February 1998 as Vice-President, Meals, and from
7330
February 1994 to May 1997 as Vice-President, Green Giant Brands. She also serves
7331
as a director of Graco, Inc., a Minneapolis-based manufacturer of fluid handling
7332
systems. </FONT></P>
7333
7334
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7335
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7336
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Richard
7337
W. Perkins</I>, 72, has been a director of the Company since 1993. Mr. Perkins has been
7338
President, Chief Executive Officer and a director of Perkins Capital Management, Inc.,
7339
a Minneapolis-based investment management company, since 1985. He is also a general
7340
partner of Spell Capital Partners, LP, a Minneapolis-based venture capital
7341
limited partnership. He is also a director of the following publicly-held companies:
7342
Synovis Life Technologies, Inc., a manufacturer of medical products; Intellefilm
7343
Corp., a producer of television and internet commercials; PW Eagle, Inc., a
7344
manufacturer of plastic pipe; Lifecore Biomedical, Inc., a medical device company;
7345
Nortech Systems, Inc., a contract manufacturer for the electronics industry; Vital
7346
Images, Inc., a medical diagnostic software company; and Paper Warehouse, Inc., a
7347
retailer specializing in party supplies and paper products. </FONT></P>
7348
7349
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7350
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7351
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Morris
7352
J. Siegel</I>, 53, has served as a director of the Company since April 18, 2003. Mr.
7353
Siegel is the founder and retired chairman of Celestial Seasonings, Inc., a
7354
manufacturer and marketer of specialty herb teas. In 2000, Celestial Seasonings merged
7355
with The Hain Food Group, a natural, specialty, organic and snack food company. Mr.
7356
Siegel then served as vice chairman of the merged company, The Hain Celestial Group,
7357
Inc. and was Chief Executive Officer of Celestial Seasonings until September 2002. In
7358
1987, Mr. Siegel founded Earth Wise, Inc., a marketer of environmentally friendly
7359
cleaning products and recycled trash bags. Mr. Siegel also currently serves as a
7360
director of Annie&#146;s Homegrown Foods, Inc., which manufactures, markets and sells
7361
premium all natural and organic macaroni and cheese dinners, all natural pasta meals
7362
and other all natural and organic food products, and is a subsidiary of Solera Capital
7363
LLC. </FONT></P>
7364
7365
<!-- MARKER FORMAT-SHEET="Para Cutoff Rule" FSL="Project" -->
7366
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=CENTER>
7367
7368
7369
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7370
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7371
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
7372
other information required under this Item with respect to directors is contained in
7373
the Section &#147;Election of Directors&#148; and &#147;Section 16(a) Beneficial Ownership Reporting
7374
Compliance&#148; in the Company&#146;s Proxy Statement for the Annual Meeting of Stockholders
7375
to be held on August 27, 2003 (the "2003 Proxy Statement&#148;), a definitive copy of which
7376
will be filed with the Commission within 120 days of the close of the last fiscal year,
7377
and is incorporated herein by reference. </FONT></P>
7378
7379
<!-- MARKER FORMAT-SHEET="Head Minor" -->
7380
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Executive
7381
Officers</FONT></H2>
7382
7383
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7384
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7385
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
7386
concerning executive officers is set forth in the Section entitled &#147;Executive Officers
7387
of the Company&#148; in Part I of this Form 10-K pursuant to Instruction 3 to paragraph (b) of
7388
Item 401 of Regulation S-K. </FONT></P>
7389
7390
<A NAME=A012></A>
7391
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7392
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 11. EXECUTIVE
7393
COMPENSATION</U> </FONT></H2>
7394
7395
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7396
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7397
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
7398
required under this item is contained in the section entitled &#147;Executive
7399
Compensation&#148; in the Company&#146;s 2003 Proxy Statement and is incorporated herein by
7400
reference. </FONT></P>
7401
7402
<A NAME=A013></A>
7403
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7404
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 12. SECURITY
7405
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</U> </FONT></H2>
7406
7407
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7408
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7409
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
7410
required under this item is contained in the section entitled &#147;Security Ownership of
7411
Principal Stockholders and Management&#148; in the Company&#146;s 2003 Proxy Statement and is
7412
incorporated herein by reference. </FONT></P>
7413
7414
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7415
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>33 </FONT></P>
7416
<HR SIZE=5 NOSHADE>
7417
7418
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7419
</TD>
7420
</TR>
7421
</TABLE>
7422
<BR>
7423
7424
7425
7426
7427
7428
<!-- *************************************************************************** -->
7429
<!-- MARKER PAGE="sheet: 34; page: 34" -->
7430
7431
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7432
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7433
<TR VALIGN=TOP>
7434
<TD>
7435
<BR>
7436
7437
7438
<A NAME=A014></A>
7439
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7440
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 13. CERTAIN
7441
RELATIONSHIPS AND RELATED TRANSACTIONS</U> </FONT></H2>
7442
7443
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7444
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7445
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
7446
required under this item is contained in the section entitled &#147;Certain Relationships
7447
and Related Transactions&#148; in the Company&#146;s 2003 Proxy Statement and is incorporated
7448
herein by reference. </FONT></P>
7449
7450
<A NAME=A015></A>
7451
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7452
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 14. CONTROLS AND
7453
PROCEDURES</U> </FONT></H2>
7454
7455
<!-- MARKER FORMAT-SHEET="Head Minor" -->
7456
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>(a) Evaluation
7457
of Disclosure Controls and Procedures.</FONT></H2>
7458
7459
<!-- MARKER FORMAT-SHEET="Para 10" -->
7460
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7461
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
7462
Company&#146;s Chief Executive Officer, Marti Morfitt, and interim Chief
7463
Financial Officer, Marcia O&#146;Brien, have reviewed the Company&#146;s
7464
disclosure controls and procedures within 90 days prior to the filing of this
7465
report. Based upon this review, each such officer believes that the
7466
Company&#146;s disclosure controls and procedures are effective in ensuring that
7467
material information related to the Company is made known to her by others
7468
within the Company. </FONT></P>
7469
7470
<!-- MARKER FORMAT-SHEET="Head Minor" -->
7471
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>(b) Changes in
7472
Internal Controls.</FONT></H2>
7473
7474
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7475
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7476
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
7477
were no significant changes in the Company&#146;s internal controls or in other factors that
7478
could significantly affect these controls during the quarter covered by this report or
7479
from the end of the reporting period to the date of this Form 10-K. </FONT></P>
7480
7481
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7482
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>34 </FONT></P>
7483
<HR SIZE=5 NOSHADE>
7484
7485
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7486
</TD>
7487
</TR>
7488
</TABLE>
7489
<BR>
7490
7491
7492
7493
7494
7495
<!-- *************************************************************************** -->
7496
<!-- MARKER PAGE="sheet: 35; page: 35" -->
7497
7498
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7499
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7500
<TR VALIGN=TOP>
7501
<TD>
7502
<BR>
7503
7504
7505
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
7506
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART IV</FONT></H1>
7507
7508
<A NAME=A016></A>
7509
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7510
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 15. [RESERVED]</U> </FONT></H2>
7511
7512
<A NAME=A017></A>
7513
<!-- MARKER FORMAT-SHEET="Head Minor Underlined" FSL="Project" -->
7514
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><U>Item 16.
7515
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K</U> </FONT></H2>
7516
7517
7518
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7519
</TD>
7520
</TR>
7521
</TABLE>
7522
<BR>
7523
7524
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
7525
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
7526
<TR VALIGN=TOP>
7527
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
7528
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
7529
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents
7530
filed as part of this Report: </FONT></TD>
7531
</TR>
7532
</TABLE>
7533
<BR>
7534
7535
7536
7537
7538
7539
<A NAME=A021></A>
7540
<table cellpadding=0 cellspacing=0 border=0 width=600>
7541
<tr valign=Bottom>
7542
<td width=3% align=LEFT nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7543
<td width=3% align=LEFT nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7544
<td width=2% align=LEFT nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7545
<td width=86% align=LEFT nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
7546
<td width=3% align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">
7547
Form 10-K<br>
7548
Page Reference</font></b></td>
7549
</tr>
7550
<tr valign=top>
7551
<td width=3% align=LEFT>&nbsp;</td>
7552
<td width=3% align=LEFT>&nbsp;</td>
7553
<td width=2% align=LEFT>&nbsp;</td>
7554
<td width=86% align=LEFT>&nbsp;</td>
7555
<td width=3% align=center nowrap>
7556
<hr NOSHADE size=1>
7557
</td>
7558
</tr>
7559
<tr valign=Bottom>
7560
<td width=3% align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
7561
<td width=3% align=LEFT><font face="Times New Roman, Times, serif" size="2">1.</font></td>
7562
<td width=2% align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
7563
<td width=86% align=LEFT><font face="Times New Roman, Times, serif" size="2">Financial
7564
Statements.</font></td>
7565
<td width=3% align=center nowrap><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7566
</tr>
7567
<tr valign=Bottom>
7568
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7569
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7570
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7571
<td align=LEFT width="100%"><font face="Times New Roman, Times, serif" size="2"></font></td>
7572
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7573
</tr>
7574
<tr valign=Bottom>
7575
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7576
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7577
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7578
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A022">Independent
7579
Auditors&#146; Report</A></font></td>
7580
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-1</font></td>
7581
</tr>
7582
<tr valign=Bottom>
7583
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7584
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7585
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7586
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7587
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7588
</tr>
7589
<tr valign=Bottom>
7590
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7591
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7592
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7593
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A023">Consolidated
7594
Statements of Operations for the Years Ended</A></font></td>
7595
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7596
</font></td>
7597
</tr>
7598
<tr valign=Bottom>
7599
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7600
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7601
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7602
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A023">March
7603
31, 2003, December 31, 2001 and December 31, 2000 and</A></font></td>
7604
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7605
</font></td>
7606
</tr>
7607
<tr valign=Bottom>
7608
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7609
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7610
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7611
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A023">for
7612
the three months ended March 31, 2002 and March 31, 2001 (unaudited)</A></font></td>
7613
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-2</font></td>
7614
</tr>
7615
<tr valign=Bottom>
7616
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7617
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7618
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7619
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7620
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7621
</tr>
7622
<tr valign=Bottom>
7623
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7624
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7625
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7626
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A024">Consolidated
7627
Balance Sheets as of March 31, 2003 and 2002</A></font></td>
7628
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-3</font></td>
7629
</tr>
7630
<tr valign=Bottom>
7631
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7632
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7633
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7634
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7635
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7636
</tr>
7637
<tr valign=Bottom>
7638
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7639
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7640
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7641
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A025">Consolidated
7642
Statements of Stockholders&#146; Equity and Comprehensive</A></font></td>
7643
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7644
</font></td>
7645
</tr>
7646
<tr valign=Bottom>
7647
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7648
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7650
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A025">Income
7651
(Loss) for the Years Ended March 31, 2003, December 31, 2001</A></font></td>
7652
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7653
</font></td>
7654
</tr>
7655
<tr valign=Bottom>
7656
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7657
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7658
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7659
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A025">and
7660
December 31, 2000 and for the three months ended</A></font></td>
7661
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7662
</font></td>
7663
</tr>
7664
<tr valign=Bottom>
7665
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7666
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7667
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7668
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A025">March
7669
31, 2002 and March 31, 2001 (unaudited)</A></font></td>
7670
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-4</font></td>
7671
</tr>
7672
<tr valign=Bottom>
7673
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7674
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7675
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7676
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7677
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7678
</tr>
7679
<tr valign=Bottom>
7680
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7681
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7682
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7683
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A026">Consolidated
7684
Statements of Cash Flows for the Years Ended</A></font></td>
7685
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7686
</font></td>
7687
</tr>
7688
<tr valign=Bottom>
7689
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7690
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7691
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7692
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A026">March
7693
31, 2003, December 31, 2001 and December 31, 2000 and</A></font></td>
7694
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7695
</font></td>
7696
</tr>
7697
<tr valign=Bottom>
7698
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7699
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7700
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7701
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;<A HREF="#A026">for
7702
the three months ended March 31, 2002 and March 31, 2001 (unaudited)</A></font></td>
7703
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-5</font></td>
7704
</tr>
7705
<tr valign=Bottom>
7706
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7707
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7708
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7709
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7710
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7711
</tr>
7712
<tr valign=Bottom>
7713
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7714
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7715
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7716
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"><A HREF="#A027">Notes to
7717
Consolidated Financial Statements</A></font></td>
7718
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">F-6</font></td>
7719
</tr>
7720
<tr valign=Bottom>
7721
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7722
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7723
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7724
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7725
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7726
</tr>
7727
<tr valign=Bottom>
7728
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7729
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">2.</font></td>
7730
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7731
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Financial
7732
Statement Schedules.</font></td>
7733
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7734
</font></td>
7735
</tr>
7736
<tr valign=Bottom>
7737
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7738
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7739
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7740
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7741
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7742
</tr>
7743
<tr valign=Bottom>
7744
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7745
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7746
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7747
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">None.</font></td>
7748
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7749
</font></td>
7750
</tr>
7751
<tr valign=Bottom>
7752
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7753
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7754
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7755
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7756
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7757
</tr>
7758
<tr valign=Bottom>
7759
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7760
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">3.</font></td>
7761
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7762
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Exhibits.</font></td>
7763
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7764
</font></td>
7765
</tr>
7766
<tr valign=Bottom>
7767
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
7768
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7769
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7770
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7771
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2"></font></td>
7772
</tr>
7773
<tr valign=Bottom>
7774
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
7775
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
7776
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
7777
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">See &#147;Exhibit
7778
Index&#148; on the page following the Signature Page.</font></td>
7779
<td align=center nowrap><font face="Times New Roman, Times, serif" size="2">
7780
</font></td>
7781
</tr>
7782
</table>
7783
<BR>
7784
7785
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
7786
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
7787
<TR VALIGN=TOP>
7788
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
7789
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
7790
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reports
7791
on Form 8-K. </FONT></TD>
7792
</TR>
7793
</TABLE>
7794
<BR>
7795
7796
7797
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 2" FSL="Project" -->
7798
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
7799
<TR VALIGN=TOP>
7800
<TD WIDTH=11%>&nbsp;</TD>
7801
<TD WIDTH=89%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>None.</FONT></TD>
7802
</TR>
7803
</TABLE>
7804
<BR>
7805
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7806
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7807
<TR VALIGN=TOP>
7808
<TD>
7809
7810
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7811
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>35 </FONT></P>
7812
<HR SIZE=5 NOSHADE>
7813
7814
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7815
</TD>
7816
</TR>
7817
</TABLE>
7818
<BR>
7819
7820
7821
7822
7823
7824
<!-- *************************************************************************** -->
7825
<!-- MARKER PAGE="sheet: 36; page: 36" -->
7826
7827
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7828
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7829
<TR VALIGN=TOP>
7830
<TD>
7831
<BR>
7832
7833
7834
7835
<A NAME=A018></A>
7836
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
7837
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES</FONT></H1>
7838
7839
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7840
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7841
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
7842
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
7843
the Registrant has duly caused this report to be signed on its behalf by the
7844
undersigned, thereunto duly authorized. </FONT></P>
7845
7846
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7847
</TD>
7848
</TR>
7849
</TABLE>
7850
<BR>
7851
7852
7853
<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Project" -->
7854
<table width=600 cellspacing=0 cellpadding=0 border=0>
7855
<tr valign=TOP>
7856
<td width=40%><font face="Times New Roman, Times, Serif" size=2><br>
7857
<br>
7858
<br>
7859
<br>
7860
Dated: June 26, 2003</font></td>
7861
<td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
7862
<td width=50%><font face="Times New Roman, Times, Serif" size=2>CNS, INC.<br>
7863
(&#147;Registrant&#148;)<br>
7864
<br>
7865
<br>
7866
By /s/ Marti Morfitt<br>
7867
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
7868
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marti Morfitt<br>
7869
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive Officer and Director</font></td>
7870
</tr>
7871
</table>
7872
<BR>
7873
7874
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7875
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7876
<TR VALIGN=TOP>
7877
<TD>
7878
<BR>
7879
7880
7881
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7882
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7883
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
7884
to the requirements of the Securities Exchange Act of 1934, this Report has been
7885
signed by the following persons on June 26, 2003 on behalf of the Registrant in the
7886
capacities indicated. </FONT></P>
7887
7888
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
7889
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Power of
7890
Attorney and Signatures)</FONT></H1>
7891
7892
<!-- MARKER FORMAT-SHEET="Para 10" FSL="Project" -->
7893
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
7894
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
7895
person whose signature appears below constitutes and appoints DANIEL E. COHEN and
7896
MARTI MORFITT as his or her true and lawful attorneys-in-fact and agents, each acting
7897
alone, with the full power of substitution and resubstitution, for him or her and in
7898
his or her name, place and stead, in any and all capacities, to sign any or all
7899
amendments to this Annual Report on Form 10-K and to file the same, with all exhibits
7900
thereto, and other documents in connection therewith, with the Securities and Exchange
7901
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
7902
full power and authority to do and perform each and every act and thing requisite and
7903
necessary to be done in and about the premises, as fully to all intents and purposes as
7904
he or she might or could do in person, hereby ratifying and confirming all said
7905
attorneys-in-fact and agents, each acting alone, or his or her substitute or
7906
substitutes, may lawfully do or cause to be done by virtue thereof. </FONT></P>
7907
7908
7909
7910
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7911
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Marti
7912
Morfitt<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Marti
7913
Morfitt<BR>Chief Executive Officer and Director<BR>(Principal Executive Officer)
7914
</FONT></P>
7915
7916
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7917
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Marcia
7918
O&#146;Brien<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Marcia
7919
O&#146;Brien<BR>Interim Chief Financial Officer<BR>(Principal Financial and Accounting
7920
Officer) </FONT></P>
7921
7922
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7923
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Daniel E. Cohen<BR>
7924
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Daniel
7925
E. Cohen<BR>Chairman of the Board and Director </FONT></P>
7926
7927
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7928
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Patrick Delaney<BR>
7929
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Patrick
7930
Delaney<BR>Director </FONT></P>
7931
7932
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7933
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>36 </FONT></P>
7934
<HR SIZE=5 NOSHADE>
7935
7936
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7937
</TD>
7938
</TR>
7939
</TABLE>
7940
<BR>
7941
7942
7943
7944
7945
7946
<!-- *************************************************************************** -->
7947
<!-- MARKER PAGE="sheet: 37; page: 37" -->
7948
7949
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7950
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
7951
<TR VALIGN=TOP>
7952
<TD>
7953
<BR>
7954
7955
7956
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7957
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ H. Robert Hawthorne<BR>
7958
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>H.
7959
Robert Hawthorne <BR>Director </FONT></P>
7960
7961
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7962
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ R. Hunt Greene<BR>
7963
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>R.
7964
Hunt Greene <BR>Director </FONT></P>
7965
7966
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7967
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Andrew J. Greenshields<BR>
7968
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Andrew
7969
J. Greenshields <BR>Director </FONT></P>
7970
7971
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7972
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Richard W. Perkins<BR>
7973
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Richard
7974
W. Perkins <BR>Director </FONT></P>
7975
7976
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
7977
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ Morris J. Siegel<BR>
7978
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>Morris
7979
J. Siegel <BR>Director </FONT></P>
7980
7981
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
7982
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>37 </FONT></P>
7983
<HR SIZE=5 NOSHADE>
7984
7985
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
7986
</TD>
7987
</TR>
7988
</TABLE>
7989
<BR>
7990
7991
7992
7993
7994
7995
<!-- *************************************************************************** -->
7996
<!-- MARKER PAGE="sheet: 38; page: 38" -->
7997
7998
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
7999
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8000
<TR VALIGN=TOP>
8001
<TD>
8002
<BR>
8003
8004
8005
<A NAME=A019></A>
8006
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
8007
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATIONS</FONT></H1>
8008
8009
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
8010
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Marti Morfitt, certify
8011
that: </FONT></P>
8012
8013
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8014
</TD>
8015
</TR>
8016
</TABLE>
8017
<BR>
8018
8019
8020
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8021
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8022
<TR VALIGN=TOP>
8023
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
8024
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8025
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8026
have reviewed this annual report on Form 10-K of CNS, Inc.; </FONT></TD>
8027
</TR>
8028
</TABLE>
8029
<BR>
8030
8031
8032
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
8033
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8034
<TR VALIGN=TOP>
8035
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
8036
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8037
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
8038
Based on my knowledge, this annual report does not contain any untrue statement
8039
of a material fact or omit to state a material fact necessary to make the
8040
statements made, in light of the circumstances under which such statements were
8041
made, not misleading with respect to the period covered by this annual report; </FONT></TD>
8042
</TR>
8043
</TABLE>
8044
<BR>
8045
8046
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
8047
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8048
<TR VALIGN=TOP>
8049
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
8050
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8051
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
8052
Based on my knowledge, the financial statements, and other financial information
8053
included in this annual report, fairly present in all material respects the
8054
financial condition, results of operations and cash flows of the registrant as
8055
of, and for, the periods presented in this annual report; </FONT></TD>
8056
</TR>
8057
</TABLE>
8058
<BR>
8059
8060
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8061
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8062
<TR VALIGN=TOP>
8063
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
8064
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8065
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8066
am responsible for establishing and maintaining disclosure controls and procedures (as
8067
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have: </FONT></TD>
8068
</TR>
8069
</TABLE>
8070
<BR>
8071
8072
8073
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8074
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8075
<TR VALIGN=TOP>
8076
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8077
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8078
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> a) </FONT></TD>
8079
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8080
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed
8081
such disclosure controls and procedures to ensure that material information relating to
8082
the registrant, including its consolidated subsidiaries, is made
8083
known to me by others within those entities, particularly during the
8084
period in which this annual report is being prepared;</FONT></TD>
8085
</TR>
8086
</TABLE>
8087
<BR>
8088
8089
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8090
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8091
<TR VALIGN=TOP>
8092
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8093
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8094
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
8095
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8096
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated
8097
the effectiveness of the registrant&#146;s disclosure controls and procedures as of a
8098
date within 90 days prior to the filing date of this annual report (the
8099
&#147;Evaluation Date&#148;); and</FONT></TD>
8100
</TR>
8101
</TABLE>
8102
<BR>
8103
8104
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8105
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8106
<TR VALIGN=TOP>
8107
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8108
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8109
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> c) </FONT></TD>
8110
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8111
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented
8112
in this annual report our conclusions about the effectiveness of the disclosure controls
8113
and procedures based on our evaluation as of the Evaluation Date;</FONT></TD>
8114
</TR>
8115
</TABLE>
8116
<BR>
8117
8118
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
8119
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8120
<TR VALIGN=TOP>
8121
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
8122
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8123
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
8124
I have disclosed, based on our most recent evaluation, to the registrant&#146;s
8125
auditors and the audit committee of registrant&#146;s board of directors (or
8126
persons performing the equivalent function): </FONT></TD>
8127
</TR>
8128
</TABLE>
8129
<BR>
8130
8131
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8132
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8133
<TR VALIGN=TOP>
8134
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8135
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8136
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> a) </FONT></TD>
8137
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8138
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all
8139
significant deficiencies in the design or operation of internal controls which could
8140
adversely affect the registrant&#146;s ability to record, process, summarize and
8141
report financial data and have identified for the registrant&#146;s
8142
auditors any material weaknesses in internal controls; and</FONT></TD>
8143
</TR>
8144
</TABLE>
8145
<BR>
8146
8147
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8148
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8149
<TR VALIGN=TOP>
8150
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8151
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8152
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> b) </FONT></TD>
8153
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8154
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
8155
fraud, whether or not material, that involves management or other employees who have a
8156
significant role in the registrant&#146;s internal controls; and</FONT></TD>
8157
</TR>
8158
</TABLE>
8159
<BR>
8160
8161
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" -->
8162
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8163
<TR VALIGN=TOP>
8164
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.</FONT></TD>
8165
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8166
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
8167
I have indicated in this annual report whether or not there were significant
8168
changes in internal controls or in other factors that could significantly affect
8169
internal controls subsequent to the date of our most recent evaluation,
8170
including any corrective actions with regard to significant deficiencies and
8171
material weaknesses. </FONT></TD>
8172
</TR>
8173
</TABLE>
8174
<BR>
8175
8176
<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Project" -->
8177
<table width=600 cellspacing=0 cellpadding=0 border=0>
8178
<tr valign=TOP>
8179
<td width=40%><font face="Times New Roman, Times, Serif" size=2><br>
8180
Date June 26, 2003</font></td>
8181
<td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
8182
<td width=50%><font face="Times New Roman, Times, Serif" size=2><br>
8183
/s/ Marti Morfitt<br>
8184
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
8185
Chief Executive Officer</font></td>
8186
</tr>
8187
</table>
8188
<BR>
8189
8190
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8191
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8192
<TR VALIGN=TOP>
8193
<TD>
8194
8195
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
8196
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>38 </FONT></P>
8197
<HR SIZE=5 NOSHADE>
8198
8199
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8200
</TD>
8201
</TR>
8202
</TABLE>
8203
<BR>
8204
8205
8206
8207
8208
8209
<!-- *************************************************************************** -->
8210
<!-- MARKER PAGE="sheet: 39; page: 39" -->
8211
8212
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8213
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8214
<TR VALIGN=TOP>
8215
<TD>
8216
<BR>
8217
8218
8219
8220
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
8221
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATIONS</FONT></H1>
8222
8223
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
8224
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Marcia O&#146;Brien,
8225
certify that: </FONT></P>
8226
8227
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8228
</TD>
8229
</TR>
8230
</TABLE>
8231
<BR>
8232
8233
8234
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8235
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8236
<TR VALIGN=TOP>
8237
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
8238
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8239
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8240
have reviewed this annual report on Form 10-K of CNS, Inc.; </FONT></TD>
8241
</TR>
8242
</TABLE>
8243
<BR>
8244
8245
8246
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8247
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8248
<TR VALIGN=TOP>
8249
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.</FONT></TD>
8250
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8251
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
8252
on my knowledge, this annual report does not contain any untrue statement of a material
8253
fact or omit to state a material fact necessary to make the statements made, in light of
8254
the circumstances under which such statements were made, not misleading with respect to
8255
the period covered by this annual report; </FONT></TD>
8256
</TR>
8257
</TABLE>
8258
<BR>
8259
8260
8261
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8262
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8263
<TR VALIGN=TOP>
8264
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.</FONT></TD>
8265
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8266
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
8267
on my knowledge, the financial statements, and other financial information included in
8268
this annual report, fairly present in all material respects the financial condition,
8269
results of operations and cash flows of the registrant as of, and for, the periods
8270
presented in this annual report; </FONT></TD>
8271
</TR>
8272
</TABLE>
8273
<BR>
8274
8275
8276
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8277
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8278
<TR VALIGN=TOP>
8279
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
8280
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8281
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8282
am responsible for establishing and maintaining disclosure controls and procedures (as
8283
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have: </FONT></TD>
8284
</TR>
8285
</TABLE>
8286
<BR>
8287
8288
8289
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8290
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8291
<TR VALIGN=TOP>
8292
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8293
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8294
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> a) </FONT></TD>
8295
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8296
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>designed
8297
such disclosure controls and procedures to ensure that material information relating to
8298
the registrant, including its consolidated subsidiaries, is made
8299
known to me by others within those entities, particularly during the
8300
period in which this annual report is being prepared;</FONT></TD>
8301
</TR>
8302
</TABLE>
8303
<BR>
8304
8305
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8306
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8307
<TR VALIGN=TOP>
8308
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8309
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8310
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
8311
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8312
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>evaluated
8313
the effectiveness of the registrant&#146;s disclosure controls and procedures as of a
8314
date within 90 days prior to the filing date of this annual report (the
8315
&#147;Evaluation Date&#148;); and</FONT></TD>
8316
</TR>
8317
</TABLE>
8318
<BR>
8319
8320
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8321
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8322
<TR VALIGN=TOP>
8323
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8324
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8325
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> c) </FONT></TD>
8326
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8327
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>presented
8328
in this annual report our conclusions about the effectiveness of the disclosure controls
8329
and procedures based on our evaluation as of the Evaluation Date;</FONT></TD>
8330
</TR>
8331
</TABLE>
8332
<BR>
8333
8334
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8335
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8336
<TR VALIGN=TOP>
8337
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
8338
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8339
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8340
have disclosed, based on our most recent evaluation, to the registrant&#146;s auditors
8341
and the audit committee of registrant&#146;s board of directors (or persons performing
8342
the equivalent function): </FONT></TD>
8343
</TR>
8344
</TABLE>
8345
<BR>
8346
8347
8348
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8349
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8350
<TR VALIGN=TOP>
8351
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8352
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8353
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> a) </FONT></TD>
8354
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8355
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all
8356
significant deficiencies in the design or operation of internal controls which could
8357
adversely affect the registrant&#146;s ability to record, process, summarize and
8358
report financial data and have identified for the registrant&#146;s
8359
auditors any material weaknesses in internal controls; and</FONT></TD>
8360
</TR>
8361
</TABLE>
8362
<BR>
8363
8364
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 In 1" FSL="Project" -->
8365
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8366
<TR VALIGN=TOP>
8367
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8368
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8369
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> b) </FONT></TD>
8370
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8371
<TD WIDTH=88%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
8372
fraud, whether or not material, that involves management or other employees who have a
8373
significant role in the registrant&#146;s internal controls; and</FONT></TD>
8374
</TR>
8375
</TABLE>
8376
<BR>
8377
8378
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8379
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8380
<TR VALIGN=TOP>
8381
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.</FONT></TD>
8382
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8383
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
8384
have indicated in this annual report whether or not there were significant changes in
8385
internal controls or in other factors that could significantly affect internal controls
8386
subsequent to the date of our most recent evaluation, including any corrective actions
8387
with regard to significant deficiencies and material weaknesses. </FONT></TD>
8388
</TR>
8389
</TABLE>
8390
<BR>
8391
8392
<table width=600 cellspacing=0 cellpadding=0 border=0>
8393
<tr valign=TOP>
8394
<td width=40%><font face="Times New Roman, Times, Serif" size=2><br>
8395
Date June 26, 2003</font></td>
8396
<td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
8397
<td width=50%><font face="Times New Roman, Times, Serif" size=2><br>
8398
/s/ Marcia O&#146;Brien<br>
8399
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
8400
Interim Chief Financial Officer</font></td>
8401
</tr>
8402
</table>
8403
<BR>
8404
8405
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8406
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8407
<TR VALIGN=TOP>
8408
<TD>
8409
8410
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
8411
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>39 </FONT></P>
8412
<HR SIZE=5 NOSHADE>
8413
8414
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8415
</TD>
8416
</TR>
8417
</TABLE>
8418
<BR>
8419
8420
8421
8422
8423
8424
<!-- *************************************************************************** -->
8425
<!-- MARKER PAGE="sheet: 40; page: 40" -->
8426
8427
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8428
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8429
<TR VALIGN=TOP>
8430
<TD>
8431
<BR>
8432
8433
8434
<A NAME=A020></A>
8435
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
8436
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>CNS, INC.<BR><U>EXHIBIT INDEX</U> </FONT></P>
8437
8438
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8439
</TD>
8440
</TR>
8441
</TABLE>
8442
<BR>
8443
8444
8445
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8446
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8447
<TR VALIGN=TOP>
8448
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Exhibit No.</U></B> </FONT></TD>
8449
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8450
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Description</U></B> </FONT></TD>
8451
</TR>
8452
</TABLE>
8453
<BR>
8454
8455
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8456
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8457
<TR VALIGN=TOP>
8458
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1 </FONT></TD>
8459
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8460
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Company&#146;s
8461
Certificate of Incorporation as amended to date (incorporated by reference to Exhibit
8462
3.1 to the Company&#146;s Annual Report on Form 10-K for the year
8463
ended December 31, 1995 (the "1995 Form 10-K&#148;)). </FONT></TD>
8464
</TR>
8465
</TABLE>
8466
<BR>
8467
8468
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8469
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8470
<TR VALIGN=TOP>
8471
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2 </FONT></TD>
8472
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8473
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Company&#146;s
8474
Amended and Restated By-Laws (incorporated by reference to Exhibit 3.1 of the
8475
Company&#146;s Annual Report on Form 10-K for the year ended December 31,
8476
2001). </FONT></TD>
8477
</TR>
8478
</TABLE>
8479
<BR>
8480
8481
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8482
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8483
<TR VALIGN=TOP>
8484
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1 </FONT></TD>
8485
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8486
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form
8487
of Amended and Restated Rights Agreement dated as of December 20, 2002 by and between
8488
CNS, Inc. and Wells Fargo Bank Minnesota, N.A., as Rights Agent
8489
(incorporated by reference to Exhibit 4.1 to the Company&#146;s
8490
Amendment No. 1 to Registration Statement on Form 8-A/A, Commission File No. 0-16612). </FONT></TD>
8491
</TR>
8492
</TABLE>
8493
<BR>
8494
8495
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8496
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8497
<TR VALIGN=TOP>
8498
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1* </FONT></TD>
8499
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8500
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS,
8501
Inc. 1987 Employee Incentive Stock Option Plan (incorporated by reference to
8502
Exhibit 10.1 to the Company&#146;s Registration Statement on Form S-18,
8503
Commission File No. 33-14052C). </FONT></TD>
8504
</TR>
8505
</TABLE>
8506
<BR>
8507
8508
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8509
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8510
<TR VALIGN=TOP>
8511
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2* </FONT></TD>
8512
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8513
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS,
8514
Inc. 1989 Employee Stock Purchase Plan, as amended (incorporated by reference to
8515
Exhibits 4.1 and 4.2 to the Company&#146;s Registration Statement on Form
8516
S-8, Commission File No. 333-68310). </FONT></TD>
8517
</TR>
8518
</TABLE>
8519
<BR>
8520
8521
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8522
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8523
<TR VALIGN=TOP>
8524
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.3* </FONT></TD>
8525
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8526
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS,
8527
Inc. 1990 Stock Plan (incorporated by reference to Exhibit 10.11 to the Company&#146;s Annual
8528
Report on Form 10-K for the year ended December 31, 1990). </FONT></TD>
8529
</TR>
8530
</TABLE>
8531
<BR>
8532
8533
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8534
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8535
<TR VALIGN=TOP>
8536
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.4* </FONT></TD>
8537
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8538
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS,
8539
Inc. 1994 Amended Stock Plan (incorporated by reference to Exhibit 10.5 to the Company&#146;s
8540
Annual Report on Form 10-K for the year ended December 31, 1997). </FONT></TD>
8541
</TR>
8542
</TABLE>
8543
<BR>
8544
8545
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8546
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8547
<TR VALIGN=TOP>
8548
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5* </FONT></TD>
8549
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8550
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS,
8551
Inc. 2000 Stock Option Plan (incorporated by reference to Exhibit 4.1 of the Company&#146;s
8552
Registration Statement on Form S-8 (File No. 333-42108)). </FONT></TD>
8553
</TR>
8554
</TABLE>
8555
<BR>
8556
8557
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8558
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8559
<TR VALIGN=TOP>
8560
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6** </FONT></TD>
8561
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8562
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
8563
Agreement dated January 30, 1992 between the Company and Creative Integration and
8564
Design, Inc. (incorporated by reference to Exhibit 10.11 to the
8565
Company&#146;s Registration Statement on Form S-2, Commission File
8566
No. 33-46120). </FONT></TD>
8567
</TR>
8568
</TABLE>
8569
<BR>
8570
8571
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8572
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8573
<TR VALIGN=TOP>
8574
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.7** </FONT></TD>
8575
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8576
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
8577
Agreement dated November 10, 1997 between the Company and Onesta Nutrition, Inc.
8578
(incorporated by reference to Exhibit 10.9 to the Company&#146;s Annual
8579
Report on Form 10-K for the year ending December 31, 1999 (the
8580
&#147;1999 Form 10-K&#148;)). </FONT></TD>
8581
</TR>
8582
</TABLE>
8583
<BR>
8584
8585
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8586
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8587
<TR VALIGN=TOP>
8588
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.8** </FONT></TD>
8589
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8590
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
8591
Agreement dated March 12, 1999 between the Company and WinEase LLC (incorporated by
8592
reference to Exhibit 10.10 to the Company&#146;s 1999 Form 10-K). </FONT></TD>
8593
</TR>
8594
</TABLE>
8595
<BR>
8596
8597
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8598
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8599
<TR VALIGN=TOP>
8600
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.9** </FONT></TD>
8601
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8602
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Addendum
8603
to License Agreement between the Company and WinEase LLC dated March 21, 2002
8604
(incorporated by reference to Exhibit 10.9 to the Company&#146;s Annual
8605
Report on Form 10-K for the year ended December 31, 2001). </FONT></TD>
8606
</TR>
8607
</TABLE>
8608
<BR>
8609
8610
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8611
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8612
<TR VALIGN=TOP>
8613
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.10** </FONT></TD>
8614
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8615
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
8616
Agreement dated June 21, 1999 between the Company and Peter Cronk and Kristen Cronk
8617
(incorporated by reference to Exhibit 10.11 of the 1999 Form 10-K). </FONT></TD>
8618
</TR>
8619
</TABLE>
8620
<BR>
8621
8622
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8623
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8624
<TR VALIGN=TOP>
8625
<TD>
8626
8627
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
8628
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>40 </FONT></P>
8629
<HR SIZE=5 NOSHADE>
8630
8631
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8632
</TD>
8633
</TR>
8634
</TABLE>
8635
<BR>
8636
8637
8638
8639
8640
8641
<!-- *************************************************************************** -->
8642
<!-- MARKER PAGE="sheet: 41; page: 41" -->
8643
8644
<BR>
8645
8646
8647
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8648
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8649
<TR VALIGN=TOP>
8650
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.11** </FONT></TD>
8651
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8652
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>License
8653
Agreement dated March 1, 2000 between the Company and Proctor and Gamble (incorporated
8654
by reference to Exhibit 10.10 to the Company&#146;s Annual Report on
8655
Form 10-K for the year ended December 31, 2000 (the "2000 Form
8656
10-K&#148;)). </FONT></TD>
8657
</TR>
8658
</TABLE>
8659
<BR>
8660
8661
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8662
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8663
<TR VALIGN=TOP>
8664
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.12 </FONT></TD>
8665
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8666
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amendment
8667
to Trademark License Agreement effective as of March 20, 2001 by and between the Company
8668
and the Procter &amp; Gamble Company (incorporated by reference to
8669
Exhibit 10.11 to the Company&#146;s Quarterly Report on Form 10-Q for the period ended March
8670
31, 2001). </FONT></TD>
8671
</TR>
8672
</TABLE>
8673
<BR>
8674
8675
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8676
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8677
<TR VALIGN=TOP>
8678
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.13** </FONT></TD>
8679
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8680
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Second
8681
Amendment to Trademark License Agreement effective as of April 27, 2001 by and
8682
between the Company and the Procter &amp; Gamble Company (incorporated by
8683
reference to Exhibit 10.12 to the Company&#146;s Quarterly Report on
8684
Form 10-Q for the period ended March 31, 2001). </FONT></TD>
8685
</TR>
8686
</TABLE>
8687
<BR>
8688
8689
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8690
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8691
<TR VALIGN=TOP>
8692
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.14** </FONT></TD>
8693
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8694
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Distributor
8695
Agreement between the Company and Eisai Co., Ltd. dated August 1, 2000 (incorporated
8696
by reference to Exhibit 10.11 to the Company&#146;s 1999 Form
8697
10-K). </FONT></TD>
8698
</TR>
8699
</TABLE>
8700
<BR>
8701
8702
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8703
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8704
<TR VALIGN=TOP>
8705
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.15** </FONT></TD>
8706
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8707
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Repackaging
8708
Agreement between the Company and Herusu, Co., Ltd. dated August 1, 2000
8709
(incorporated by reference to Exhibit 10.12 to the Company&#146;s 2000 Form
8710
10-K). </FONT></TD>
8711
</TR>
8712
</TABLE>
8713
<BR>
8714
8715
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8716
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8717
<TR VALIGN=TOP>
8718
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.16** </FONT></TD>
8719
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8720
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Supply
8721
Agreement between the Company and Tapemark, Inc. dated October 15, 2001 (incorporated
8722
by reference to Exhibit 10.15 to the Company&#146;s Quarterly Report
8723
on Form 10-Q for the period ended September 30, 2001 (the
8724
&#147;September 30, 2001 Quarterly Report&#148;)). </FONT></TD>
8725
</TR>
8726
</TABLE>
8727
<BR>
8728
8729
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8730
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8731
<TR VALIGN=TOP>
8732
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.17** </FONT></TD>
8733
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8734
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Supply
8735
Agreement between the Company and WebTec Converting, LLC dated October 5, 2001
8736
(incorporated by reference to Exhibit 10.16 to the September 30, 2001
8737
Quarterly Report). </FONT></TD>
8738
</TR>
8739
</TABLE>
8740
<BR>
8741
8742
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8743
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8744
<TR VALIGN=TOP>
8745
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.18** </FONT></TD>
8746
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8747
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Medical
8748
Specialties Material Purchase Agreement between the Company and Minnesota Mining and
8749
Manufacturing Company dated August 1, 2001 (incorporated by
8750
reference to Exhibit 10.17 to the September 30, 2001 Quarterly
8751
Report). </FONT></TD>
8752
</TR>
8753
</TABLE>
8754
<BR>
8755
8756
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8757
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8758
<TR VALIGN=TOP>
8759
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.19* </FONT></TD>
8760
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8761
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8762
Agreement between the Company and Daniel E. Cohen dated February 12, 1999
8763
(incorporated by referenced to Exhibit 10.9 to the Company&#146;s Annual
8764
Report on Form 10-K for the year ended December 31, 1998 (the
8765
&#147;1998 Form 10-K&#148;)). </FONT></TD>
8766
</TR>
8767
</TABLE>
8768
<BR>
8769
8770
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8771
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8772
<TR VALIGN=TOP>
8773
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.20* </FONT></TD>
8774
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8775
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>First
8776
Amendment to Executive Employment Agreement between the Company and Daniel E. Cohen
8777
dated June 29, 2001 (incorporated by reference to Exhibit 10.19 to
8778
the September 30, 2001 Quarterly Report). </FONT></TD>
8779
</TR>
8780
</TABLE>
8781
<BR>
8782
8783
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8784
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8785
<TR VALIGN=TOP>
8786
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.21* </FONT></TD>
8787
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8788
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8789
Agreement between the Company and Marti Morfitt dated February 12, 1999 (incorporated by
8790
referenced to Exhibit 10.10 to the 1998 Form 10-K). </FONT></TD>
8791
</TR>
8792
</TABLE>
8793
<BR>
8794
8795
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8796
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8797
<TR VALIGN=TOP>
8798
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.22* </FONT></TD>
8799
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8800
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8801
Agreement between the Company and John J. Keppeler dated February 12, 1999 (incorporated
8802
by referenced to Exhibit 10.13 to the 1998 Form 10-K). </FONT></TD>
8803
</TR>
8804
</TABLE>
8805
<BR>
8806
8807
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8808
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8809
<TR VALIGN=TOP>
8810
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.23* </FONT></TD>
8811
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8812
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8813
Agreement between the Company and Carol J. Watzke dated February 12, 1999 (incorporated
8814
by referenced to Exhibit 10.15 to the 1998 Form 10-K). </FONT></TD>
8815
</TR>
8816
</TABLE>
8817
<BR>
8818
8819
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8820
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8821
<TR VALIGN=TOP>
8822
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.24* </FONT></TD>
8823
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8824
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8825
Agreement between the Company and M. W. Anderson dated February 12, 1999 (incorporated by
8826
referenced to Exhibit 10.17 to the 1998 Form 10-K). </FONT></TD>
8827
</TR>
8828
</TABLE>
8829
<BR>
8830
8831
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8832
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8833
<TR VALIGN=TOP>
8834
<TD>
8835
8836
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
8837
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>41 </FONT></P>
8838
<HR SIZE=5 NOSHADE>
8839
8840
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8841
</TD>
8842
</TR>
8843
</TABLE>
8844
<BR>
8845
8846
8847
8848
8849
8850
<!-- *************************************************************************** -->
8851
<!-- MARKER PAGE="sheet: 42; page: 42" -->
8852
8853
<BR>
8854
8855
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8856
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8857
<TR VALIGN=TOP>
8858
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.25* </FONT></TD>
8859
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8860
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8861
Agreement between the Company and Larry R. Muma dated January 2, 2001 (incorporated by
8862
reference to Exhibit 10.21 to the 2000 Form 10-K). </FONT></TD>
8863
</TR>
8864
</TABLE>
8865
<BR>
8866
8867
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8868
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8869
<TR VALIGN=TOP>
8870
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.26* </FONT></TD>
8871
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8872
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Agreement
8873
between the Company and Teri P. Osgood dated February 14, 2002. </FONT></TD>
8874
</TR>
8875
</TABLE>
8876
<BR>
8877
8878
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8879
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8880
<TR VALIGN=TOP>
8881
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.27* </FONT></TD>
8882
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8883
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8884
Agreement between the Company and Linda Kollofski dated October 29, 2002. </FONT></TD>
8885
</TR>
8886
</TABLE>
8887
<BR>
8888
8889
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8890
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8891
<TR VALIGN=TOP>
8892
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.28* </FONT></TD>
8893
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8894
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment
8895
Agreement between the Company and John Kundtz dated July 22, 2002. </FONT></TD>
8896
</TR>
8897
</TABLE>
8898
<BR>
8899
8900
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8901
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8902
<TR VALIGN=TOP>
8903
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.1 </FONT></TD>
8904
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8905
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subsidiaries
8906
of the Company (incorporated by reference to Exhibit 21.1 to the 1999 Form 10-K). </FONT></TD>
8907
</TR>
8908
</TABLE>
8909
<BR>
8910
8911
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8912
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8913
<TR VALIGN=TOP>
8914
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.1 </FONT></TD>
8915
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8916
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consent
8917
of KPMG LLP. </FONT></TD>
8918
</TR>
8919
</TABLE>
8920
<BR>
8921
8922
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8923
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8924
<TR VALIGN=TOP>
8925
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.1 </FONT></TD>
8926
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8927
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Powers
8928
of Attorney (included on signature page hereof). </FONT></TD>
8929
</TR>
8930
</TABLE>
8931
<BR>
8932
8933
<!-- MARKER FORMAT-SHEET="Exhibit Index Hang" FSL="Project" -->
8934
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8935
<TR VALIGN=TOP>
8936
<TD WIDTH=11%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>99.1 </FONT></TD>
8937
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8938
<TD WIDTH=86%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certification
8939
Pursuant to 18 U.S.C. Section 1350. </FONT></TD>
8940
</TR>
8941
</TABLE>
8942
<BR>
8943
8944
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8945
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8946
<TR VALIGN=TOP>
8947
<TD>
8948
8949
<!-- MARKER FORMAT-SHEET="Footnote Rule" FSL="Project" -->
8950
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>
8951
8952
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8953
</TD>
8954
</TR>
8955
</TABLE>
8956
<BR>
8957
8958
8959
8960
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8961
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8962
<TR VALIGN=TOP>
8963
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* </FONT></TD>
8964
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8965
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicates
8966
Compensatory Agreement </FONT></TD>
8967
</TR>
8968
</TABLE>
8969
<BR>
8970
8971
8972
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10" FSL="Project" -->
8973
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
8974
<TR VALIGN=TOP>
8975
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>** </FONT></TD>
8976
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
8977
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain
8978
portions of this Exhibit have been deleted and filed separately with the Commission
8979
pursuant to a request for confidential treatment under Rule 24b-2. Spaces corresponding
8980
to the deleted portions are represented by brackets with asterisks. </FONT></TD>
8981
</TR>
8982
</TABLE>
8983
<BR>
8984
8985
8986
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
8987
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
8988
<TR VALIGN=TOP>
8989
<TD>
8990
8991
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
8992
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>42 </FONT></P>
8993
<HR SIZE=5 NOSHADE>
8994
8995
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
8996
</TD>
8997
</TR>
8998
</TABLE>
8999
<BR>
9000
9001
9002
9003
9004
9005
<!-- *************************************************************************** -->
9006
<!-- MARKER PAGE="sheet: 43; page: 43" -->
9007
9008
9009
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
9010
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
9011
<TR VALIGN=TOP>
9012
<TD>
9013
<BR>
9014
9015
9016
<A NAME=A022></A>
9017
<!-- MARKER FORMAT-SHEET="Head Major 10" -->
9018
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Independent
9019
Auditors&#146; Report</FONT></H1>
9020
9021
<!-- MARKER FORMAT-SHEET="Head Minor" -->
9022
<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>The Board of
9023
Directors and Stockholders<BR>CNS, Inc.:</FONT></H2>
9024
9025
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
9026
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have audited the
9027
accompanying consolidated balance sheets of CNS, Inc. and subsidiaries as of
9028
March&nbsp;31, 2003 and 2002 and the related consolidated statements of
9029
operations, stockholders&#146; equity and comprehensive income (loss), and cash
9030
flows for the years ended March 31, 2003, December 31, 2001 and 2000 and the
9031
three months ended March 31, 2002. These consolidated financial statements are
9032
the responsibility of the Company&#146;s management. Our responsibility is to
9033
express an opinion on these consolidated financial statements based on our
9034
audits. </FONT></P>
9035
9036
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
9037
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted our audits in
9038
accordance with auditing standards generally accepted in the United States of
9039
America. Those standards require that we plan and perform the audit to obtain
9040
reasonable assurance about whether the financial statements are free of material
9041
misstatement. An audit includes examining, on a test basis, evidence supporting
9042
the amounts and disclosures in the financial statements. An audit also includes
9043
assessing the accounting principles used and significant estimates made by
9044
management as well as evaluating the overall financial statement presentation.
9045
We believe that our audits provide a reasonable basis for our opinion. </FONT></P>
9046
9047
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
9048
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In our opinion, the
9049
consolidated financial statements referred to above present fairly, in all
9050
material respects, the financial position of CNS, Inc. and subsidiaries as of
9051
March 31, 2003 and 2002 and the results of their operations and their cash flows
9052
for the years ended March 31, 2003, December 31, 2001 and 2000 and the three
9053
months ended March 31, 2002 in conformity with accounting principles generally
9054
accepted in the United States of America. </FONT></P>
9055
9056
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
9057
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Minneapolis, Minnesota<BR>April 23, 2003 </FONT></P>
9058
9059
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
9060
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2> </FONT></P>
9061
<HR SIZE=5 NOSHADE>
9062
9063
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
9064
</TD>
9065
</TR>
9066
</TABLE>
9067
<BR>
9068
9069
9070
9071
9072
9073
<!-- *************************************************************************** -->
9074
<!-- MARKER PAGE="sheet: 44; page: 44" -->
9075
9076
9077
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
9078
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
9079
<TR VALIGN=TOP>
9080
<TD>
9081
<BR>
9082
9083
9084
<A NAME=A023></A>
9085
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
9086
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>CNS, INC.</B><BR>
9087
Consolidated Statements of Operations<BR>
9088
(in thousands, except per share amounts) </FONT></P>
9089
9090
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
9091
</TD>
9092
</TR>
9093
</TABLE>
9094
<BR>
9095
9096
9097
9098
9099
9100
<table cellpadding=0 cellspacing=0 border=0 width=600>
9101
<tr valign=Bottom>
9102
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9103
<td colspan="8" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">For
9104
the Years Ended</font></b></td>
9105
<td align=center nowrap rowspan="2"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9106
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">For
9107
the Three<br>Months Ended</font></b></td>
9108
<td align=LEFT rowspan="2"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9109
</tr>
9110
<tr valign=Bottom>
9111
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">March
9112
31,</font></b></td>
9113
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9114
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">December
9115
31,</font></b></td>
9116
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">March
9117
31,</font></b></td>
9118
</tr>
9119
<tr valign=Bottom>
9120
<td colspan="14" align=center nowrap>
9121
<hr NOSHADE size=1>
9122
</td>
9123
<td align=center nowrap>&nbsp;</td>
9124
</tr>
9125
<tr valign=Bottom>
9126
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
9127
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9128
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
9129
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9130
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
9131
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9132
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
9133
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9134
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
9135
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9136
</tr>
9137
<tr valign=Bottom>
9138
<td colspan="15" align=LEFT>
9139
<hr NOSHADE size=1>
9140
</td>
9141
<td align=LEFT>&nbsp;</td>
9142
</tr>
9143
<tr valign=Bottom align="right">
9144
<td colspan="15" valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
9145
<td>&nbsp;</td>
9146
</tr>
9147
<tr valign=Bottom bgcolor="#c0c0c0">
9148
<td width=40% align=LEFT><font face="Times New Roman, Times, serif" size="2">Net
9149
sales</font></td>
9150
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9151
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 79,075</font></td>
9152
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
9153
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9154
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 76,242</font></td>
9155
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
9156
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9157
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 61,777</font></td>
9158
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
9159
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9160
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 19,135</font></td>
9161
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
9162
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9163
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 23,468</font></td>
9164
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9165
</tr>
9166
<tr valign=Bottom>
9167
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Cost of
9168
goods sold</font></td>
9169
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9170
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">25,992</font></td>
9171
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9172
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9173
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">27,698</font></td>
9174
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9175
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9176
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">24,907</font></td>
9177
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9178
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9179
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,390</font></td>
9180
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9181
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9182
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,706</font></td>
9183
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9184
</tr>
9185
<tr valign=Bottom>
9186
<td colspan="15" align=LEFT>
9187
<hr NOSHADE size=1>
9188
</td>
9189
<td align=LEFT>&nbsp;</td>
9190
</tr>
9191
<tr valign=Bottom>
9192
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9193
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9194
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9195
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9196
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9197
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9198
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9199
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9200
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9201
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9202
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9203
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9204
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9205
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9206
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9207
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9208
</tr>
9209
<tr valign=Bottom bgcolor="#c0c0c0">
9210
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
9211
profit</font></td>
9212
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9213
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">53,083</font></td>
9214
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9215
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9216
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">48,544</font></td>
9217
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9218
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9219
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36,870</font></td>
9220
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9221
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9222
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,745</font></td>
9223
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9224
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9225
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,762</font></td>
9226
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9227
</tr>
9228
<tr valign=Bottom>
9229
<td colspan="15" align=LEFT>
9230
<hr NOSHADE size=1>
9231
</td>
9232
<td align=LEFT>&nbsp;</td>
9233
</tr>
9234
<tr valign=Bottom>
9235
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9236
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9237
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9238
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9239
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9240
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9241
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9242
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9243
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9244
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9245
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9246
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9247
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9248
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9249
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9250
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9251
</tr>
9252
<tr valign=Bottom>
9253
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Operating
9254
expenses:</font></td>
9255
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9256
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9257
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9258
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9259
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9260
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9261
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9262
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9263
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9264
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9265
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9266
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9267
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9268
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9269
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9270
</tr>
9271
<tr valign=Bottom>
9272
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising
9273
and promotion</font></td>
9274
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9275
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">30,930</font></td>
9276
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9277
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9278
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">34,256</font></td>
9279
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9280
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9281
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">39,579</font></td>
9282
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9283
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9284
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,796</font></td>
9285
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9286
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9287
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,935</font></td>
9288
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9289
</tr>
9290
<tr valign=Bottom bgcolor="#c0c0c0">
9291
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling,
9292
general and administrative</font></td>
9293
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9294
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,514</font></td>
9295
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9296
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9297
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,583</font></td>
9298
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9299
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9300
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">15,134</font></td>
9301
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9302
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9303
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,213</font></td>
9304
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9305
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9306
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,766</font></td>
9307
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9308
</tr>
9309
<tr valign=Bottom>
9310
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special
9311
charges</font></td>
9312
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9313
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9314
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9315
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9316
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">930</font></td>
9317
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9318
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9319
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9320
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9321
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9322
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9323
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9324
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9325
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9326
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9327
</tr>
9328
<tr valign=Bottom>
9329
<td colspan="15" align=LEFT>
9330
<hr NOSHADE size=1>
9331
</td>
9332
<td align=LEFT>&nbsp;</td>
9333
</tr>
9334
<tr valign=Bottom>
9335
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9336
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9337
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9338
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9339
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9340
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9341
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9342
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9343
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9344
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9345
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9346
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9347
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9348
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9349
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9350
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9351
</tr>
9352
<tr valign=Bottom bgcolor="#c0c0c0">
9353
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
9354
operating expenses</font></td>
9355
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9356
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">43,444</font></td>
9357
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9358
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9359
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">49,769</font></td>
9360
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9361
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9362
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">54,713</font></td>
9363
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9364
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9365
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,009</font></td>
9366
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9367
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9368
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">18,701</font></td>
9369
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9370
</tr>
9371
<tr valign=Bottom>
9372
<td colspan="15" align=LEFT>
9373
<hr NOSHADE size=1>
9374
</td>
9375
<td align=LEFT>&nbsp;</td>
9376
</tr>
9377
<tr valign=Bottom>
9378
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9379
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9380
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9381
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9382
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9383
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9384
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9385
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9386
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9387
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9388
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9389
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9390
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9391
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9392
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9393
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9394
</tr>
9395
<tr valign=Bottom>
9396
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
9397
income (loss)</font></td>
9398
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9399
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,639</font></td>
9400
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9401
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9402
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1,225</font></td>
9403
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9404
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9405
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(17,843</font></td>
9406
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9407
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9408
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">736</font></td>
9409
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9410
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9411
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(3,939</font></td>
9412
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9413
</tr>
9414
<tr valign=Bottom>
9415
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9416
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9417
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9418
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9419
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9420
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9421
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9422
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9423
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9424
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9425
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9426
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9427
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9428
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9429
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9430
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9431
</tr>
9432
<tr valign=Bottom bgcolor="#c0c0c0">
9433
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Investment
9434
income</font></td>
9435
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9436
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">821</font></td>
9437
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9438
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9439
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,242</font></td>
9440
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9441
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9442
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,234</font></td>
9443
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9444
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9445
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">236</font></td>
9446
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9447
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9448
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">345</font></td>
9449
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9450
</tr>
9451
<tr valign=Bottom>
9452
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Gain (loss)
9453
on sales of marketable securities</font></td>
9454
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9455
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">18</font></td>
9456
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9457
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9458
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">64</font></td>
9459
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9460
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9461
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(51</font></td>
9462
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9463
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9464
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">36</font></td>
9465
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9466
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9467
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17</font></td>
9468
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9469
</tr>
9470
<tr valign=Bottom>
9471
<td colspan="15" align=LEFT>
9472
<hr NOSHADE size=1>
9473
</td>
9474
<td align=LEFT>&nbsp;</td>
9475
</tr>
9476
<tr valign=Bottom>
9477
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9478
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9479
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9480
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9481
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9482
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9483
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9484
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9485
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9486
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9487
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9488
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9489
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9490
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9491
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9492
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9493
</tr>
9494
<tr valign=Bottom bgcolor="#c0c0c0">
9495
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
9496
(loss) before income taxes</font></td>
9497
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9498
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10,478</font></td>
9499
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9500
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9501
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">81</font></td>
9502
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9503
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9504
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(15,660</font></td>
9505
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9506
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9507
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,008</font></td>
9508
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9509
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9510
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(3,577</font></td>
9511
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9512
</tr>
9513
<tr valign=Bottom>
9514
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9515
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9516
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9517
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9518
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9519
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9520
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9521
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9522
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9523
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9524
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9525
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9526
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9527
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9528
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9529
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9530
</tr>
9531
<tr valign=Bottom>
9532
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Income
9533
tax expense (benefit)</font></td>
9534
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9535
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,962</font></td>
9536
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9537
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9538
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9539
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9540
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9541
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9542
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9543
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9544
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(9,126</font></td>
9545
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9546
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9547
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
9548
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9549
</tr>
9550
<tr valign=Bottom>
9551
<td colspan="15" align=LEFT>
9552
<hr NOSHADE size=1>
9553
</td>
9554
<td align=LEFT>&nbsp;</td>
9555
</tr>
9556
<tr valign=Bottom>
9557
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9558
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9559
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9560
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9561
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9562
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9563
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9564
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9565
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9566
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9567
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9568
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9569
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9570
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9571
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9572
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9573
</tr>
9574
<tr valign=Bottom bgcolor="#c0c0c0">
9575
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
9576
income (loss)</font></td>
9577
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9578
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 6,516</font></td>
9579
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9580
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9581
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 81</font></td>
9582
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9583
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9584
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (15,660</font></td>
9585
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9586
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9587
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 10,134</font></td>
9588
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9589
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9590
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (3,577</font></td>
9591
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9592
</tr>
9593
<tr valign=Bottom>
9594
<td colspan="15" align=LEFT>
9595
<hr NOSHADE size=2>
9596
</td>
9597
<td align=LEFT>&nbsp;</td>
9598
</tr>
9599
<tr valign=Bottom>
9600
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9601
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9602
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9603
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9604
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9605
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9606
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9607
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9608
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9609
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9610
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9611
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9612
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9613
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9614
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9615
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9616
</tr>
9617
<tr valign=Bottom>
9618
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Basic net
9619
income (loss) per share</font></td>
9620
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9621
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.48</font></td>
9622
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9623
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9624
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .01</font></td>
9625
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9626
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9627
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (1.09</font></td>
9628
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9629
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9630
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .74</font></td>
9631
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9632
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9633
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (.25</font></td>
9634
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9635
</tr>
9636
<tr valign=Bottom>
9637
<td colspan="15" align=LEFT>
9638
<hr NOSHADE size=2>
9639
</td>
9640
<td align=LEFT>&nbsp;</td>
9641
</tr>
9642
<tr valign=Bottom>
9643
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9644
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9645
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9646
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9647
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9648
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9650
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9651
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9652
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9653
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9654
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9655
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9656
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9657
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9658
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9659
</tr>
9660
<tr valign=Bottom bgcolor="#c0c0c0">
9661
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Weighted
9662
average number of common shares<br>
9663
&nbsp;&nbsp;&nbsp;&nbsp;outstanding</font></td>
9664
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9665
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,467</font></td>
9666
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9667
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9668
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,131</font></td>
9669
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9670
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9671
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,372</font></td>
9672
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9673
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9674
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,711</font></td>
9675
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9676
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9677
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,123</font></td>
9678
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9679
</tr>
9680
<tr valign=Bottom>
9681
<td colspan="15" align=LEFT>
9682
<hr NOSHADE size=2>
9683
</td>
9684
<td align=LEFT>&nbsp;</td>
9685
</tr>
9686
<tr valign=Bottom>
9687
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9688
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9689
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9690
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9691
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9692
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9693
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9694
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9695
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9696
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9697
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9698
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9699
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9700
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9701
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9702
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9703
</tr>
9704
<tr valign=Bottom>
9705
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Diluted
9706
net income (loss) per share</font></td>
9707
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9708
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.46</font></td>
9709
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9710
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9711
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .01</font></td>
9712
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9713
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9714
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (1.09</font></td>
9715
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9716
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9717
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .71</font></td>
9718
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9719
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
9720
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (.25</font></td>
9721
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
9722
</tr>
9723
<tr valign=Bottom>
9724
<td colspan="15" align=LEFT>
9725
<hr NOSHADE size=2>
9726
</td>
9727
<td align=LEFT>&nbsp;</td>
9728
</tr>
9729
<tr valign=Bottom bgcolor="#c0c0c0">
9730
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Weighted
9731
average number of common</font></td>
9732
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9733
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9734
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9735
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9736
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9737
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9738
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9739
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9740
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9741
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9742
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9743
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9744
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9745
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9746
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9747
</tr>
9748
<tr valign=Bottom bgcolor="#c0c0c0">
9749
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
9750
assumed conversion shares outstanding</font></td>
9751
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9752
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,044</font></td>
9753
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9754
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9755
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,431</font></td>
9756
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9757
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9758
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,372</font></td>
9759
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9760
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9761
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,198</font></td>
9762
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9763
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9764
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,123</font></td>
9765
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9766
</tr>
9767
<tr valign=Bottom>
9768
<td colspan="15" align=LEFT>
9769
<hr NOSHADE size=2>
9770
</td>
9771
<td align=LEFT>&nbsp;</td>
9772
</tr>
9773
</table>
9774
<BR>
9775
9776
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
9777
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
9778
<TR VALIGN=TOP>
9779
<TD>
9780
9781
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
9782
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are
9783
an integral part of the consolidated financial statements. </FONT></P>
9784
9785
9786
9787
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
9788
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-2 </FONT></P>
9789
<HR SIZE=5 NOSHADE>
9790
9791
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
9792
</TD>
9793
</TR>
9794
</TABLE>
9795
<BR>
9796
9797
9798
9799
9800
9801
<!-- *************************************************************************** -->
9802
<!-- MARKER PAGE="sheet: 45; page: 45" -->
9803
9804
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
9805
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
9806
<TR VALIGN=TOP>
9807
<TD>
9808
<BR>
9809
9810
9811
9812
<A NAME=A024></A>
9813
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
9814
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>CNS, INC.</B><BR>
9815
Consolidated Balance Sheets<BR>
9816
(in thousands, except per share amounts) </FONT></P>
9817
9818
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
9819
</TD>
9820
</TR>
9821
</TABLE>
9822
<BR>
9823
9824
9825
<table cellpadding=0 cellspacing=0 border=0 width=600>
9826
<tr valign=Bottom>
9827
<td align=center>&nbsp;</td>
9828
<td colspan="5" align=center><b><font face="Times New Roman, Times, serif" size="1">March
9829
31,</font></b></td>
9830
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
9831
</tr>
9832
<tr valign=Bottom>
9833
<td align=center>&nbsp;</td>
9834
<td colspan="6" align=center>
9835
<hr NOSHADE size=1>
9836
</td>
9837
</tr>
9838
<tr valign=Bottom>
9839
<td align=center><b><font face="Times New Roman, Times, Serif" size=2>Assets</font></b></td>
9840
<td colspan="2" align=center><b><font face="Times New Roman, Times, serif" size="1">&nbsp;2003</font></b></td>
9841
<td align=center><b><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></b></td>
9842
<td colspan="2" align=center><b><font face="Times New Roman, Times, serif" size="1">&nbsp;2002</font></b></td>
9843
<td align=center><b><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></b></td>
9844
</tr>
9845
<tr>
9846
<td colspan=6>
9847
<hr NOSHADE size=1>
9848
</td>
9849
<td>&nbsp;</td>
9850
</tr>
9851
<tr valign=Bottom>
9852
<td align=LEFT width="100%"><font face="Times New Roman, Times, serif" size="2">Current
9853
assets:</font></td>
9854
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9855
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9856
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9857
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9858
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
9859
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9860
</tr>
9861
<tr valign=Bottom bgcolor="#C0C0C0">
9862
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
9863
and cash equivalents</font></td>
9864
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
9865
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 16,554</font></td>
9866
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
9867
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
9868
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 5,633</font></td>
9869
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9870
</tr>
9871
<tr valign=Bottom>
9872
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable
9873
securities</font></td>
9874
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9875
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">25,061</font></td>
9876
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9877
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9878
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">19,029</font></td>
9879
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9880
</tr>
9881
<tr valign=Bottom bgcolor="#C0C0C0">
9882
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
9883
receivable, net of allowance for doubtful accounts<br>
9884
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
9885
$330 in 2003 and $500 in 2002</font></td>
9886
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9887
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">11,011</font></td>
9888
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9889
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9890
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">11,682</font></td>
9891
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9892
</tr>
9893
<tr valign=Bottom>
9894
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></td>
9895
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9896
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,266</font></td>
9897
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9898
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9899
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,465</font></td>
9900
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9901
</tr>
9902
<tr valign=Bottom bgcolor="#C0C0C0">
9903
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
9904
income taxes</font></td>
9905
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9906
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,660</font></td>
9907
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9908
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9909
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,879</font></td>
9910
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9911
</tr>
9912
<tr valign=Bottom>
9913
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid
9914
expenses and other current assets</font></td>
9915
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9916
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,035</font></td>
9917
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9918
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9919
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">999</font></td>
9920
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9921
</tr>
9922
<tr>
9923
<td colspan=6>
9924
<hr NOSHADE size=1>
9925
</td>
9926
<td>&nbsp;</td>
9927
</tr>
9928
<tr valign=Bottom>
9929
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9930
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9931
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9932
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9933
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9934
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9935
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9936
</tr>
9937
<tr valign=Bottom bgcolor="#C0C0C0">
9938
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
9939
current assets</font></td>
9940
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9941
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">61,587</font></td>
9942
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9943
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9944
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">47,687</font></td>
9945
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9946
</tr>
9947
<tr valign=Bottom>
9948
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9949
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9950
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9951
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9952
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9953
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9954
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9955
</tr>
9956
<tr valign=Bottom>
9957
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Property
9958
and equipment, net</font></td>
9959
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9960
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,605</font></td>
9961
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9962
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9963
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,400</font></td>
9964
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9965
</tr>
9966
<tr valign=Bottom bgcolor="#C0C0C0">
9967
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Product
9968
rights, net</font></td>
9969
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9970
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,293</font></td>
9971
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9972
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9973
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,179</font></td>
9974
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9975
</tr>
9976
<tr valign=Bottom>
9977
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Deferred
9978
income taxes</font></td>
9979
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9980
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">890</font></td>
9981
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9982
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9983
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,220</font></td>
9984
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
9985
</tr>
9986
<tr>
9987
<td colspan=6>
9988
<hr NOSHADE size=1>
9989
</td>
9990
<td>&nbsp;</td>
9991
</tr>
9992
<tr valign=Bottom>
9993
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
9994
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9995
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9996
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
9997
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
9998
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
9999
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10000
</tr>
10001
<tr valign=Bottom bgcolor="#C0C0C0">
10002
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;
10003
</font></td>
10004
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10005
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 65,375</font></td>
10006
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10007
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10008
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 54,486</font></td>
10009
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10010
</tr>
10011
<tr>
10012
<td colspan=6>
10013
<hr NOSHADE size=2>
10014
</td>
10015
<td>&nbsp;</td>
10016
</tr>
10017
<tr valign=Bottom>
10018
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10019
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10020
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10021
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10022
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10023
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10024
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10025
</tr>
10026
<tr valign=Bottom>
10027
<td align=center><b><font face="Times New Roman, Times, serif" size="2">Liabilities
10028
and Stockholders&#146; Equity</font></b></td>
10029
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10030
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10031
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10032
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10033
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10034
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10035
</tr>
10036
<tr>
10037
<td colspan=6>
10038
<hr NOSHADE size=1>
10039
</td>
10040
<td>&nbsp;</td>
10041
</tr>
10042
<tr valign=Bottom>
10043
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10044
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10045
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10046
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10047
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10048
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10049
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10050
</tr>
10051
<tr valign=Bottom>
10052
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Current
10053
liabilities:</font></td>
10054
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10055
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10056
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10057
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10058
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10059
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10060
</tr>
10061
<tr valign=Bottom>
10062
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
10063
payable</font></td>
10064
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10065
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 7,615</font></td>
10066
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10067
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10068
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 3,413</font></td>
10069
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10070
</tr>
10071
<tr valign=Bottom bgcolor="#C0C0C0">
10072
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
10073
expenses</font></td>
10074
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10075
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">7,948</font></td>
10076
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10077
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10078
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,330</font></td>
10079
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10080
</tr>
10081
<tr valign=Bottom>
10082
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
10083
income taxes</font></td>
10084
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10085
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">758</font></td>
10086
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10087
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10088
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">521</font></td>
10089
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10090
</tr>
10091
<tr>
10092
<td colspan=6>
10093
<hr NOSHADE size=1>
10094
</td>
10095
<td>&nbsp;</td>
10096
</tr>
10097
<tr valign=Bottom>
10098
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10099
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10100
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10101
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10102
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10103
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10104
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10105
</tr>
10106
<tr valign=Bottom bgcolor="#C0C0C0">
10107
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
10108
current liabilities</font></td>
10109
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10110
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16,321</font></td>
10111
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10112
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10113
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">10,264</font></td>
10114
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10115
</tr>
10116
<tr valign=Bottom>
10117
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10118
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10119
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10120
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10121
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10122
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10123
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10124
</tr>
10125
<tr valign=Bottom>
10126
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Stockholders&#146;
10127
equity:</font></td>
10128
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10129
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10130
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10131
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10132
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10133
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10134
</tr>
10135
<tr valign=Bottom bgcolor="#C0C0C0">
10136
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
10137
stock - authorized 8,484 shares;</font></td>
10138
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10139
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10140
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10141
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10142
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10143
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10144
</tr>
10145
<tr valign=Bottom bgcolor="#C0C0C0">
10146
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;none
10147
issued or outstanding</font></td>
10148
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10149
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
10150
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10151
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10152
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
10153
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10154
</tr>
10155
<tr valign=Bottom>
10156
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
10157
stock - $.01 par value; authorized 50,000 shares;</font></td>
10158
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10159
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10160
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10161
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10162
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10163
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10164
</tr>
10165
<tr valign=Bottom>
10166
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued
10167
19,295 shares in 2003 and 2002</font></td>
10168
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10169
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">193</font></td>
10170
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10171
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10172
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">193</font></td>
10173
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10174
</tr>
10175
<tr valign=Bottom bgcolor="#C0C0C0">
10176
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional
10177
paid-in capital</font></td>
10178
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10179
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">59,879</font></td>
10180
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10181
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10182
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">60,796</font></td>
10183
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10184
</tr>
10185
<tr valign=Bottom>
10186
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury
10187
shares - at cost; 5,989 shares in 2003 and 5,756 shares in 2002</font></td>
10188
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10189
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(26,694</font></td>
10190
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
10191
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10192
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(25,821</font></td>
10193
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
10194
</tr>
10195
<tr valign=Bottom bgcolor="#C0C0C0">
10196
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained
10197
earnings</font></td>
10198
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10199
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">15,472</font></td>
10200
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10201
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10202
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,956</font></td>
10203
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10204
</tr>
10205
<tr valign=Bottom>
10206
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated
10207
other comprehensive income</font></td>
10208
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10209
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">204</font></td>
10210
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10211
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10212
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">98</font></td>
10213
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10214
</tr>
10215
<tr>
10216
<td colspan=6>
10217
<hr NOSHADE size=1>
10218
</td>
10219
<td>&nbsp;</td>
10220
</tr>
10221
<tr valign=Bottom>
10222
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10223
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10224
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10225
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10226
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10227
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10228
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10229
</tr>
10230
<tr valign=Bottom bgcolor="#C0C0C0">
10231
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
10232
stockholders&#146; equity</font></td>
10233
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10234
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">49,054</font></td>
10235
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10236
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10237
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">44,222</font></td>
10238
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10239
</tr>
10240
<tr valign=Bottom>
10241
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10242
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10243
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10244
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10245
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10246
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10247
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10248
</tr>
10249
<tr valign=Bottom>
10250
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Commitments
10251
(notes 10 and 11)</font></td>
10252
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10253
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10254
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10255
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10256
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10257
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10258
</tr>
10259
<tr>
10260
<td colspan=6>
10261
<hr NOSHADE size=1>
10262
</td>
10263
<td>&nbsp;</td>
10264
</tr>
10265
<tr valign=Bottom>
10266
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
10267
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10268
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10269
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10270
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
10271
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
10272
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
10273
</tr>
10274
<tr valign=Bottom bgcolor="#C0C0C0">
10275
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"> </font></td>
10276
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10277
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 65,375</font></td>
10278
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10279
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
10280
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 54,486</font></td>
10281
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
10282
</tr>
10283
<tr>
10284
<td colspan=6>
10285
<hr NOSHADE size=2>
10286
</td>
10287
<td>&nbsp;</td>
10288
</tr>
10289
</table>
10290
<BR>
10291
10292
10293
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
10294
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
10295
<TR VALIGN=TOP>
10296
<TD>
10297
10298
10299
10300
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
10301
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are an
10302
integral part of the consolidated financial statements. </FONT></P>
10303
10304
10305
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
10306
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-3 </FONT></P>
10307
<HR SIZE=5 NOSHADE>
10308
10309
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
10310
</TD>
10311
</TR>
10312
</TABLE>
10313
<BR>
10314
10315
10316
10317
10318
10319
<!-- *************************************************************************** -->
10320
<!-- MARKER PAGE="sheet: 46; page: 46" -->
10321
10322
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
10323
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
10324
<TR VALIGN=TOP>
10325
<TD>
10326
<BR>
10327
10328
<A NAME=A025></A>
10329
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
10330
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>CNS, INC.</B><BR>Consolidated
10331
Statements of Stockholders&#146; Equity and Comprehensive Income (Loss) <BR>(in thousands) </FONT></P>
10332
10333
10334
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
10335
</TD>
10336
</TR>
10337
</TABLE>
10338
<BR>
10339
10340
10341
<table cellpadding=0 cellspacing=0 border=0 width=700>
10342
<tr valign=Bottom align="center">
10343
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10344
<td nowrap colspan="4"><b><font face="Times New Roman, Times, serif" size="1">Common
10345
stock</font></b></td>
10346
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10347
<td nowrap colspan="2" rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">Additional<br>
10348
paid-in <br>
10349
capital <br>
10350
</font></b></td>
10351
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10352
<td nowrap colspan="4"><b><font face="Times New Roman, Times, serif" size="1">Treasury
10353
shares</font></b></td>
10354
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10355
<td nowrap colspan="2" rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">
10356
Retained<br>
10357
earnings<br>
10358
(deficit)<br>
10359
</font></b></td>
10360
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10361
<td nowrap colspan="2" rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">
10362
Accumulated <br>
10363
other <br>
10364
comprehensive<br>
10365
income (loss)<br>
10366
</font></b></td>
10367
<td nowrap rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10368
<td nowrap colspan="2" rowspan="3"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1">
10369
Total<br>
10370
stockholders&#146;<br>
10371
equity </font></b></td>
10372
<td nowrap rowspan="3">&nbsp;</td>
10373
</tr>
10374
<tr valign=Bottom align="center">
10375
<td nowrap colspan="4">
10376
<hr NOSHADE size=1>
10377
</td>
10378
<td nowrap colspan="4">
10379
<hr NOSHADE size=1>
10380
</td>
10381
</tr>
10382
<tr valign=Bottom align="center">
10383
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Number
10384
<br>
10385
of shares<br>
10386
</font></b></td>
10387
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10388
<td nowrap colspan="2"><b><font face="Times New Roman, Times, serif" size="1">
10389
Par <br>
10390
value<br>
10391
</font></b></td>
10392
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Number
10393
<br>
10394
of shares<br>
10395
</font></b></td>
10396
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
10397
<td nowrap colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Cost</font></b></td>
10398
</tr>
10399
<tr valign="top">
10400
<td colspan=22>
10401
<hr NOSHADE size=1>
10402
</td>
10403
<td>&nbsp;</td>
10404
</tr>
10405
<tr valign=Bottom bgcolor="#c0c0c0">
10406
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
10407
at December 31, 1999</font></td>
10408
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19,295</font></td>
10409
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10410
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
10411
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 193</font></td>
10412
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10413
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
10414
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 61,531</font></td>
10415
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10416
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">4,838</font></td>
10417
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10418
<td align=left><font face="Times New Roman, Times, serif" size="1">$&nbsp;&nbsp;</font></td>
10419
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> (22,221</font></td>
10420
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10421
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
10422
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 14,401</font></td>
10423
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10424
<td align=right width="5%"><font face="Times New Roman, Times, serif" size="1">$</font></td>
10425
<td align=RIGHT width="5%"><font face="Times New Roman, Times, serif" size="1"> (320</font></td>
10426
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
10427
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
10428
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 53,584</font></td>
10429
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10430
</tr>
10431
<tr valign=Bottom>
10432
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
10433
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10434
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10435
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10436
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10437
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10438
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10439
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10440
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10441
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10442
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10443
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10444
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10445
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10446
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10447
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10448
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10449
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10450
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10451
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10452
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10453
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10454
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10455
</tr>
10456
<tr valign=Bottom>
10457
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
10458
issued in connection with</font></td>
10459
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10460
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10461
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10462
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10463
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10464
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10465
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10466
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10467
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10468
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10469
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10470
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10471
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10472
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10473
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10474
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10475
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10476
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10477
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10478
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10479
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10480
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10481
</tr>
10482
<tr valign=Bottom>
10483
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
10484
Stock Purchase Plan</font></td>
10485
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10486
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10487
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10488
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10489
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10490
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10491
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(131</font></td>
10492
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10493
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(26</font></td>
10494
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10495
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10496
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">214</font></td>
10497
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10498
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10499
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10500
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10501
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10502
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10503
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10504
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10505
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">83</font></td>
10506
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10507
</tr>
10508
<tr valign=Bottom bgcolor="#c0c0c0">
10509
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
10510
options exercised</font></td>
10511
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10512
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10513
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10514
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10515
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10516
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10517
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(218</font></td>
10518
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10519
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(29</font></td>
10520
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10521
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10522
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">238</font></td>
10523
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10524
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10525
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10526
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10527
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10528
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10529
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10530
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10531
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">20</font></td>
10532
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10533
</tr>
10534
<tr valign=Bottom>
10535
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury
10536
shares purchased</font></td>
10537
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10538
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10539
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10540
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10541
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10542
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10543
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10544
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10545
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">396</font></td>
10546
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10547
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10548
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,510</font></td>
10549
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10550
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10551
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10552
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10553
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10554
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10555
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10556
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10557
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,510</font></td>
10558
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10559
</tr>
10560
<tr valign=Bottom>
10561
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
10562
loss:</font></td>
10563
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10564
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10565
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10566
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10567
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10568
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10569
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10570
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10571
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10572
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10573
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10574
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10575
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10576
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10577
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10578
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10579
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10580
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10581
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10582
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10583
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10584
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10585
</tr>
10586
<tr valign=Bottom bgcolor="#c0c0c0">
10587
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
10588
loss for the year</font></td>
10589
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10590
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10591
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10592
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10593
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10594
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10595
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10596
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10597
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10598
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10599
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10600
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10601
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10602
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10603
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(15,660</font></td>
10604
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10605
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10606
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10607
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10608
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10609
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(15,660</font></td>
10610
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10611
</tr>
10612
<tr valign=Bottom>
10613
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
10614
gains on marketable securities</font></td>
10615
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10616
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10617
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10618
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10619
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10620
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10621
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10622
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10623
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10624
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10625
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10626
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10627
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10628
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10629
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10630
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10631
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10632
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10633
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10634
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10635
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10636
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10637
</tr>
10638
<tr valign=Bottom>
10639
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net
10640
of income tax effect of $0</font></td>
10641
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10642
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10643
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10644
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10645
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10646
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10647
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10648
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10649
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10650
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10651
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10652
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10653
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10654
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10655
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10656
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10657
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10658
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">420</font></td>
10659
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10660
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10661
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">420</font></td>
10662
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10663
</tr>
10664
<tr valign=Bottom>
10665
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10666
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10667
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10668
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10669
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10670
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10671
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10672
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10673
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10674
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10675
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10676
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10677
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10678
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10679
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10680
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10681
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10682
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10683
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10684
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10685
<td align=left colspan="2">
10686
<hr NOSHADE size=1>
10687
</td>
10688
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10689
</tr>
10690
<tr valign=Bottom bgcolor="#c0c0c0">
10691
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
10692
comprehensive loss</font></td>
10693
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10694
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10695
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10696
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10697
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10698
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10699
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10700
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10701
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10702
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10703
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10704
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10705
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10706
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10707
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10708
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10709
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10710
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10711
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10712
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10713
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(15,240</font></td>
10714
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10715
</tr>
10716
<tr>
10717
<td colspan=22>
10718
<hr NOSHADE size=1>
10719
</td>
10720
<td><font face="Times New Roman, Times, serif" size="1"></font></td>
10721
</tr>
10722
<tr valign=Bottom>
10723
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
10724
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10725
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10726
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10727
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10728
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10729
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10730
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10731
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10732
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10733
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10734
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10735
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10736
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10737
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10738
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10739
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10740
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10741
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10742
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10743
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10744
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10745
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10746
</tr>
10747
<tr valign=Bottom>
10748
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
10749
at December 31, 2000</font></td>
10750
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19,295</font></td>
10751
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10752
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10753
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">193</font></td>
10754
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10755
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10756
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">61,182</font></td>
10757
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10758
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">5,179</font></td>
10759
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10760
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10761
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(23,279</font></td>
10762
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10763
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10764
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,259</font></td>
10765
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10766
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10767
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">100</font></td>
10768
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10769
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10770
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">36,937</font></td>
10771
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10772
</tr>
10773
<tr valign=Bottom>
10774
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
10775
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10776
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10777
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10778
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10779
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10780
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10781
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10782
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10783
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10784
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10785
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10786
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10787
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10788
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10789
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10790
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10791
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10792
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10793
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10794
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
10795
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
10796
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
10797
</tr>
10798
<tr valign=Bottom>
10799
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
10800
issued in connection with</font></td>
10801
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10802
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10803
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10804
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10805
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10806
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10807
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10808
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10809
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10810
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10811
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10812
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10813
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10814
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10815
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10816
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10817
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10818
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10819
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10820
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10821
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10822
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10823
</tr>
10824
<tr valign=Bottom bgcolor="#c0c0c0">
10825
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
10826
Stock Purchase Plan</font></td>
10827
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10828
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10829
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10830
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10831
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10832
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10833
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(189</font></td>
10834
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10835
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(36</font></td>
10836
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10837
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10838
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">303</font></td>
10839
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10840
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10841
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10842
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10843
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10844
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10845
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10846
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10847
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">114</font></td>
10848
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10849
</tr>
10850
<tr valign=Bottom>
10851
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
10852
options exercised</font></td>
10853
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10854
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10855
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10856
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10857
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10858
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10859
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(262</font></td>
10860
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10861
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(51</font></td>
10862
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10863
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10864
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">436</font></td>
10865
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10866
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10867
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10868
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10869
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10870
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10871
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10872
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10873
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">174</font></td>
10874
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10875
</tr>
10876
<tr valign=Bottom bgcolor="#c0c0c0">
10877
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
10878
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10879
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10880
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10881
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10882
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10883
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10884
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">54</font></td>
10885
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10886
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10887
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10888
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10889
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10890
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10891
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10892
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10893
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10894
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10895
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10896
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10897
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10898
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">54</font></td>
10899
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10900
</tr>
10901
<tr valign=Bottom>
10902
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury
10903
shares purchased</font></td>
10904
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10905
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10906
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10907
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10908
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10909
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10910
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10911
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10912
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">202</font></td>
10913
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10914
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10915
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,010</font></td>
10916
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10917
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10918
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10919
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10920
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10921
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10922
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10923
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10924
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,010</font></td>
10925
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
10926
</tr>
10927
<tr valign=Bottom>
10928
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
10929
income:</font></td>
10930
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10931
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10932
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10933
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10934
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10935
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10936
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10937
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10938
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10939
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10940
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10941
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10942
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10943
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10944
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10945
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10946
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10947
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10948
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10949
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10950
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10951
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10952
</tr>
10953
<tr valign=Bottom bgcolor="#c0c0c0">
10954
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
10955
income for the year</font></td>
10956
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10957
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10958
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10959
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10960
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10961
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10962
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10963
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10964
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10965
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10966
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10967
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10968
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10969
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10970
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">81</font></td>
10971
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10972
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10973
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
10974
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10975
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10976
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">81</font></td>
10977
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10978
</tr>
10979
<tr valign=Bottom>
10980
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
10981
gains on marketable securities</font></td>
10982
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10983
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10984
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10985
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10986
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10987
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10988
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10989
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10990
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10991
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10992
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10993
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10994
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10995
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10996
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
10997
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10998
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
10999
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11000
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11001
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11002
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11003
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11004
</tr>
11005
<tr valign=Bottom>
11006
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net
11007
of income tax effect of $0</font></td>
11008
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11009
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11010
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11011
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11012
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11013
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11014
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11015
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11016
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11017
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11018
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11019
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11020
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11021
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11022
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11023
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11024
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11025
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">262</font></td>
11026
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11027
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11028
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">262</font></td>
11029
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11030
</tr>
11031
<tr valign=Bottom>
11032
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11033
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11034
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11035
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11036
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11037
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11038
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11039
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11040
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11041
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11042
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11043
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11044
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11045
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11046
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11047
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11048
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11049
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11050
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11051
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11052
<td align=left colspan="2">
11053
<hr NOSHADE size=1>
11054
</td>
11055
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11056
</tr>
11057
<tr valign=Bottom bgcolor="#c0c0c0">
11058
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
11059
comprehensive income</font></td>
11060
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11061
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11062
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11063
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11064
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11065
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11066
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11067
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11068
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11069
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11070
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11071
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11072
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11073
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11074
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11075
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11076
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11077
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11078
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11079
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11080
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">343</font></td>
11081
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11082
</tr>
11083
<tr>
11084
<td colspan=22>
11085
<hr NOSHADE size=1>
11086
</td>
11087
<td><font face="Times New Roman, Times, serif" size="1"></font></td>
11088
</tr>
11089
<tr valign=Bottom>
11090
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
11091
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11092
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11093
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11094
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11095
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11096
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11097
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11098
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11099
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11100
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11101
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11102
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11103
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11104
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11105
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11106
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11107
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11108
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11109
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11110
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11111
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11112
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11113
</tr>
11114
<tr valign=Bottom>
11115
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
11116
at December 31, 2001</font></td>
11117
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19,295</font></td>
11118
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11119
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11120
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">193</font></td>
11121
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11122
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11123
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">60,785</font></td>
11124
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11125
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">5,294</font></td>
11126
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11127
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11128
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(23,550</font></td>
11129
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11130
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11131
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(1,178</font></td>
11132
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11133
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11134
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">362</font></td>
11135
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11136
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11137
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">36,612</font></td>
11138
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11139
</tr>
11140
<tr valign=Bottom>
11141
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
11142
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11143
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11144
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11145
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11146
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11147
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11148
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11149
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11150
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11151
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11152
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11153
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11154
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11155
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11156
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11157
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11158
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11159
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11160
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11161
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11162
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11163
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11164
</tr>
11165
<tr valign=Bottom bgcolor="#c0c0c0">
11166
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
11167
options exercised</font></td>
11168
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11169
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11170
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11171
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11172
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11173
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11174
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(95</font></td>
11175
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11176
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(20</font></td>
11177
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11178
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11179
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">167</font></td>
11180
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11181
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11182
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11183
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11184
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11185
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11186
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11187
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11188
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">72</font></td>
11189
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11190
</tr>
11191
<tr valign=Bottom>
11192
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
11193
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11194
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11195
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11196
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11197
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11198
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11199
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">106</font></td>
11200
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11201
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11202
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11203
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11204
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11205
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11206
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11207
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11208
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11209
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11210
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11211
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11212
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11213
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">106</font></td>
11214
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11215
</tr>
11216
<tr valign=Bottom bgcolor="#c0c0c0">
11217
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury
11218
shares purchased</font></td>
11219
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11220
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11221
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11222
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11223
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11224
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11225
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11226
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11227
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">482</font></td>
11228
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11229
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11230
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,438</font></td>
11231
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11232
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11233
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11234
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11235
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11236
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11237
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11238
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11239
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,438</font></td>
11240
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11241
</tr>
11242
<tr valign=Bottom>
11243
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
11244
income:</font></td>
11245
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11246
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11247
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11248
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11249
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11250
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11251
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11252
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11253
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11254
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11255
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11256
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11257
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11258
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11259
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11260
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11261
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11262
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11263
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11264
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11265
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11266
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11267
</tr>
11268
<tr valign=Bottom>
11269
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
11270
income for the period</font></td>
11271
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11272
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11273
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11274
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11275
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11276
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11277
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11278
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11279
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11280
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11281
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11282
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11283
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11284
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11285
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">10,134</font></td>
11286
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11287
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11288
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11289
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11290
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11291
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">10,134</font></td>
11292
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11293
</tr>
11294
<tr valign=Bottom bgcolor="#c0c0c0">
11295
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
11296
losses on marketable securities</font></td>
11297
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11298
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11299
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11300
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11301
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11302
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11303
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11304
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11305
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11306
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11307
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11308
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11309
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11310
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11311
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11312
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11313
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11314
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11315
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11316
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11317
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11318
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11319
</tr>
11320
<tr valign=Bottom bgcolor="#c0c0c0">
11321
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net
11322
of income tax effect of $58</font></td>
11323
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11324
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11325
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11326
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11327
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11328
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11329
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11330
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11331
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11332
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11333
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11334
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11335
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11336
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11337
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11338
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11339
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11340
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(264</font></td>
11341
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11342
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11343
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(264</font></td>
11344
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11345
</tr>
11346
<tr valign=Bottom>
11347
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11348
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11349
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11350
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11351
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11352
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11353
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11354
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11355
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11356
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11357
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11358
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11359
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11360
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11361
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11362
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11363
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11364
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11365
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11366
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11367
<td align=left colspan="2">
11368
<hr NOSHADE size=1>
11369
</td>
11370
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11371
</tr>
11372
<tr valign=Bottom>
11373
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
11374
comprehensive income</font></td>
11375
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11376
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11377
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11378
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11379
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11380
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11381
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11382
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11383
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11384
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11385
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11386
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11387
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11388
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11389
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11390
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11391
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11392
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11393
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11394
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11395
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">9,870</font></td>
11396
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11397
</tr>
11398
<tr>
11399
<td colspan=22>
11400
<hr NOSHADE size=1>
11401
</td>
11402
<td><font face="Times New Roman, Times, serif" size="1"></font></td>
11403
</tr>
11404
<tr valign=Bottom>
11405
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
11406
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11407
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11408
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11409
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11410
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11411
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11412
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11413
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11414
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11415
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11416
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11417
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11418
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11419
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11420
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11421
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11422
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11423
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11424
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11425
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11426
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11427
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11428
</tr>
11429
<tr valign=Bottom bgcolor="#c0c0c0">
11430
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
11431
at March 31, 2002</font></td>
11432
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19,295</font></td>
11433
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11434
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11435
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">193</font></td>
11436
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11437
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11438
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">60,796</font></td>
11439
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11440
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">5,756</font></td>
11441
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11442
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11443
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(25,821</font></td>
11444
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11445
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11446
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">8,956</font></td>
11447
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11448
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11449
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">98</font></td>
11450
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11451
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11452
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">44,222</font></td>
11453
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11454
</tr>
11455
<tr valign=Bottom>
11456
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
11457
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11458
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11459
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11460
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11461
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11462
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11463
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11464
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11465
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11466
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11467
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11468
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11469
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11470
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11471
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11472
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11473
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11474
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11475
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11476
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11477
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11478
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11479
</tr>
11480
<tr valign=Bottom>
11481
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
11482
issued in connection with</font></td>
11483
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11484
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11485
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11486
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11487
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11488
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11489
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11490
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11491
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11492
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11493
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11494
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11495
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11496
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11497
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11498
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11499
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11500
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11501
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11502
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11503
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11504
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11505
</tr>
11506
<tr valign=Bottom>
11507
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee
11508
Stock Purchase Plan</font></td>
11509
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11510
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11511
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11512
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11513
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11514
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11515
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(69</font></td>
11516
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11517
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(19</font></td>
11518
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11519
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11520
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">163</font></td>
11521
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11522
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11523
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11524
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11525
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11526
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11527
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11528
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11529
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">94</font></td>
11530
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11531
</tr>
11532
<tr valign=Bottom bgcolor="#c0c0c0">
11533
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
11534
options exercised</font></td>
11535
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11536
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11537
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11538
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11539
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11540
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11541
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(862</font></td>
11542
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11543
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(206</font></td>
11544
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11545
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11546
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">1,717</font></td>
11547
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11548
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11549
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11550
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11551
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11552
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11553
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11554
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11555
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">855</font></td>
11556
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11557
</tr>
11558
<tr valign=Bottom>
11559
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
11560
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11561
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11562
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11563
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11564
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11565
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11566
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">14</font></td>
11567
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11568
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11569
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11570
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11571
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">2</font></td>
11572
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11573
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11574
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11575
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11576
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11577
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11578
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11579
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11580
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">16</font></td>
11581
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11582
</tr>
11583
<tr valign=Bottom bgcolor="#c0c0c0">
11584
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury
11585
shares purchased</font></td>
11586
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11587
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11588
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11589
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11590
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11591
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11592
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11593
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11594
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">458</font></td>
11595
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11596
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11597
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,755</font></td>
11598
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11599
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11600
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11601
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11602
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11603
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11604
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11605
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11606
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">(2,755</font></td>
11607
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11608
</tr>
11609
<tr valign=Bottom>
11610
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
11611
income:</font></td>
11612
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11613
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11614
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11615
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11616
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11617
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11618
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11619
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11620
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11621
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11622
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11623
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11624
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11625
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11626
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11627
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11628
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11629
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11630
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11631
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11632
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11633
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11634
</tr>
11635
<tr valign=Bottom bgcolor="#c0c0c0">
11636
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
11637
income for the year</font></td>
11638
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11639
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11640
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11641
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11642
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11643
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11644
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11645
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11646
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11647
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11648
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11649
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11650
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11651
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11652
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">6,516</font></td>
11653
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11654
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11655
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11656
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11657
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11658
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">6,516</font></td>
11659
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11660
</tr>
11661
<tr valign=Bottom>
11662
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
11663
gains on marketable securities</font></td>
11664
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11665
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11666
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11667
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11668
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11669
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11670
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11671
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11672
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11673
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11674
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11675
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11676
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11677
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11678
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11679
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11680
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11681
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11682
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11683
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11684
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11685
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11686
</tr>
11687
<tr valign=Bottom>
11688
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;net
11689
of income tax effect of $60</font></td>
11690
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11691
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11692
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11693
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11694
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11695
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11696
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11697
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11698
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11699
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11700
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11701
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11702
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11703
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11704
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">0</font></td>
11705
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11706
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11707
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">106</font></td>
11708
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11709
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11710
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">106</font></td>
11711
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11712
</tr>
11713
<tr valign=Bottom>
11714
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11715
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11716
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11717
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11718
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11719
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11720
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11721
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11722
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11723
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11724
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11725
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11726
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11727
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11728
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11729
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11730
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11731
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11732
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11733
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11734
<td align=left colspan="2">
11735
<hr NOSHADE size=1>
11736
</td>
11737
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11738
</tr>
11739
<tr valign=Bottom bgcolor="#c0c0c0">
11740
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
11741
comprehensive income</font></td>
11742
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11743
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11744
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11745
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11746
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11747
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11748
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11749
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11750
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11751
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11752
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11753
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11754
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11755
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11756
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11757
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11758
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11759
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> </font></td>
11760
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11761
<td align=left><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11762
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">6,622</font></td>
11763
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11764
</tr>
11765
<tr>
11766
<td colspan=22>
11767
<hr NOSHADE size=1>
11768
</td>
11769
<td><font face="Times New Roman, Times, serif" size="1"></font></td>
11770
</tr>
11771
<tr valign=Bottom>
11772
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;&nbsp;</font></td>
11773
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11774
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11775
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11776
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11777
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11778
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11779
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11780
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11781
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11782
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11783
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11784
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11785
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11786
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11787
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11788
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11789
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11790
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11791
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11792
<td align=left><font face="Times New Roman, Times, serif" size="1"></font></td>
11793
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"></font></td>
11794
<td align=LEFT><font face="Times New Roman, Times, serif" size="1"></font></td>
11795
</tr>
11796
<tr valign=Bottom>
11797
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">Balance
11798
at March 31, 2003</font></td>
11799
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">19,295</font></td>
11800
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11801
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
11802
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 193</font></td>
11803
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11804
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
11805
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 59,879</font></td>
11806
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11807
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1">5,989</font></td>
11808
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11809
<td align=left><font face="Times New Roman, Times, serif" size="1">$&nbsp;</font></td>
11810
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> (26,694</font></td>
11811
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">)</font></td>
11812
<td align=left><font face="Times New Roman, Times, serif" size="1">$</font></td>
11813
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 15,472</font></td>
11814
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11815
<td align=right><font face="Times New Roman, Times, serif" size="1">$</font></td>
11816
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 204</font></td>
11817
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11818
<td align=left><font face="Times New Roman, Times, serif" size="1">$&nbsp;</font></td>
11819
<td align=RIGHT><font face="Times New Roman, Times, serif" size="1"> 49,054</font></td>
11820
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
11821
</tr>
11822
<tr>
11823
<td colspan=22>
11824
<hr NOSHADE size=2>
11825
</td>
11826
<td><font face="Times New Roman, Times, serif" size="1"></font></td>
11827
</tr>
11828
</table>
11829
<BR>
11830
11831
11832
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
11833
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
11834
<TR VALIGN=TOP>
11835
<TD>
11836
11837
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
11838
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are
11839
an integral part of the consolidated financial statements. </FONT></P>
11840
11841
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
11842
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-4 </FONT></P>
11843
<HR SIZE=5 NOSHADE>
11844
11845
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
11846
</TD>
11847
</TR>
11848
</TABLE>
11849
<BR>
11850
11851
11852
11853
11854
11855
<!-- *************************************************************************** -->
11856
<!-- MARKER PAGE="sheet: 47; page: 47" -->
11857
11858
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
11859
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
11860
<TR VALIGN=TOP>
11861
<TD>
11862
<BR>
11863
11864
11865
<A NAME=A026></A>
11866
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
11867
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>CNS, INC.</B><BR>
11868
Consolidated Statements of Cash Flows<BR>(in thousands) </FONT></P>
11869
11870
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
11871
</TD>
11872
</TR>
11873
</TABLE>
11874
<BR>
11875
11876
11877
<table cellpadding=0 cellspacing=0 border=0 width=625>
11878
<tr valign=Bottom>
11879
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11880
<td colspan="8" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">For
11881
the Years Ended</font></b></td>
11882
<td align=center nowrap rowspan="2"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11883
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">For
11884
the Three Months Ended</font></b></td>
11885
<td align=LEFT rowspan="2"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11886
</tr>
11887
<tr valign=Bottom>
11888
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">March
11889
31,</font></b></td>
11890
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11891
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">December
11892
31,</font></b></td>
11893
<td colspan="5" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">March
11894
31,</font></b></td>
11895
</tr>
11896
<tr valign=Bottom>
11897
<td colspan="14" align=center nowrap>
11898
<hr NOSHADE size=1>
11899
</td>
11900
<td align=center nowrap>&nbsp;</td>
11901
</tr>
11902
<tr valign=Bottom>
11903
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
11904
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11905
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
11906
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11907
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
11908
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11909
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
11910
<td align=center nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11911
<td colspan="2" align=center nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
11912
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
11913
</tr>
11914
<tr valign=Bottom>
11915
<td colspan="15" align=LEFT>
11916
<hr NOSHADE size=1>
11917
</td>
11918
<td align=LEFT>&nbsp;</td>
11919
</tr>
11920
<tr valign=Bottom align="right">
11921
<td colspan="15" valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
11922
<td>&nbsp;</td>
11923
</tr>
11924
<tr valign=Bottom>
11925
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>Operating
11926
activities:</font></td>
11927
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11928
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
11929
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11930
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11931
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
11932
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11933
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11934
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
11935
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11936
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11937
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
11938
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11939
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11940
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2></font></td>
11941
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11942
</tr>
11943
<tr valign=Bottom bgcolor="#C0C0C0">
11944
<td align=LEFT nowrap width="100%"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
11945
income (loss)</font></td>
11946
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
11947
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 6,516</font></td>
11948
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
11949
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
11950
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 81</font></td>
11951
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
11952
<td align=left><font face="Times New Roman, Times, Serif" size=2>$&nbsp;&nbsp;</font></td>
11953
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (15,660</font></td>
11954
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
11955
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
11956
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 10,134</font></td>
11957
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
11958
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
11959
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> (3,577</font></td>
11960
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
11961
</tr>
11962
<tr valign=Bottom>
11963
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments
11964
to reconcile net income (loss) to net </font></td>
11965
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11966
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11967
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11968
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11969
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11970
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11971
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11972
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11973
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11974
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11975
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11976
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11977
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11978
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11979
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11980
</tr>
11981
<tr valign=Bottom>
11982
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cash
11983
provided by (used in) operating activities:</font></td>
11984
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11985
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11986
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11987
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11988
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11989
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11990
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11991
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11992
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11993
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11994
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11995
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11996
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11997
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
11998
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
11999
</tr>
12000
<tr valign=Bottom>
12001
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
12002
and amortization</font></td>
12003
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12004
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,251</font></td>
12005
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12006
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12007
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,244</font></td>
12008
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12009
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12010
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,051</font></td>
12011
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12012
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12013
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>330</font></td>
12014
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12015
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12016
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>271</font></td>
12017
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12018
</tr>
12019
<tr valign=Bottom bgcolor="#C0C0C0">
12020
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
12021
income taxes</font></td>
12022
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12023
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,489</font></td>
12024
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12025
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12026
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12027
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12028
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12029
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12030
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12031
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12032
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(9,126</font></td>
12033
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12034
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12035
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12036
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12037
</tr>
12038
<tr valign=Bottom>
12039
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
12040
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12041
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>16</font></td>
12042
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12043
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12044
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>90</font></td>
12045
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12046
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12047
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>81</font></td>
12048
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12049
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12050
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>74</font></td>
12051
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12052
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12053
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12054
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12055
</tr>
12056
<tr valign=Bottom>
12057
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes
12058
in operating assets and liabilities:</font></td>
12059
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12060
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12061
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12062
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12063
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12064
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12065
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12066
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12067
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12068
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12069
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12070
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12071
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12072
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12073
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12074
</tr>
12075
<tr valign=Bottom bgcolor="#C0C0C0">
12076
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
12077
receivable</font></td>
12078
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12079
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>671</font></td>
12080
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12081
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12082
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>275</font></td>
12083
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12084
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12085
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,212</font></td>
12086
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12087
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12088
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>626</font></td>
12089
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12090
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12091
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,182</font></td>
12092
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12093
</tr>
12094
<tr valign=Bottom>
12095
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></td>
12096
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12097
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,199</font></td>
12098
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12099
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12100
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,070</font></td>
12101
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12102
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12103
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>153</font></td>
12104
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12105
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12106
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,357</font></td>
12107
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12108
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12109
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,767</font></td>
12110
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12111
</tr>
12112
<tr valign=Bottom bgcolor="#C0C0C0">
12113
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid
12114
expenses and other current assets</font></td>
12115
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12116
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(36</font></td>
12117
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12118
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12119
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,964</font></td>
12120
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12121
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12122
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>3,546</font></td>
12123
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12124
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12125
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>294</font></td>
12126
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12127
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12128
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>362</font></td>
12129
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12130
</tr>
12131
<tr valign=Bottom>
12132
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
12133
payable and accrued expenses</font></td>
12134
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12135
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,057</font></td>
12136
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12137
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12138
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(5,401</font></td>
12139
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12140
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12141
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>7,654</font></td>
12142
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12143
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12144
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(3,742</font></td>
12145
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12146
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12147
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(5,544</font></td>
12148
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12149
</tr>
12150
<tr>
12151
<td colspan=15 nowrap>
12152
<hr NOSHADE size=1>
12153
</td>
12154
<td>&nbsp;</td>
12155
</tr>
12156
<tr valign=Bottom>
12157
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12158
<td align=left>&nbsp;</td>
12159
<td align=RIGHT>&nbsp;</td>
12160
<td align=LEFT>&nbsp;</td>
12161
<td align=left>&nbsp;</td>
12162
<td align=RIGHT>&nbsp;</td>
12163
<td align=LEFT>&nbsp;</td>
12164
<td align=left>&nbsp;</td>
12165
<td align=RIGHT>&nbsp;</td>
12166
<td align=LEFT>&nbsp;</td>
12167
<td align=left>&nbsp;</td>
12168
<td align=RIGHT>&nbsp;</td>
12169
<td align=LEFT>&nbsp;</td>
12170
<td align=left>&nbsp;</td>
12171
<td align=RIGHT>&nbsp;</td>
12172
<td align=LEFT>&nbsp;</td>
12173
</tr>
12174
<tr valign=Bottom bgcolor="#C0C0C0">
12175
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
12176
cash provided by (used in) operating<br>
12177
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;activities</font></td>
12178
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12179
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>19,163</font></td>
12180
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12181
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12182
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,817</font></td>
12183
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12184
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12185
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(4,387</font></td>
12186
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12187
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12188
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(53</font></td>
12189
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12190
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12191
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(11,437</font></td>
12192
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12193
</tr>
12194
<tr>
12195
<td colspan=15 nowrap>
12196
<hr NOSHADE size=1>
12197
</td>
12198
<td>&nbsp;</td>
12199
</tr>
12200
<tr valign=Bottom>
12201
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12202
<td align=left>&nbsp;</td>
12203
<td align=RIGHT>&nbsp;</td>
12204
<td align=LEFT>&nbsp;</td>
12205
<td align=left>&nbsp;</td>
12206
<td align=RIGHT>&nbsp;</td>
12207
<td align=LEFT>&nbsp;</td>
12208
<td align=left>&nbsp;</td>
12209
<td align=RIGHT>&nbsp;</td>
12210
<td align=LEFT>&nbsp;</td>
12211
<td align=left>&nbsp;</td>
12212
<td align=RIGHT>&nbsp;</td>
12213
<td align=LEFT>&nbsp;</td>
12214
<td align=left>&nbsp;</td>
12215
<td align=RIGHT>&nbsp;</td>
12216
<td align=LEFT>&nbsp;</td>
12217
</tr>
12218
<tr valign=Bottom>
12219
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>Investing
12220
activities:</font></td>
12221
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12222
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12223
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12224
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12225
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12226
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12227
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12228
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12229
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12230
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12231
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12232
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12233
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12234
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12235
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12236
</tr>
12237
<tr valign=Bottom>
12238
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases
12239
of marketable securities</font></td>
12240
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12241
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(36,255</font></td>
12242
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12243
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12244
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(44,911</font></td>
12245
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12246
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12247
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(63,151</font></td>
12248
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12249
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12250
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(11,218</font></td>
12251
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12252
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12253
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(6,970</font></td>
12254
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12255
</tr>
12256
<tr valign=Bottom bgcolor="#C0C0C0">
12257
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
12258
and maturities of marketable securities</font></td>
12259
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12260
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>30,389</font></td>
12261
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12262
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12263
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>55,550</font></td>
12264
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12265
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12266
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>71,967</font></td>
12267
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12268
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12269
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,846</font></td>
12270
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12271
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12272
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>17,425</font></td>
12273
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12274
</tr>
12275
<tr valign=Bottom>
12276
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments
12277
for purchases of property and equipment</font></td>
12278
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12279
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(60</font></td>
12280
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12281
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12282
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(394</font></td>
12283
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12284
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12285
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,019</font></td>
12286
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12287
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12288
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(8</font></td>
12289
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12290
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12291
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(255</font></td>
12292
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12293
</tr>
12294
<tr valign=Bottom bgcolor="#C0C0C0">
12295
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments
12296
for product rights</font></td>
12297
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12298
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(510</font></td>
12299
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12300
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12301
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(357</font></td>
12302
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12303
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12304
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(141</font></td>
12305
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12306
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12307
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12308
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12309
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12310
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(148</font></td>
12311
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12312
</tr>
12313
<tr>
12314
<td colspan=15 nowrap>
12315
<hr NOSHADE size=1>
12316
</td>
12317
<td>&nbsp;</td>
12318
</tr>
12319
<tr valign=Bottom>
12320
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12321
<td align=left>&nbsp;</td>
12322
<td align=RIGHT>&nbsp;</td>
12323
<td align=LEFT>&nbsp;</td>
12324
<td align=left>&nbsp;</td>
12325
<td align=RIGHT>&nbsp;</td>
12326
<td align=LEFT>&nbsp;</td>
12327
<td align=left>&nbsp;</td>
12328
<td align=RIGHT>&nbsp;</td>
12329
<td align=LEFT>&nbsp;</td>
12330
<td align=left>&nbsp;</td>
12331
<td align=RIGHT>&nbsp;</td>
12332
<td align=LEFT>&nbsp;</td>
12333
<td align=left>&nbsp;</td>
12334
<td align=RIGHT>&nbsp;</td>
12335
<td align=LEFT>&nbsp;</td>
12336
</tr>
12337
<tr valign=Bottom>
12338
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
12339
cash provided by (used in) investing<br>
12340
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;activities</font></td>
12341
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12342
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(6,436</font></td>
12343
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12344
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12345
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>9,888</font></td>
12346
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12347
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12348
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,656</font></td>
12349
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12350
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12351
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(380</font></td>
12352
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12353
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12354
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,052</font></td>
12355
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12356
</tr>
12357
<tr>
12358
<td colspan=15 nowrap>
12359
<hr NOSHADE size=1>
12360
</td>
12361
<td>&nbsp;</td>
12362
</tr>
12363
<tr valign=Bottom>
12364
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12365
<td align=left>&nbsp;</td>
12366
<td align=RIGHT>&nbsp;</td>
12367
<td align=LEFT>&nbsp;</td>
12368
<td align=left>&nbsp;</td>
12369
<td align=RIGHT>&nbsp;</td>
12370
<td align=LEFT>&nbsp;</td>
12371
<td align=left>&nbsp;</td>
12372
<td align=RIGHT>&nbsp;</td>
12373
<td align=LEFT>&nbsp;</td>
12374
<td align=left>&nbsp;</td>
12375
<td align=RIGHT>&nbsp;</td>
12376
<td align=LEFT>&nbsp;</td>
12377
<td align=left>&nbsp;</td>
12378
<td align=RIGHT>&nbsp;</td>
12379
<td align=LEFT>&nbsp;</td>
12380
</tr>
12381
<tr valign=Bottom>
12382
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>Financing
12383
activities:</font></td>
12384
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12385
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12386
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12387
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12388
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12389
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12390
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12391
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12392
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12393
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12394
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12395
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12396
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12397
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12398
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12399
</tr>
12400
<tr valign=Bottom bgcolor="#C0C0C0">
12401
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
12402
from the issuance of common stock</font></td>
12403
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12404
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12405
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12406
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12407
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12408
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12409
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12410
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12411
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12412
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12413
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12414
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12415
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12416
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12417
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12418
</tr>
12419
<tr valign=Bottom bgcolor="#C0C0C0">
12420
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under
12421
Employee Stock Purchase Plan</font></td>
12422
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12423
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>94</font></td>
12424
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12425
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12426
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>114</font></td>
12427
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12428
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12429
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>83</font></td>
12430
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12431
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12432
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12433
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12434
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12435
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12436
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12437
</tr>
12438
<tr valign=Bottom>
12439
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds
12440
from the exercise of stock options</font></td>
12441
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12442
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>855</font></td>
12443
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12444
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12445
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>174</font></td>
12446
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12447
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12448
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>20</font></td>
12449
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12450
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12451
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>72</font></td>
12452
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12453
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12454
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>88</font></td>
12455
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12456
</tr>
12457
<tr valign=Bottom bgcolor="#C0C0C0">
12458
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
12459
of treasury shares</font></td>
12460
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12461
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,755</font></td>
12462
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12463
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12464
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,010</font></td>
12465
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12466
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12467
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,510</font></td>
12468
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12469
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12470
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,438</font></td>
12471
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12472
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12473
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(51</font></td>
12474
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12475
</tr>
12476
<tr>
12477
<td colspan=15 nowrap>
12478
<hr NOSHADE size=1>
12479
</td>
12480
<td>&nbsp;</td>
12481
</tr>
12482
<tr valign=Bottom>
12483
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12484
<td align=left>&nbsp;</td>
12485
<td align=RIGHT>&nbsp;</td>
12486
<td align=LEFT>&nbsp;</td>
12487
<td align=left>&nbsp;</td>
12488
<td align=RIGHT>&nbsp;</td>
12489
<td align=LEFT>&nbsp;</td>
12490
<td align=left>&nbsp;</td>
12491
<td align=RIGHT>&nbsp;</td>
12492
<td align=LEFT>&nbsp;</td>
12493
<td align=left>&nbsp;</td>
12494
<td align=RIGHT>&nbsp;</td>
12495
<td align=LEFT>&nbsp;</td>
12496
<td align=left>&nbsp;</td>
12497
<td align=RIGHT>&nbsp;</td>
12498
<td align=LEFT>&nbsp;</td>
12499
</tr>
12500
<tr valign=Bottom>
12501
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
12502
cash provided by (used in) financing<br>
12503
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;activities</font></td>
12504
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12505
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,806</font></td>
12506
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12507
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12508
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(722</font></td>
12509
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12510
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12511
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,407</font></td>
12512
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12513
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12514
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,366</font></td>
12515
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12516
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12517
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>37</font></td>
12518
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12519
</tr>
12520
<tr>
12521
<td colspan=15 nowrap>
12522
<hr NOSHADE size=1>
12523
</td>
12524
<td>&nbsp;</td>
12525
</tr>
12526
<tr valign=Bottom>
12527
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12528
<td align=left>&nbsp;</td>
12529
<td align=RIGHT>&nbsp;</td>
12530
<td align=LEFT>&nbsp;</td>
12531
<td align=left>&nbsp;</td>
12532
<td align=RIGHT>&nbsp;</td>
12533
<td align=LEFT>&nbsp;</td>
12534
<td align=left>&nbsp;</td>
12535
<td align=RIGHT>&nbsp;</td>
12536
<td align=LEFT>&nbsp;</td>
12537
<td align=left>&nbsp;</td>
12538
<td align=RIGHT>&nbsp;</td>
12539
<td align=LEFT>&nbsp;</td>
12540
<td align=left>&nbsp;</td>
12541
<td align=RIGHT>&nbsp;</td>
12542
<td align=LEFT>&nbsp;</td>
12543
</tr>
12544
<tr valign=Bottom bgcolor="#C0C0C0">
12545
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
12546
increase (decrease) in cash and cash<br>
12547
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;equivalents</font></td>
12548
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12549
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>10,921</font></td>
12550
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12551
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12552
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>6,349</font></td>
12553
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12554
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12555
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>862</font></td>
12556
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12557
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12558
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(2,799</font></td>
12559
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12560
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12561
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>(1,348</font></td>
12562
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>)</font></td>
12563
</tr>
12564
<tr valign=Bottom>
12565
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12566
<td align=left>&nbsp;</td>
12567
<td align=RIGHT>&nbsp;</td>
12568
<td align=LEFT>&nbsp;</td>
12569
<td align=left>&nbsp;</td>
12570
<td align=RIGHT>&nbsp;</td>
12571
<td align=LEFT>&nbsp;</td>
12572
<td align=left>&nbsp;</td>
12573
<td align=RIGHT>&nbsp;</td>
12574
<td align=LEFT>&nbsp;</td>
12575
<td align=left>&nbsp;</td>
12576
<td align=RIGHT>&nbsp;</td>
12577
<td align=LEFT>&nbsp;</td>
12578
<td align=left>&nbsp;</td>
12579
<td align=RIGHT>&nbsp;</td>
12580
<td align=LEFT>&nbsp;</td>
12581
</tr>
12582
<tr valign=Bottom>
12583
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>Cash
12584
and cash equivalents:</font></td>
12585
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12586
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12587
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12588
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12589
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12590
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12591
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12592
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12593
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12594
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12595
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12596
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12597
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12598
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12599
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12600
</tr>
12601
<tr valign=Bottom>
12602
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beginning
12603
of period</font></td>
12604
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12605
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>5,633</font></td>
12606
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12607
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12608
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,083</font></td>
12609
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12610
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12611
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>1,221</font></td>
12612
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12613
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12614
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>8,432</font></td>
12615
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12616
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12617
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>2,083</font></td>
12618
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12619
</tr>
12620
<tr>
12621
<td colspan=15 nowrap>
12622
<hr NOSHADE size=1>
12623
</td>
12624
<td>&nbsp;</td>
12625
</tr>
12626
<tr valign=Bottom>
12627
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12628
<td align=left>&nbsp;</td>
12629
<td align=RIGHT>&nbsp;</td>
12630
<td align=LEFT>&nbsp;</td>
12631
<td align=left>&nbsp;</td>
12632
<td align=RIGHT>&nbsp;</td>
12633
<td align=LEFT>&nbsp;</td>
12634
<td align=left>&nbsp;</td>
12635
<td align=RIGHT>&nbsp;</td>
12636
<td align=LEFT>&nbsp;</td>
12637
<td align=left>&nbsp;</td>
12638
<td align=RIGHT>&nbsp;</td>
12639
<td align=LEFT>&nbsp;</td>
12640
<td align=left>&nbsp;</td>
12641
<td align=RIGHT>&nbsp;</td>
12642
<td align=LEFT>&nbsp;</td>
12643
</tr>
12644
<tr valign=Bottom bgcolor="#C0C0C0">
12645
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;End
12646
of period</font></td>
12647
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12648
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 16,554</font></td>
12649
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12650
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12651
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 8,432</font></td>
12652
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12653
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12654
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 2,083</font></td>
12655
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12656
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12657
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 5,633</font></td>
12658
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12659
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12660
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 735</font></td>
12661
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12662
</tr>
12663
<tr>
12664
<td colspan=15 nowrap>
12665
<hr NOSHADE size=2>
12666
</td>
12667
<td>&nbsp;</td>
12668
</tr>
12669
<tr valign=Bottom>
12670
<td align=LEFT nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</td>
12671
<td align=left>&nbsp;</td>
12672
<td align=RIGHT>&nbsp;</td>
12673
<td align=LEFT>&nbsp;</td>
12674
<td align=left>&nbsp;</td>
12675
<td align=RIGHT>&nbsp;</td>
12676
<td align=LEFT>&nbsp;</td>
12677
<td align=left>&nbsp;</td>
12678
<td align=RIGHT>&nbsp;</td>
12679
<td align=LEFT>&nbsp;</td>
12680
<td align=left>&nbsp;</td>
12681
<td align=RIGHT>&nbsp;</td>
12682
<td align=LEFT>&nbsp;</td>
12683
<td align=left>&nbsp;</td>
12684
<td align=RIGHT>&nbsp;</td>
12685
<td align=LEFT>&nbsp;</td>
12686
</tr>
12687
<tr valign=Bottom>
12688
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>Supplemental
12689
disclosure of cash flow information:</font></td>
12690
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12691
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12692
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12693
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12694
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12695
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12696
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12697
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12698
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12699
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12700
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12701
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12702
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12703
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> </font></td>
12704
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12705
</tr>
12706
<tr valign=Bottom>
12707
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
12708
paid during the year for interest</font></td>
12709
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12710
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0</font></td>
12711
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12712
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12713
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0</font></td>
12714
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12715
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12716
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0</font></td>
12717
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12718
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12719
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0</font></td>
12720
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12721
<td align=left><font face="Times New Roman, Times, Serif" size=2>$</font></td>
12722
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2> 0</font></td>
12723
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12724
</tr>
12725
<tr valign=Bottom bgcolor="#C0C0C0">
12726
<td align=LEFT nowrap><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
12727
paid during the year for income taxes</font></td>
12728
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12729
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>237</font></td>
12730
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12731
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12732
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12733
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12734
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12735
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12736
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12737
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12738
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>35</font></td>
12739
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12740
<td align=left><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12741
<td align=RIGHT><font face="Times New Roman, Times, Serif" size=2>0</font></td>
12742
<td align=LEFT><font face="Times New Roman, Times, Serif" size=2>&nbsp;</font></td>
12743
</tr>
12744
<tr>
12745
<td colspan=15>
12746
<hr NOSHADE size=2>
12747
</td>
12748
<td>&nbsp;</td>
12749
</tr>
12750
</table>
12751
<BR>
12752
12753
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
12754
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
12755
<TR VALIGN=TOP>
12756
<TD>
12757
12758
12759
<!-- MARKER FORMAT-SHEET="Para Flush 10" -->
12760
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying notes are an
12761
integral part of the consolidated financial statements. </FONT></P>
12762
12763
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
12764
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-5 </FONT></P>
12765
<HR SIZE=5 NOSHADE>
12766
12767
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
12768
</TD>
12769
</TR>
12770
</TABLE>
12771
<BR>
12772
12773
12774
12775
12776
12777
<!-- *************************************************************************** -->
12778
<!-- MARKER PAGE="sheet: 48; page: 48" -->
12779
12780
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
12781
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
12782
<TR VALIGN=TOP>
12783
<TD>
12784
<BR>
12785
12786
<A NAME=A027></A>
12787
<!-- MARKER FORMAT-SHEET="Head Major 10" FSL="Project" -->
12788
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CNS, INC.<BR>Notes to
12789
Consolidated Financial Statements<BR>March 31, 2003, December
12790
31, 2001 and 2000</FONT></H1><BR>
12791
12792
<!-- MARKER FORMAT-SHEET="Head Minor" FSL="Project" -->
12793
<H2 ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2></FONT></H2>
12794
12795
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
12796
</TD>
12797
</TR>
12798
</TABLE>
12799
12800
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
12801
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12802
<TR VALIGN=TOP>
12803
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(1) </B> </FONT></TD>
12804
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
12805
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Summary
12806
of Significant Accounting Policies</B> </FONT></TD>
12807
</TR>
12808
</TABLE>
12809
<BR>
12810
12811
12812
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12813
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12814
<TR VALIGN=TOP>
12815
<TD WIDTH=6%>&nbsp;</TD>
12816
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12817
<B>Principles
12818
of Consolidation</B> The accompanying consolidated financial statements include the
12819
accounts of CNS, Inc. and its subsidiaries (&#147;the Company&#148;). All material
12820
intercompany accounts and transactions have been eliminated in
12821
consolidation.</FONT></TD>
12822
</TR>
12823
</TABLE>
12824
<BR>
12825
12826
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12827
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12828
<TR VALIGN=TOP>
12829
<TD WIDTH=6%>&nbsp;</TD>
12830
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12831
<B>Business</B>
12832
The Company designs, manufactures and markets consumer products, including Breathe
12833
Right&reg; nasal strips, Breathe Right Snore Relief&#153; throat spray and FiberChoice&reg; tablets.
12834
The Company&#146;s products are sold over-the-counter in retail outlets, including
12835
mass merchant, drug, grocery and club stores. The Company primarily uses
12836
international distributors to market Breathe Right nasal strips outside
12837
the U.S.</FONT></TD>
12838
</TR>
12839
</TABLE>
12840
<BR>
12841
12842
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12843
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12844
<TR VALIGN=TOP>
12845
<TD WIDTH=6%>&nbsp;</TD>
12846
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12847
<B>Fiscal
12848
Year Change</B> In 2002, the Company changed its fiscal year-end from December 31 to March
12849
31. The three-month transition period ended March 31, 2002 bridges the gap
12850
between the Company&#146;s old and new fiscal year-ends.</FONT></TD>
12851
</TR>
12852
</TABLE>
12853
<BR>
12854
12855
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12856
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12857
<TR VALIGN=TOP>
12858
<TD WIDTH=6%>&nbsp;</TD>
12859
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12860
<B>Principles
12861
of Consolidation</B> The accompanying consolidated financial statements include the
12862
accounts of CNS, Inc. and its subsidiaries (&#147;the Company&#148;). All material
12863
intercompany accounts and transactions have been eliminated in
12864
consolidation.</FONT></TD>
12865
</TR>
12866
</TABLE>
12867
<BR>
12868
12869
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12870
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12871
<TR VALIGN=TOP>
12872
<TD WIDTH=6%>&nbsp;</TD>
12873
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12874
<B>Accounting
12875
Estimates</B> The preparation of financial statements in conformity with accounting
12876
principles generally accepted in the United States of America requires
12877
management to make estimates and assumptions that affect the reported
12878
amounts of assets and liabilities and disclosure of contingent assets and liabilities
12879
at the date of the financial statements and the reported amounts of
12880
revenues and expenses during the reporting period. Actual results could differ from
12881
those estimates. The Company&#146;s estimates and assumptions
12882
primarily arise from risks and uncertainties associated with potential future product
12883
returns, the uncollectibility of accounts receivable and inventory
12884
obsolescence.</FONT></TD>
12885
</TR>
12886
</TABLE>
12887
<BR>
12888
12889
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12890
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12891
<TR VALIGN=TOP>
12892
<TD WIDTH=6%>&nbsp;</TD>
12893
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12894
<B>Basis
12895
of Presentation</B> Certain amounts from prior years&#146; financial statements have been
12896
reclassified to conform to the current year presentation.</FONT></TD>
12897
</TR>
12898
</TABLE>
12899
<BR>
12900
12901
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12902
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12903
<TR VALIGN=TOP>
12904
<TD WIDTH=6%>&nbsp;</TD>
12905
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12906
<B>Change
12907
in Method of Accounting for Sales Incentives and Consideration Paid to a Reseller</B>
12908
Effective January 1, 2002, the Company implemented Emerging Issues Task Force
12909
bulletins Number 00-14 &#147;Accounting for Certain Sales Incentives&#148;,
12910
Number 00-25 &#147;Vendor Income Statement Characterization of Consideration Paid to a
12911
Reseller&#148; and Number 01-9 &#147;Accounting for Consideration
12912
Given by a Vendor to a Customer&#148;. These new accounting standards had no impact
12913
on the Company&#146;s net income; however, they did require
12914
reclassification of certain promotional costs such as sales incentives, promotional
12915
funds, and consumer coupon redemptions that were previously reported as a
12916
component of advertising and promotion expense as a reduction of net
12917
sales.</FONT></TD>
12918
</TR>
12919
</TABLE>
12920
<BR>
12921
12922
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
12923
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
12924
<TR VALIGN=TOP>
12925
<TD>
12926
12927
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
12928
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-6 </FONT></P>
12929
<HR SIZE=5 NOSHADE>
12930
12931
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
12932
</TD>
12933
</TR>
12934
</TABLE>
12935
<BR>
12936
12937
12938
12939
12940
12941
<!-- *************************************************************************** -->
12942
<!-- MARKER PAGE="sheet: 49; page: 49" -->
12943
12944
<BR>
12945
12946
12947
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
12948
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
12949
<TR VALIGN=TOP>
12950
<TD WIDTH=6%>&nbsp;</TD>
12951
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12952
The
12953
following table presents the impact of the adoption of the provisions of EITF Issue
12954
Nos. 00-14, 00-25 and 01-9 discussed above, on the consolidated statements of
12955
operations for the years ended December 31, 2001 and 2000, respectively:</FONT></TD>
12956
</TR>
12957
</TABLE>
12958
<BR>
12959
12960
12961
12962
<table cellpadding=0 cellspacing=0 border=0 width=600>
12963
<tr valign=Bottom align="center">
12964
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12965
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12966
<td nowrap colspan="5"><b><font face="Times New Roman, Times, serif" size="1">For
12967
the Years Ended<br>
12968
December 31, <br>
12969
</font></b></td>
12970
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12971
</tr>
12972
<tr valign=Bottom align="center">
12973
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12974
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12975
<td colspan="5">
12976
<hr NOSHADE size=1>
12977
</td>
12978
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12979
</tr>
12980
<tr valign=Bottom align="center">
12981
<td><b><font face="Times New Roman, Times, serif" size="1">&nbsp;&nbsp;</font></b></td>
12982
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12983
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
12984
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12985
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
12986
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
12987
</tr>
12988
<tr>
12989
<td>&nbsp;</td>
12990
<td colspan=6>
12991
<hr NOSHADE size=1>
12992
</td>
12993
<td>&nbsp;</td>
12994
</tr>
12995
<tr valign=Bottom>
12996
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
12997
<td width=100% align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Net
12998
sales - previous reporting basis</font></td>
12999
<td bgcolor="#C0C0C0" align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13000
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13001
83,934</font></td>
13002
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13003
<td bgcolor="#C0C0C0" align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13004
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13005
68,892</font></td>
13006
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13007
</tr>
13008
<tr valign=Bottom>
13009
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13010
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Impact
13011
of adopting accounting changes</font></td>
13012
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13013
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,692</font></td>
13014
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13015
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13016
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,115</font></td>
13017
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13018
</tr>
13019
<tr>
13020
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13021
<td colspan=6>
13022
<hr NOSHADE size=1>
13023
</td>
13024
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13025
</tr>
13026
<tr valign=Bottom>
13027
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13028
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Net
13029
sales - current reporting basis</font></td>
13030
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13031
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13032
76,242</font></td>
13033
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13034
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13035
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13036
61,777</font></td>
13037
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13038
</tr>
13039
<tr>
13040
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13041
<td colspan=6>
13042
<hr NOSHADE size=2>
13043
</td>
13044
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13045
</tr>
13046
<tr valign=Bottom>
13047
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13048
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13049
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
13050
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13051
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13052
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
13053
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13054
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13055
</tr>
13056
<tr valign=Bottom>
13057
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13058
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Advertising
13059
and promotion expense -</font></td>
13060
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13061
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13062
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13063
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13064
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13065
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13066
</tr>
13067
<tr valign=Bottom>
13068
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13069
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;previous
13070
reporting basis</font></td>
13071
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13072
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13073
41,948</font></td>
13074
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13075
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13076
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13077
46,694</font></td>
13078
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13079
</tr>
13080
<tr valign=Bottom>
13081
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13082
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Impact
13083
of adopting accounting changes</font></td>
13084
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13085
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,692</font></td>
13086
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13087
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13088
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,115</font></td>
13089
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13090
</tr>
13091
<tr>
13092
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13093
<td colspan=6>
13094
<hr NOSHADE size=1>
13095
</td>
13096
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13097
</tr>
13098
<tr valign=Bottom>
13099
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13100
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Advertising
13101
and promotion expense -</font></td>
13102
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13103
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13104
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13105
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13106
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13107
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13108
</tr>
13109
<tr valign=Bottom>
13110
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13111
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;current
13112
reporting basis</font></td>
13113
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13114
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13115
34,256</font></td>
13116
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13117
<td align=left bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
13118
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13119
39,579</font></td>
13120
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13121
</tr>
13122
<tr>
13123
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13124
<td colspan=6>
13125
<hr NOSHADE size=2>
13126
</td>
13127
<td><font face="Times New Roman, Times, serif" size="2"></font></td>
13128
</tr>
13129
</table>
13130
<BR>
13131
13132
13133
13134
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13135
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13136
<TR VALIGN=TOP>
13137
<TD WIDTH=6%>&nbsp;</TD>
13138
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13139
The
13140
Company&#146;s results of operations for the years disclosed above were not affected by
13141
the adoption of the provisions of these three announcements.</FONT></TD>
13142
</TR>
13143
</TABLE>
13144
<BR>
13145
13146
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13147
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13148
<TR VALIGN=TOP>
13149
<TD WIDTH=6%>&nbsp;</TD>
13150
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13151
<B>Change
13152
in Method of Accounting for Long-Lived Assets</B> Effective January 1, 2002, the
13153
Company adopted Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.
13154
144, &#147;Accounting for the Impairment or Disposal of Long-Lived
13155
Assets.&#148; This statement superceded SFAS No. 121, &#147;Accounting for the
13156
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
13157
Of.&#148; SFAS No. 144 retains the previously existing accounting requirements related
13158
to the recognition and measurement of the impairment of long-lived
13159
assets to be held and used while expanding the measurement requirements of
13160
long-lived assets to be disposed of by sale. It also expands the previously
13161
existing reporting requirements for discontinued operations to include a
13162
component of an entity that either has been disposed of or is classified as held for sale.</FONT></TD>
13163
</TR>
13164
</TABLE>
13165
<BR>
13166
13167
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13168
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13169
<TR VALIGN=TOP>
13170
<TD WIDTH=6%>&nbsp;</TD>
13171
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13172
<B>Revenue
13173
Recognition</B> Revenue from sales is recognized at the time products are shipped less
13174
estimated sales returns, certain promotional costs and other allowances.</FONT></TD>
13175
</TR>
13176
</TABLE>
13177
<BR>
13178
13179
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13180
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13181
<TR VALIGN=TOP>
13182
<TD WIDTH=6%>&nbsp;</TD>
13183
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13184
<B>Fair
13185
Value of Financial Instruments</B> All financial instruments are carried at amounts that
13186
approximate fair value.</FONT></TD>
13187
</TR>
13188
</TABLE>
13189
<BR>
13190
13191
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13192
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13193
<TR VALIGN=TOP>
13194
<TD WIDTH=6%>&nbsp;</TD>
13195
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13196
<B>Cash
13197
Equivalents</B> Cash equivalents consist primarily of money market funds.</FONT></TD>
13198
</TR>
13199
</TABLE>
13200
<BR>
13201
13202
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13203
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13204
<TR VALIGN=TOP>
13205
<TD WIDTH=6%>&nbsp;</TD>
13206
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13207
<B>Marketable
13208
Securities</B> The Company classifies its marketable debt securities as
13209
available-for-sale and records these securities at fair market value. Net realized
13210
and unrealized gains and losses are determined on the specific
13211
identification cost basis. Any unrealized gains and losses, net of deferred income
13212
taxes, are included in stockholders&#146; equity as a separate component
13213
of other comprehensive income. A decline in the market value of any available-for-sale
13214
security below cost that is deemed other than temporary, results in a
13215
charge to operations resulting in the establishment of a new cost basis for the
13216
security. Realized securities gains or losses are included in gain
13217
(loss) on sales of marketable securities in the consolidated statements of operations.</FONT></TD>
13218
</TR>
13219
</TABLE>
13220
<BR>
13221
13222
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
13223
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
13224
<TR VALIGN=TOP>
13225
<TD>
13226
13227
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
13228
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-7 </FONT></P>
13229
<HR SIZE=5 NOSHADE>
13230
13231
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
13232
</TD>
13233
</TR>
13234
</TABLE>
13235
<BR>
13236
13237
13238
13239
13240
13241
<!-- *************************************************************************** -->
13242
<!-- MARKER PAGE="sheet: 50; page: 50" -->
13243
13244
<BR>
13245
13246
13247
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13248
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13249
<TR VALIGN=TOP>
13250
<TD WIDTH=6%>&nbsp;</TD>
13251
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13252
<B>Inventories</B>
13253
Inventories are valued at the lower of cost (determined on a first-in, first-out
13254
basis) or market. Inventory reserves have been established for potential
13255
product obsolescence.</FONT></TD>
13256
</TR>
13257
</TABLE>
13258
<BR>
13259
13260
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13261
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13262
<TR VALIGN=TOP>
13263
<TD WIDTH=6%>&nbsp;</TD>
13264
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
13265
Property
13266
and Equipment</B> Property and equipment are stated at cost. Equipment is depreciated using
13267
the straight-line method over three to five years. Leasehold improvements
13268
are amortized over the lesser of the estimated useful life of the
13269
improvement or the term of the lease.</FONT></TD>
13270
</TR>
13271
</TABLE>
13272
<BR>
13273
13274
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13275
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13276
<TR VALIGN=TOP>
13277
<TD WIDTH=6%>&nbsp;</TD>
13278
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
13279
Product
13280
Rights</B> Product rights, consisting of patents, trademarks and other product
13281
rights, are stated at cost and are amortized over three to seven years using the
13282
straight-line method.</FONT></TD>
13283
</TR>
13284
</TABLE>
13285
<BR>
13286
13287
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13288
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13289
<TR VALIGN=TOP>
13290
<TD WIDTH=6%>&nbsp;</TD>
13291
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13292
<B>Stock-Based
13293
Compensation</B> The Company accounts for stock-based compensation arrangements in
13294
accordance with the provisions of Accounting Principles Board Opinion (&#147;APB&#148;)
13295
No. 25, &#147;Accounting for Stock Issued to Employees,&#148; and
13296
complies with the disclosure provisions of SFAS No. 148, &#147;Accounting for
13297
Stock-Based Compensation&#148;. Under APB No. 25, compensation cost is
13298
determined based on the difference, if any, on the grant date between the fair value of
13299
the Company&#146;s stock and the amount an employee must pay to acquire
13300
the stock. Accordingly, no compensation expense associated with the fair market
13301
value of stock option grants or shares sold to employees under the
13302
Employee Stock Purchase Plan has been recognized in the Company&#146;s
13303
financial statements.</FONT></TD>
13304
</TR>
13305
</TABLE>
13306
<BR>
13307
13308
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13309
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13310
<TR VALIGN=TOP>
13311
<TD WIDTH=6%>&nbsp;</TD>
13312
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13313
The
13314
fair value of each stock option grant issued and shares sold to employees under the
13315
Employee Stock Purchase Plan are estimated on the date of grant or purchase using
13316
the Black-Scholes option-pricing model. The following assumptions were
13317
made in estimating fair value:</FONT></TD>
13318
</TR>
13319
</TABLE>
13320
<BR>
13321
13322
13323
13324
13325
<table cellpadding=0 cellspacing=0 border=0 width=600>
13326
<tr valign=Bottom>
13327
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13328
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13329
<td align=center colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
13330
the Years Ended</font></b></td>
13331
<td align=center rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13332
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
13333
the Three Months<br>
13334
Ended <br>
13335
</font></b></td>
13336
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13337
</tr>
13338
<tr valign=Bottom>
13339
<td align=center colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
13340
31,</font></b></td>
13341
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13342
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
13343
31,</font></b></td>
13344
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
13345
31,</font></b></td>
13346
</tr>
13347
<tr valign=Bottom>
13348
<td colspan="14" align=RIGHT>
13349
<hr size="1" noshade>
13350
</td>
13351
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13352
</tr>
13353
<tr valign=Bottom>
13354
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
13355
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13356
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
13357
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13358
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
13359
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
13360
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13361
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
13362
</tr>
13363
<tr valign=Bottom>
13364
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13365
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13366
<td colspan="14" align=RIGHT>
13367
<hr size="1" noshade>
13368
</td>
13369
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13370
</tr>
13371
<tr valign=Bottom>
13372
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13373
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13374
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13375
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13376
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13377
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13378
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13379
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13380
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13381
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13382
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13383
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13384
<td align=RIGHT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13385
<td colspan="3" align=right valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
13386
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13387
</tr>
13388
<tr valign=Bottom>
13389
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13390
<td width=100% align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Expected
13391
lives (Years)</font></td>
13392
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13393
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">6</font></td>
13394
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13395
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13396
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">6</font></td>
13397
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13398
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13399
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">6</font></td>
13400
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13401
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13402
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">6</font></td>
13403
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13404
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13405
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">6</font></td>
13406
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13407
</tr>
13408
<tr valign=Bottom>
13409
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13410
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Dividend
13411
Yield</font></td>
13412
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13413
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.00</font></td>
13414
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13415
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13416
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.00</font></td>
13417
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13418
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13419
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.00</font></td>
13420
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13421
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13422
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.00</font></td>
13423
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13424
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13425
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0.00</font></td>
13426
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13427
</tr>
13428
<tr valign=Bottom>
13429
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13430
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Expected
13431
volatility</font></td>
13432
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13433
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">60.00</font></td>
13434
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">%</font></td>
13435
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13436
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">60.00</font></td>
13437
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">%</font></td>
13438
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13439
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">65.00</font></td>
13440
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">%</font></td>
13441
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13442
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">60.00</font></td>
13443
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">%</font></td>
13444
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13445
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">60.00</font></td>
13446
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">%</font></td>
13447
</tr>
13448
<tr valign=Bottom>
13449
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13450
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Risk-Free
13451
Interest Rate</font></td>
13452
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13453
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.00</font></td>
13454
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
13455
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13456
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.00</font></td>
13457
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
13458
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13459
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6.50</font></td>
13460
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
13461
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13462
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.00</font></td>
13463
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
13464
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13465
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.00</font></td>
13466
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">%</font></td>
13467
</tr>
13468
</table>
13469
<BR>
13470
13471
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
13472
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
13473
<TR VALIGN=TOP>
13474
<TD>
13475
13476
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
13477
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-8 </FONT></P>
13478
<HR SIZE=5 NOSHADE>
13479
13480
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
13481
</TD>
13482
</TR>
13483
</TABLE>
13484
<BR>
13485
13486
13487
13488
13489
13490
<!-- *************************************************************************** -->
13491
<!-- MARKER PAGE="sheet: 51; page: 51" -->
13492
13493
<BR>
13494
13495
13496
13497
13498
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13499
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13500
<TR VALIGN=TOP>
13501
<TD WIDTH=6%>&nbsp;</TD>
13502
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13503
Had
13504
compensation cost for the Company&#146;s stock option plan been determined pursuant to
13505
SFAS No. 148, net earnings and earnings per share would have been as follows: </FONT></TD>
13506
</TR>
13507
</TABLE>
13508
<BR>
13509
13510
<table cellpadding=0 cellspacing=0 border=0 width=600>
13511
<tr valign=Bottom>
13512
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13513
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13514
<td align=center colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
13515
the Years Ended</font></b></td>
13516
<td align=center rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13517
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
13518
the Three Months<br>
13519
Ended <br>
13520
</font></b></td>
13521
<td align=LEFT rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13522
</tr>
13523
<tr valign=Bottom>
13524
<td align=center colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
13525
31,</font></b></td>
13526
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13527
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
13528
31,</font></b></td>
13529
<td align=center colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
13530
31,</font></b></td>
13531
</tr>
13532
<tr valign=Bottom>
13533
<td colspan="14" align=RIGHT>
13534
<hr size="1" noshade>
13535
</td>
13536
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13537
</tr>
13538
<tr valign=Bottom>
13539
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
13540
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13541
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
13542
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13543
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
13544
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
13545
<td align=center><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13546
<td align=center colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
13547
</tr>
13548
<tr valign=Bottom>
13549
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13550
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13551
<td colspan="14" align=RIGHT>
13552
<hr size="1" noshade>
13553
</td>
13554
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13555
</tr>
13556
<tr valign=Bottom>
13557
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13558
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13559
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13560
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13561
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13562
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13563
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13564
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13565
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13566
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13567
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13568
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13569
<td align=RIGHT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13570
<td colspan="3" align=right valign="top" height="20"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
13571
<td align=LEFT height="20"><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
13572
</tr>
13573
<tr valign=Bottom>
13574
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13575
<td width=100% align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Net
13576
income (loss),</font></td>
13577
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13578
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;
13579
</font></td>
13580
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13581
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13582
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13583
</font></td>
13584
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13585
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13586
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13587
</font></td>
13588
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13589
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13590
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13591
</font></td>
13592
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
13593
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13594
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
13595
</font></td>
13596
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13597
</tr>
13598
<tr valign=Bottom>
13599
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13600
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;as
13601
reported</font></td>
13602
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13603
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13604
6,516</font></td>
13605
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13606
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13607
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13608
81</font></td>
13609
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13610
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13611
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13612
(15,660</font></td>
13613
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13614
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13615
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13616
10,134</font></td>
13617
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13618
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13619
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13620
(3,577</font></td>
13621
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13622
</tr>
13623
<tr valign=Bottom>
13624
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13625
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Deduct:
13626
Total stock-based</font></td>
13627
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13628
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13629
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13630
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13631
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13632
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13633
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13634
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13635
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13636
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13637
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13638
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13639
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13640
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13641
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13642
</tr>
13643
<tr valign=Bottom>
13644
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13645
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;compensation
13646
expense</font></td>
13647
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13648
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13650
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13651
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13652
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13653
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13654
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13655
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13656
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13657
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13658
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13659
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13660
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13661
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13662
</tr>
13663
<tr valign=Bottom>
13664
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13665
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;determined
13666
under the fair</font></td>
13667
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13668
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13669
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13670
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13671
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13672
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13673
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13674
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13675
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13676
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13677
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13678
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13679
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13680
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13681
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13682
</tr>
13683
<tr valign=Bottom>
13684
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13685
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;value
13686
based method for all</font></td>
13687
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13688
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13689
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13690
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13691
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13692
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13693
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13694
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13695
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13696
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13697
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13698
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13699
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13700
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13701
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13702
</tr>
13703
<tr valign=Bottom>
13704
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13705
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;awards,
13706
net of related tax</font></td>
13707
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13708
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13709
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13710
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13711
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13712
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13713
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13714
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13715
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13716
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13717
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13718
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13719
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13720
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13721
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13722
</tr>
13723
<tr valign=Bottom>
13724
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13725
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;effects</font></td>
13726
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13727
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">456</font></td>
13728
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13729
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13730
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">523</font></td>
13731
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13732
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13733
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">325</font></td>
13734
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13735
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13736
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">124</font></td>
13737
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13738
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13739
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">89</font></td>
13740
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13741
</tr>
13742
<tr valign=Bottom>
13743
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13744
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13745
<td align=RIGHT colspan="14">
13746
<hr size="1" noshade>
13747
</td>
13748
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13749
</tr>
13750
<tr valign=Bottom>
13751
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13752
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13753
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13754
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13755
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13756
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13757
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13758
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13759
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13760
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13761
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13762
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13763
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13764
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13765
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13766
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13767
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13768
</tr>
13769
<tr valign=Bottom>
13770
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13771
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Proforma
13772
net income (loss)</font></td>
13773
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13774
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13775
6,060</font></td>
13776
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13777
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13778
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13779
(442</font></td>
13780
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13781
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13782
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13783
(15,985</font></td>
13784
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13785
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13786
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13787
10,010</font></td>
13788
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13789
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13790
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13791
(3,666</font></td>
13792
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13793
</tr>
13794
<tr valign=Bottom>
13795
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13796
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13797
<td align=RIGHT colspan="14">
13798
<hr size="2" noshade>
13799
</td>
13800
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13801
</tr>
13802
<tr valign=Bottom>
13803
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13804
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13805
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13806
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13807
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13808
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13809
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13810
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13811
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13812
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13813
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13814
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13815
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13816
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13817
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13818
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13819
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13820
</tr>
13821
<tr valign=Bottom>
13822
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13823
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Earnings
13824
(loss) per share:</font></td>
13825
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13826
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13827
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13828
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13829
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13830
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13831
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13832
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13833
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13834
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13835
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13836
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13837
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13838
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
13839
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13840
</tr>
13841
<tr valign=Bottom>
13842
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13843
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic
13844
- as reported</font></td>
13845
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13846
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.48</font></td>
13847
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13848
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13849
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.01</font></td>
13850
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13851
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13852
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (1.09</font></td>
13853
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13854
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13855
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .74</font></td>
13856
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13857
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13858
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (.25</font></td>
13859
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13860
</tr>
13861
<tr valign=Bottom>
13862
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13863
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13864
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13865
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13866
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13867
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13868
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13869
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13870
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13871
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13872
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13873
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13874
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13875
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13876
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13877
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13878
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13879
</tr>
13880
<tr valign=Bottom>
13881
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13882
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic
13883
- proforma</font></td>
13884
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13885
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13886
0.45</font></td>
13887
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13888
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13889
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13890
(0.03</font></td>
13891
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13892
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13893
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13894
(1.11</font></td>
13895
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13896
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13897
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13898
.73</font></td>
13899
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13900
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13901
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13902
(.26</font></td>
13903
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13904
</tr>
13905
<tr valign=Bottom>
13906
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13907
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13908
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13909
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13910
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13911
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13912
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13913
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13914
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13915
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13916
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13917
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13918
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13919
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13920
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13921
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13922
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13923
</tr>
13924
<tr valign=Bottom>
13925
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13926
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
13927
- as reported</font></td>
13928
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13929
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.46</font></td>
13930
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13931
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13932
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 0.01</font></td>
13933
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13934
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13935
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (1.09</font></td>
13936
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13937
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13938
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> .71</font></td>
13939
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13940
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
13941
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> (.25</font></td>
13942
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
13943
</tr>
13944
<tr valign=Bottom>
13945
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
13946
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13947
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13948
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13949
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13950
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13951
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13952
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13953
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13954
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13955
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13956
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13957
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13958
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13959
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13960
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
13961
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13962
</tr>
13963
<tr valign=Bottom>
13964
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
13965
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted
13966
- proforma</font></td>
13967
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13968
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13969
0.43</font></td>
13970
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13971
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13972
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13973
(0.03</font></td>
13974
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13975
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13976
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13977
(1.11</font></td>
13978
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13979
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13980
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13981
.71</font></td>
13982
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
13983
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
13984
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
13985
(.26</font></td>
13986
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
13987
</tr>
13988
</table>
13989
<BR>
13990
13991
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
13992
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
13993
<TR VALIGN=TOP>
13994
<TD WIDTH=6%>&nbsp;</TD>
13995
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
13996
<B>Foreign
13997
Currency Transactions</B> Most foreign transactions are in U.S. dollars, although some
13998
are conducted in functional local currencies. The functional currency is
13999
translated into U.S. dollars for the balance sheet accounts using
14000
current exchange rates in effect at the balance sheet date and for revenue and expense
14001
accounts using a weighted average exchange rate during the fiscal
14002
year. Gains and losses resulting from transactions denominated in foreign
14003
currencies are included in the consolidated statements of operations.</FONT></TD>
14004
</TR>
14005
</TABLE>
14006
<BR>
14007
14008
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14009
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14010
<TR VALIGN=TOP>
14011
<TD WIDTH=6%>&nbsp;</TD>
14012
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14013
<B>Advertising</B>
14014
The Company capitalizes the production costs of advertising and expenses these costs the
14015
first time the advertising runs.</FONT></TD>
14016
</TR>
14017
</TABLE>
14018
<BR>
14019
14020
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14021
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14022
<TR VALIGN=TOP>
14023
<TD WIDTH=6%>&nbsp;</TD>
14024
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14025
<B>Income
14026
Taxes</B> Deferred tax assets and liabilities and the resultant provision for income taxes
14027
are determined based on the difference between the financial statement and
14028
tax bases of assets and liabilities using enacted tax rates in effect
14029
for the year in which the differences are expected to reverse. Deferred tax assets are
14030
recognized when management determines that it is more likely than not
14031
that the asset will be realized.</FONT></TD>
14032
</TR>
14033
</TABLE>
14034
<BR>
14035
14036
14037
14038
14039
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14040
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14041
<TR VALIGN=TOP>
14042
<TD WIDTH=6%>&nbsp;</TD>
14043
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14044
<B>Net Income (Loss) Per Share</B> Basic net income (loss) per share and diluted net
14045
income (loss) per share have been computed based upon the weighted average
14046
number of common shares outstanding during the year. Assumed conversion shares
14047
were excluded from the net loss per share computation as their effect is
14048
antidilutive. Common stock options could potentially dilute basic earnings per
14049
share in future periods if the Company generates net income. Diluted net income
14050
per share has been computed based upon the weighted average number of common and
14051
assumed conversion shares outstanding during the year.</FONT></TD>
14052
</TR>
14053
</TABLE>
14054
<BR>
14055
14056
14057
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
14058
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
14059
<TR VALIGN=TOP>
14060
<TD>
14061
14062
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
14063
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-9 </FONT></P>
14064
<HR SIZE=5 NOSHADE>
14065
14066
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
14067
</TD>
14068
</TR>
14069
</TABLE>
14070
<BR>
14071
14072
14073
14074
14075
14076
<!-- *************************************************************************** -->
14077
<!-- MARKER PAGE="sheet: 52; page: 52" -->
14078
14079
<BR>
14080
14081
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14082
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14083
<TR VALIGN=TOP>
14084
<TD WIDTH=6%>&nbsp;</TD>
14085
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14086
<B>Comprehensive
14087
Income (Loss)</B> Comprehensive income (loss) consists of the Company&#146;s net income
14088
(loss) and unrealized gains (losses) on marketable securities and is presented
14089
in the consolidated statements of stockholders&#146; equity and
14090
comprehensive income (loss).</FONT></TD>
14091
</TR>
14092
</TABLE>
14093
<BR>
14094
14095
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14096
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14097
<TR VALIGN=TOP>
14098
<TD WIDTH=6%>&nbsp;</TD>
14099
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14100
<B>Recent
14101
Accounting Pronouncements</B> In June 2002, the Financial Accounting Standards Board (&#147;FASB&#148;)
14102
issued Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 146,
14103
&#147;Accounting for Costs Associated with Exit or Disposal
14104
Activities.&#148; This statement provides guidance on accounting for restructuring
14105
activities. This statement requires that a liability for a cost
14106
associated with an exit or disposal activity be recognized when the liability is
14107
incurred. The provisions of the statement are effective for exit or
14108
disposal activities initiated after December 31, 2002, with early adoption encouraged.
14109
The Company will apply the provisions of SFAS No. 146 for exit or
14110
disposal activities initiated after December 31, 2002, as required.</FONT></TD>
14111
</TR>
14112
</TABLE>
14113
<BR>
14114
14115
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14116
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14117
<TR VALIGN=TOP>
14118
<TD WIDTH=6%>&nbsp;</TD>
14119
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14120
In
14121
December 2002, the FASB issued SFAS No. 148, &#147;Accounting for Stock-Based
14122
Compensation&#148;. This statement supercedes SFAS No. 123, &#147;Accounting for
14123
Stock-Based Compensation&#148;. This statement provides alternative
14124
methods of transition for a voluntary change to the fair value based method of
14125
accounting for stock-based compensation. In addition, the statement
14126
amends disclosure requirements to require prominent disclosures in annual and interim
14127
financial statements about the method of accounting used for stock-based
14128
employee compensation and the effect of the method used on reported results. The
14129
interim disclosure provisions became effective for the Company for the
14130
interim period beginning January 1, 2003. The annual disclosure provisions became
14131
effective for the Company for the year ended March 31, 2003.</FONT></TD>
14132
</TR>
14133
</TABLE>
14134
<BR>
14135
14136
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14137
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14138
<TR VALIGN=TOP>
14139
<TD WIDTH=6%>&nbsp;</TD>
14140
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14141
In
14142
November 2002, the FASB issued Interpretation No. 45, &#147;Guarantor&#146;s Accounting
14143
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
14144
Indebtedness of Others&#148; which requires certain guarantees to be
14145
recorded at fair value. This Interpretation also requires a guarantor to make certain
14146
disclosures about guarantees, including product warranties, even when
14147
the likelihood of making any payments under the guarantee is remote. The Company has
14148
adopted the disclosure requirements in this Interpretation as of January
14149
1, 2003, as required.</FONT></TD>
14150
</TR>
14151
</TABLE>
14152
<BR>
14153
14154
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14155
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14156
<TR VALIGN=TOP>
14157
<TD WIDTH=6%>&nbsp;</TD>
14158
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14159
In
14160
May 2003, the FASB issued SFAS No.150, &#147;Accounting for Certain Financial
14161
Instruments with Characteristics of both Liabilities and Equity&#148; which requires
14162
that certain types of financial instruments with characteristics of a
14163
liability be presented as a liability. The Company is required to implement SFAS No.
14164
150 beginning with the quarter ending June 30, 2003. Management does not
14165
expect this statement to have a material impact on the Company&#146;s consolidated
14166
financial position.</FONT></TD>
14167
</TR>
14168
</TABLE>
14169
<BR>
14170
14171
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
14172
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
14173
<TR VALIGN=TOP>
14174
<TD>
14175
14176
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
14177
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-10 </FONT></P>
14178
<HR SIZE=5 NOSHADE>
14179
14180
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
14181
</TD>
14182
</TR>
14183
</TABLE>
14184
<BR>
14185
14186
14187
14188
14189
14190
<!-- *************************************************************************** -->
14191
<!-- MARKER PAGE="sheet: 53; page: 53" -->
14192
14193
<BR>
14194
14195
14196
14197
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
14198
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14199
<TR VALIGN=TOP>
14200
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(2) </B> </FONT></TD>
14201
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
14202
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Marketable
14203
Securities</B> </FONT></TD>
14204
</TR>
14205
</TABLE>
14206
<BR>
14207
14208
14209
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14210
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14211
<TR VALIGN=TOP>
14212
<TD WIDTH=6%>&nbsp;</TD>
14213
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14214
Marketable
14215
securities, including estimated fair value based on quoted market prices or valuation
14216
models, are summarized as follows (in thousands):</FONT></TD>
14217
</TR>
14218
</TABLE>
14219
<BR>
14220
14221
14222
<table cellpadding=0 cellspacing=0 border=0 width=600>
14223
<tr valign=Bottom align="center">
14224
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14225
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14226
<td colspan="11"><b><font face="Times New Roman, Times, serif" size="1">March
14227
31,</font></b></td>
14228
</tr>
14229
<tr valign=Bottom align="center">
14230
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14231
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14232
<td colspan="11">
14233
<hr NOSHADE size=1>
14234
</td>
14235
</tr>
14236
<tr valign=Bottom align="center">
14237
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14238
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14239
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
14240
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14241
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
14242
</tr>
14243
<tr valign=Bottom align="center">
14244
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14245
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14246
<td colspan="11">
14247
<hr NOSHADE size=1>
14248
</td>
14249
</tr>
14250
<tr valign=Bottom align="center">
14251
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14252
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14253
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Cost</font></b></td>
14254
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14255
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Fair
14256
Value</font></b></td>
14257
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14258
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Cost</font></b></td>
14259
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14260
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">Fair
14261
Value</font></b></td>
14262
</tr>
14263
<tr valign="top">
14264
<td>&nbsp; </td>
14265
<td colspan=12>
14266
<hr NOSHADE size=1>
14267
</td>
14268
</tr>
14269
<tr valign=Bottom>
14270
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14271
<td width=100% align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Commercial
14272
paper</font></td>
14273
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
14274
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
14275
5,415</font></td>
14276
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14277
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
14278
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
14279
5,415</font></td>
14280
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14281
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
14282
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
14283
3,148</font></td>
14284
<td bgcolor="#C0C0C0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14285
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
14286
<td bgcolor="#C0C0C0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
14287
3,148</font></td>
14288
</tr>
14289
<tr valign=Bottom>
14290
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14291
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Certificate
14292
of deposit</font></td>
14293
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14294
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
14295
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14296
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14297
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
14298
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14299
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14300
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,000</font></td>
14301
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14302
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14303
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">997</font></td>
14304
</tr>
14305
<tr valign=Bottom>
14306
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14307
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">Corporate
14308
bonds</font></td>
14309
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14310
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">7,225</font></td>
14311
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14312
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14313
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">7,361</font></td>
14314
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14315
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14316
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">9,075</font></td>
14317
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14318
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14319
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">9,240</font></td>
14320
</tr>
14321
<tr valign=Bottom>
14322
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14323
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">U.S. Government
14324
obligations</font></td>
14325
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14326
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,099</font></td>
14327
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14328
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14329
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">12,285</font></td>
14330
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14331
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14332
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,650</font></td>
14333
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14334
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14335
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,644</font></td>
14336
</tr>
14337
<tr>
14338
<td><font face="Times New Roman, Times, serif" size="2"></font> </td>
14339
<td colspan=12>
14340
<hr NOSHADE size=1>
14341
</td>
14342
</tr>
14343
<tr>
14344
<td><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font>
14345
</td>
14346
<td colspan=12>&nbsp; </td>
14347
</tr>
14348
<tr valign=Bottom>
14349
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14350
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
14351
marketable securities</font></td>
14352
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14353
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
14354
24,739</font></td>
14355
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14356
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14357
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
14358
25,061</font></td>
14359
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14360
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14361
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
14362
18,873</font></td>
14363
<td align=LEFT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14364
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14365
<td align=RIGHT bgcolor="#C0C0C0"><font face="Times New Roman, Times, serif" size="2">
14366
19,029</font></td>
14367
</tr>
14368
<tr>
14369
<td><font face="Times New Roman, Times, serif" size="2"></font> </td>
14370
<td colspan=12>
14371
<hr NOSHADE size=2>
14372
</td>
14373
</tr>
14374
</table>
14375
<BR>
14376
14377
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14378
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14379
<TR VALIGN=TOP>
14380
<TD WIDTH=6%>&nbsp;</TD>
14381
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14382
Maturities
14383
of marketable securities at March 31, 2003 are as follows (in thousands):</FONT></TD>
14384
</TR>
14385
</TABLE>
14386
<BR>
14387
14388
14389
14390
<table cellpadding=0 cellspacing=0 border=0 width=600>
14391
<tr valign=Bottom align="center">
14392
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14393
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14394
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Cost</font></b></td>
14395
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14396
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Fair
14397
Value</font></b></td>
14398
</tr>
14399
<tr valign=top>
14400
<td align=LEFT>&nbsp;</td>
14401
<td colspan="6" align=LEFT>
14402
<hr size="1" noshade>
14403
</td>
14404
</tr>
14405
<tr valign=Bottom>
14406
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14407
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Due
14408
within one year</font></td>
14409
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14410
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14411
10,502</font></td>
14412
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14413
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14414
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14415
10,558</font></td>
14416
</tr>
14417
<tr valign=Bottom>
14418
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14419
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Due after
14420
one year through three years</font></td>
14421
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14422
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,237</font></td>
14423
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14424
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14425
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">14,503</font></td>
14426
</tr>
14427
<tr valign=Bottom>
14428
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14429
<td colspan="6" align=LEFT>
14430
<hr size="1" noshade>
14431
</td>
14432
</tr>
14433
<tr valign=Bottom>
14434
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14435
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14436
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14437
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14438
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14439
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14440
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14441
</tr>
14442
<tr valign=Bottom>
14443
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14444
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
14445
marketable securities</font></td>
14446
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14447
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14448
24,739</font></td>
14449
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14450
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14451
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14452
25,061</font></td>
14453
</tr>
14454
<tr valign=Bottom>
14455
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14456
<td colspan="6" align=LEFT>
14457
<hr size="2" noshade>
14458
</td>
14459
</tr>
14460
</table>
14461
<BR>
14462
14463
14464
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14465
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14466
<TR VALIGN=TOP>
14467
<TD WIDTH=6%>&nbsp;</TD>
14468
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14469
Gross
14470
unrealized gains on marketable securities available for sale totaled $324,000 and
14471
$195,000 at March 31, 2003 and 2002, respectively. Gross unrealized losses on
14472
marketable securities available for sale totaled $2,000 and $39,000
14473
at March 31, 2003 and 2002, respectively.</FONT></TD>
14474
</TR>
14475
</TABLE>
14476
<BR>
14477
14478
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14479
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14480
<TR VALIGN=TOP>
14481
<TD WIDTH=6%>&nbsp;</TD>
14482
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14483
Realized
14484
gains on sales of marketable securities were $18,000; $64,000 and $0 for the
14485
years ended March 31, 2003; December 31, 2001 and 2000, respectively. Realized gains
14486
on sales of marketable securities were $36,000 and $17,000
14487
(unaudited) for the three months ended March 31, 2002 and 2001, respectively.
14488
Realized losses on sales of marketable securities were $51,000 for
14489
the year ended December 31, 2000.</FONT></TD>
14490
</TR>
14491
</TABLE>
14492
<BR>
14493
14494
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
14495
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14496
<TR VALIGN=TOP>
14497
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(3) </B> </FONT></TD>
14498
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
14499
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Advertising</B> </FONT></TD>
14500
</TR>
14501
</TABLE>
14502
<BR>
14503
14504
14505
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14506
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14507
<TR VALIGN=TOP>
14508
<TD WIDTH=6%>&nbsp;</TD>
14509
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14510
At
14511
March 31, 2003 and 2002, $668,000 and $686,000, respectively, of advertising
14512
costs were reported as assets. Advertising expense was $22,657,000,
14513
$19,486,000 and $26,027,000 for the years ended March 31, 2003,
14514
December 31, 2001 and 2000, respectively. Advertising expense was $6,708,000 and
14515
$9,081,000 (unaudited) for the three months ended March 31, 2002 and
14516
2001, respectively.</FONT></TD>
14517
</TR>
14518
</TABLE>
14519
<BR>
14520
14521
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
14522
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
14523
<TR VALIGN=TOP>
14524
<TD>
14525
14526
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
14527
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-11 </FONT></P>
14528
<HR SIZE=5 NOSHADE>
14529
14530
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
14531
</TD>
14532
</TR>
14533
</TABLE>
14534
<BR>
14535
14536
14537
14538
14539
14540
<!-- *************************************************************************** -->
14541
<!-- MARKER PAGE="sheet: 54; page: 54" -->
14542
14543
<BR>
14544
14545
14546
14547
14548
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
14549
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14550
<TR VALIGN=TOP>
14551
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(4) </B> </FONT></TD>
14552
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
14553
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Details
14554
of Selected Balance Sheet Accounts</B> </FONT></TD>
14555
</TR>
14556
</TABLE>
14557
<BR>
14558
14559
14560
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
14561
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
14562
<TR VALIGN=TOP>
14563
<TD WIDTH=6%>&nbsp;</TD>
14564
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
14565
Details
14566
of selected balance sheet accounts are as follows (in thousands):</FONT></TD>
14567
</TR>
14568
</TABLE>
14569
<BR>
14570
14571
14572
<table cellpadding=0 cellspacing=0 border=0 width=600>
14573
<tr valign=Bottom align="center">
14574
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14575
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14576
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">March
14577
31,</font></b></td>
14578
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14579
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">December
14580
31,</font></b></td>
14581
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14582
</tr>
14583
<tr valign=Bottom>
14584
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
14585
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
14586
<td align=LEFT colspan="11">
14587
<hr size="1" noshade>
14588
</td>
14589
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
14590
</tr>
14591
<tr valign=Bottom align="center">
14592
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14593
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14594
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
14595
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14596
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
14597
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14598
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
14599
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14600
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
14601
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14602
</tr>
14603
<tr valign=Bottom>
14604
<td align=LEFT>&nbsp;</td>
14605
<td align=LEFT colspan="12">
14606
<hr size="1" noshade>
14607
</td>
14608
<td align=LEFT>&nbsp;</td>
14609
</tr>
14610
<tr valign=Bottom>
14611
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14612
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Allowance
14613
for doubtful accounts:</font></td>
14614
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14615
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14616
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14617
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14618
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14619
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14620
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14621
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14622
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
14623
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14624
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14625
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14626
</tr>
14627
<tr valign=Bottom>
14628
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14629
<td width="60%" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Balance
14630
beginning of period</font></td>
14631
<td width="2%" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14632
<td width="6%" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14633
500</font></td>
14634
<td width="2%" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14635
<td width="2%" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14636
<td width="6%" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14637
500</font></td>
14638
<td width="2%" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14639
<td width="2%" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14640
<td width="6%" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14641
300</font></td>
14642
<td width="2%" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14643
<td width="2%" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14644
<td width="6%" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14645
280</font></td>
14646
<td width="2%" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14647
</tr>
14648
<tr valign=Bottom>
14649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14650
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Plus
14651
provision for doubtful accounts</font></td>
14652
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14653
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">55</font></td>
14654
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14655
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14656
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">31</font></td>
14657
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14658
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14659
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">316</font></td>
14660
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14661
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14662
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">26</font></td>
14663
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14664
</tr>
14665
<tr valign=Bottom>
14666
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14667
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Less
14668
charge offs</font></td>
14669
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14670
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">225</font></td>
14671
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14672
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14673
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">31</font></td>
14674
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14675
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14676
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">116</font></td>
14677
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14678
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14679
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6</font></td>
14680
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14681
</tr>
14682
<tr valign=Bottom>
14683
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14684
<td align=LEFT colspan="12">
14685
<hr size="1" noshade>
14686
</td>
14687
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14688
</tr>
14689
<tr valign=Bottom>
14690
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
14691
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14692
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14693
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14694
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14695
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14696
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14697
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14698
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14699
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14700
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14701
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14702
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14703
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14704
</tr>
14705
<tr valign=Bottom>
14706
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14707
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance
14708
end of period</font></td>
14709
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
14710
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 330</font></td>
14711
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14712
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
14713
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 500</font></td>
14714
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14715
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
14716
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 500</font></td>
14717
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14718
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
14719
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 300</font></td>
14720
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14721
</tr>
14722
<tr valign=Bottom>
14723
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14724
<td align=LEFT colspan="12">
14725
<hr size="2" noshade>
14726
</td>
14727
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14728
</tr>
14729
<tr valign=Bottom>
14730
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
14731
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14732
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14733
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14734
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14735
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14736
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14737
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14738
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14739
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14740
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14741
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14742
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14743
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14744
</tr>
14745
<tr valign=Bottom align="center">
14746
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14747
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14748
<td colspan="5">&nbsp;</td>
14749
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14750
<td colspan="5"><b><font face="Times New Roman, Times, serif" size="1">March
14751
31,</font></b></td>
14752
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14753
</tr>
14754
<tr valign=Bottom>
14755
<td align=LEFT colspan="8"><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
14756
<td align=LEFT colspan="5">
14757
<hr size="1" noshade>
14758
</td>
14759
<td align=LEFT><font face="Times New Roman, Times, serif" size="1">&nbsp;</font></td>
14760
</tr>
14761
<tr valign=Bottom align="center">
14762
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14763
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14764
<td colspan="2"><b></b></td>
14765
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14766
<td colspan="2"><b></b></td>
14767
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14768
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
14769
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14770
<td colspan="2"><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
14771
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
14772
</tr>
14773
<tr valign=Bottom>
14774
<td align=LEFT>&nbsp;</td>
14775
<td align=LEFT colspan="12">
14776
<hr size="1" noshade>
14777
</td>
14778
<td align=LEFT>&nbsp;</td>
14779
</tr>
14780
<tr valign=Bottom>
14781
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14782
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Inventories:</font></td>
14783
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14784
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14785
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14786
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14787
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14788
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14789
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14790
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14791
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14792
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14793
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14794
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14795
</tr>
14796
<tr valign=Bottom>
14797
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14798
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Finished
14799
goods</font></td>
14800
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14801
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14802
</font></td>
14803
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14804
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14805
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14806
</font></td>
14807
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14808
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14809
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14810
2,225</font></td>
14811
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14812
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14813
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14814
2,602</font></td>
14815
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14816
</tr>
14817
<tr valign=Bottom>
14818
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14819
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Raw
14820
materials and component parts</font></td>
14821
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14822
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14823
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14824
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14825
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14826
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14827
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14828
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,041</font></td>
14829
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14830
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14831
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,863</font></td>
14832
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14833
</tr>
14834
<tr valign=Bottom>
14835
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14836
<td align=LEFT colspan="12">
14837
<hr size="1" noshade>
14838
</td>
14839
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14840
</tr>
14841
<tr valign=Bottom>
14842
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
14843
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14844
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14845
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14846
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14847
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14848
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14849
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14850
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14851
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14852
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14853
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14854
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14855
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14856
</tr>
14857
<tr valign=Bottom>
14858
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14859
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
14860
inventories</font></td>
14861
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14862
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14863
</font></td>
14864
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14865
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14866
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14867
</font></td>
14868
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14869
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14870
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14871
3,266</font></td>
14872
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14873
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
14874
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14875
4,465</font></td>
14876
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14877
</tr>
14878
<tr valign=Bottom>
14879
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14880
<td align=LEFT colspan="12">
14881
<hr size="2" noshade>
14882
</td>
14883
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14884
</tr>
14885
<tr valign=Bottom>
14886
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
14887
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14888
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14889
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14890
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14891
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14892
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14893
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14894
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14895
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14896
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14897
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14898
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14899
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14900
</tr>
14901
<tr valign=Bottom>
14902
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14903
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Property
14904
and equipment:</font></td>
14905
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14906
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14907
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14908
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14909
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14910
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14911
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14912
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14913
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14914
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14915
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14916
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14917
</tr>
14918
<tr valign=Bottom>
14919
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14920
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Warehouse
14921
and production equipment</font></td>
14922
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14923
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14924
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14925
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14926
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14927
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14928
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
14929
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 760</font></td>
14930
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14931
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
14932
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 760</font></td>
14933
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14934
</tr>
14935
<tr valign=Bottom>
14936
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14937
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Office
14938
equipment and information systems</font></td>
14939
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14940
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14941
</font></td>
14942
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14943
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14944
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
14945
</font></td>
14946
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14947
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14948
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,680</font></td>
14949
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14950
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14951
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3,650</font></td>
14952
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14953
</tr>
14954
<tr valign=Bottom>
14955
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14956
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Leasehold
14957
improvements</font></td>
14958
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14959
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14960
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14961
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14962
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
14963
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14964
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14965
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,050</font></td>
14966
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14967
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14968
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,050</font></td>
14969
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14970
</tr>
14971
<tr valign=Bottom>
14972
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14973
<td align=LEFT colspan="12">
14974
<hr size="1" noshade>
14975
</td>
14976
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14977
</tr>
14978
<tr valign=Bottom>
14979
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
14980
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14981
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14982
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14983
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14984
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14985
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14986
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14987
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14988
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14989
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14990
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
14991
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
14992
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14993
</tr>
14994
<tr valign=Bottom>
14995
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
14996
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Less
14997
accumulated depreciation</font></td>
14998
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
14999
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15000
</font></td>
15001
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15002
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15003
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15004
</font></td>
15005
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15006
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15007
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(3,885</font></td>
15008
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15009
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15010
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(3,060</font></td>
15011
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15012
</tr>
15013
<tr valign=Bottom>
15014
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15015
<td align=LEFT colspan="12">
15016
<hr size="1" noshade>
15017
</td>
15018
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15019
</tr>
15020
<tr valign=Bottom>
15021
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15022
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15023
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15024
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15025
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15026
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15027
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15028
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15029
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15030
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15031
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15032
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15033
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15034
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15035
</tr>
15036
<tr valign=Bottom>
15037
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15038
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
15039
and equipment, net</font></td>
15040
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15041
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15042
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15043
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15044
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15045
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15046
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
15047
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 1,605</font></td>
15048
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15049
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
15050
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 2,400</font></td>
15051
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15052
</tr>
15053
<tr valign=Bottom>
15054
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15055
<td align=LEFT colspan="12">
15056
<hr size="2" noshade>
15057
</td>
15058
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15059
</tr>
15060
<tr valign=Bottom>
15061
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15062
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15063
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15064
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15065
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15066
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15067
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15068
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15069
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15070
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15071
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15072
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15073
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15074
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15075
</tr>
15076
<tr valign=Bottom>
15077
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15078
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Product
15079
rights:</font></td>
15080
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15081
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15082
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15083
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15084
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15085
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15086
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15087
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15088
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15089
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15090
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15091
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15092
</tr>
15093
<tr valign=Bottom>
15094
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15095
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Product
15096
rights</font></td>
15097
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15098
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15099
</font></td>
15100
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15101
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15102
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15103
</font></td>
15104
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15105
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15106
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15107
3,416</font></td>
15108
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15109
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15110
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15111
2,906</font></td>
15112
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15113
</tr>
15114
<tr valign=Bottom>
15115
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15116
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Less
15117
accumulated amortization</font></td>
15118
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15119
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15120
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15121
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15122
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15123
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15124
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15125
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(2,123</font></td>
15126
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15127
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15128
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(1,727</font></td>
15129
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15130
</tr>
15131
<tr valign=Bottom>
15132
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15133
<td align=LEFT colspan="12">
15134
<hr size="1" noshade>
15135
</td>
15136
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15137
</tr>
15138
<tr valign=Bottom>
15139
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15140
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15141
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15142
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15143
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15144
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15145
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15146
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15147
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15148
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15149
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15150
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15151
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15152
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15153
</tr>
15154
<tr valign=Bottom>
15155
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15156
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product
15157
rights, net</font></td>
15158
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15159
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15160
</font></td>
15161
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15162
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15163
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15164
</font></td>
15165
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15166
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15167
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15168
1,293</font></td>
15169
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15170
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15171
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15172
1,179</font></td>
15173
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15174
</tr>
15175
<tr valign=Bottom>
15176
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15177
<td align=LEFT colspan="12">
15178
<hr size="2" noshade>
15179
</td>
15180
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15181
</tr>
15182
<tr valign=Bottom>
15183
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15184
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15185
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15186
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15187
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15188
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15189
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15190
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15191
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15192
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15193
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15194
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15195
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15196
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15197
</tr>
15198
<tr valign=Bottom>
15199
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15200
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Accrued
15201
expenses:</font></td>
15202
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15203
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15204
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15205
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15206
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15207
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15208
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15209
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15210
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15211
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15212
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15213
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15214
</tr>
15215
<tr valign=Bottom>
15216
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15217
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Promotions
15218
and allowances</font></td>
15219
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15220
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15221
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15222
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15223
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15224
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15225
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
15226
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 4,703</font></td>
15227
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15228
<td align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
15229
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 3,347</font></td>
15230
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15231
</tr>
15232
<tr valign=Bottom>
15233
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15234
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Royalties
15235
and commissions</font></td>
15236
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15237
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15238
</font></td>
15239
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15240
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15241
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15242
</font></td>
15243
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15244
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15245
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">778</font></td>
15246
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15247
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15248
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">951</font></td>
15249
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15250
</tr>
15251
<tr valign=Bottom>
15252
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15253
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Salaries,
15254
incentives and paid time off</font></td>
15255
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15256
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15257
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15258
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15259
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15260
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15261
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15262
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,829</font></td>
15263
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15264
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15265
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,638</font></td>
15266
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15267
</tr>
15268
<tr valign=Bottom>
15269
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15270
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring
15271
costs</font></td>
15272
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15273
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15274
</font></td>
15275
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15276
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15277
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15278
</font></td>
15279
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15280
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15281
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">26</font></td>
15282
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15283
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15284
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">206</font></td>
15285
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15286
</tr>
15287
<tr valign=Bottom>
15288
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15289
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
15290
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15291
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15292
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15293
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15294
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15295
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15296
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15297
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">612</font></td>
15298
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15299
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15300
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">188</font></td>
15301
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15302
</tr>
15303
<tr valign=Bottom>
15304
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15305
<td align=LEFT colspan="12">
15306
<hr size="1" noshade>
15307
</td>
15308
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15309
</tr>
15310
<tr valign=Bottom>
15311
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15312
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15313
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15314
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15315
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15316
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15317
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15318
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15319
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15320
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15321
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15322
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
15323
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15324
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15325
</tr>
15326
<tr valign=Bottom>
15327
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15328
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
15329
accrued expenses</font></td>
15330
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15331
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15332
</font></td>
15333
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15334
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15335
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15336
</font></td>
15337
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15338
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15339
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15340
7,948</font></td>
15341
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15342
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15343
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15344
6,330</font></td>
15345
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15346
</tr>
15347
<tr valign=Bottom>
15348
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15349
<td align=LEFT colspan="12">
15350
<hr size="1" noshade>
15351
</td>
15352
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15353
</tr>
15354
</table>
15355
<BR>
15356
15357
15358
15359
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
15360
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
15361
<TR VALIGN=TOP>
15362
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(5) </B> </FONT></TD>
15363
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
15364
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Stockholders&#146; Equity</B> </FONT></TD>
15365
</TR>
15366
</TABLE>
15367
<BR>
15368
15369
15370
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
15371
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
15372
<TR VALIGN=TOP>
15373
<TD WIDTH=6%>&nbsp;</TD>
15374
<TD WIDTH=94%>
15375
<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Stock
15376
Options </B>The Company&#146;s stock option plans allow for the grant of options to
15377
officers, directors, and employees to purchase up to 3,650,000 shares of common stock
15378
at exercise prices not less than 100% of fair market value on the dates
15379
of grant. The term of the options may not exceed ten years and options vest in
15380
increments over 1 to 5 years from the grant date. The plans allow for
15381
the grant of shares of restricted common stock. No shares of restricted common
15382
stock have been granted under these plans as of March 31, 2003. </FONT></TD>
15383
</TR>
15384
</TABLE>
15385
<BR>
15386
15387
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
15388
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
15389
<TR VALIGN=TOP>
15390
<TD>
15391
15392
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
15393
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-12 </FONT></P>
15394
<HR SIZE=5 NOSHADE>
15395
15396
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
15397
</TD>
15398
</TR>
15399
</TABLE>
15400
<BR>
15401
15402
15403
15404
15405
15406
<!-- *************************************************************************** -->
15407
<!-- MARKER PAGE="sheet: 55; page: 55" -->
15408
15409
<BR>
15410
15411
15412
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
15413
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
15414
<TR VALIGN=TOP>
15415
<TD WIDTH=6%>&nbsp;</TD>
15416
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
15417
Stock
15418
option activity under these plans is summarized as follows: </FONT></TD>
15419
</TR>
15420
</TABLE>
15421
<BR>
15422
15423
15424
15425
15426
15427
15428
<table cellpadding=0 cellspacing=0 border=0 width=600>
15429
<tr valign=Bottom align="center">
15430
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15431
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15432
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">Weighted-average<br>
15433
Exercise Price <br>
15434
Per Share <br>
15435
</font></b></td>
15436
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15437
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Shares
15438
<br>
15439
Outstanding<br>
15440
</font></b></td>
15441
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15442
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"> Shares
15443
<br>
15444
Available<br>
15445
For Grant<br>
15446
</font></b></td>
15447
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15448
</tr>
15449
<tr valign=top>
15450
<td align=LEFT>&nbsp;</td>
15451
<td align=LEFT colspan="7">
15452
<hr size="1" noshade>
15453
</td>
15454
<td align=LEFT>&nbsp;</td>
15455
</tr>
15456
<tr valign=Bottom>
15457
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15458
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Balance
15459
at December 31, 1999</font></td>
15460
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
15461
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
15462
4.47</font></td>
15463
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15464
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,771,390</font></td>
15465
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15466
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">64,750</font></td>
15467
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15468
</tr>
15469
<tr valign=Bottom>
15470
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15471
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;New
15472
2000 Plan</font></td>
15473
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15474
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15475
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15476
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15477
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15478
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">700,000</font></td>
15479
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15480
</tr>
15481
<tr valign=Bottom>
15482
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15483
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Granted</font></td>
15484
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15485
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.01</font></td>
15486
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15487
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">358,400</font></td>
15488
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15489
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(358,400</font></td>
15490
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15491
</tr>
15492
<tr valign=Bottom>
15493
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15494
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Exercised</font></td>
15495
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15496
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.18</font></td>
15497
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15498
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(69,690</font></td>
15499
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15500
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15501
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15502
</tr>
15503
<tr valign=Bottom>
15504
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15505
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Canceled</font></td>
15506
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15507
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.18</font></td>
15508
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15509
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(168,100</font></td>
15510
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15511
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">168,100</font></td>
15512
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15513
</tr>
15514
<tr valign=Bottom>
15515
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15516
<td align=LEFT colspan="7">
15517
<hr size="1" noshade>
15518
</td>
15519
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15520
</tr>
15521
<tr valign=Bottom>
15522
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15523
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15524
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15525
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15526
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15527
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15528
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15529
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15530
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15531
</tr>
15532
<tr valign=Bottom>
15533
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15534
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Balance
15535
at December 31, 2000</font></td>
15536
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15537
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.33</font></td>
15538
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15539
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,892,000</font></td>
15540
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15541
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">574,450</font></td>
15542
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15543
</tr>
15544
<tr valign=Bottom>
15545
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15546
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Granted</font></td>
15547
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15548
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.26</font></td>
15549
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15550
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">345,960</font></td>
15551
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15552
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(345,960</font></td>
15553
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15554
</tr>
15555
<tr valign=Bottom>
15556
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15557
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Exercised</font></td>
15558
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15559
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3.36</font></td>
15560
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15561
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(51,800</font></td>
15562
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15563
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15564
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15565
</tr>
15566
<tr valign=Bottom>
15567
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15568
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Canceled</font></td>
15569
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15570
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.47</font></td>
15571
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15572
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(102,970</font></td>
15573
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15574
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">102,970</font></td>
15575
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15576
</tr>
15577
<tr valign=Bottom>
15578
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15579
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Expired</font></td>
15580
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15581
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15582
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15583
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15584
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15585
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,280</font></td>
15586
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15587
</tr>
15588
<tr valign=Bottom>
15589
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15590
<td align=LEFT colspan="7">
15591
<hr size="1" noshade>
15592
</td>
15593
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15594
</tr>
15595
<tr valign=Bottom>
15596
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15597
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15598
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15599
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15600
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15601
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15602
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15603
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15604
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15605
</tr>
15606
<tr valign=Bottom>
15607
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15608
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Balance
15609
at December 31, 2001</font></td>
15610
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15611
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.33</font></td>
15612
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15613
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,083,190</font></td>
15614
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15615
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">324,180</font></td>
15616
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15617
</tr>
15618
<tr valign=Bottom>
15619
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15620
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Granted</font></td>
15621
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15622
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5.98</font></td>
15623
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15624
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">117,100</font></td>
15625
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15626
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(117,100</font></td>
15627
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15628
</tr>
15629
<tr valign=Bottom>
15630
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15631
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Exercised</font></td>
15632
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15633
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">3.63</font></td>
15634
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15635
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(19,696</font></td>
15636
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15637
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
15638
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15639
</tr>
15640
<tr valign=Bottom>
15641
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15642
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Canceled</font></td>
15643
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15644
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.09</font></td>
15645
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15646
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(4,560</font></td>
15647
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15648
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,560</font></td>
15649
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15650
</tr>
15651
<tr valign=Bottom>
15652
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15653
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Expired</font></td>
15654
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15655
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15656
</font></td>
15657
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15658
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
15659
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15660
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(3,000</font></td>
15661
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15662
</tr>
15663
<tr valign=Bottom>
15664
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15665
<td align=LEFT colspan="7">
15666
<hr size="1" noshade>
15667
</td>
15668
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15669
</tr>
15670
<tr valign=Bottom>
15671
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15672
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15673
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15674
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15675
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15676
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15677
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15678
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15679
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15680
</tr>
15681
<tr valign=Bottom>
15682
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15683
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Balance
15684
at March 31, 2002</font></td>
15685
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">$</font></td>
15686
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 4.43</font></td>
15687
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15688
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,176,034</font></td>
15689
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15690
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">208,640</font></td>
15691
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15692
</tr>
15693
<tr valign=Bottom>
15694
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15695
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Granted</font></td>
15696
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15697
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.01</font></td>
15698
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15699
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">175,460</font></td>
15700
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15701
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(175,460</font></td>
15702
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15703
</tr>
15704
<tr valign=Bottom>
15705
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15706
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Exercised</font></td>
15707
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15708
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4.15</font></td>
15709
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15710
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(205,900</font></td>
15711
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15712
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15713
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15714
</tr>
15715
<tr valign=Bottom>
15716
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15717
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Canceled</font></td>
15718
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15719
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.68</font></td>
15720
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15721
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(61,090</font></td>
15722
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
15723
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">61,090</font></td>
15724
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15725
</tr>
15726
<tr valign=Bottom>
15727
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15728
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Expired</font></td>
15729
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15730
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
15731
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15732
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
15733
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15734
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(7,560</font></td>
15735
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
15736
</tr>
15737
<tr valign=Bottom>
15738
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15739
<td align=LEFT colspan="7">
15740
<hr size="1" noshade>
15741
</td>
15742
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15743
</tr>
15744
<tr valign=Bottom>
15745
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
15746
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15747
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15748
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15749
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15750
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15751
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15752
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
15753
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15754
</tr>
15755
<tr valign=Bottom>
15756
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15757
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Balance
15758
at March 31, 2003</font></td>
15759
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15760
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15761
4.58</font></td>
15762
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15763
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,084,504</font></td>
15764
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15765
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">86,710</font></td>
15766
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15767
</tr>
15768
<tr valign=Bottom>
15769
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15770
<td align=LEFT colspan="7">
15771
<hr size="2" noshade>
15772
</td>
15773
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
15774
</tr>
15775
</table>
15776
<BR>
15777
15778
15779
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
15780
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
15781
<TR VALIGN=TOP>
15782
<TD WIDTH=6%>&nbsp;</TD>
15783
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
15784
Information
15785
on outstanding and currently exercisable options by price range as of March 31, 2003, is
15786
summarized as follows:</FONT></TD>
15787
</TR>
15788
</TABLE>
15789
<BR>
15790
15791
15792
15793
15794
15795
15796
15797
<table cellpadding=0 cellspacing=0 border=0 width=600>
15798
<tr align="center">
15799
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15800
<td colspan="2" nowrap valign="bottom"><b><font face="Times New Roman, Times, serif" size="1">Price
15801
Range<br>
15802
Per Share <br>
15803
</font></b></td>
15804
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15805
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1">
15806
Total <br>
15807
Number of<br>
15808
Shares <br>
15809
</font></b></td>
15810
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15811
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1">
15812
Weighted- <br>
15813
average <br>
15814
Remaining <br>
15815
Life (Years)<br>
15816
</font></b></td>
15817
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15818
<td colspan="2" nowrap valign="bottom"><b><font face="Times New Roman, Times, serif" size="1">Weighted-<br>
15819
average <br>
15820
Exercise<br>
15821
Price <br>
15822
</font></b></td>
15823
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15824
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1">Exercisable<br>
15825
Number of <br>
15826
Shares <br>
15827
</font></b></td>
15828
<td valign="bottom" nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
15829
<td colspan="2" nowrap valign="bottom"><b><font face="Times New Roman, Times, serif" size="1">Weighted-<br>
15830
average <br>
15831
Exercise<br>
15832
Price </font></b></td>
15833
</tr>
15834
<tr>
15835
<td align=LEFT>&nbsp;</td>
15836
<td colspan="14" align=left>
15837
<hr size="1" noshade>
15838
</td>
15839
</tr>
15840
<tr>
15841
<td valign="bottom" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
15842
</font></td>
15843
<td valign="bottom" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15844
<td valign="bottom" align=CENTER nowrap bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2.31
15845
- 2.81</font></td>
15846
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15847
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">192,303</font></td>
15848
<td valign="bottom" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15849
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">5.6</font></td>
15850
<td valign="bottom" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15851
<td valign="bottom" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15852
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15853
2.77</font></td>
15854
<td valign="bottom" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15855
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">192,303</font></td>
15856
<td valign="bottom" align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
15857
<td valign="bottom" align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
15858
<td valign="bottom" align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15859
2.77</font></td>
15860
</tr>
15861
<tr>
15862
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15863
</font></td>
15864
<td align=CENTER valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15865
<td align=CENTER nowrap valign="bottom"><font face="Times New Roman, Times, serif" size="2">3.10
15866
- 3.94</font></td>
15867
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15868
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">379,000</font></td>
15869
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15870
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">2.8</font></td>
15871
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15872
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15873
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">3.26</font></td>
15874
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15875
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">337,200</font></td>
15876
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15877
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15878
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">3.21</font></td>
15879
</tr>
15880
<tr>
15881
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15882
</font></td>
15883
<td align=CENTER valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2"></font></td>
15884
<td align=CENTER nowrap valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.00
15885
- 4.50</font></td>
15886
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15887
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">608,381</font></td>
15888
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15889
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">7.2</font></td>
15890
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15891
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15892
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.23</font></td>
15893
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15894
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">443,613</font></td>
15895
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15896
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15897
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">4.25</font></td>
15898
</tr>
15899
<tr>
15900
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15901
</font></td>
15902
<td align=CENTER valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15903
<td align=CENTER nowrap valign="bottom"><font face="Times New Roman, Times, serif" size="2">5.00
15904
- 5.94</font></td>
15905
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15906
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">640,600</font></td>
15907
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15908
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">4.6</font></td>
15909
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15910
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15911
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">5.37</font></td>
15912
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15913
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">532,600</font></td>
15914
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15915
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15916
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">5.38</font></td>
15917
</tr>
15918
<tr>
15919
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15920
</font></td>
15921
<td align=CENTER valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2"></font></td>
15922
<td align=CENTER nowrap valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.05
15923
- 6.85</font></td>
15924
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15925
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">174,220</font></td>
15926
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15927
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">9.0</font></td>
15928
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15929
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15930
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.40</font></td>
15931
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15932
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">34,740</font></td>
15933
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15934
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15935
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6.05</font></td>
15936
</tr>
15937
<tr>
15938
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15939
</font></td>
15940
<td align=CENTER valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15941
<td align=CENTER nowrap valign="bottom"><font face="Times New Roman, Times, serif" size="2">7.25</font></td>
15942
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15943
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">90,000</font></td>
15944
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15945
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">4.3</font></td>
15946
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15947
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15948
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">7.25</font></td>
15949
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15950
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">90,000</font></td>
15951
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15952
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15953
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2">7.25</font></td>
15954
</tr>
15955
<tr>
15956
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15957
<td align=CENTER valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15958
<td align=CENTER nowrap valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15959
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15960
<td align=RIGHT valign="bottom">
15961
<hr size="1" noshade>
15962
</td>
15963
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15964
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15965
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15966
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15967
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15968
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15969
<td align=RIGHT valign="bottom">
15970
<hr size="1" noshade>
15971
</td>
15972
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15973
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15974
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
15975
</tr>
15976
<tr>
15977
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2">
15978
</font></td>
15979
<td align=CENTER valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2"></font></td>
15980
<td align=CENTER nowrap valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15981
</font></td>
15982
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15983
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,084,504</font></td>
15984
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15985
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15986
</font></td>
15987
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15988
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15989
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15990
</font></td>
15991
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15992
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,630,456</font></td>
15993
<td align=LEFT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15994
<td align=left valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
15995
<td align=RIGHT valign="bottom" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
15996
</font></td>
15997
</tr>
15998
<tr>
15999
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16000
<td align=CENTER valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16001
<td align=CENTER nowrap valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16002
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16003
<td align=RIGHT valign="bottom">
16004
<hr size="2" noshade>
16005
</td>
16006
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16007
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16008
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16009
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16010
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16011
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16012
<td align=RIGHT valign="bottom">
16013
<hr size="2" noshade>
16014
</td>
16015
<td align=LEFT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16016
<td align=left valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16017
<td align=RIGHT valign="bottom"><font face="Times New Roman, Times, serif" size="2"></font></td>
16018
</tr>
16019
</table>
16020
<BR>
16021
16022
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
16023
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
16024
<TR VALIGN=TOP>
16025
<TD>
16026
16027
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
16028
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-13 </FONT></P>
16029
<HR SIZE=5 NOSHADE>
16030
16031
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
16032
</TD>
16033
</TR>
16034
</TABLE>
16035
<BR>
16036
16037
16038
16039
16040
16041
<!-- *************************************************************************** -->
16042
<!-- MARKER PAGE="sheet: 56; page: 56" -->
16043
16044
<BR>
16045
16046
16047
16048
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16049
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16050
<TR VALIGN=TOP>
16051
<TD WIDTH=6%>&nbsp;</TD>
16052
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16053
At
16054
March 31, 2003, the weighted-average remaining contractual life of outstanding
16055
options was 5.5 years. At March 31, 2003; December 31, 2001 and 2000, currently
16056
exercisable options aggregated 1,630,456; 1,409,570 and 1,207,232
16057
shares of common stock, respectively and the weighted-average exercise price of those
16058
options was $4.43; $4.46 and $4.55, respectively.</FONT></TD>
16059
</TR>
16060
</TABLE>
16061
<BR>
16062
16063
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16064
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16065
<TR VALIGN=TOP>
16066
<TD WIDTH=6%>&nbsp;</TD>
16067
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16068
The
16069
per share weighted-average fair value of stock options granted during the year ended
16070
March 31, 2003; December 31, 2001 and 2000 is estimated as $3.54; $2.55 and
16071
$2.60, respectively on the date of grant using the Black-Scholes
16072
option pricing model with the following assumptions: volatility of 60% in 2003 and
16073
2001 and 65% in 2000; risk-free interest rate of 5.00% in 2003 and 2001
16074
and 6.50% in 2000, and an expected life of 6 years.</FONT></TD>
16075
</TR>
16076
</TABLE>
16077
<BR>
16078
16079
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16080
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16081
<TR VALIGN=TOP>
16082
<TD WIDTH=6%>&nbsp;</TD>
16083
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16084
<B>Employee Stock Purchase Plan</B> The Employee Stock Purchase Plan allows eligible
16085
employees to purchase shares of the Company&#146;s common stock through payroll
16086
deductions. The purchase price is the lower of 85% of the fair market value of
16087
the stock on the first or last day of each six-month period during which an
16088
employee participated in the plan. The Company has reserved 400,000 shares under
16089
the plan of which employees as of March 31, 2003 have purchased 243,884 shares.
16090
Common shares sold to employees under the Purchase Plan in fiscal 2003, 2001 and
16091
2000 were 19,517, 35,860 and 25,857, respectively. There was no common stock
16092
sold to employees during the periods ended March 31, 2002 and 2001.</FONT></TD>
16093
</TR>
16094
</TABLE>
16095
<BR>
16096
16097
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16098
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16099
<TR VALIGN=TOP>
16100
<TD WIDTH=6%>&nbsp;</TD>
16101
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16102
The
16103
weighted-average fair value of each purchase right granted in fiscal 2002, 2001 and 2000
16104
was $2.26, $2.25 and $1.44, respectively. </FONT></TD>
16105
</TR>
16106
</TABLE>
16107
<BR>
16108
16109
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16110
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16111
<TR VALIGN=TOP>
16112
<TD WIDTH=6%>&nbsp;</TD>
16113
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16114
<B>Warrants</B>
16115
In connection with agreements to license certain intellectual property rights to
16116
potential products, licensors were issued warrants. During 1999, warrants were
16117
issued to purchase 50,000 shares of the Company&#146;s common stock
16118
exercisable at a price of $3.44 per share exercisable evenly over three years and
16119
for a period of 10 years. The issuance of the warrants resulted in an
16120
expense of $110,000. Warrants were issued during 1997 to purchase 25,000 shares
16121
at a price of $8.00 per share exercisable in 2000 and for a period of
16122
five years. Of these warrants, 65,000 shares are currently exercisable.</FONT></TD>
16123
</TR>
16124
</TABLE>
16125
<BR>
16126
16127
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16128
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16129
<TR VALIGN=TOP>
16130
<TD WIDTH=6%>&nbsp;</TD>
16131
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16132
<B>Preferred Stock</B> At March 31, 2003, the Company is authorized to issue 1,000,000
16133
shares of Series A Junior Participating Preferred Stock upon a triggering event
16134
under the Company&#146;s stockholders&#146; rights plan and is authorized to
16135
issue up to an additional 7,483,589 shares of undesignated preferred
16136
stock.</FONT></TD>
16137
</TR>
16138
</TABLE>
16139
<BR>
16140
16141
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
16142
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
16143
<TR VALIGN=TOP>
16144
<TD>
16145
16146
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
16147
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-14 </FONT></P>
16148
<HR SIZE=5 NOSHADE>
16149
16150
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
16151
</TD>
16152
</TR>
16153
</TABLE>
16154
<BR>
16155
16156
16157
16158
16159
16160
<!-- *************************************************************************** -->
16161
<!-- MARKER PAGE="sheet: 57; page: 57" -->
16162
16163
<BR>
16164
16165
16166
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
16167
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16168
<TR VALIGN=TOP>
16169
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(6) </B> </FONT></TD>
16170
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
16171
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Income
16172
Taxes</B> </FONT></TD>
16173
</TR>
16174
</TABLE>
16175
<BR>
16176
16177
16178
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16179
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16180
<TR VALIGN=TOP>
16181
<TD WIDTH=6%>&nbsp;</TD>
16182
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16183
Income
16184
tax expense (benefit) for the years ended March 31, 2003; December 31, 2001 and
16185
2000 and for the three months ended March 31, 2002 and 2001 is as follows (in
16186
thousands):</FONT></TD>
16187
</TR>
16188
</TABLE>
16189
<BR>
16190
16191
16192
16193
16194
16195
<table cellpadding=0 cellspacing=0 border=0 width=600>
16196
<tr valign=Bottom align="center">
16197
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16198
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16199
<td colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
16200
the Years Ended</font></b></td>
16201
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16202
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
16203
the Three Months Ended</font></b></td>
16204
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16205
</tr>
16206
<tr valign=Bottom align="center">
16207
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16208
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16209
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
16210
31,</font></b></td>
16211
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16212
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
16213
31,</font></b></td>
16214
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16215
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
16216
31,</font></b></td>
16217
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16218
</tr>
16219
<tr valign=Bottom align="center">
16220
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16221
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16222
<td colspan="14">
16223
<hr size="1" noshade>
16224
</td>
16225
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16226
</tr>
16227
<tr valign=Bottom align="center">
16228
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16229
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16230
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
16231
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16232
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
16233
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16234
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
16235
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16236
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
16237
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16238
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
16239
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16240
</tr>
16241
<tr valign=Bottom align="center">
16242
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16243
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16244
<td colspan="14">
16245
<hr size="1" noshade>
16246
</td>
16247
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16248
</tr>
16249
<tr valign=Bottom align="center">
16250
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16251
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16252
<td colspan="14" align=right valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
16253
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16254
</tr>
16255
<tr valign=Bottom>
16256
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16257
<td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">Current
16258
income tax</font></td>
16259
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16260
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16261
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16262
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16263
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16264
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16265
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16266
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16267
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16268
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16269
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16270
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16271
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16272
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16273
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16274
</tr>
16275
<tr valign=Bottom>
16276
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16277
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;expense
16278
(benefit)</font></td>
16279
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16280
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16281
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16282
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16283
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16284
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16285
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16286
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16287
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16288
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16289
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16290
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16291
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16292
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16293
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16294
</tr>
16295
<tr valign=Bottom>
16296
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16297
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Federal</font></td>
16298
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16299
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16300
224</font></td>
16301
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16302
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16303
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16304
0</font></td>
16305
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16306
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16307
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16308
0</font></td>
16309
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16310
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16311
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16312
0</font></td>
16313
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16314
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16315
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16316
0</font></td>
16317
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16318
</tr>
16319
<tr valign=Bottom>
16320
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16321
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;State</font></td>
16322
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16323
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">115</font></td>
16324
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16325
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16326
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16327
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16328
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16329
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16330
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16331
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16332
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16333
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16334
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16335
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16336
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16337
</tr>
16338
<tr valign=Bottom>
16339
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16340
<td align=LEFT colspan="15">
16341
<hr size="1" noshade>
16342
</td>
16343
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16344
</tr>
16345
<tr valign=Bottom>
16346
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16347
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16348
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16349
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16350
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16351
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16352
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16353
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16354
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16355
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16356
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16357
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16358
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16359
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16360
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16361
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16362
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16363
</tr>
16364
<tr valign=Bottom>
16365
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16366
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16367
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16368
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">339</font></td>
16369
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16370
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16371
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16372
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16373
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16374
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16375
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16376
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16377
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16378
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16379
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16380
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16381
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16382
</tr>
16383
<tr valign=Bottom>
16384
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16385
<td align=LEFT colspan="15">
16386
<hr size="1" noshade>
16387
</td>
16388
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16389
</tr>
16390
<tr valign=Bottom>
16391
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16392
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16393
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16394
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16395
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16396
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16397
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16398
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16399
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16400
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16401
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16402
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16403
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16404
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16405
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16406
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16407
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16408
</tr>
16409
<tr valign=Bottom>
16410
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16411
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Deferred
16412
income tax</font></td>
16413
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16414
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16415
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16416
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16417
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16418
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16419
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16420
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16421
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16422
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16423
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16424
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16425
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16426
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16427
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16428
</tr>
16429
<tr valign=Bottom>
16430
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16431
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;expense
16432
(benefit)</font></td>
16433
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16434
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16435
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16436
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16437
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16438
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16439
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16440
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16441
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16442
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16443
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16444
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16445
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16446
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16447
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16448
</tr>
16449
<tr valign=Bottom>
16450
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16451
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Federal</font></td>
16452
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16453
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,366</font></td>
16454
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16455
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16456
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16457
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16458
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16459
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16460
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16461
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16462
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(8,388</font></td>
16463
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
16464
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16465
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16466
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16467
</tr>
16468
<tr valign=Bottom>
16469
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16470
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;State</font></td>
16471
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16472
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">257</font></td>
16473
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16474
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16475
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16476
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16477
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16478
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16479
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16480
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16481
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(738</font></td>
16482
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16483
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16484
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16485
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16486
</tr>
16487
<tr valign=Bottom>
16488
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16489
<td align=LEFT colspan="15">
16490
<hr size="1" noshade>
16491
</td>
16492
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16493
</tr>
16494
<tr valign=Bottom>
16495
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16496
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16497
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16498
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16499
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16500
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16501
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16502
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16503
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16504
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16505
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16506
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16507
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16508
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16509
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16510
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16511
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16512
</tr>
16513
<tr valign=Bottom>
16514
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16515
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16516
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16517
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,623</font></td>
16518
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16519
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16520
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16521
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16522
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16523
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16524
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16525
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16526
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(9,126</font></td>
16527
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
16528
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16529
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16530
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16531
</tr>
16532
<tr valign=Bottom>
16533
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16534
<td align=LEFT colspan="15">
16535
<hr size="1" noshade>
16536
</td>
16537
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16538
</tr>
16539
<tr valign=Bottom>
16540
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16541
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16542
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16543
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16544
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16545
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16546
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16547
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16548
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16549
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16550
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16551
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16552
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16553
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16554
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
16555
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
16556
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16557
</tr>
16558
<tr valign=Bottom>
16559
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16560
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Total
16561
income tax</font></td>
16562
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16563
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16564
</font></td>
16565
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16566
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16567
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16568
</font></td>
16569
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16570
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16571
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16572
</font></td>
16573
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16574
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16575
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16576
</font></td>
16577
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16578
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16579
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16580
</font></td>
16581
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16582
</tr>
16583
<tr valign=Bottom>
16584
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16585
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;expense
16586
(benefit)</font></td>
16587
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16588
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16589
3,962</font></td>
16590
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16591
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16592
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16593
0</font></td>
16594
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16595
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16596
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16597
0</font></td>
16598
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16599
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16600
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16601
(9,126</font></td>
16602
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16603
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16604
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16605
0</font></td>
16606
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16607
</tr>
16608
<tr valign=Bottom>
16609
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16610
<td align=LEFT colspan="15">
16611
<hr size="2" noshade>
16612
</td>
16613
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16614
</tr>
16615
</table>
16616
<BR>
16617
16618
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16619
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16620
<TR VALIGN=TOP>
16621
<TD WIDTH=6%>&nbsp;</TD>
16622
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16623
The
16624
following table is a reconciliation of the statutory federal income tax expense
16625
(benefit) to the effective income tax expense (benefit) for the years ended March
16626
31, 2003; December 31, 2001 and 2000 and for the three months
16627
ended March 31, 2002 and 2001 (in thousands):</FONT></TD>
16628
</TR>
16629
</TABLE>
16630
<BR>
16631
16632
16633
<table cellpadding=0 cellspacing=0 border=0 width=600>
16634
<tr valign=Bottom align="center">
16635
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16636
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16637
<td colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
16638
the Years Ended</font></b></td>
16639
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16640
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
16641
the Three Months Ended</font></b></td>
16642
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16643
</tr>
16644
<tr valign=Bottom align="center">
16645
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16646
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16647
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
16648
31,</font></b></td>
16649
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16650
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
16651
31,</font></b></td>
16652
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16653
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
16654
31,</font></b></td>
16655
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16656
</tr>
16657
<tr valign=Bottom align="center">
16658
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16659
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16660
<td colspan="14">
16661
<hr size="1" noshade>
16662
</td>
16663
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16664
</tr>
16665
<tr valign=Bottom align="center">
16666
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16667
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16668
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
16669
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16670
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
16671
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16672
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
16673
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16674
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
16675
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16676
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
16677
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16678
</tr>
16679
<tr valign=Bottom align="center">
16680
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16681
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16682
<td colspan="14">
16683
<hr size="1" noshade>
16684
</td>
16685
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16686
</tr>
16687
<tr valign=Bottom align="center">
16688
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16689
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16690
<td colspan="14" align=right valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
16691
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16692
</tr>
16693
<tr valign=Bottom>
16694
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16695
<td align=LEFT width="100%" bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Computed
16696
tax</font></td>
16697
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16698
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16699
</font></td>
16700
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16701
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16702
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16703
</font></td>
16704
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16705
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16706
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16707
</font></td>
16708
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16709
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16710
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16711
</font></td>
16712
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16713
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16714
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16715
</font></td>
16716
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16717
</tr>
16718
<tr valign=Bottom>
16719
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16720
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;expense
16721
(benefit)</font></td>
16722
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16723
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16724
3,667</font></td>
16725
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16726
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16727
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16728
28</font></td>
16729
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16730
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16731
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16732
(5,481</font></td>
16733
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16734
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16735
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16736
353</font></td>
16737
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16738
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16739
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16740
(1,252</font></td>
16741
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16742
</tr>
16743
<tr valign=Bottom>
16744
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16745
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">State taxes,
16746
net of</font></td>
16747
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16748
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16749
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16750
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16751
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16752
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16753
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16754
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16755
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16756
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16757
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16758
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16759
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16760
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
16761
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16762
</tr>
16763
<tr valign=Bottom>
16764
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16765
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;federal
16766
benefit</font></td>
16767
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16768
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">242</font></td>
16769
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16770
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16771
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16772
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16773
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16774
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(554</font></td>
16775
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
16776
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16777
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(480</font></td>
16778
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
16779
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16780
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16781
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16782
</tr>
16783
<tr valign=Bottom>
16784
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16785
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Change
16786
in deferred tax</font></td>
16787
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16788
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16789
</font></td>
16790
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16791
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16792
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16793
</font></td>
16794
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16795
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16796
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16797
</font></td>
16798
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16799
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16800
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16801
</font></td>
16802
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16803
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16804
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16805
</font></td>
16806
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16807
</tr>
16808
<tr valign=Bottom>
16809
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16810
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;valuation
16811
allowance</font></td>
16812
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16813
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
16814
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16815
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16816
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(46</font></td>
16817
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16818
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16819
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">6,018</font></td>
16820
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16821
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16822
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(9,126</font></td>
16823
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16824
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16825
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,252</font></td>
16826
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16827
</tr>
16828
<tr valign=Bottom>
16829
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16830
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Other</font></td>
16831
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16832
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">53</font></td>
16833
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16834
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16835
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">18</font></td>
16836
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16837
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16838
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">17</font></td>
16839
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16840
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16841
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">127</font></td>
16842
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16843
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16844
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
16845
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16846
</tr>
16847
<tr valign=Bottom>
16848
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16849
<td align=LEFT colspan="15">
16850
<hr size="1" noshade>
16851
</td>
16852
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16853
</tr>
16854
<tr valign=Bottom>
16855
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16856
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Actual
16857
tax</font></td>
16858
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16859
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16860
</font></td>
16861
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16862
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16863
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16864
</font></td>
16865
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16866
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16867
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16868
</font></td>
16869
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16870
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16871
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16872
</font></td>
16873
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16874
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16875
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16876
</font></td>
16877
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16878
</tr>
16879
<tr valign=Bottom>
16880
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16881
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;expense
16882
(benefit)</font></td>
16883
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16884
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16885
3,962</font></td>
16886
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16887
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16888
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16889
0</font></td>
16890
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16891
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16892
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16893
0</font></td>
16894
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16895
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16896
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16897
(9,126</font></td>
16898
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
16899
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
16900
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
16901
0</font></td>
16902
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
16903
</tr>
16904
<tr valign=Bottom>
16905
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16906
<td align=LEFT colspan="15">
16907
<hr size="2" noshade>
16908
</td>
16909
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
16910
</tr>
16911
</table>
16912
<BR>
16913
16914
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16915
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16916
<TR VALIGN=TOP>
16917
<TD WIDTH=6%>&nbsp;</TD>
16918
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16919
The
16920
Company recognized a tax benefit of $9.1 million during the March quarter of 2002
16921
as a result of reinstating net deferred tax assets, including the benefit of net
16922
operating loss carryforwards.</FONT></TD>
16923
</TR>
16924
</TABLE>
16925
<BR>
16926
16927
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
16928
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
16929
<TR VALIGN=TOP>
16930
<TD>
16931
16932
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
16933
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-15 </FONT></P>
16934
<HR SIZE=5 NOSHADE>
16935
16936
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
16937
</TD>
16938
</TR>
16939
</TABLE>
16940
<BR>
16941
16942
16943
16944
16945
16946
<!-- *************************************************************************** -->
16947
<!-- MARKER PAGE="sheet: 58; page: 58" -->
16948
16949
<BR>
16950
16951
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
16952
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
16953
<TR VALIGN=TOP>
16954
<TD WIDTH=6%>&nbsp;</TD>
16955
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
16956
The
16957
tax effects of temporary differences that give rise to significant portions of the
16958
deferred tax assets and deferred tax liabilities for 2003 and 2002 are presented
16959
below (in thousands):</FONT></TD>
16960
</TR>
16961
</TABLE>
16962
<BR>
16963
16964
16965
16966
<table cellpadding=0 cellspacing=0 border=0 width=600>
16967
<tr valign=Bottom align="center">
16968
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16969
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16970
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
16971
31,</font></b></td>
16972
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16973
</tr>
16974
<tr valign=Bottom align="center">
16975
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16976
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16977
<td colspan="5" nowrap>
16978
<hr size="1" noshade>
16979
</td>
16980
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16981
</tr>
16982
<tr valign=Bottom align="center">
16983
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16984
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16985
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
16986
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16987
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
16988
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
16989
</tr>
16990
<tr valign=top>
16991
<td align=LEFT>&nbsp;</td>
16992
<td align=LEFT colspan="6">
16993
<hr size="1" noshade>
16994
</td>
16995
<td align=LEFT>&nbsp;</td>
16996
</tr>
16997
<tr valign=Bottom>
16998
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
16999
<td width=100% align=LEFT><font face="Times New Roman, Times, serif" size="2">Deferred
17000
tax assets:</font></td>
17001
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17002
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17003
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17004
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17005
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17006
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17007
</tr>
17008
<tr valign=Bottom>
17009
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17010
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Inventory
17011
items</font></td>
17012
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
17013
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17014
383</font></td>
17015
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17016
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
17017
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17018
324</font></td>
17019
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17020
</tr>
17021
<tr valign=Bottom>
17022
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17023
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Accounts
17024
receivable allowance</font></td>
17025
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17026
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">122</font></td>
17027
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17028
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17029
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">185</font></td>
17030
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17031
</tr>
17032
<tr valign=Bottom>
17033
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17034
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Product
17035
rights</font></td>
17036
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17037
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">304</font></td>
17038
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17039
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17040
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">304</font></td>
17041
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17042
</tr>
17043
<tr valign=Bottom>
17044
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17045
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Accrued
17046
expenses</font></td>
17047
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17048
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,108</font></td>
17049
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17050
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17051
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,128</font></td>
17052
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17053
</tr>
17054
<tr valign=Bottom>
17055
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17056
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Contract
17057
termination</font></td>
17058
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17059
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">770</font></td>
17060
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17061
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17062
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
17063
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17064
</tr>
17065
<tr valign=Bottom>
17066
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17067
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Net
17068
operating loss and credit carryforwards</font></td>
17069
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17070
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,166</font></td>
17071
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17072
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17073
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,400</font></td>
17074
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17075
</tr>
17076
<tr valign=Bottom>
17077
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17078
<td align=LEFT colspan="6">
17079
<hr size="1" noshade>
17080
</td>
17081
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17082
</tr>
17083
<tr valign=Bottom>
17084
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17085
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
17086
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17087
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17088
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17089
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17090
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17091
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17092
</tr>
17093
<tr valign=Bottom>
17094
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17095
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Less
17096
valuation allowance</font></td>
17097
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17098
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
17099
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17100
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17101
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">0</font></td>
17102
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17103
</tr>
17104
<tr valign=Bottom>
17105
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17106
<td align=LEFT colspan="6">
17107
<hr size="1" noshade>
17108
</td>
17109
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17110
</tr>
17111
<tr valign=Bottom>
17112
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17113
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17114
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17115
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,853</font></td>
17116
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17117
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17118
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">9,341</font></td>
17119
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17120
</tr>
17121
<tr valign=Bottom>
17122
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17123
<td align=LEFT colspan="6">
17124
<hr size="1" noshade>
17125
</td>
17126
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17127
</tr>
17128
<tr valign=Bottom>
17129
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17130
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
17131
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17132
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17133
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17134
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17135
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17136
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17137
</tr>
17138
<tr valign=Bottom>
17139
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17140
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Deferred
17141
tax liabilities:</font></td>
17142
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17143
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17144
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17145
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17146
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17147
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17148
</tr>
17149
<tr valign=Bottom>
17150
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17151
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
17152
gains on marketable securities</font></td>
17153
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17154
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(119</font></td>
17155
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
17156
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17157
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(58</font></td>
17158
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
17159
</tr>
17160
<tr valign=Bottom>
17161
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17162
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;Property
17163
and equipment</font></td>
17164
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17165
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(184</font></td>
17166
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
17167
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17168
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">(184</font></td>
17169
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">)</font></td>
17170
</tr>
17171
<tr valign=Bottom>
17172
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17173
<td align=LEFT colspan="6">
17174
<hr size="1" noshade>
17175
</td>
17176
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17177
</tr>
17178
<tr valign=Bottom>
17179
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17180
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17181
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17182
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(303</font></td>
17183
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
17184
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17185
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">(242</font></td>
17186
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">)</font></td>
17187
</tr>
17188
<tr valign=Bottom>
17189
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17190
<td align=LEFT colspan="6">
17191
<hr size="1" noshade>
17192
</td>
17193
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17194
</tr>
17195
<tr valign=Bottom>
17196
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17197
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
17198
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17199
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17200
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17201
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17202
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17203
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17204
</tr>
17205
<tr valign=Bottom>
17206
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17207
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
17208
deferred tax assets</font></td>
17209
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;</font></td>
17210
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 5,550</font></td>
17211
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17212
<td align=left><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;</font></td>
17213
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> 9,099</font></td>
17214
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17215
</tr>
17216
<tr valign=Bottom>
17217
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17218
<td align=LEFT colspan="6">
17219
<hr size="2" noshade>
17220
</td>
17221
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17222
</tr>
17223
</table>
17224
<BR>
17225
17226
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17227
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17228
<TR VALIGN=TOP>
17229
<TD WIDTH=6%>&nbsp;</TD>
17230
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17231
In
17232
assessing the realization of deferred tax assets, management considers whether it is
17233
more likely than not that some portion or all of the deferred tax assets will not be
17234
realized. The ultimate realization of deferred tax assets is
17235
dependent upon the generation of future taxable income during the periods in which
17236
those temporary differences become deductible. Based on the level of
17237
historical taxable income and projections of future taxable income over the periods
17238
in which the deferred tax assets are deductible, management believes that
17239
it is more likely than not the Company will realize the benefits of these deductible
17240
differences.</FONT></TD>
17241
</TR>
17242
</TABLE>
17243
<BR>
17244
17245
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17246
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17247
<TR VALIGN=TOP>
17248
<TD WIDTH=6%>&nbsp;</TD>
17249
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17250
As
17251
of March 31, 2003, the Company has reported federal net operating loss carryforwards of
17252
approximately $3,900,000. The federal net operating loss carryforwards begin to
17253
expire in 2019. Additionally, the Company has a federal credit
17254
carryforward for alternative minimum tax of approximately $730,000 that has no
17255
expiration date.</FONT></TD>
17256
</TR>
17257
</TABLE>
17258
<BR>
17259
17260
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17261
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17262
<TR VALIGN=TOP>
17263
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(7) </B> </FONT></TD>
17264
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17265
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Sales</B> </FONT></TD>
17266
</TR>
17267
</TABLE>
17268
<BR>
17269
17270
17271
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17272
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17273
<TR VALIGN=TOP>
17274
<TD WIDTH=6%>&nbsp;</TD>
17275
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17276
The
17277
Company had one significant customer who accounted for 25%, 22% and 20% of net sales in
17278
the years ended March 31, 2003; December 31, 2001 and 2000, respectively. The
17279
Company had one significant customer who accounted for
17280
approximately 22% and 21% (unaudited) of net sales for the three months ended
17281
March 31, 2002 and 2001, respectively. Accounts receivable from this
17282
customer as of March 31, 2003 and 2002 were $2,611,000 and $2,223,000, respectively.</FONT></TD>
17283
</TR>
17284
</TABLE>
17285
<BR>
17286
17287
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
17288
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
17289
<TR VALIGN=TOP>
17290
<TD>
17291
17292
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
17293
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-16 </FONT></P>
17294
<HR SIZE=5 NOSHADE>
17295
17296
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
17297
</TD>
17298
</TR>
17299
</TABLE>
17300
<BR>
17301
17302
17303
17304
17305
17306
<!-- *************************************************************************** -->
17307
<!-- MARKER PAGE="sheet: 59; page: 59" -->
17308
17309
<BR>
17310
17311
17312
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17313
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17314
<TR VALIGN=TOP>
17315
<TD WIDTH=6%>&nbsp;</TD>
17316
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17317
Net
17318
sales by geographic area are as follows (in thousands):</FONT></TD>
17319
</TR>
17320
</TABLE>
17321
<BR>
17322
17323
17324
17325
<table cellpadding=0 cellspacing=0 border=0 width=600>
17326
<tr valign=Bottom align="center">
17327
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17328
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17329
<td colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
17330
the Years Ended</font></b></td>
17331
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17332
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
17333
the Three Months Ended</font></b></td>
17334
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17335
</tr>
17336
<tr valign=Bottom align="center">
17337
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17338
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17339
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
17340
31,</font></b></td>
17341
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17342
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
17343
31,</font></b></td>
17344
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17345
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
17346
31,</font></b></td>
17347
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17348
</tr>
17349
<tr valign=Bottom align="center">
17350
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17351
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17352
<td colspan="14">
17353
<hr size="1" noshade>
17354
</td>
17355
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17356
</tr>
17357
<tr valign=Bottom align="center">
17358
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17359
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17360
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
17361
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17362
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
17363
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17364
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
17365
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17366
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
17367
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17368
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
17369
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17370
</tr>
17371
<tr valign=Bottom align="center">
17372
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17373
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17374
<td colspan="14">
17375
<hr size="1" noshade>
17376
</td>
17377
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17378
</tr>
17379
<tr valign=Bottom align="center">
17380
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17381
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17382
<td colspan="14" align=right valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
17383
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17384
</tr>
17385
<tr valign=Bottom>
17386
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17387
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Domestic</font></td>
17388
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;</font></td>
17389
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17390
65,262</font></td>
17391
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17392
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;</font></td>
17393
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17394
60,228</font></td>
17395
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17396
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$&nbsp;&nbsp;</font></td>
17397
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17398
55,727</font></td>
17399
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17400
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17401
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17402
15,195</font></td>
17403
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17404
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17405
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17406
18,727</font></td>
17407
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17408
</tr>
17409
<tr valign=Bottom>
17410
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17411
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">International</font></td>
17412
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17413
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17414
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17415
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17416
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17417
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17418
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17419
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17420
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17421
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17422
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17423
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17424
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17425
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17426
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17427
</tr>
17428
<tr valign=Bottom>
17429
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17430
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Japan</font></td>
17431
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17432
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">5,360</font></td>
17433
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17434
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17435
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">8,055</font></td>
17436
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17437
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17438
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,083</font></td>
17439
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17440
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17441
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,996</font></td>
17442
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17443
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17444
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,644</font></td>
17445
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17446
</tr>
17447
<tr valign=Bottom>
17448
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17449
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UK</font></td>
17450
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17451
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,275</font></td>
17452
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17453
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17454
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2,378</font></td>
17455
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17456
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17457
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">767</font></td>
17458
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17459
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17460
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">426</font></td>
17461
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17462
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17463
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">665</font></td>
17464
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17465
</tr>
17466
<tr valign=Bottom>
17467
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17468
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Italy</font></td>
17469
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17470
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,020</font></td>
17471
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17472
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17473
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">2,312</font></td>
17474
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17475
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17476
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">808</font></td>
17477
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17478
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17479
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">260</font></td>
17480
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17481
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17482
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">621</font></td>
17483
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17484
</tr>
17485
<tr valign=Bottom>
17486
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17487
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Netherlands</font></td>
17488
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17489
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,632</font></td>
17490
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17491
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17492
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,178</font></td>
17493
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17494
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17495
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">750</font></td>
17496
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17497
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17498
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">522</font></td>
17499
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17500
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17501
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">333</font></td>
17502
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17503
</tr>
17504
<tr valign=Bottom>
17505
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17506
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Canada</font></td>
17507
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17508
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,161</font></td>
17509
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17510
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17511
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,102</font></td>
17512
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17513
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17514
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">928</font></td>
17515
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17516
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17517
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">346</font></td>
17518
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17519
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17520
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">296</font></td>
17521
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17522
</tr>
17523
<tr valign=Bottom>
17524
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17525
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
17526
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17527
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">1,365</font></td>
17528
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17529
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17530
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">989</font></td>
17531
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17532
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17533
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">714</font></td>
17534
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17535
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17536
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">390</font></td>
17537
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17538
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17539
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">182</font></td>
17540
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17541
</tr>
17542
<tr valign=Bottom>
17543
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17544
<td align=LEFT colspan="15">
17545
<hr size="1" noshade>
17546
</td>
17547
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17548
</tr>
17549
<tr valign=Bottom>
17550
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17551
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Total</font></td>
17552
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17553
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17554
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17555
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17556
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17557
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17558
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17559
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17560
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17561
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17562
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17563
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17564
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17565
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
17566
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17567
</tr>
17568
<tr valign=Bottom>
17569
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17570
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">international</font></td>
17571
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17572
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">13,813</font></td>
17573
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17574
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17575
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">16,014</font></td>
17576
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17577
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17578
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">6,050</font></td>
17579
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17580
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17581
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">3,940</font></td>
17582
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17583
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17584
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">4,741</font></td>
17585
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17586
</tr>
17587
<tr valign=Bottom>
17588
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17589
<td align=LEFT colspan="15">
17590
<hr size="1" noshade>
17591
</td>
17592
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17593
</tr>
17594
<tr valign=Bottom>
17595
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17596
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;</font></td>
17597
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17598
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17599
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17600
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17601
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17602
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17603
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17604
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17605
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17606
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17607
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17608
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17609
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17610
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17611
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17612
</tr>
17613
<tr valign=Bottom>
17614
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17615
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;Net
17616
sales</font></td>
17617
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17618
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17619
79,075</font></td>
17620
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17621
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17622
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17623
76,242</font></td>
17624
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17625
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17626
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17627
61,777</font></td>
17628
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17629
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17630
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17631
19,135</font></td>
17632
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17633
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$&nbsp;</font></td>
17634
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17635
23,468</font></td>
17636
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17637
</tr>
17638
<tr valign=Bottom>
17639
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17640
<td align=LEFT colspan="15">
17641
<hr size="2" noshade>
17642
</td>
17643
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17644
</tr>
17645
</table>
17646
<BR>
17647
17648
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17649
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17650
<TR VALIGN=TOP>
17651
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(8) </B> </FONT></TD>
17652
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17653
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Employee
17654
Benefit Plan</B> </FONT></TD>
17655
</TR>
17656
</TABLE>
17657
<BR>
17658
17659
17660
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17661
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17662
<TR VALIGN=TOP>
17663
<TD WIDTH=6%>&nbsp;</TD>
17664
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17665
The
17666
Company provides a defined contribution plan which covers all eligible employees.
17667
Generally, employees may contribute up to 50% of base compensation to the plan, not
17668
to exceed annual limits. The Company matches 25% of employee
17669
contributions up to 5% each year, with certain limitations. The Company may also
17670
make additional discretionary contributions. Employee benefit plan
17671
expense was $204,000; $269,000 and $166,000 for the years ended March 31,
17672
2003; December 31, 2001 and 2000, respectively. Employee benefit plan
17673
expense was $46,000 and $120,000 (unaudited) for the three months ended March 31,
17674
2002 and 2001, respectively.</FONT></TD>
17675
</TR>
17676
</TABLE>
17677
<BR>
17678
17679
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17680
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17681
<TR VALIGN=TOP>
17682
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(9) </B> </FONT></TD>
17683
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17684
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Special
17685
Charges</B> </FONT></TD>
17686
</TR>
17687
</TABLE>
17688
<BR>
17689
17690
17691
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17692
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17693
<TR VALIGN=TOP>
17694
<TD WIDTH=6%>&nbsp;</TD>
17695
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17696
On
17697
June 26, 2001, the Company announced a plan to streamline and realign the Company&#146;s
17698
resources to better match its strategic goals. The Company recorded a special charge
17699
of $930,000 for costs associated with this restructure plan.
17700
Approximately 20 jobs, or 25% of the workforce from throughout the Company, were
17701
eliminated. These cost-cutting actions were expected to result in
17702
annualized savings of approximately $2 to $2.5 million. Cost savings relating to
17703
this plan were realized beginning in July of 2001. During 2001, the
17704
Company utilized $608,000 of the $930,000 accrual, primarily for severance
17705
benefits. During the three months ended March 31, 2002, the Company
17706
utilized $116,000 for severance payments and during the year ended March 31, 2003, the
17707
Company utilized $180,000 for severance payments.</FONT></TD>
17708
</TR>
17709
</TABLE>
17710
<BR>
17711
17712
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17713
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17714
<TR VALIGN=TOP>
17715
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(10) </B> </FONT></TD>
17716
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17717
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>License
17718
Agreements</B> </FONT></TD>
17719
</TR>
17720
</TABLE>
17721
<BR>
17722
17723
17724
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17725
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17726
<TR VALIGN=TOP>
17727
<TD WIDTH=6%>&nbsp;</TD>
17728
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17729
The
17730
Company has agreements to exclusively license intellectual property rights to certain
17731
products. Royalties due under these agreements are based on various percentages of
17732
net sales. To maintain the Company&#146;s licenses, it must make
17733
minimum royalty payments of $795,000 each year until patents for the products
17734
expire. Royalties are classified as a component of cost of goods sold.
17735
Royalty expense was approximately $2,652,000, $3,524,000 and $2,692,000 for
17736
the years ended March 31, 2003; December 31, 2001 and 2000,
17737
respectively. Royalty expense was approximately $724,000 and $1,040,000
17738
(unaudited) for the three months ended March 31, 2002 and 2001, respectively.</FONT></TD>
17739
</TR>
17740
</TABLE>
17741
<BR>
17742
17743
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
17744
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
17745
<TR VALIGN=TOP>
17746
<TD>
17747
17748
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
17749
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-17 </FONT></P>
17750
<HR SIZE=5 NOSHADE>
17751
17752
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
17753
</TD>
17754
</TR>
17755
</TABLE>
17756
<BR>
17757
17758
17759
17760
17761
17762
<!-- *************************************************************************** -->
17763
<!-- MARKER PAGE="sheet: 60; page: 60" -->
17764
17765
<BR>
17766
17767
17768
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17769
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17770
<TR VALIGN=TOP>
17771
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(11) </B> </FONT></TD>
17772
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17773
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Operating
17774
Leases</B> </FONT></TD>
17775
</TR>
17776
</TABLE>
17777
<BR>
17778
17779
17780
<!-- MARKER FORMAT-SHEET="Para 10 in 1" FSL="Project" -->
17781
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17782
<TR VALIGN=TOP>
17783
<TD WIDTH=6%>&nbsp;</TD>
17784
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
17785
Company leases equipment and office space under noncancelable operating leases that
17786
have initial or noncancelable lease terms in excess of one year. Future minimum
17787
lease payments due in accordance with these leases as of March 31, 2003
17788
are as follows (in thousands):</FONT></TD>
17789
</TR>
17790
</TABLE>
17791
<BR>
17792
17793
17794
17795
17796
<table cellpadding=0 cellspacing=0 border=0 width=600>
17797
<tr valign=Bottom>
17798
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17799
<td align=LEFT><b><font face="Times New Roman, Times, serif" size="1">Year
17800
ending March 31, </font></b></td>
17801
<td colspan="2" align=center><b><font face="Times New Roman, Times, serif" size="1">Amount</font></b></td>
17802
</tr>
17803
<tr valign=top>
17804
<td align=LEFT>&nbsp;</td>
17805
<td align=LEFT colspan="3">
17806
<hr size="1" noshade>
17807
</td>
17808
</tr>
17809
<tr valign=Bottom>
17810
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17811
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2004</font></td>
17812
<td bgcolor="#c0c0c0" align=left><font face="Times New Roman, Times, serif" size="2">$</font></td>
17813
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17814
766,000</font></td>
17815
</tr>
17816
<tr valign=Bottom>
17817
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17818
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">2005</font></td>
17819
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17820
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741,000</font></td>
17821
</tr>
17822
<tr valign=Bottom>
17823
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17824
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2006</font></td>
17825
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17826
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">741,000</font></td>
17827
</tr>
17828
<tr valign=Bottom>
17829
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17830
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">2007</font></td>
17831
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17832
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">741,000</font></td>
17833
</tr>
17834
<tr valign=Bottom>
17835
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17836
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">2008</font></td>
17837
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17838
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">741,000</font></td>
17839
</tr>
17840
<tr valign=Bottom>
17841
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17842
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Later years</font></td>
17843
<td align=left><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17844
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">1,977,000</font></td>
17845
</tr>
17846
<tr valign=Bottom>
17847
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17848
<td align=LEFT colspan="3">
17849
<hr size="1" noshade>
17850
</td>
17851
</tr>
17852
<tr valign=Bottom>
17853
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17854
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17855
<td align=left><font face="Times New Roman, Times, serif" size="2"></font></td>
17856
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
17857
</tr>
17858
<tr valign=Bottom>
17859
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17860
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Future
17861
minimum lease payments</font></td>
17862
<td align=left bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">$</font></td>
17863
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">
17864
5,707,000</font></td>
17865
</tr>
17866
<tr valign=Bottom>
17867
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17868
<td align=LEFT colspan="3">
17869
<hr size="2" noshade>
17870
</td>
17871
</tr>
17872
</table>
17873
<BR>
17874
17875
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17876
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17877
<TR VALIGN=TOP>
17878
<TD WIDTH=6%>&nbsp;</TD>
17879
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17880
Total
17881
rental expense for operating leases was $781,000, $789,000 and $559,000 for
17882
the years ended March 31, 2003; December 31, 2001 and 2000, respectively. Total rental
17883
expense for operating leases was $195,000 and $195,000 (unaudited)
17884
for the three months ended March 31, 2002 and 2001, respectively.</FONT></TD>
17885
</TR>
17886
</TABLE>
17887
<BR>
17888
17889
<!-- MARKER FORMAT-SHEET="Para Hang Arabic 10 -- Bold" FSL="Project" -->
17890
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17891
<TR VALIGN=TOP>
17892
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(12) </B> </FONT></TD>
17893
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
17894
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Net
17895
Income (Loss) Per Share</B> </FONT></TD>
17896
</TR>
17897
</TABLE>
17898
<BR>
17899
17900
17901
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
17902
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
17903
<TR VALIGN=TOP>
17904
<TD WIDTH=6%>&nbsp;</TD>
17905
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
17906
A
17907
reconciliation of basic and diluted weighted average common shares outstanding is as
17908
follows (in thousands):</FONT></TD>
17909
</TR>
17910
</TABLE>
17911
<BR>
17912
17913
17914
<table cellpadding=0 cellspacing=0 border=0 width=600>
17915
<tr valign=Bottom align="center">
17916
<td rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17917
<td rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17918
<td colspan="8" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
17919
the Years Ended</font></b></td>
17920
<td nowrap rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17921
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">For
17922
the Three Months</font></b></td>
17923
<td rowspan="4"><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17924
</tr>
17925
<tr valign=Bottom align="center">
17926
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">March
17927
31,</font></b></td>
17928
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17929
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">December
17930
31,</font></b></td>
17931
<td colspan="5" nowrap><b><font face="Times New Roman, Times, serif" size="1">
17932
Ended March 31,</font></b></td>
17933
</tr>
17934
<tr valign=Bottom align="center">
17935
<td colspan="14">
17936
<hr size="1" noshade>
17937
</td>
17938
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17939
</tr>
17940
<tr valign=Bottom align="center">
17941
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2003</font></b></td>
17942
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17943
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
17944
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17945
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2000</font></b></td>
17946
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2002</font></b></td>
17947
<td nowrap><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17948
<td colspan="2" nowrap><b><font face="Times New Roman, Times, serif" size="1">2001</font></b></td>
17949
</tr>
17950
<tr valign=Bottom align="center">
17951
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17952
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17953
<td colspan="14">
17954
<hr size="1" noshade>
17955
</td>
17956
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17957
</tr>
17958
<tr valign=Bottom align="center">
17959
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17960
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17961
<td colspan="14" align=right valign="top"><b><font face="Times New Roman, Times, serif" size="1">(unaudited)</font></b></td>
17962
<td><b><font face="Times New Roman, Times, serif" size="1"></font></b></td>
17963
</tr>
17964
<tr valign=Bottom>
17965
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17966
<td width=100% align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">Weighted
17967
average common</font></td>
17968
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17969
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17970
</font></td>
17971
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17972
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17973
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17974
</font></td>
17975
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17976
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17977
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17978
</font></td>
17979
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17980
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17981
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17982
</font></td>
17983
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
17984
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17985
<td bgcolor="#c0c0c0" align=RIGHT><font face="Times New Roman, Times, serif" size="2">
17986
</font></td>
17987
<td bgcolor="#c0c0c0" align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17988
</tr>
17989
<tr valign=Bottom>
17990
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
17991
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;shares
17992
outstanding</font></td>
17993
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17994
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">13,467</font></td>
17995
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17996
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17997
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,131</font></td>
17998
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
17999
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18000
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,372</font></td>
18001
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18002
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18003
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">13,711</font></td>
18004
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18005
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18006
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,123</font></td>
18007
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18008
</tr>
18009
<tr valign=Bottom>
18010
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18011
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Assumed
18012
conversion of</font></td>
18013
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18014
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18015
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18016
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18017
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18018
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18019
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18020
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18021
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18022
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18023
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18024
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18025
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18026
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18027
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18028
</tr>
18029
<tr valign=Bottom>
18030
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18031
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;stock
18032
options</font></td>
18033
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18034
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">577</font></td>
18035
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18036
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18037
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">300</font></td>
18038
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18039
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18040
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
18041
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18042
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18043
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">487</font></td>
18044
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18045
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18046
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">0</font></td>
18047
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18048
</tr>
18049
<tr valign=Bottom>
18050
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18051
<td align=LEFT colspan="15">
18052
<hr size="1" noshade>
18053
</td>
18054
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18055
</tr>
18056
<tr valign=Bottom>
18057
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18058
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18059
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18060
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18061
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18062
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18063
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18064
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18065
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18066
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18067
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18068
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18069
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18070
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18071
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18072
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"></font></td>
18073
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18074
</tr>
18075
<tr valign=Bottom>
18076
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18077
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">Average
18078
common and</font></td>
18079
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18080
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18081
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18082
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18083
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18084
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18085
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18086
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18087
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18088
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18089
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18090
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18091
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18092
<td align=RIGHT><font face="Times New Roman, Times, serif" size="2"> </font></td>
18093
<td align=LEFT><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18094
</tr>
18095
<tr valign=Bottom>
18096
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18097
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;assumed
18098
conversion shares</font></td>
18099
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18100
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,044</font></td>
18101
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18102
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18103
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,431</font></td>
18104
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18105
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18106
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,372</font></td>
18107
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18108
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18109
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,198</font></td>
18110
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18111
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18112
<td align=RIGHT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">14,123</font></td>
18113
<td align=LEFT bgcolor="#c0c0c0"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
18114
</tr>
18115
<tr valign=Bottom>
18116
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18117
<td align=LEFT colspan="15">
18118
<hr size="2" noshade>
18119
</td>
18120
<td align=LEFT><font face="Times New Roman, Times, serif" size="2"></font></td>
18121
</tr>
18122
</table>
18123
<BR>
18124
18125
<!-- MARKER FORMAT-SHEET="Para Flush 10 In 1" FSL="Project" -->
18126
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
18127
<TR VALIGN=TOP>
18128
<TD WIDTH=6%>&nbsp;</TD>
18129
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
18130
As
18131
of March 31, 2003, a total of 191,000 options and warrants to purchase shares of
18132
common stock with a range of exercise prices from $6.79 to $8.00 per share were
18133
outstanding but were not included in the computation of diluted
18134
earnings per share because the exercise price was greater than the average market price
18135
of the common shares. The options expire from 2003 to 2011.</FONT></TD>
18136
</TR>
18137
</TABLE>
18138
<BR>
18139
18140
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
18141
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
18142
<TR VALIGN=TOP>
18143
<TD>
18144
18145
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
18146
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>F-18 </FONT></P>
18147
<HR SIZE=5 NOSHADE>
18148
18149
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
18150
</TD>
18151
</TR>
18152
</TABLE>
18153
<BR>
18154
18155
18156
18157
</BODY>
18158
</HTML>
18159
18160
18161
</TEXT>
18162
</DOCUMENT>
18163
<DOCUMENT>
18164
<TYPE>EX-10
18165
<SEQUENCE>3
18166
<FILENAME>cns032695_ex10-26.txt
18167
<TEXT>
18168
18169
EXHIBIT 10.26
18170
18171
18172
[CNS Letterhead]
18173
18174
18175
18176
18177
18178
February 14, 2002
18179
18180
Teri Osgood
18181
6905 Howard Lane
18182
Eden Prairie, MN 55346
18183
18184
Dear Teri:
18185
18186
This letter describes our agreement regarding your resignation as
18187
Vice-President, US Marketing and officer of CNS, Inc. ("CNS") effective April
18188
15, 2002.
18189
18190
We will provide you with the following benefits in connection with your
18191
departure from CNS:
18192
18193
1. We will pay you Salary Continuation pursuant to the terms of Paragraph 7 of
18194
the Employment Agreement as follows: 24 semi-monthly paychecks of
18195
$7,299.05, subject to applicable withholding, beginning with the later of
18196
(a) our April 30, 2002 payday or (b) our first regular payday following
18197
expiration of the 15-day rescission period described on page 3 of this
18198
agreement and our receipt of Exhibit A, signed and dated by you after
18199
expiration of the rescission period. Exhibit A is your certification that
18200
you took no steps to exercise your right of rescission. In the event of a
18201
Change in Control, as that term is defined in the "Executive Employment
18202
Agreement" dated February 12, 1999, the above- referenced semimonthly
18203
paychecks will be accelerated and payable, in full, on demand by you. We
18204
will also pay you for your accrued unused paid time off ($9,287.78 or
18205
110.28 hours, as of February 15, 2002.)
18206
18207
You will be eligible to receive a bonus consistent with CNS business
18208
performance under the CNS Management Incentive Plan for 2001/2002 based on
18209
your April 15, 2002 Resignation Date, the terms of the Plan and provided
18210
that the Plan objectives have been met. Payment of any available bonus
18211
would occur at the normal payout time for all employees. We estimate the
18212
payout to be made in May 2002.
18213
18214
18215
18216
18217
<PAGE>
18218
18219
Teri Osgood Separation Letter
18220
Page Two
18221
18222
18223
2 We will continue to pay the employer share, and you will continue to be
18224
responsible for the employee share, as applicable, of your CNS group
18225
health, dental and life insurance premiums through April 30, 2003 or, if
18226
earlier, the date on which you are eligible to participate in other group
18227
plans through your new employer, provided you make the appropriate timely
18228
written elections to continue your CNS group coverage's. Your share of the
18229
premiums will be deducted from the Salary Continuation payments described
18230
in paragraph 1. You agree to notify CNS immediately if your eligibility
18231
under other group plans through your new employer occurs. If you are not
18232
covered under other such group plans as of April 30, 2003, you will have
18233
the right to continue your group coverage's at your own expense for up to
18234
an additional six months, in accordance with applicable state and federal
18235
group insurance continuation laws and the terms of the plans. All rights
18236
which you may have under CNS's group plans, are subject to the terms of the
18237
plans, applicable laws and the continuation of said plans for active CNS
18238
employees. Information and election forms concerning your group coverages
18239
will be mailed to you.
18240
18241
3. We are providing you with the opportunity to voluntarily resign from your
18242
employment. If any prospective employer of yours wishes to contact CNS for
18243
employment information, you agree to direct that employer to make a written
18244
inquiry to Michelle Beuning, Director of Human Resources. Ms. Beuning will
18245
provide the prospective employer, in writing, with your job title, the
18246
scope of your responsibilities, your dates of employment, and the fact that
18247
you voluntarily resigned your employment.
18248
18249
4. We will provide an executive outplacement package that we have selected
18250
with Right Management Consultants at our expense.
18251
18252
5. To the extent required under applicable law, we will indemnify you and hold
18253
you harmless with respect to any action in which you are a named defendant
18254
which arises out of your CNS employment responsibilities.
18255
18256
6. We will remove all restrictive legends on any shares of CNS common stock
18257
held by you. In connection with the removal, you agree that for a period of
18258
90 days from the date you cease to be employed by CNS, any shares that you
18259
sell will be sold in compliance with the applicable requirements of Rule
18260
144 under the Securities Act of 1933.
18261
18262
18263
18264
18265
<PAGE>
18266
18267
Teri Osgood Separation Letter
18268
Page Three
18269
18270
18271
As of April 15, 2002 the remaining 50,400 shares of your stock options will be
18272
exercisable according to the terms of the applicable Stock Option Plan. Your
18273
stock options are set forth on Exhibit B.
18274
18275
In consideration of the benefits to be afforded to you as outlined above, you
18276
agree to do the following things:
18277
18278
1. You hereby release CNS, Inc., its past and present affiliates, and its and
18279
their past and present officers, directors, agents, shareholders,
18280
employees, attorneys, insurers and indemnitors (collectively, the
18281
"Releasees") from any and all claims and causes of action, known or
18282
unknown, which you may have against any and all of them. Through this
18283
release, you extinguish all causes of action against the Releasees
18284
occurring up to the date on which you sign this agreement, including but
18285
not limited to any contract, compensation or benefit claims; intentional
18286
infliction of emotional distress, defamation or any other tort claims; and
18287
all claims arising from any federal, state or municipal law or ordinance,
18288
including the Employee Retirement Income Security Act, the Family and
18289
Medical Leave Act. This release extinguishes any potential claims of
18290
employment discrimination arising from your employment with and resignation
18291
from CNS, including specifically any claims under the Minnesota Human
18292
Rights Act, the Americans With Disabilities Act, Title VII of the Civil
18293
Rights Act of 1964, the Older Workers Benefit Protection Act, and the Age
18294
Discrimination in Employment Act. This release does not extinguish any
18295
claims that arise against CNS after you sign this agreement. You certify
18296
that you (a) have not filed any claims, complaints or other actions against
18297
any Releasee and (b) are hereby waiving any right to recover from any
18298
Releasee under any lawsuit or charge filed by you or any federal, state or
18299
local agency on your behalf based upon any event occurring up to the date
18300
on which you sign this agreement. You are advised by CNS to review your
18301
rights and responsibilities under this agreement with your own lawyer.
18302
18303
18304
18305
18306
<PAGE>
18307
18308
Teri Osgood Separation Letter
18309
Page Four
18310
18311
18312
You have 21 days to review and consider this offer. If you sign this letter
18313
before 21 days have elapsed from the date on which you first receive it,
18314
then you will be voluntarily waiving your right to the full 21-day review
18315
period. You also have the right to rescind this agreement within 15
18316
calendar days of the date upon which you sign it. You understand that if
18317
you desire to rescind this agreement, you must put the rescission in
18318
writing and deliver it to Michelle Beuning, CNS, Inc., 7615 Smetana Lane,
18319
P.O. Box 39802, Minneapolis, MN 55439-0802 by hand or by mail within 15
18320
calendar days of the date on which you sign this agreement. If you deliver
18321
the rescission by mail, it must be postmarked within 15 calendar days of
18322
the date on which you sign this agreement and sent by certified mail,
18323
return receipt requested. If you rescind this agreement, all of CNS's
18324
obligations to you, other than payment of accrued unused paid time off,
18325
will immediately cease, and CNS will owe you nothing hereunder.
18326
18327
2. At our specific request and at mutually convenient times while you are
18328
receiving payments under this agreement, you agree to consult with me or my
18329
designee with respect to transitional CNS business matters. You also agree
18330
to cooperate with CNS in any current or future claims or lawsuits involving
18331
CNS where you have knowledge of the underlying facts. In addition, you
18332
agree that you will not voluntarily aid, assist, or cooperate with any
18333
claimants or plaintiffs or their attorneys or agents in any claims or
18334
lawsuits commenced in the future against CNS, provided, however, that
18335
nothing in this agreement will be construed to prevent you from testifying
18336
truthfully as required by valid legal or administrative process.
18337
18338
3. You agree that you will continue to speak positively and with respect
18339
towards CNS as you have in the past.
18340
18341
4. All knowledge and information not already available to the public which you
18342
have acquired with respect to product development, improvements,
18343
modifications, discoveries, designs, methods, systems, computer software,
18344
programs, codes and documentation, research, designs, formulas,
18345
instructions, methods, inventions, trade secrets, services or other private
18346
or confidential matters of CNS (such as those concerning sales, costs,
18347
profits, organizations, customer lists, pricing methods, etc.), or of any
18348
third party which CNS is obligated to keep confidential, shall be regarded
18349
by you as strictly confidential and shall not be used by you directly or
18350
indirectly or disclosed to any persons, corporations or firms. All of the
18351
foregoing knowledge and information are collectively referred to as
18352
"Confidential Information". Your obligations under this paragraph will not
18353
apply to any information which (a) is or becomes known to the general
18354
public under
18355
18356
18357
18358
18359
<PAGE>
18360
18361
Teri Osgood Separation Letter
18362
Page Five
18363
18364
18365
circumstances involving no breach by you of the terms of this paragraph,
18366
(b) is generally disclosed to third parties by CNS as a continuing practice
18367
without restriction on such third parties, (c) is approved for release by
18368
written authorization of CNS' Board, or (d) you are obligated by law to
18369
disclose. Confidential Information also includes the terms of this
18370
agreement. You agree that you will not disclose its terms to anyone other
18371
than your family members, tax and legal advisors and as otherwise required
18372
by law.
18373
18374
5. During the one-year period following your termination date, you shall not
18375
directly or indirectly engage in, enter into or participate in the business
18376
of CNS or in any business or commercial activity which does or is
18377
reasonably likely to compete with or adversely affect the Business or
18378
products of CNS, either as an individual for your own account, as a partner
18379
or a joint venturer, or as an officer, director, consultant or holder of
18380
more than five percent (5%) of the entity interest in, any other person,
18381
firm, partnership or corporation, or an employee, agent or salesman for any
18382
person. In addition, during such period you shall not: avail yourself of
18383
any advantages or acquaintances you have made with any person who has,
18384
within the twelve (12) month period ended on the date of termination of
18385
your employment, been a customer of CNS or its affiliates, and which would,
18386
directly or indirectly, materially divert business from or materially and
18387
adversely affect the Business of CNS; interfere with the contractual
18388
relations between CNS and any of its employees; or employ or cause to be
18389
employed in any capacity or retain or cause to be retained as a consultant
18390
any person who was employed in any capacity by CNS during the twelve (12)
18391
month period ended on the date of termination of your employment.
18392
18393
For purposes of this Agreement, the "Business of CNS" or "Business" means
18394
and includes the business of the manufacture, production, sale, marketing
18395
and distribution of the Breathe Right strip, FiberChoice, Flair strips and
18396
any other products currently offered or currently under development by CNS
18397
or offered or currently under development by CNS during the 12 months prior
18398
to the date of termination of your employment.
18399
18400
18401
18402
18403
<PAGE>
18404
18405
Teri Osgood Separation Letter
18406
Page Six
18407
18408
18409
6. For one year following your termination date, you agree that you will not,
18410
directly or indirectly, solicit any current or prospective CNS customer,
18411
broker, vendor or distributor who is not, as of your termination date, a
18412
current customer, broker, vendor or distributor of your new employer,
18413
consulting business or any other enterprise in which you become involved
18414
after your resignation from CNS, for the purpose of providing products or
18415
services for or on behalf of said customer, broker, vendor or distributor
18416
which are currently competitive with the products or services being
18417
provided by CNS, which are in the development stages of being competitive
18418
with the products or services being provided by CNS, or which would in any
18419
way cause said customer, broker, vendor or distributor to discontinue or
18420
reduce its business relationship with CNS. Current CNS customers, brokers,
18421
vendors or distributors include those customers, brokers, vendors or
18422
distributors with whom CNS has had a business relationship at any time
18423
within the two years immediately preceding your resignation date.
18424
Prospective CNS customers, brokers, vendors and distributors are those with
18425
whom (a) a CNS representative has been in direct personal contact and (b)
18426
CNS has a reasonable opportunity of entering into a business relationship
18427
within six months following your resignation date. You also agree that
18428
during the same one-year period, you will not directly or indirectly
18429
solicit any CNS employee to terminate his or her employment with CNS. This
18430
employee nonsolicitation obligation shall apply to employees of CNS as of
18431
your resignation date.
18432
18433
If, in your opinion, the restrictions in this paragraph 6 or in paragraph 5
18434
prevent you from obtaining employment, you may make a written request for
18435
modification of the restrictions with respect to a specific position that
18436
you are considering. The president of CNS will review and consider your
18437
request and if she determines, in her sole discretion, that the requested
18438
modification will not be adverse to CNS's business interests, she will
18439
provide you with the modification, which must then be memorialized in
18440
writing and signed by both parties. In addition, if you have any questions
18441
with respect to the scope of your obligations hereunder, you agree to seek
18442
clarification from the president.
18443
18444
This agreement shall not in any way be construed as an admission of liability by
18445
CNS or as an admission that CNS has acted wrongfully with respect to you. CNS
18446
specifically denies and disclaims any such liability or wrongful acts. If any
18447
provision of this agreement is found to be illegal or unenforceable, such
18448
provision will be severed or modified to the extent necessary to make it
18449
enforceable, and as so severed or modified, the remainder of this agreement
18450
shall remain in full force and effect.
18451
18452
You understand that if you violate any obligation which you have to CNS under
18453
this agreement, all payments and benefits to you hereunder will immediately
18454
cease. In such event, your release
18455
18456
18457
18458
18459
<PAGE>
18460
18461
Teri Osgood Separation Letter
18462
Page Seven
18463
18464
18465
of your claims shall remain fully in effect in consideration of the payments and
18466
benefits which you received prior to any such breach.
18467
18468
This agreement sets forth our entire agreement and fully supersedes any prior
18469
agreements, contracts or understandings between you and CNS. CNS asks that our
18470
records reflect that you conclude your employment on terms you understand and
18471
accept. Therefore, we ask you to declare that you have entered into this
18472
agreement voluntarily, without coercion, duress, or reliance on any
18473
representations by any CNS employee, agent or lawyer.
18474
18475
If this letter accurately reflects our understanding and agreement, please sign
18476
both copies and return the original to me. We appreciate all of your efforts and
18477
contributions to CNS over the past 3 1/2 years and wish you success in your
18478
future career.
18479
18480
Sincerely,
18481
18482
CNS, INC.
18483
18484
18485
/s/ Marti Morfitt
18486
- ------------------------------------
18487
Marti Morfitt
18488
President & CEO
18489
18490
Acknowledged and agreed to, with declarations confirmed, this 22nd day of
18491
February, 2002.
18492
18493
18494
18495
/s/ Teri Osgood
18496
- ------------------------------------
18497
Teri Osgood
18498
18499
18500
18501
18502
<PAGE>
18503
18504
EXHIBIT A
18505
TO
18506
RELEASE AGREEMENT
18507
18508
18509
18510
18511
March 11, 2002
18512
18513
18514
18515
18516
Ms. Michelle Beuning
18517
Director of Human Resources
18518
CNS, Inc.
18519
7615 Smetana Lane
18520
P. O. Box 39802
18521
Minneapolis, MN 55439-0802
18522
18523
Dear Michelle:
18524
18525
This letter, signed and dated more than 15 days after I signed the Agreement
18526
between CNS and me dated February 14, 2002, is to certify that I have taken no
18527
steps to exercise my 15-day right of rescission, as described in the Agreement.
18528
18529
Sincerely,
18530
18531
/s/ Teri Osgood
18532
- ------------------------------------
18533
Teri Osgood
18534
18535
18536
18537
18538
<PAGE>
18539
18540
EXHIBIT B
18541
18542
18543
18544
STOCK OPTION SCHEDULE
18545
As of 4/15/02
18546
18547
- --------------------------------------------------------------------------------
18548
OPTION PLAN PRICE DATE GRANTED REMAINING VESTED SHARES
18549
- --------------------------------------------------------------------------------
18550
1994 Stock Option Plan 4.125 08/17/98 30,000
18551
- --------------------------------------------------------------------------------
18552
1994 Stock Option Plan 2.8125 04/15/99 15,000
18553
- --------------------------------------------------------------------------------
18554
1990 Stock Option Plan 4.00 05/03/00 2,400
18555
- --------------------------------------------------------------------------------
18556
2000 Stock Option Plan 4.375 03/15/01 3,000
18557
- --------------------------------------------------------------------------------
18558
18559
The stock option exercise period for the grants dated 8/17/98, 4/15/99 and
18560
5/3/00 has been extended from 30 days to 90 days to the extent exercisable at
18561
date of termination for the lesser of 90 days from the date of termination or
18562
the balance of the option's term.
18563
18564
This will constitute the only amendment to these stock option agreements.
18565
18566
18567
/s/ Marti Morfitt
18568
- ------------------------------------
18569
Marti Morfitt
18570
President and CEO
18571
18572
18573
18574
18575
</TEXT>
18576
</DOCUMENT>
18577
<DOCUMENT>
18578
<TYPE>EX-10
18579
<SEQUENCE>4
18580
<FILENAME>cns032695_ex10-27.txt
18581
<TEXT>
18582
18583
EXHIBIT 10.27
18584
18585
18586
EXECUTIVE EMPLOYMENT AGREEMENT
18587
18588
18589
This Agreement is made as of October 29, 2002 (the "Effective Date") between
18590
CNS, INC. a Delaware corporation ("CNS") and Linda Kollofski ("Employee").
18591
18592
WHEREAS, CNS considers the establishment and maintenance of a sound and vital
18593
management to be essential to protecting and enhancing the best interests of CNS
18594
and its shareholders; and
18595
18596
WHEREAS, Employee has made and is expected to continue to make, due to his
18597
experience and knowledge, a significant contribution to the profitability,
18598
growth and financial strength of CNS; and
18599
18600
WHEREAS, CNS, as a publicly held corporation, recognizes that the possibility of
18601
a change in control may exist and that such possibility and the uncertainty and
18602
questions which it may raise among management may result in the departure or
18603
distraction of the performance of Employee's duties to the detriment of CNS and
18604
its shareholders; and
18605
18606
WHEREAS, Employee is willing to continue his employment with CNS upon the
18607
understanding that CNS will provide income security if Employee's employment is
18608
terminated under certain terms and conditions;
18609
18610
WHEREAS, it is in the best interests of CNS and its stockholders to employ
18611
Employee and to reinforce and encourage his continued attention and dedication
18612
to his assigned duties without distraction and to ensure his continued
18613
availability to CNS in the event of a Change in Control; and
18614
18615
WHEREAS, it is further in CNS's best interests to receive certain assurances
18616
from Employee regarding CNS's confidentiality, competition and other proprietary
18617
business concerns;
18618
18619
THEREFORE, in consideration of the foregoing and of this agreement, certain
18620
change in control protection, continued employment and other benefits hereunder,
18621
as well as other mutual covenants and obligations hereinafter set forth, CNS and
18622
Employee agree as follows:
18623
18624
1. Employment. CNS agrees to continue to employ Employee as its Vice
18625
President, New Business Development under the terms, conditions and
18626
benefits set forth herein and Employee accepts continued employment with
18627
CNS on said terms, conditions and benefits.
18628
18629
2. Term. The term of Employee's employment shall continue until terminated
18630
pursuant to paragraph 6, 7, or 8 herein.
18631
18632
18633
18634
18635
<PAGE>
18636
18637
EXECUTIVE EMPLOYMENT AGREEMENT
18638
PAGE 2
18639
18640
18641
3. Duties. In his position as Vice President, New Business Development,
18642
Employee will continue to faithfully and diligently perform such executive
18643
management responsibilities as may be assigned to him from time to time by
18644
the Chief Executive Officer, President or Chairman of the Board of
18645
Directors of CNS (the "Board"); devote his full time, energy and skill to
18646
CNS's business, as is reasonably necessary to execute fully his duties
18647
hereunder, except for vacations, absences made necessary because of
18648
illness, and service on other corporate, civic, or charitable boards or
18649
committees not significantly interfering with his duties hereunder; and
18650
promote CNS's best interests. The principal place of employment and the
18651
location of Employee's principal office and normal place of work shall be
18652
in the Minneapolis, Minnesota metropolitan area. Employee will be expected
18653
to travel to other locations, as necessary, in the performance of his
18654
duties during the term of this Agreement. Employee shall notify the
18655
President of any other paid position which he is considering accepting,
18656
including but not limited to a board of directors position, a position as
18657
an employee or an independent consultant, or any position, whether or not
18658
for pay, which could constitute a conflict of interest with CNS. The
18659
Employee agrees not to accept any such position without the President of
18660
CNS's prior approval.
18661
18662
4. Compensation. For all services rendered by Employee, CNS shall pay Employee
18663
the compensation described in Exhibit A, payable at such times as salaried
18664
employees of CNS are customarily paid. The President of CNS shall, from
18665
time to time during Employee's employment, review his annual salary in
18666
connection with possible increases, giving consideration to inflation
18667
factors, performance of Employee and CNS, salaries paid for positions of
18668
similar responsibility for other companies, and other relevant factors, and
18669
shall provide for such increases when deemed appropriate. Employee shall in
18670
addition be eligible to participate in the annual management incentive
18671
bonus program, as approved by the Board of Directors. In the event of
18672
termination of this Agreement by CNS without Good Cause, as defined in
18673
paragraph 7 herein, the Board may, in good faith and in its sole
18674
discretion, determine and cause to be paid a partial bonus based on
18675
Employee's performance through the date of termination, and such
18676
determination shall be final and binding.
18677
18678
5. Benefits. Employee shall be entitled to Paid Time Off consistent with CNS
18679
policy and such insurance, 401(k) program and other benefits available to
18680
all salaried employees of CNS, subject to any limitations on such benefits
18681
to officers, directors or highly paid employees in order that such benefit
18682
programs qualify under federal or state law for favored tax or other
18683
treatment. Such benefit programs may be changed from time to time by the
18684
Board. Employee shall also be entitled to reimbursement of his reasonable
18685
and necessary expenses incurred in connection with the performance of his
18686
duties hereunder.
18687
18688
6. Termination by Employee. Employee may resign his employment with CNS
18689
effective upon 30 days' advance written notice to the President. If
18690
Employee resigns under this paragraph, the President retains the right to
18691
terminate his employment, effective upon written notice to Employee, at any
18692
time during the 30-day notice period, provided, however, that base salary
18693
and the employer portion of his health insurance premiums will continue to
18694
be paid by CNS for the duration of the 30-day notice period. In connection
18695
18696
18697
18698
18699
<PAGE>
18700
18701
EXECUTIVE EMPLOYMENT AGREEMENT
18702
PAGE 3
18703
18704
18705
with his termination, Employee will receive any accrued unused Paid Time
18706
Off to which he is entitled.
18707
18708
7. Termination by CNS. CNS shall have the right to terminate Employee's
18709
employment in any of the following ways:
18710
18711
a. CNS may, by written notice to Employee, terminate his employment
18712
without Good Cause, in which event Employee will be paid his base
18713
salary up to the date of termination. Employee is also entitled to
18714
receive Salary Continuation for one year from his termination date.
18715
"Salary Continuation" shall mean payment by CNS of the Employee's base
18716
salary as of his termination date, payable to Employee on the same
18717
schedule and in the same amount as the payment of base salary prior to
18718
termination of his employment, until such time as the full Salary
18719
Continuation obligation shall be discharged, as provided in this
18720
paragraph 7. During the period when Salary Continuation is payable to
18721
Employee, CNS will also continue to provide to Employee all group
18722
medical, dental and life plan benefits provided to its other senior
18723
executives. Employee shall also receive any accrued unused Paid Time
18724
Off to which he is entitled. Receipt of Salary Continuation is subject
18725
to Employee's compliance with his obligations under paragraphs 9, 10,
18726
11 and 12 of this Agreement and his execution of a standard release
18727
agreement which includes, in addition to release of claims against CNS
18728
and related releasees, an obligation not to speak negatively about or
18729
harm CNS, confidentiality with respect to the termination process, and
18730
cooperation with the transition of responsibilities. Payment of the
18731
employer portion of Employee's group medical, dental and life plan
18732
premiums under this paragraph and under paragraphs 6 and 8 herein
18733
shall cease as of the date on which Employee is covered under other
18734
such group plans if such coverage occurs prior to termination of any
18735
salary continuation periods set forth in said paragraphs.
18736
18737
b. CNS, by written notice to Employee, may terminate his employment for
18738
Good Cause, as defined below. In the event of termination under this
18739
subparagraph 7.b., Employee shall be paid his base salary up to the
18740
date of termination. "Good Cause" for the purpose of this Agreement
18741
shall mean one or more of the following: (i) willful and premeditated
18742
failure or refusal of Employee to render services to CNS in accordance
18743
with his obligations under paragraph 3; (ii) the commission by
18744
Employee of an act of fraud or embezzlement against CNS; (iii) the
18745
commission by Employee of any other willful or reckless act which
18746
injures CNS in a substantial or material way (it being understood that
18747
mere negligence in performance of duties is not Good Cause under this
18748
Agreement); (iv) the breach by Employee of any provision of this
18749
Agreement; or (v) the commission of a substantial act of moral
18750
turpitude by Employee which is deemed by CNS's Board to have a
18751
material adverse effect on CNS; or (vi) unsatisfactory performance
18752
after specific notice of performance deficiencies, description of
18753
expectations and opportunity to cure.
18754
18755
18756
18757
18758
<PAGE>
18759
18760
EXECUTIVE EMPLOYMENT AGREEMENT
18761
PAGE 4
18762
18763
18764
c. CNS, by written notice to Employee, may terminate Employee's
18765
employment under this Agreement if he becomes physically or mentally
18766
disabled during the term so that he has not been able to substantially
18767
perform, for a period of 120 consecutive days, with reasonable
18768
accommodation, the usual duties assigned to him hereunder
18769
("Disability"). Upon such determination, CNS shall pay to Employee his
18770
base salary up to the date of such termination to the extent not
18771
covered by any disability plan.
18772
18773
d. This Agreement shall terminate upon the Employee's death during its
18774
term, except that CNS shall pay to the legal representative of
18775
Employee's estate all base salary due him up to the date of his death.
18776
18777
8. Termination Following a Change in Control.
18778
18779
DEFINITION.
18780
18781
a. For purposes of this Agreement, "Change in Control" shall mean the
18782
occurrence of one of the following events:
18783
18784
i. ACQUISITION OF 25% OF STOCK IN CNS
18785
any "person" [as such term is used in Section 13(d) and 4(d) of
18786
the Securities Exchange Act of 1934, as amended ("Exchange
18787
Act")], other than a trustee or other fiduciary holding
18788
securities under an employee benefit plan of CNS is or becomes
18789
the "beneficial owner" (as defined in Rule 13d-3 under the
18790
Exchange Act), directly or indirectly of securities representing
18791
25% or more of the combined voting power of CNS's then
18792
outstanding securities;
18793
18794
ii. CHANGE IN 50% OF BOARD DIRECTORS WHO WERE NOT APPROVED BY BOARD
18795
during any period of two consecutive years (not including any
18796
period ending prior to the effective date of this Agreement),
18797
individuals who at the beginning of such period constitute the
18798
Board of Directors of CNS, and any new director [other than a
18799
director designated by a person who has entered into agreement
18800
with CNS to effect a transaction permitted by Section 6(a)(I),
18801
(iii) or (iv)] whose election by the Board of Directors of CNS or
18802
nomination for election by CNS's stockholders was approved by
18803
vote of at least two-thirds of the directors then still in office
18804
who either were directors at the beginning of the period or whose
18805
election or nomination for election was previously so approved
18806
("Continuing Directors"), cease for any reason to constitute at
18807
least a majority of the Board of Directors of CNS;
18808
18809
iii. MERGER OR CONSOLIDATION WHERE CNS SHAREHOLDERS OWN LESS THAN 50%
18810
OF SURVIVING COMPANY'S STOCK
18811
the stockholders of CNS approve a merger or consolidation of CNS
18812
with
18813
18814
18815
18816
18817
<PAGE>
18818
18819
EXECUTIVE EMPLOYMENT AGREEMENT
18820
PAGE 3
18821
18822
18823
any other corporation, other than (A) a merger or consolidation
18824
which would result in the voting securities of CNS outstanding
18825
immediately prior thereto continuing to represent (either by
18826
remaining outstanding or by being converted into voting
18827
securities of the merged or consolidated entity) 50% or more of
18828
the combined voting power of the voting securities of CNS or such
18829
merged or consolidated entity outstanding immediately after such
18830
merger or consolidation, or (B) a merger or consolidation
18831
effected to implement a recapitalization of CNS or similar
18832
transaction in which no "person" acquires more than 25% of the
18833
combined voting power of CNS's then outstanding securities;
18834
18835
iv. SALE OF CNS ASSETS FOR VALUE TOTALING 50% OR MORE OF CNS STOCK
18836
MARKET VALUE
18837
the stockholders of CNS approve a plan of complete liquidation or
18838
a sale or disposition by CNS of all or substantially all of CNS's
18839
assets. "The sale or disposition by CNS of all or substantially
18840
all of CNS's assets" shall mean a sale or other disposition
18841
transaction or series of related transactions involving assets of
18842
CNS or of any direct or indirect subsidiary of CNS (including the
18843
stock of any direct or indirect subsidiary of CNS) in which the
18844
value of the assets or stock being sold or otherwise disposed of
18845
(as measured by the purchase price being paid therefor or by such
18846
other method as the Board of Directors of CNS determines is
18847
appropriate in a case where there is no readily ascertainable
18848
purchase price) constitutes more than 50% of the fair market
18849
value of CNS. For purposes of the preceding sentence, the "fair
18850
market value of CNS" shall be the aggregate market value of CNS's
18851
outstanding common stock (on a fully diluted basis) plus the
18852
aggregate market value of CNS's other outstanding equity
18853
securities. The aggregate market value of CNS's common stock
18854
shall be determined by multiplying the number of shares of CNS
18855
common stock (on a fully diluted basis) outstanding on the date
18856
of the execution and delivery of a definitive agreement
18857
("Transaction Date") with respect to the sale or disposition by
18858
CNS of all or substantially all of CNS's assets by the average
18859
closing price for CNS's common stock for the ten trading days
18860
immediately preceding the Transaction Date. The aggregate market
18861
value of any other equity securities of CNS shall be determined
18862
in a manner similar to that prescribed in the immediately
18863
preceding sentence for determining the aggregate market value of
18864
CNS's common stock or by such other method as the Board of
18865
Directors of CNS shall determine is appropriate; and
18866
18867
Employee agrees that, subject to the terms and conditions of this
18868
Agreement, in the event of a Change in Control of CNS occurring after
18869
the date hereof, Employee will remain in the employ of CNS for a
18870
period of 30 days from the occurrence of such Change in Control.
18871
18872
18873
18874
18875
<PAGE>
18876
18877
EXECUTIVE EMPLOYMENT AGREEMENT
18878
PAGE 6
18879
18880
18881
b. Applicability. In the event of a Change in Control, the terms of this
18882
subparagraph 8.b shall be effective for a period of 24 months
18883
following the Change in Control. At the expiration of such 24 month
18884
period this Agreement in its entirety shall be terminated and be of no
18885
further effect. Employee shall be entitled to receive the benefits set
18886
forth in subparagraph 8.f if, within 24 months of such Change in
18887
Control, his employment is terminated by CNS or its successor without
18888
Good Cause (as defined in paragraph 7.a above), or by Employee for
18889
Good Reason (as defined in subparagraph 8.b.i, below). Employee shall,
18890
in return for the benefits provided under subparagraph 8.f., sign a
18891
standard release agreement with CNS, in which he agrees to release any
18892
and all claims and causes of action which he might have against CNS
18893
and in which he affirms and acknowledges his obligations under
18894
paragraphs 9, 10, 11 and 12 of this Agreement.
18895
18896
i. Termination for Good Reason shall be effective immediately upon
18897
written notice from the Employee to the President. Good Reason
18898
shall exist if CNS has materially breached any of the terms of
18899
this Agreement; Employee is assigned duties which are materially
18900
inconsistent with his position, duties, responsibilities and
18901
status as Vice President, New Business Development; his
18902
compensation, including any incentive compensation or bonus plan,
18903
is reduced; or relocation of CNS would require him to relocate
18904
his principal residence outside reasonable commuting distance of
18905
the Twin Cities Metropolitan area.
18906
18907
ii. Termination without Good Cause shall be effective upon 30 days'
18908
advance notice by CNS to the Employee. For purposes of this
18909
paragraph 8, Good Cause shall be defined as in subparagraph 7.b.
18910
18911
c. Notice of Termination. Any purported termination of employment under
18912
this paragraph 8 and also under paragraphs 6 and 7 shall be
18913
communicated by written Notice of Termination to the other party
18914
hereto in accordance with paragraph 20 hereunder. For purposes of this
18915
Agreement, a "Notice of Termination" shall mean a notice which
18916
indicates the specific termination provision in this Agreement relied
18917
upon and which sets forth the facts and circumstances claimed to
18918
provide a basis for termination of Employee's employment.
18919
18920
d. Date of Termination. For purposes of this paragraph 8 and also
18921
paragraphs 6 and 7 of this Agreement, "Date of Termination" shall
18922
mean:
18923
18924
i. if Employee's employment is terminated for Disability, as defined
18925
in paragraph 7.c. hereunder, 30 days after Notice of Termination
18926
is given (provided that Employee shall not have returned to the
18927
full-time performance of Employee's duties during such 30 day
18928
period); and
18929
18930
18931
18932
18933
<PAGE>
18934
18935
EXECUTIVE EMPLOYMENT AGREEMENT
18936
PAGE 7
18937
18938
18939
ii. if Employee's employment is terminated pursuant to a provision
18940
contained in paragraph 6, 7 or 8 herein or for any other reason
18941
(other than Disability), the date specified in the Notice of
18942
Termination, consistent with the provisions in said paragraphs.
18943
18944
e. Dispute of Termination. If, within ten days after any Notice of
18945
Termination is given under this paragraph 8, the party receiving such
18946
Notice of Termination notifies the other party that a dispute exists
18947
concerning the termination, the Date of Termination shall be the date
18948
on which the dispute is finally determined, either by mutual written
18949
agreement of the parties, or by a final judgment, order or decree of a
18950
court of competent jurisdiction (which is not appealable or the time
18951
for appeal therefrom having expired and no appeal having been
18952
perfected); provided, that the Date of Termination shall be extended
18953
by a notice of dispute only if such notice is given in good faith and
18954
the party giving such notice pursues the resolution of such dispute
18955
with reasonable diligence. Notwithstanding the pendency of any such
18956
dispute, CNS shall continue to pay Employee full compensation in
18957
effect when the notice giving rise to the dispute was given
18958
(including, but not limited to, base salary) and continue Employee as
18959
a participant in all compensation, benefit and insurance plans in
18960
which Employee was participating when the notice giving rise to the
18961
dispute was given, to the extent permissible under the terms of the
18962
applicable group plans and state and federal law, until the dispute is
18963
finally resolved in accordance with this subparagraph. Amounts paid
18964
under this subsection are in addition to all other amounts due under
18965
this Agreement and shall not be offset against or reduce any other
18966
amounts under this Agreement.
18967
18968
f. Compensation Upon Termination. Following a Change in Control, as
18969
defined in subparagraph 8.a. above, to the extent provided in
18970
subparagraph 8.b. above, Employee shall be entitled to the following
18971
benefits in lieu of any benefits which would otherwise be available to
18972
him upon termination under paragraphs 6 or 7 hereunder:
18973
18974
i. CNS shall pay Employee through the Date of Termination Employee's
18975
base salary at the rate in effect at the time the Notice of
18976
Termination is given and any other form or type of other
18977
compensation otherwise payable for such period, including any
18978
applicable incentive bonus, commensurate with his performance and
18979
the performance of CNS.
18980
18981
ii. In lieu of any further salary payments for periods subsequent to
18982
the Date of Termination, CNS shall pay a severance payment (the
18983
"Severance Payment") equal to 24 months of Employee's
18984
Compensation as defined below based on the average monthly
18985
Compensation paid to Employee during the 24 month period ending
18986
immediately prior to the Date of Termination (without giving
18987
effect to any reduction in such Compensation which would
18988
constitute a breach of this Agreement). If the Employee has not
18989
been employed by CNS for 24 months as of the Date of Termination,
18990
18991
18992
18993
18994
<PAGE>
18995
18996
EXECUTIVE EMPLOYMENT AGREEMENT
18997
PAGE 8
18998
18999
19000
average monthly Compensation shall be the Employee's average
19001
monthly Compensation for the number of months during which the
19002
Employee has been employed at CNS. For purposes of this
19003
subparagraph, Compensation shall mean and include every type and
19004
form of compensation paid to Employee by CNS (or any corporation
19005
("Affiliate") affiliated with CNS within the meaning of Section
19006
1504 of the Internal Revenue Code of 1986, as may be amended from
19007
time to time (the "Code")) and included in Employee's gross
19008
income for federal income tax purposes, but excluding
19009
compensation income arising from (1) hiring bonuses and (2)
19010
compensation income recognized as a result of the exercise of
19011
stock options or sale of the stock so acquired. All of Employee's
19012
contributions to any qualified plan pursuant to Section 401(k) of
19013
the Code or any flexible benefit plan pursuant to Section 125 of
19014
the Code shall be deemed to be included in gross income for
19015
federal tax purposes for purposes of this subparagraph. The
19016
Severance Payment shall be made in a single lump sum within 60
19017
days after the Date of Termination.
19018
19019
iii. For 18 months following the Employee's Date of Termination, CNS
19020
shall arrange to provide, at its sole expense, Employee with
19021
group medical, dental and life plan benefits substantially
19022
similar to those which Employee was receiving or entitled to
19023
receive immediately prior to the Notice of Termination. The cost
19024
of providing such benefits shall be in addition to (and shall not
19025
reduce) the Severance Payment. Benefits otherwise receivable by
19026
Employee pursuant to this paragraph (iii) shall be reduced to the
19027
extent comparable benefits are actually received by Employee
19028
during such period from any third party, and any such benefits
19029
actually received by Employee shall be reported to CNS.
19030
19031
iv. CNS shall also pay to Employee all legal fees and expenses
19032
incurred by Employee as a result of such termination (including
19033
all such fees and expenses, if any, incurred in contesting or
19034
disputing any such termination or in seeking to obtain or enforce
19035
any right or benefit provided by this paragraph).
19036
19037
v. The Severance Payment shall be reduced and offset by the amount
19038
of any other payment received or to be received by Employee in
19039
connection with his termination of employment pursuant to any
19040
policies of CNS.
19041
19042
vi. If a determination is made by legislation, regulations, rulings
19043
directed to CNS or Employee, or court decision that the aggregate
19044
amount of any payment made to Employee hereunder, or pursuant to
19045
any plan, program or policy of CNS in connection with, on account
19046
of, or as a result of, a Change of Control constitutes an "excess
19047
parachute payment" as defined in Section 280G of the Code subject
19048
to the excise tax provisions of Section 4999 of the Code, or any
19049
successor sections thereof, Employee shall be
19050
19051
19052
19053
19054
<PAGE>
19055
19056
EXECUTIVE EMPLOYMENT AGREEMENT
19057
PAGE 9
19058
19059
19060
entitled to receive from CNS, in addition to any other amounts
19061
payable hereunder, an amount which shall be equal to such excise
19062
tax, plus, on a net after-tax basis, an amount equal to the
19063
aggregate amount of any interest, penalties, fines or additions
19064
to any tax, including income tax, which are imposed in connection
19065
with the imposition of such excise tax. Such amount shall be
19066
payable to Employee as soon as may be practicable after such
19067
final determination is made. Employee and CNS shall mutually and
19068
reasonably determine whether or not such determination has
19069
occurred or whether any appeal to such determination should be
19070
made.
19071
19072
vii. Employee shall be entitled to receive all benefits payable to
19073
Employee under the CNS, Inc. Profit Sharing Plan and Trust or any
19074
successor of such Plan and Trust and any other plan or agreement
19075
relating to retirement benefits, and, in addition, if Employee is
19076
not fully vested in his account balance under such Plan, a single
19077
lump sum payment in cash from CNS representing the nonvested
19078
portion of his account, which shall be in addition to, and not
19079
reduced by, any other amounts payable to Employee under this
19080
paragraph 8.
19081
19082
viii. Employee shall not be required to mitigate the amount of any
19083
payment provided for in this paragraph 8 by seeking other
19084
employment or otherwise, nor shall the amount of any payment or
19085
benefit provided for in this paragraph 8 be reduced by any
19086
compensation earned by Employee as the result of employment by
19087
another employer or by retirement benefits after the Date of
19088
Termination, or otherwise except as specifically provided in this
19089
paragraph 8.
19090
19091
ix. In order to assure the performance of CNS or its successor of its
19092
obligations under this paragraph, CNS may deposit in trust an
19093
amount equal to the maximum payment that will be due Employee
19094
under the terms hereof. Under a written trust instrument, the
19095
Trustee shall be instructed to pay to Employee (or Employee's
19096
legal representative, as the case may be) the amount to which
19097
Employee shall be entitled under the terms hereof, and the
19098
balance, if any, of the trust not so paid or reserved for payment
19099
shall be repaid to CNS. If CNS deposits funds in trust, payment
19100
shall be made no later than the occurrence of a Change in
19101
Control. If and to the extent there are not amounts in trust
19102
sufficient to pay Employee under this Agreement, CNS shall remain
19103
liable for any and all payments due to Employee. In accordance
19104
with the terms of such trust, at all times during the term of
19105
this Agreement, Employee shall have no rights, other than as an
19106
unsecured general creditor of CNS, to any amounts held in trust
19107
and all trust assets shall be general assets of CNS and subject
19108
to the claims of creditors of CNS. Failure of CNS to establish or
19109
fully fund such trust shall not be deemed a revocation or
19110
termination of this Agreement by CNS.
19111
19112
19113
19114
19115
<PAGE>
19116
19117
EXECUTIVE EMPLOYMENT AGREEMENT
19118
PAGE 10
19119
19120
19121
x. As a condition of receiving the Severance Payment and other
19122
benefits provided in this subparagraph 8.f and in subparagraph
19123
8.g, Employee shall be required to sign a standard release
19124
agreement with CNS in which he agrees to release any and all
19125
claims and causes of action which he might have against CNS and
19126
in which he affirms and acknowledges his obligations under
19127
paragraphs 9, 10, 11 and 12 of this Agreement.
19128
19129
g. Stock Options. Employee shall, immediately upon a Change in Control,
19130
vest in all stock options which have been granted to him and he shall
19131
be entitled to exercise all rights and to receive all benefits
19132
accruing to him under any and all CNS stock purchase and stock option
19133
plans or programs, including the CNS, Inc. 1994 Amended Stock Plan, or
19134
any successor to any such plan or program, which shall be in addition
19135
to and not reduced by any other amounts payable to Employee under this
19136
paragraph 8.
19137
19138
9. Confidential Information. All knowledge and information not already
19139
available to the public which Employee may acquire or has acquired with
19140
respect to product development, improvements, modifications, discoveries,
19141
designs, methods, systems, computer software, programs, codes and
19142
documentation, research, designs, formulas, instructions, methods,
19143
inventions, trade secrets, services or other private or confidential
19144
matters of CNS (such as those concerning sales, costs, profits,
19145
organizations, customer lists, pricing methods, etc.), or of any third
19146
party which CNS is obligated to keep confidential, shall be regarded by
19147
Employee as strictly confidential and shall not be used by Employee
19148
directly or indirectly or disclosed to any persons, corporations or firms.
19149
All of the foregoing knowledge and information are collectively termed
19150
"Confidential Information" herein. Employee's obligations under this
19151
paragraph will not apply to any information which (a) is or becomes known
19152
to the general public under circumstances involving no breach by Employee
19153
of the terms of this paragraph, (b) is generally disclosed to third parties
19154
by CNS as a continuing practice without restriction on such third parties,
19155
(c) is approved for release by written authorization of CNS's Board, or (d)
19156
Employee is obligated by law to disclose.
19157
19158
10. Disclosure and Transfer of Product Developments, etc.
19159
19160
a. Employee will make full and prompt disclosure to CNS or all product
19161
developments, improvements, modifications, discoveries, computer
19162
software, programs, codes and documentation, research, designs,
19163
formulas, configurations, instructions, methods and inventions (all of
19164
which are collectively termed "Developments" herein), whether
19165
patentable or not, made, discovered, conceived or first reduced to
19166
practice by Employee or under his direction during his employment,
19167
alone or with others, whether or not made or conceived during normal
19168
working hours or on the premises of CNS which relate in any material
19169
way to the business or to research or development work of CNS.
19170
Employee confirms by his acceptance of this Agreement that CNS owns
19171
and shall own all of the Developments.
19172
19173
19174
19175
19176
<PAGE>
19177
19178
EXECUTIVE EMPLOYMENT AGREEMENT
19179
PAGE 11
19180
19181
19182
b. Employee also agrees on behalf of himself and his heirs and legal
19183
representatives that he will promptly communicate, disclose and
19184
transfer to CNS, free of encumbrances and restrictions, all of his
19185
right, title and interest in the Developments covered by subparagraph
19186
10.a. and any patents or patent applications covering such
19187
Developments and to execute and deliver such assignments, patents and
19188
applications, and any other documents as CNS may direct, and to
19189
cooperate fully with CNS to enable it to secure any patents or
19190
otherwise protect such Developments in any and all countries. Employee
19191
shall assign to CNS any and all copyrights and reproduction rights to
19192
all material prepared by Employee in connection with his employment.
19193
19194
c. Notwithstanding subparagraphs 10.a. and b., however, this paragraph 10
19195
shall not apply to Developments for which no equipment, supplies,
19196
facility or trade secret information of CNS was used and which was
19197
developed entirely on the Employee's own time, and (1) which do not
19198
relate (a) directly to the business of CNS or (b) to CNS's actual or
19199
demonstrably anticipated research or development, or (2) which does
19200
not result from any work performed by Employee for CNS.
19201
19202
This will confirm that Employee's obligations to CNS under paragraphs 9, 10
19203
and 11 will continue after the termination of Employee's employment.
19204
19205
11. Non-Competition. During the term of Employee's employment by CNS and for
19206
twelve (12) months thereafter, Employee shall not directly or indirectly
19207
engage in, enter into or participate in the business of CNS or in any
19208
business or commercial activity which does or is reasonably likely to
19209
compete with or adversely affect the Business or products of CNS, either as
19210
an individual for Employee's own account, as a partner or a joint venturer,
19211
or as an officer, director, consultant or holder of more than five percent
19212
(5%) of the entity interest in, any other person, firm, partnership or
19213
corporation, or an employee, agent or salesman for any person. In addition,
19214
during such period Employee shall not: avail himself of any advantages or
19215
acquaintances he has made with any person who has, within the twelve (12)
19216
month period ended on the date of termination of his employment, been a
19217
customer of CNS or its affiliates, and which would, directly or indirectly,
19218
materially divert business from or materially and adversely affect the
19219
Business of CNS; interfere with the contractual relations between CNS and
19220
any of its employees; or employ or cause to be employed in any capacity or
19221
retain or cause to be retained as a consultant any person who was employed
19222
in any capacity by CNS during the twelve (12) month period ended on the
19223
date of termination of Employee's employment.
19224
19225
For purposes of this Agreement, the "Business of CNS" or "Business" means
19226
and includes the business of the manufacture, production, sale, marketing
19227
and distribution of the Breathe Right strip and any other products
19228
currently offered or currently under development by CNS or offered or
19229
currently under development by CNS during one (1) year prior to the date of
19230
termination of Employee's employment.
19231
19232
19233
19234
19235
<PAGE>
19236
19237
EXECUTIVE EMPLOYMENT AGREEMENT
19238
PAGE 12
19239
19240
19241
Inasmuch as the activities of CNS are conducted on an international basis,
19242
the restrictions of this paragraph 11 shall apply throughout the United
19243
States, Canada, Japan and Europe.
19244
19245
12. Non-Solicitation. During the term of Employee's employment by CNS and for
19246
twelve (12) months thereafter, Employee shall not directly or indirectly
19247
solicit any current or prospective CNS customer, broker, vendor or
19248
distributor for the purpose of providing products or services for or on
19249
behalf of said customer, broker, vendor or distributor which are
19250
competitive with the products or services being provided by CNS, which are
19251
in the development stages of being competitive with the products or
19252
services being provided by CNS, or which would in any way cause said
19253
customer, broker, vendor or distributor to discontinue or reduce its
19254
business relationship with CNS. Current CNS customers, brokers, vendors or
19255
distributors include those customer, brokers, vendors or distributors with
19256
whom CNS has had a business relationship at any time within one year
19257
immediately preceding Employee's termination date. Prospective CNS
19258
customers, brokers, vendors and distributors include those with whom (a) a
19259
CNS representative has been in direct personal contact and (b) CNS has a
19260
reasonable opportunity of entering into a business relationship within six
19261
months following Employee's termination date. Employee also agrees that
19262
during his employment in the one year period following his employment, he
19263
will not directly or indirectly solicit any CNS employees to terminate his
19264
or her employment with CNS. This Employee non-solicitation obligation
19265
applies to Employees of CNS during Employee's employment and as of his
19266
termination date.
19267
19268
13. Remedies. Employee acknowledges that the restrictions set forth in
19269
paragraphs 9, 10, 11 and 12 hereof are reasonably necessary to protect
19270
legitimate business interests of CNS. It is understood that if Employee
19271
violates his obligations under any of these paragraphs, CNS would suffer
19272
irreparable harm for which a recovery of money damages would be an
19273
incomplete and inadequate remedy. It is therefore agreed that CNS, in
19274
addition to any remedies at law, shall be entitled, as a matter of right,
19275
in any court of competent jurisdiction, to a mandatory injunction
19276
restraining Employee pending litigation, as well as upon final
19277
determination thereof, from violating this Agreement. In addition, CNS will
19278
discontinue payment to Employee of any Severance or Salary Continuation
19279
Payments, benefits or bonus which he may be entitled to receive or is
19280
receiving under paragraphs 6, 7 or 8 hereunder or otherwise, in the event
19281
of his violation of any of his obligations under this Agreement. In the
19282
event of cessation of payments and benefits, Employee's release of his
19283
claims against CNS shall remain valid and fully enforceable in
19284
consideration of the benefits which Employee received prior to set breach.
19285
19286
14. Severability. The parties intend that the covenants and agreements
19287
contained herein shall be deemed to be a series of separate covenants and
19288
agreements, one for each and every state of the United States and political
19289
subdivision outside the United States where the business described is
19290
conducted. If, in any judicial proceeding, a court shall refuse to enforce
19291
any of the separate covenants deemed included in such action, then such
19292
unenforceable covenants shall be deemed eliminated from the provisions of
19293
this Agreement for the purpose of such proceeding to the extent necessary
19294
to permit the remaining covenants to be enforced in such proceeding.
19295
Further, in the event that any
19296
19297
19298
19299
19300
<PAGE>
19301
19302
EXECUTIVE EMPLOYMENT AGREEMENT
19303
PAGE 13
19304
19305
19306
provision is held to be overbroad as written, such provision shall be
19307
deemed amended to narrow its application to the extent necessary to make
19308
the provision enforceable according to applicable law and enforced as
19309
amended
19310
19311
15. Binding Effect.
19312
19313
a. CNS will require any successor (whether direct or indirect, by
19314
purchase, merger, consolidation or otherwise) to all or substantially
19315
all of the business and/or assets as defined in subparagraph 8.a of
19316
CNS to expressly assume and agree to perform this Agreement in the
19317
same manner and to the same extent that CNS would be required to
19318
perform it if no such succession had taken place, in which case, the
19319
term "CNS" as used in this Agreement shall instead refer to CNS'
19320
successor. Failure of CNS to obtain such assumption and agreement
19321
prior to the effectiveness of any such succession shall be a breach of
19322
this Agreement and shall entitle Employee to compensation from CNS in
19323
the same amount and on the same terms as he would be entitled
19324
hereunder if he terminated his employment for Good Reason following a
19325
Change in Control, except that for purposes of implementing the
19326
foregoing, the date on which any such succession becomes effective
19327
shall be deemed the Date of Termination.
19328
19329
b. This Agreement shall inure to the benefit of and be enforceable by
19330
Employee's personal or legal representatives, successors, heirs, and
19331
designated beneficiaries. If Employee should die while any amount
19332
would still be payable to Employee hereunder if Employee had continued
19333
to live, all such amounts, unless otherwise provided herein, shall be
19334
paid in accordance with the terms of this Agreement to Employee's
19335
designated beneficiaries, or, if there is no such designated
19336
beneficiary, to Employee's estate.
19337
19338
16. Entire Agreement. From and after the date of this Agreement the terms and
19339
provisions of this Agreement constitute the entire agreement between the
19340
parties and this Agreement supersedes any previous oral or written
19341
communications, representations, or agreements with respect to any subject,
19342
including the subject matter of compensation, bonus, participation and
19343
profit sharing and termination compensation.
19344
19345
17. Waiver and Interpretation. The waiver by either party of a breach of any
19346
provision of this Agreement by the other party shall not operate or be
19347
construed as a waiver of any subsequent breach by the breaching party. No
19348
waiver shall be valid unless in writing and signed by the party providing
19349
such waiver. If any provision of this Agreement is held by any court to be
19350
unenforceable, then such provision shall be deemed to be eliminated from
19351
the Agreement to permit enforceability of the remaining provisions. If any
19352
provision is held to be overbroad, such provision shall be amended to
19353
narrow its application to the extent necessary for enforceability. For
19354
purposes of the release agreement which Employee shall be required to
19355
execute as a condition of receiving any payments and benefits hereunder,
19356
"CNS", as referred to in this Agreement, shall include CNS and all its
19357
19358
19359
19360
19361
<PAGE>
19362
19363
EXECUTIVE EMPLOYMENT AGREEMENT
19364
PAGE 14
19365
19366
19367
affiliates, shareholders, officers, directors, employees, agents,
19368
attorneys, insurers and indemnitors.
19369
19370
18. Applicable Law. All questions pertaining to the validity, construction,
19371
execution and performance of this Agreement shall be construed and governed
19372
in accordance with the laws of the State of Minnesota. The parties consent
19373
to the personal jurisdiction of the State of Minnesota, waive any argument
19374
that such a forum is not convenient, and agree that any litigation relating
19375
to this Agreement shall be venued in Minneapolis, Minnesota.
19376
19377
19. Tax Withholding. CNS may withhold from any payment of benefits under this
19378
Agreement (and forward to the appropriate taxing authority) any taxes
19379
required to be withheld under applicable law.
19380
19381
20. Notice. Any notice required or desired to be given under this Agreement
19382
shall be deemed given if in writing sent by certified mail to his residence
19383
in the case of Employee, or to its principal office in the case of CNS.
19384
19385
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
19386
year first set forth above.
19387
19388
CNS, INC.
19389
19390
19391
By /s/ Marti Morfitt
19392
--------------------------------------
19393
Marti Morfitt
19394
Its President & CEO
19395
19396
19397
19398
EMPLOYEE
19399
19400
19401
/s/ Linda Kollofski
19402
----------------------------------------
19403
Linda Kollofski
19404
19405
19406
19407
19408
<PAGE>
19409
19410
EXECUTIVE EMPLOYMENT AGREEMENT
19411
19412
EXHIBIT A
19413
19414
NAME: Linda Kollofski
19415
19416
DATE: October 29, 2002
19417
19418
POSITION: Vice President, New Business Development
19419
19420
DEPARTMENT: New Business Development
19421
19422
BASE SALARY: $175,000
19423
19424
19425
19426
MANAGEMENT INCENTIVE PLAN LEVEL: 15% at Threshold
19427
30% at Plan
19428
60% at Maximum
19429
19430
19431
19432
19433
</TEXT>
19434
</DOCUMENT>
19435
<DOCUMENT>
19436
<TYPE>EX-10
19437
<SEQUENCE>5
19438
<FILENAME>cns032695_ex10-28.txt
19439
<TEXT>
19440
19441
EXHIBIT 10.28
19442
19443
19444
EXECUTIVE EMPLOYMENT AGREEMENT
19445
19446
19447
This Agreement is made as of July 22, 2002 (the "Effective Date") between CNS,
19448
INC. a Delaware corporation ("CNS") and John F. Kundtz ("Employee").
19449
19450
WHEREAS, CNS considers the establishment and maintenance of a sound and vital
19451
management to be essential to protecting and enhancing the best interests of CNS
19452
and its shareholders; and
19453
19454
WHEREAS, Employee has made and is expected to continue to make, due to his
19455
experience and knowledge, a significant contribution to the profitability,
19456
growth and financial strength of CNS; and
19457
19458
WHEREAS, CNS, as a publicly held corporation, recognizes that the possibility of
19459
a change in control may exist and that such possibility and the uncertainty and
19460
questions which it may raise among management may result in the departure or
19461
distraction of the performance of Employee's duties to the detriment of CNS and
19462
its shareholders; and
19463
19464
WHEREAS, Employee is willing to continue his employment with CNS upon the
19465
understanding that CNS will provide income security if Employee's employment is
19466
terminated under certain terms and conditions;
19467
19468
WHEREAS, it is in the best interests of CNS and its stockholders to employ
19469
Employee and to reinforce and encourage his continued attention and dedication
19470
to his assigned duties without distraction and to ensure his continued
19471
availability to CNS in the event of a Change in Control; and
19472
19473
WHEREAS, it is further in CNS's best interests to receive certain assurances
19474
from Employee regarding CNS's confidentiality, competition and other proprietary
19475
business concerns;
19476
19477
THEREFORE, in consideration of the foregoing and of this agreement, certain
19478
change in control protection, continued employment and other benefits hereunder,
19479
as well as other mutual covenants and obligations hereinafter set forth, CNS and
19480
Employee agree as follows:
19481
19482
1. Employment. CNS agrees to continue to employ Employee as its Vice President
19483
Marketing, Breathe Right Brand under the terms, conditions and benefits set
19484
forth herein and Employee accepts continued employment with CNS on said
19485
terms, conditions and benefits.
19486
19487
2. Term. The term of Employee's employment shall continue until terminated
19488
pursuant to paragraph 6, 7, or 8 herein.
19489
19490
19491
19492
19493
<PAGE>
19494
19495
EXECUTIVE EMPLOYMENT AGREEMENT
19496
PAGE 2
19497
19498
19499
3. Duties. In his position as Vice President Marketing, Breathe Right Brand,
19500
Employee will continue to faithfully and diligently perform such executive
19501
management responsibilities as may be assigned to him from time to time by
19502
the President and Chief Executive Officer or Chairman of the Board of
19503
Directors of CNS (the "Board"); devote his full time, energy and skill to
19504
CNS's business, as is reasonably necessary to execute fully his duties
19505
hereunder, except for vacations, absences made necessary because of
19506
illness, and service on other corporate, civic, or charitable boards or
19507
committees not significantly interfering with his duties hereunder; and
19508
promote CNS's best interests. The principal place of employment and the
19509
location of Employee's principal office and normal place of work shall be
19510
in the Minneapolis, Minnesota metropolitan area. Employee will be expected
19511
to travel to other locations, as necessary, in the performance of his
19512
duties during the term of this Agreement. Employee shall notify the
19513
President of any other paid position which he is considering accepting,
19514
including but not limited to a board of directors position, a position as
19515
an employee or an independent consultant, or any position, whether or not
19516
for pay, which could constitute a conflict of interest with CNS. The
19517
Employee agrees not to accept any such position without the President of
19518
CNS's prior approval.
19519
19520
4. Compensation. For all services rendered by Employee, CNS shall pay Employee
19521
the compensation described in Exhibit A, payable at such times as salaried
19522
employees of CNS are customarily paid. The President and CEO of CNS shall,
19523
from time to time during Employee's employment, review his annual salary in
19524
connection with possible increases, giving consideration to inflation
19525
factors, performance of Employee and CNS, salaries paid for positions of
19526
similar responsibility for other companies, and other relevant factors, and
19527
shall provide for such increases when deemed appropriate. Employee shall in
19528
addition be eligible to participate in the annual management incentive
19529
bonus program, as approved by the Board of Directors. In the event of
19530
termination of this Agreement by CNS without Good Cause, as defined in
19531
paragraph 7 herein, the Board may, in good faith and in its sole
19532
discretion, determine and cause to be paid a partial bonus based on
19533
Employee's performance through the date of termination, and such
19534
determination shall be final and binding.
19535
19536
5. Benefits. Employee shall be entitled to Paid Time Off consistent with CNS
19537
policy and such insurance, 401(k) program and other benefits available to
19538
all salaried employees of CNS, subject to any limitations on such benefits
19539
to officers, directors or highly paid employees in order that such benefit
19540
programs qualify under federal or state law for favored tax or other
19541
treatment. Such benefit programs may be changed from time to time by the
19542
Board. Employee shall also be entitled to reimbursement of his reasonable
19543
and necessary expenses incurred in connection with the performance of his
19544
duties hereunder.
19545
19546
6. Termination by Employee. Employee may resign his employment with CNS
19547
effective upon 30 days' advance written notice to the President. If
19548
Employee resigns under this paragraph, the President and CEO retains the
19549
right to terminate his employment, effective upon written notice to
19550
Employee, at any time during the 30-day notice period, provided, however,
19551
that base salary and the employer portion of his health insurance premiums
19552
will continue to be paid by CNS for the duration of the 30-day notice
19553
period. In connection
19554
19555
19556
19557
19558
<PAGE>
19559
19560
EXECUTIVE EMPLOYMENT AGREEMENT
19561
PAGE 3
19562
19563
19564
with his termination, Employee will receive any accrued unused Paid Time
19565
Off to which he is entitled.
19566
19567
7. Termination by CNS. CNS shall have the right to terminate Employee's
19568
employment in any of the following ways:
19569
19570
a. CNS may, by written notice to Employee, terminate his employment
19571
without Good Cause, in which event Employee will be paid his base
19572
salary up to the date of termination. Employee is also entitled to
19573
receive Salary Continuation for one year from his termination date.
19574
"Salary Continuation" shall mean payment by CNS of the Employee's base
19575
salary as of his termination date, payable to Employee on the same
19576
schedule and in the same amount as the payment of base salary prior to
19577
termination of his employment, until such time as the full Salary
19578
Continuation obligation shall be discharged, as provided in this
19579
paragraph 7. During the period when Salary Continuation is payable to
19580
Employee, CNS will also continue to provide to Employee all group
19581
medical, dental and life plan benefits provided to its other senior
19582
executives. Employee shall also receive any accrued unused Paid Time
19583
Off to which he is entitled. Receipt of Salary Continuation is subject
19584
to Employee's compliance with his obligations under paragraphs 9, 10,
19585
11 and 12 of this Agreement and his execution of a standard release
19586
agreement which includes, in addition to release of claims against CNS
19587
and related releasees, an obligation not to speak negatively about or
19588
harm CNS, confidentiality with respect to the termination process, and
19589
cooperation with the transition of responsibilities. Payment of the
19590
employer portion of Employee's group medical, dental and life plan
19591
premiums under this paragraph and under paragraphs 6 and 8 herein
19592
shall cease as of the date on which Employee is covered under other
19593
such group plans if such coverage occurs prior to termination of any
19594
salary continuation periods set forth in said paragraphs.
19595
19596
b. CNS, by written notice to Employee, may terminate his employment for
19597
Good Cause, as defined below. In the event of termination under this
19598
subparagraph 7.b., Employee shall be paid his base salary up to the
19599
date of termination. "Good Cause" for the purpose of this Agreement
19600
shall mean one or more of the following: (i) willful and premeditated
19601
failure or refusal of Employee to render services to CNS in accordance
19602
with his obligations under paragraph 3; (ii) the commission by
19603
Employee of an act of fraud or embezzlement against CNS; (iii) the
19604
commission by Employee of any other willful or reckless act which
19605
injures CNS in a substantial or material way (it being understood that
19606
mere negligence in performance of duties is not Good Cause under this
19607
Agreement); (iv) the breach by Employee of any provision of this
19608
Agreement; or (v) the commission of a substantial act of moral
19609
turpitude by Employee which is deemed by CNS's Board to have a
19610
material adverse effect on CNS; or (vi) unsatisfactory performance
19611
after specific notice of performance deficiencies, description of
19612
expectations and opportunity to cure.
19613
19614
19615
19616
19617
<PAGE>
19618
19619
EXECUTIVE EMPLOYMENT AGREEMENT
19620
PAGE 4
19621
19622
19623
c. CNS, by written notice to Employee, may terminate Employee's
19624
employment under this Agreement if he becomes physically or mentally
19625
disabled during the term so that he has not been able to substantially
19626
perform, for a period of 120 consecutive days, with reasonable
19627
accommodation, the usual duties assigned to him hereunder
19628
("Disability"). Upon such determination, CNS shall pay to Employee his
19629
base salary up to the date of such termination to the extent not
19630
covered by any disability plan.
19631
19632
d. This Agreement shall terminate upon the Employee's death during its
19633
term, except that CNS shall pay to the legal representative of
19634
Employee's estate all base salary due him up to the date of his death.
19635
19636
8. Termination Following a Change in Control.
19637
19638
DEFINITION.
19639
19640
a. For purposes of this Agreement, "Change in Control" shall mean the
19641
occurrence of one of the following events:
19642
19643
i. ACQUISITION OF 25% OF STOCK IN CNS
19644
any "person" [as such term is used in Section 13(d) and 4(d) of
19645
the Securities Exchange Act of 1934, as amended ("Exchange
19646
Act")], other than a trustee or other fiduciary holding
19647
securities under an employee benefit plan of CNS is or becomes
19648
the "beneficial owner" (as defined in Rule 13d-3 under the
19649
Exchange Act), directly or indirectly of securities representing
19650
25% or more of the combined voting power of CNS's then
19651
outstanding securities;
19652
19653
ii. CHANGE IN 50% OF BOARD DIRECTORS WHO WERE NOT APPROVED BY BOARD
19654
during any period of two consecutive years (not including any
19655
period ending prior to the effective date of this Agreement),
19656
individuals who at the beginning of such period constitute the
19657
Board of Directors of CNS, and any new director [other than a
19658
director designated by a person who has entered into agreement
19659
with CNS to effect a transaction permitted by Section 6(a)(I),
19660
(iii) or (iv)] whose election by the Board of Directors of CNS or
19661
nomination for election by CNS's stockholders was approved by
19662
vote of at least two-thirds of the directors then still in office
19663
who either were directors at the beginning of the period or whose
19664
election or nomination for election was previously so approved
19665
("Continuing Directors"), cease for any reason to constitute at
19666
least a majority of the Board of Directors of CNS;
19667
19668
iii. MERGER OR CONSOLIDATION WHERE CNS SHAREHOLDERS OWN LESS THAN 50%
19669
OF SURVIVING COMPANY'S STOCK
19670
the stockholders of CNS approve a merger or consolidation of CNS
19671
with
19672
19673
19674
19675
19676
<PAGE>
19677
19678
EXECUTIVE EMPLOYMENT AGREEMENT
19679
PAGE 5
19680
19681
19682
any other corporation, other than (A) a merger or consolidation
19683
which would result in the voting securities of CNS outstanding
19684
immediately prior thereto continuing to represent (either by
19685
remaining outstanding or by being converted into voting
19686
securities of the merged or consolidated entity) 50% or more of
19687
the combined voting power of the voting securities of CNS or such
19688
merged or consolidated entity outstanding immediately after such
19689
merger or consolidation, or (B) a merger or consolidation
19690
effected to implement a recapitalization of CNS or similar
19691
transaction in which no "person" acquires more than 25% of the
19692
combined voting power of CNS's then outstanding securities;
19693
19694
iv. SALE OF CNS ASSETS FOR VALUE TOTALING 50% OR MORE OF CNS STOCK
19695
MARKET VALUE
19696
the stockholders of CNS approve a plan of complete liquidation or
19697
a sale or disposition by CNS of all or substantially all of CNS's
19698
assets. "The sale or disposition by CNS of all or substantially
19699
all of CNS's assets" shall mean a sale or other disposition
19700
transaction or series of related transactions involving assets of
19701
CNS or of any direct or indirect subsidiary of CNS (including the
19702
stock of any direct or indirect subsidiary of CNS) in which the
19703
value of the assets or stock being sold or otherwise disposed of
19704
(as measured by the purchase price being paid therefor or by such
19705
other method as the Board of Directors of CNS determines is
19706
appropriate in a case where there is no readily ascertainable
19707
purchase price) constitutes more than 50% of the fair market
19708
value of CNS. For purposes of the preceding sentence, the "fair
19709
market value of CNS" shall be the aggregate market value of CNS's
19710
outstanding common stock (on a fully diluted basis) plus the
19711
aggregate market value of CNS's other outstanding equity
19712
securities. The aggregate market value of CNS's common stock
19713
shall be determined by multiplying the number of shares of CNS
19714
common stock (on a fully diluted basis) outstanding on the date
19715
of the execution and delivery of a definitive agreement
19716
("Transaction Date") with respect to the sale or disposition by
19717
CNS of all or substantially all of CNS's assets by the average
19718
closing price for CNS's common stock for the ten trading days
19719
immediately preceding the Transaction Date. The aggregate market
19720
value of any other equity securities of CNS shall be determined
19721
in a manner similar to that prescribed in the immediately
19722
preceding sentence for determining the aggregate market value of
19723
CNS's common stock or by such other method as the Board of
19724
Directors of CNS shall determine is appropriate; and
19725
19726
Employee agrees that, subject to the terms and conditions of this
19727
Agreement, in the event of a Change in Control of CNS occurring after
19728
the date hereof, Employee will remain in the employ of CNS for a
19729
period of 30 days from the occurrence of such Change in Control.
19730
19731
19732
19733
19734
<PAGE>
19735
19736
EXECUTIVE EMPLOYMENT AGREEMENT
19737
PAGE 6
19738
19739
19740
b. Applicability. In the event of a Change in Control, the terms of this
19741
subparagraph 8.b shall be effective for a period of 24 months
19742
following the Change in Control. At the expiration of such 24 month
19743
period this Agreement in its entirety shall be terminated and be of no
19744
further effect. Employee shall be entitled to receive the benefits set
19745
forth in subparagraph 8.f if, within 24 months of such Change in
19746
Control, his employment is terminated by CNS or its successor without
19747
Good Cause (as defined in paragraph 7.a above), or by Employee for
19748
Good Reason (as defined in subparagraph 8.b.i, below). Employee shall,
19749
in return for the benefits provided under subparagraph 8.f., sign a
19750
standard release agreement with CNS, in which he agrees to release any
19751
and all claims and causes of action which he might have against CNS
19752
and in which he affirms and acknowledges his obligations under
19753
paragraphs 9, 10, 11 and 12 of this Agreement.
19754
19755
i. Termination for Good Reason shall be effective immediately upon
19756
written notice from the Employee to the President and CEO. Good
19757
Reason shall exist if CNS has materially breached any of the
19758
terms of this Agreement; Employee is assigned duties which are
19759
materially inconsistent with his position, duties,
19760
responsibilities and status as Vice President Marketing, Breathe
19761
Right Brand; his compensation, including any incentive
19762
compensation or bonus plan, is reduced; or relocation of CNS
19763
would require him to relocate his principal residence outside
19764
reasonable commuting distance of the Twin Cities Metropolitan
19765
area.
19766
19767
ii. Termination without Good Cause shall be effective upon 30 days'
19768
advance notice by CNS to the Employee. For purposes of this
19769
paragraph 8, Good Cause shall be defined as in subparagraph 7.b.
19770
19771
c. Notice of Termination. Any purported termination of employment under
19772
this paragraph 8 and also under paragraphs 6 and 7 shall be
19773
communicated by written Notice of Termination to the other party
19774
hereto in accordance with paragraph 20 hereunder. For purposes of this
19775
Agreement, a "Notice of Termination" shall mean a notice which
19776
indicates the specific termination provision in this Agreement relied
19777
upon and which sets forth the facts and circumstances claimed to
19778
provide a basis for termination of Employee's employment.
19779
19780
d. Date of Termination. For purposes of this paragraph 8 and also
19781
paragraphs 6 and 7 of this Agreement, "Date of Termination" shall
19782
mean:
19783
19784
i. if Employee's employment is terminated for Disability, as defined
19785
in paragraph 7.c. hereunder, 30 days after Notice of Termination
19786
is given (provided that Employee shall not have returned to the
19787
full-time performance of Employee's duties during such 30 day
19788
period); and
19789
19790
19791
19792
19793
<PAGE>
19794
19795
EXECUTIVE EMPLOYMENT AGREEMENT
19796
PAGE 7
19797
19798
19799
ii. if Employee's employment is terminated pursuant to a provision
19800
contained in paragraph 6, 7 or 8 herein or for any other reason
19801
(other than Disability), the date specified in the Notice of
19802
Termination, consistent with the provisions in said paragraphs.
19803
19804
e. Dispute of Termination. If, within ten days after any Notice of
19805
Termination is given under this paragraph 8, the party receiving such
19806
Notice of Termination notifies the other party that a dispute exists
19807
concerning the termination, the Date of Termination shall be the date
19808
on which the dispute is finally determined, either by mutual written
19809
agreement of the parties, or by a final judgment, order or decree of a
19810
court of competent jurisdiction (which is not appealable or the time
19811
for appeal therefrom having expired and no appeal having been
19812
perfected); provided, that the Date of Termination shall be extended
19813
by a notice of dispute only if such notice is given in good faith and
19814
the party giving such notice pursues the resolution of such dispute
19815
with reasonable diligence. Notwithstanding the pendency of any such
19816
dispute, CNS shall continue to pay Employee full compensation in
19817
effect when the notice giving rise to the dispute was given
19818
(including, but not limited to, base salary) and continue Employee as
19819
a participant in all compensation, benefit and insurance plans in
19820
which Employee was participating when the notice giving rise to the
19821
dispute was given, to the extent permissible under the terms of the
19822
applicable group plans and state and federal law, until the dispute is
19823
finally resolved in accordance with this subparagraph. Amounts paid
19824
under this subsection are in addition to all other amounts due under
19825
this Agreement and shall not be offset against or reduce any other
19826
amounts under this Agreement.
19827
19828
f. Compensation Upon Termination. Following a Change in Control, as
19829
defined in subparagraph 8.a. above, to the extent provided in
19830
subparagraph 8.b. above, Employee shall be entitled to the following
19831
benefits in lieu of any benefits which would otherwise be available to
19832
him upon termination under paragraphs 6 or 7 hereunder:
19833
19834
i. CNS shall pay Employee through the Date of Termination Employee's
19835
base salary at the rate in effect at the time the Notice of
19836
Termination is given and any other form or type of other
19837
compensation otherwise payable for such period, including any
19838
applicable incentive bonus, commensurate with his performance and
19839
the performance of CNS.
19840
19841
ii. In lieu of any further salary payments for periods subsequent to
19842
the Date of Termination, CNS shall pay a severance payment (the
19843
"Severance Payment") equal to 24 months of Employee's
19844
Compensation as defined below based on the average monthly
19845
Compensation paid to Employee during the 24 month period ending
19846
immediately prior to the Date of Termination (without giving
19847
effect to any reduction in such Compensation which would
19848
constitute a breach of this Agreement). If the Employee has not
19849
been employed by CNS for 24 months as of the Date of Termination,
19850
19851
19852
19853
19854
<PAGE>
19855
19856
EXECUTIVE EMPLOYMENT AGREEMENT
19857
PAGE 8
19858
19859
19860
average monthly Compensation shall be the Employee's average
19861
monthly Compensation for the number of months during which the
19862
Employee has been employed at CNS. For purposes of this
19863
subparagraph, Compensation shall mean and include every type and
19864
form of compensation paid to Employee by CNS (or any corporation
19865
("Affiliate") affiliated with CNS within the meaning of Section
19866
1504 of the Internal Revenue Code of 1986, as may be amended from
19867
time to time (the "Code")) and included in Employee's gross
19868
income for federal income tax purposes, but excluding
19869
compensation income arising from (1) hiring bonuses and (2)
19870
compensation income recognized as a result of the exercise of
19871
stock options or sale of the stock so acquired. All of Employee's
19872
contributions to any qualified plan pursuant to Section 401(k) of
19873
the Code or any flexible benefit plan pursuant to Section 125 of
19874
the Code shall be deemed to be included in gross income for
19875
federal tax purposes for purposes of this subparagraph. The
19876
Severance Payment shall be made in a single lump sum within 60
19877
days after the Date of Termination.
19878
19879
iii. For 18 months following the Employee's Date of Termination, CNS
19880
shall arrange to provide, at its sole expense, Employee with
19881
group medical, dental and life plan benefits substantially
19882
similar to those which Employee was receiving or entitled to
19883
receive immediately prior to the Notice of Termination. The cost
19884
of providing such benefits shall be in addition to (and shall not
19885
reduce) the Severance Payment. Benefits otherwise receivable by
19886
Employee pursuant to this paragraph (iii) shall be reduced to the
19887
extent comparable benefits are actually received by Employee
19888
during such period from any third party, and any such benefits
19889
actually received by Employee shall be reported to CNS.
19890
19891
iv. CNS shall also pay to Employee all legal fees and expenses
19892
incurred by Employee as a result of such termination (including
19893
all such fees and expenses, if any, incurred in contesting or
19894
disputing any such termination or in seeking to obtain or enforce
19895
any right or benefit provided by this paragraph).
19896
19897
v. The Severance Payment shall be reduced and offset by the amount
19898
of any other payment received or to be received by Employee in
19899
connection with his termination of employment pursuant to any
19900
policies of CNS.
19901
19902
vi. If a determination is made by legislation, regulations, rulings
19903
directed to CNS or Employee, or court decision that the aggregate
19904
amount of any payment made to Employee hereunder, or pursuant to
19905
any plan, program or policy of CNS in connection with, on account
19906
of, or as a result of, a Change of Control constitutes an "excess
19907
parachute payment" as defined in Section 280G of the Code subject
19908
to the excise tax provisions of Section 4999 of the Code, or any
19909
successor sections thereof, Employee shall be
19910
19911
19912
19913
19914
<PAGE>
19915
19916
EXECUTIVE EMPLOYMENT AGREEMENT
19917
PAGE 9
19918
19919
19920
entitled to receive from CNS, in addition to any other amounts
19921
payable hereunder, an amount which shall be equal to such excise
19922
tax, plus, on a net after-tax basis, an amount equal to the
19923
aggregate amount of any interest, penalties, fines or additions
19924
to any tax, including income tax, which are imposed in connection
19925
with the imposition of such excise tax. Such amount shall be
19926
payable to Employee as soon as may be practicable after such
19927
final determination is made. Employee and CNS shall mutually and
19928
reasonably determine whether or not such determination has
19929
occurred or whether any appeal to such determination should be
19930
made.
19931
19932
vii. Employee shall be entitled to receive all benefits payable to
19933
Employee under the CNS, Inc. Profit Sharing Plan and Trust or any
19934
successor of such Plan and Trust and any other plan or agreement
19935
relating to retirement benefits, and, in addition, if Employee is
19936
not fully vested in his account balance under such Plan, a single
19937
lump sum payment in cash from CNS representing the nonvested
19938
portion of his account, which shall be in addition to, and not
19939
reduced by, any other amounts payable to Employee under this
19940
paragraph 8.
19941
19942
viii. Employee shall not be required to mitigate the amount of any
19943
payment provided for in this paragraph 8 by seeking other
19944
employment or otherwise, nor shall the amount of any payment or
19945
benefit provided for in this paragraph 8 be reduced by any
19946
compensation earned by Employee as the result of employment by
19947
another employer or by retirement benefits after the Date of
19948
Termination, or otherwise except as specifically provided in this
19949
paragraph 8.
19950
19951
ix. In order to assure the performance of CNS or its successor of its
19952
obligations under this paragraph, CNS may deposit in trust an
19953
amount equal to the maximum payment that will be due Employee
19954
under the terms hereof. Under a written trust instrument, the
19955
Trustee shall be instructed to pay to Employee (or Employee's
19956
legal representative, as the case may be) the amount to which
19957
Employee shall be entitled under the terms hereof, and the
19958
balance, if any, of the trust not so paid or reserved for payment
19959
shall be repaid to CNS. If CNS deposits funds in trust, payment
19960
shall be made no later than the occurrence of a Change in
19961
Control. If and to the extent there are not amounts in trust
19962
sufficient to pay Employee under this Agreement, CNS shall remain
19963
liable for any and all payments due to Employee. In accordance
19964
with the terms of such trust, at all times during the term of
19965
this Agreement, Employee shall have no rights, other than as an
19966
unsecured general creditor of CNS, to any amounts held in trust
19967
and all trust assets shall be general assets of CNS and subject
19968
to the claims of creditors of CNS. Failure of CNS to establish or
19969
fully fund such trust shall not be deemed a revocation or
19970
termination of this Agreement by CNS.
19971
19972
19973
19974
19975
<PAGE>
19976
19977
EXECUTIVE EMPLOYMENT AGREEMENT
19978
PAGE 10
19979
19980
19981
x. As a condition of receiving the Severance Payment and other
19982
benefits provided in this subparagraph 8.f and in subparagraph
19983
8.g, Employee shall be required to sign a standard release
19984
agreement with CNS in which he agrees to release any and all
19985
claims and causes of action which he might have against CNS and
19986
in which he affirms and acknowledges his obligations under
19987
paragraphs 9, 10, 11 and 12 of this Agreement.
19988
19989
g. Stock Options. Employee shall, immediately upon a Change in Control,
19990
vest in all stock options which have been granted to him and he shall
19991
be entitled to exercise all rights and to receive all benefits
19992
accruing to him under any and all CNS stock purchase and stock option
19993
plans or programs, including the CNS, Inc. 1994 Amended Stock Plan, or
19994
any successor to any such plan or program, which shall be in addition
19995
to and not reduced by any other amounts payable to Employee under this
19996
paragraph 8.
19997
19998
9. Confidential Information. All knowledge and information not already
19999
available to the public which Employee may acquire or has acquired with
20000
respect to product development, improvements, modifications, discoveries,
20001
designs, methods, systems, computer software, programs, codes and
20002
documentation, research, designs, formulas, instructions, methods,
20003
inventions, trade secrets, services or other private or confidential
20004
matters of CNS (such as those concerning sales, costs, profits,
20005
organizations, customer lists, pricing methods, etc.), or of any third
20006
party which CNS is obligated to keep confidential, shall be regarded by
20007
Employee as strictly confidential and shall not be used by Employee
20008
directly or indirectly or disclosed to any persons, corporations or firms.
20009
All of the foregoing knowledge and information are collectively termed
20010
"Confidential Information" herein. Employee's obligations under this
20011
paragraph will not apply to any information which (a) is or becomes known
20012
to the general public under circumstances involving no breach by Employee
20013
of the terms of this paragraph, (b) is generally disclosed to third parties
20014
by CNS as a continuing practice without restriction on such third parties,
20015
(c) is approved for release by written authorization of CNS's Board, or (d)
20016
Employee is obligated by law to disclose.
20017
20018
10. Disclosure and Transfer of Product Developments, etc.
20019
20020
a. Employee will make full and prompt disclosure to CNS or all product
20021
developments, improvements, modifications, discoveries, computer
20022
software, programs, codes and documentation, research, designs,
20023
formulas, configurations, instructions, methods and inventions (all of
20024
which are collectively termed "Developments" herein), whether
20025
patentable or not, made, discovered, conceived or first reduced to
20026
practice by Employee or under his direction during his employment,
20027
alone or with others, whether or not made or conceived during normal
20028
working hours or on the premises of CNS which relate in any material
20029
way to the business or to research or development work of CNS.
20030
Employee confirms by his acceptance of this Agreement that CNS owns
20031
and shall own all of the Developments.
20032
20033
20034
20035
20036
<PAGE>
20037
20038
EXECUTIVE EMPLOYMENT AGREEMENT
20039
PAGE 11
20040
20041
20042
b. Employee also agrees on behalf of himself and his heirs and legal
20043
representatives that he will promptly communicate, disclose and
20044
transfer to CNS, free of encumbrances and restrictions, all of his
20045
right, title and interest in the Developments covered by subparagraph
20046
10.a. and any patents or patent applications covering such
20047
Developments and to execute and deliver such assignments, patents and
20048
applications, and any other documents as CNS may direct, and to
20049
cooperate fully with CNS to enable it to secure any patents or
20050
otherwise protect such Developments in any and all countries. Employee
20051
shall assign to CNS any and all copyrights and reproduction rights to
20052
all material prepared by Employee in connection with his employment.
20053
20054
c. Notwithstanding subparagraphs 10.a. and b., however, this paragraph 10
20055
shall not apply to Developments for which no equipment, supplies,
20056
facility or trade secret information of CNS was used and which was
20057
developed entirely on the Employee's own time, and (1) which do not
20058
relate (a) directly to the business of CNS or (b) to CNS's actual or
20059
demonstrably anticipated research or development, or (2) which does
20060
not result from any work performed by Employee for CNS.
20061
20062
This will confirm that Employee's obligations to CNS under paragraphs 9, 10
20063
and 11 will continue after the termination of Employee's employment.
20064
20065
11. Non-Competition. During the term of Employee's employment by CNS and for
20066
twelve (12) months thereafter, Employee shall not directly or indirectly
20067
engage in, enter into or participate in the business of CNS or in any
20068
business or commercial activity which does or is reasonably likely to
20069
compete with or adversely affect the Business or products of CNS, either as
20070
an individual for Employee's own account, as a partner or a joint venturer,
20071
or as an officer, director, consultant or holder of more than five percent
20072
(5%) of the entity interest in, any other person, firm, partnership or
20073
corporation, or an employee, agent or salesman for any person. In addition,
20074
during such period Employee shall not: avail himself of any advantages or
20075
acquaintances he has made with any person who has, within the twelve (12)
20076
month period ended on the date of termination of his employment, been a
20077
customer of CNS or its affiliates, and which would, directly or indirectly,
20078
materially divert business from or materially and adversely affect the
20079
Business of CNS; interfere with the contractual relations between CNS and
20080
any of its employees; or employ or cause to be employed in any capacity or
20081
retain or cause to be retained as a consultant any person who was employed
20082
in any capacity by CNS during the twelve (12) month period ended on the
20083
date of termination of Employee's employment.
20084
20085
For purposes of this Agreement, the "Business of CNS" or "Business" means
20086
and includes the business of the manufacture, production, sale, marketing
20087
and distribution of the Breathe Right strip and any other products
20088
currently offered or currently under development by CNS or offered or
20089
currently under development by CNS during one (1) year prior to the date of
20090
termination of Employee's employment.
20091
20092
20093
20094
20095
<PAGE>
20096
20097
EXECUTIVE EMPLOYMENT AGREEMENT
20098
PAGE 12
20099
20100
20101
Inasmuch as the activities of CNS are conducted on an international basis,
20102
the restrictions of this paragraph 11 shall apply throughout the United
20103
States, Canada, Japan and Europe.
20104
20105
12. Non-Solicitation. During the term of Employee's employment by CNS and for
20106
twelve (12) months thereafter, Employee shall not directly or indirectly
20107
solicit any current or prospective CNS customer, broker, vendor or
20108
distributor for the purpose of providing products or services for or on
20109
behalf of said customer, broker, vendor or distributor which are
20110
competitive with the products or services being provided by CNS, which are
20111
in the development stages of being competitive with the products or
20112
services being provided by CNS, or which would in any way cause said
20113
customer, broker, vendor or distributor to discontinue or reduce its
20114
business relationship with CNS. Current CNS customers, brokers, vendors or
20115
distributors include those customer, brokers, vendors or distributors with
20116
whom CNS has had a business relationship at any time within one year
20117
immediately preceding Employee's termination date. Prospective CNS
20118
customers, brokers, vendors and distributors include those with whom (a) a
20119
CNS representative has been in direct personal contact and (b) CNS has a
20120
reasonable opportunity of entering into a business relationship within six
20121
months following Employee's termination date. Employee also agrees that
20122
during his employment in the one year period following his employment, he
20123
will not directly or indirectly solicit any CNS employees to terminate his
20124
or her employment with CNS. This Employee non-solicitation obligation
20125
applies to Employees of CNS during Employee's employment and as of his
20126
termination date.
20127
20128
13. Remedies. Employee acknowledges that the restrictions set forth in
20129
paragraphs 9, 10,11 and 12 hereof are reasonably necessary to protect
20130
legitimate business interests of CNS. It is understood that if Employee
20131
violates his obligations under any of these paragraphs, CNS would suffer
20132
irreparable harm for which a recovery of money damages would be an
20133
incomplete and inadequate remedy. It is therefore agreed that CNS, in
20134
addition to any remedies at law, shall be entitled, as a matter of right,
20135
in any court of competent jurisdiction, to a mandatory injunction
20136
restraining Employee pending litigation, as well as upon final
20137
determination thereof, from violating this Agreement. In addition, CNS will
20138
discontinue payment to Employee of any Severance or Salary Continuation
20139
Payments, benefits or bonus which he may be entitled to receive or is
20140
receiving under paragraphs 6, 7 or 8 hereunder or otherwise, in the event
20141
of his violation of any of his obligations under this Agreement. In the
20142
event of cessation of payments and benefits, Employee's release of his
20143
claims against CNS shall remain valid and fully enforceable in
20144
consideration of the benefits which Employee received prior to set breach.
20145
20146
14. Severability. The parties intend that the covenants and agreements
20147
contained herein shall be deemed to be a series of separate covenants and
20148
agreements, one for each and every state of the United States and political
20149
subdivision outside the United States where the business described is
20150
conducted. If, in any judicial proceeding, a court shall refuse to enforce
20151
any of the separate covenants deemed included in such action, then such
20152
unenforceable covenants shall be deemed eliminated from the provisions of
20153
this Agreement for the purpose of such proceeding to the extent necessary
20154
to permit the remaining covenants to be enforced in such proceeding.
20155
Further, in the event that any
20156
20157
20158
20159
20160
<PAGE>
20161
20162
EXECUTIVE EMPLOYMENT AGREEMENT
20163
PAGE 13
20164
20165
20166
provision is held to be overbroad as written, such provision shall be
20167
deemed amended to narrow its application to the extent necessary to make
20168
the provision enforceable according to applicable law and enforced as
20169
amended
20170
20171
15. Binding Effect.
20172
20173
a. CNS will require any successor (whether direct or indirect, by
20174
purchase, merger, consolidation or otherwise) to all or substantially
20175
all of the business and/or assets as defined in subparagraph 8.a of
20176
CNS to expressly assume and agree to perform this Agreement in the
20177
same manner and to the same extent that CNS would be required to
20178
perform it if no such succession had taken place, in which case, the
20179
term "CNS" as used in this Agreement shall instead refer to CNS'
20180
successor. Failure of CNS to obtain such assumption and agreement
20181
prior to the effectiveness of any such succession shall be a breach of
20182
this Agreement and shall entitle Employee to compensation from CNS in
20183
the same amount and on the same terms as he would be entitled
20184
hereunder if he terminated his employment for Good Reason following a
20185
Change in Control, except that for purposes of implementing the
20186
foregoing, the date on which any such succession becomes effective
20187
shall be deemed the Date of Termination.
20188
20189
b. This Agreement shall inure to the benefit of and be enforceable by
20190
Employee's personal or legal representatives, successors, heirs, and
20191
designated beneficiaries. If Employee should die while any amount
20192
would still be payable to Employee hereunder if Employee had continued
20193
to live, all such amounts, unless otherwise provided herein, shall be
20194
paid in accordance with the terms of this Agreement to Employee's
20195
designated beneficiaries, or, if there is no such designated
20196
beneficiary, to Employee's estate.
20197
20198
16. Entire Agreement. From and after the date of this Agreement the terms and
20199
provisions of this Agreement constitute the entire agreement between the
20200
parties and this Agreement supersedes any previous oral or written
20201
communications, representations, or agreements with respect to any subject,
20202
including the subject matter of compensation, bonus, participation and
20203
profit sharing and termination compensation.
20204
20205
17. Waiver and Interpretation. The waiver by either party of a breach of any
20206
provision of this Agreement by the other party shall not operate or be
20207
construed as a waiver of any subsequent breach by the breaching party. No
20208
waiver shall be valid unless in writing and signed by the party providing
20209
such waiver. If any provision of this Agreement is held by any court to be
20210
unenforceable, then such provision shall be deemed to be eliminated from
20211
the Agreement to permit enforceability of the remaining provisions. If any
20212
provision is held to be overbroad, such provision shall be amended to
20213
narrow its application to the extent necessary for enforceability. For
20214
purposes of the release agreement which Employee shall be required to
20215
execute as a condition of receiving any payments and benefits hereunder,
20216
"CNS", as referred to in this Agreement, shall include CNS and all its
20217
20218
20219
20220
20221
<PAGE>
20222
20223
EXECUTIVE EMPLOYMENT AGREEMENT
20224
PAGE 14
20225
20226
20227
affiliates, shareholders, officers, directors, employees, agents,
20228
attorneys, insurers and indemnitors.
20229
20230
18. Applicable Law. All questions pertaining to the validity, construction,
20231
execution and performance of this Agreement shall be construed and governed
20232
in accordance with the laws of the State of Minnesota. The parties consent
20233
to the personal jurisdiction of the State of Minnesota, waive any argument
20234
that such a forum is not convenient, and agree that any litigation relating
20235
to this Agreement shall be venued in Minneapolis, Minnesota.
20236
20237
19. Tax Withholding. CNS may withhold from any payment of benefits under this
20238
Agreement (and forward to the appropriate taxing authority) any taxes
20239
required to be withheld under applicable law.
20240
20241
20. Notice. Any notice required or desired to be given under this Agreement
20242
shall be deemed given if in writing sent by certified mail to his residence
20243
in the case of Employee, or to its principal office in the case of CNS.
20244
20245
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
20246
year first set forth above.
20247
20248
CNS, INC.
20249
20250
20251
By: /s/ Marti Morfitt
20252
-------------------------------------
20253
Marti Morfitt
20254
Its: President & CEO
20255
20256
20257
EMPLOYEE
20258
20259
20260
/s/ John F. Kundtz
20261
----------------------------------------
20262
John F. Kundtz
20263
20264
20265
20266
20267
<PAGE>
20268
20269
EXECUTIVE EMPLOYMENT AGREEMENT
20270
20271
EXHIBIT A
20272
20273
20274
NAME: John F. Kundtz
20275
20276
DATE: July 22, 2002
20277
20278
POSITION: Vice President Marketing, Breathe Right Brand
20279
20280
DEPARTMENT: Marketing
20281
20282
BASE SALARY: $175,000
20283
20284
20285
MANAGEMENT INCENTIVE PLAN LEVEL: 15% at Threshold
20286
30% at Plan
20287
60% at Maximum
20288
20289
20290
20291
20292
</TEXT>
20293
</DOCUMENT>
20294
<DOCUMENT>
20295
<TYPE>EX-23
20296
<SEQUENCE>6
20297
<FILENAME>cns032695_ex23-1.htm
20298
<TEXT>
20299
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
20300
<HTML>
20301
<HEAD>
20302
<!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.2b) -->
20303
<!-- Project: X:\JOBS\03-56131\d03-56131.eep -->
20304
<!-- Control Number: 03-56131 -->
20305
<!-- Rev Number: 1.0 -->
20306
<!-- Client Name: CNS, Inc. -->
20307
<!-- Project Name: Form Type: 10-K -->
20308
<!-- Firm Name: American Financial Printing, Inc. -->
20309
<TITLE>EX-23.1</TITLE>
20310
</HEAD>
20311
<BODY>
20312
20313
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
20314
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
20315
<TR VALIGN=TOP>
20316
<TD>
20317
<BR>
20318
20319
<!-- MARKER FORMAT-SHEET="Para Right 10" FSL="Project" -->
20320
<P ALIGN="RIGHT"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>Exhibit 23.1</B> </FONT></P>
20321
20322
<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Project" -->
20323
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>INDEPENDENT AUDITORS&#146; CONSENT </FONT></P>
20324
20325
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
20326
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors<BR>CNS, Inc.: </FONT></P>
20327
20328
<!-- MARKER FORMAT-SHEET="Para 10" -->
20329
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20330
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
20331
consent to incorporation by reference in the registration statements Nos.
20332
333-68310, 333-42108, 333-60017, 33-59719, 33-42971, 33-29454, 33-19043,
20333
33-15044 and 33-14052 on Form S-8 of CNS, Inc. of our report dated April 23,
20334
2003, relating to the Consolidated Balance Sheets of CNS, Inc. and subsidiaries
20335
as of March 31, 2003 and 2002, and the related Consolidated Statements of
20336
Operations, Stockholders&#146; Equity and Comprehensive Income (Loss), and Cash
20337
Flows for the years ended March 31, 2003, December 31, 2001 and December 31,
20338
2000 and the three months ended March 31, 2002, which report is included in the
20339
March 31, 2003, annual report on Form 10-K of CNS, Inc. </FONT></P>
20340
<BR>
20341
20342
20343
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
20344
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/ KPMG LLP </FONT></P>
20345
20346
<!-- MARKER FORMAT-SHEET="Para Flush 10" FSL="Project" -->
20347
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Minneapolis, Minnesota<BR>June 26, 2003 </FONT></P>
20348
20349
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
20350
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2> </FONT></P>
20351
<HR SIZE=5 NOSHADE>
20352
20353
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
20354
</TD>
20355
</TR>
20356
</TABLE>
20357
<BR>
20358
20359
20360
20361
20362
</BODY>
20363
</HTML>
20364
20365
20366
</TEXT>
20367
</DOCUMENT>
20368
<DOCUMENT>
20369
<TYPE>EX-99
20370
<SEQUENCE>7
20371
<FILENAME>cns032695_ex99-1.htm
20372
<TEXT>
20373
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 3.2 Final//EN">
20374
<HTML>
20375
<HEAD>
20376
<!-- Created by EDGAR Ease Plus (EDGAR Ease+ 1.2b) -->
20377
<!-- Project: X:\JOBS\03-56131\d03-56131.eep -->
20378
<!-- Control Number: 03-56131 -->
20379
<!-- Rev Number: 1.0 -->
20380
<!-- Client Name: CNS, Inc. -->
20381
<!-- Project Name: Form Type: 10-K -->
20382
<!-- Firm Name: American Financial Printing, Inc. -->
20383
<TITLE>EX-99.1</TITLE>
20384
</HEAD>
20385
<BODY>
20386
20387
20388
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
20389
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
20390
<TR VALIGN=TOP>
20391
<TD>
20392
<BR>
20393
20394
<!-- MARKER FORMAT-SHEET="Para Right 10" FSL="Project" -->
20395
<P ALIGN="RIGHT"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><B>Exhibit 99.1</B> </FONT></P>
20396
20397
<!-- MARKER FORMAT-SHEET="Head Major 10" FSL="Project" -->
20398
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION OF<BR>PRESIDENT
20399
AND CHIEF FINANCIAL OFFICER</FONT></H1>
20400
20401
<!-- MARKER FORMAT-SHEET="Head Major 10" FSL="Project" -->
20402
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PURSUANT TO<BR>18 U.S.C.
20403
SECTION 1350,<BR>AS ADOPTED PURSUANT TO<BR>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></H1>
20404
20405
<!-- MARKER FORMAT-SHEET="Para 10" -->
20406
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20407
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I,
20408
Marti Morfitt, the President of CNS, Inc. (the &#147;Company&#148;) in
20409
compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
20410
the Sarbanes-Oxley Act of 2002, hereby certify that, the Company&#146;s Annual
20411
Report on Form 10-K for the period ended March 31, 2003 fully complies with the
20412
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
20413
and fairly presents, in all material respects, the financial condition and
20414
results of operations of the Company. </FONT></P>
20415
20416
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
20417
</TD>
20418
</TR>
20419
</TABLE>
20420
<BR>
20421
20422
<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Project" -->
20423
<table width=600 cellspacing=0 cellpadding=0 border=0>
20424
<tr valign=TOP>
20425
<td width=40%><font face="Times New Roman, Times, Serif" size=2></font></td>
20426
<td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
20427
<td width=50%><font face="Times New Roman, Times, Serif" size=2> <br>
20428
/s/ Marti Morfitt<br>
20429
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
20430
&nbsp;&nbsp;&nbsp;Marti Morfitt<br>
20431
Title: President and Chief Executive Officer CNS, Inc.<br>
20432
Dated: June 26, 2003</font></td>
20433
</tr>
20434
</table>
20435
<BR>
20436
20437
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
20438
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
20439
<TR VALIGN=TOP>
20440
<TD>
20441
20442
20443
<!-- MARKER FORMAT-SHEET="Para 10" -->
20444
<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
20445
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I,
20446
Marcia O&#146;Brien, the Chief Financial Officer of CNS, Inc. (the
20447
&#147;Company&#148;) in compliance with 18 U.S.C. Section 1350, as adopted
20448
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that
20449
the Company&#146;s Annual Report on Form 10-K for the period ended March 31,
20450
2003 fully complies with the requirements of Section 13(a) or 15(d) of the
20451
Securities Exchange Act of 1934 and fairly presents, in all material respects,
20452
the financial condition and results of operations of the Company. </FONT></P>
20453
20454
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
20455
</TD>
20456
</TR>
20457
</TABLE>
20458
<BR>
20459
20460
20461
<table width=600 cellspacing=0 cellpadding=0 border=0>
20462
<tr valign=TOP>
20463
<td width=40%><font face="Times New Roman, Times, Serif" size=2></font></td>
20464
<td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
20465
<td width=50%><font face="Times New Roman, Times, Serif" size=2> <br>
20466
/s/ Marcia O&#146;Brien<br>
20467
&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
20468
&nbsp;&nbsp;&nbsp;Marcia O&#146;Brien<br>
20469
Title: Interim Chief Financial Officer, CNS, Inc.<br>
20470
Dated: June 26, 2003</font></td>
20471
</tr>
20472
</table>
20473
<BR>
20474
20475
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
20476
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
20477
<TR VALIGN=TOP>
20478
<TD>
20479
20480
<!-- MARKER FORMAT-SHEET="Page Number w/ Rule" FSL="Project" -->
20481
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2> </FONT></P>
20482
<HR SIZE=5 NOSHADE>
20483
20484
<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
20485
</TD>
20486
</TR>
20487
</TABLE>
20488
<BR>
20489
20490
20491
</BODY>
20492
</HTML>
20493
20494
20495
</TEXT>
20496
</DOCUMENT>
20497
</SEC-DOCUMENT>
20498
-----END PRIVACY-ENHANCED MESSAGE-----
20499
20500