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## 11. Stock Options and Restricted Shares 

The Company maintains stock incentive plans (the “Plans”) for the benefit of cer tain officers, directors and employees. Options granted generally vest over two or three years and are exercisable for periods up to ten years from the date of grant at a price which equals fair market value at the date of grant. 

The Company accounts for the Plans in accor dance with APB Opinion No. 25, under which no compensation cost has been recognized. Had compensation cost for the Plans been determined consistent with Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation,” the Com - pany’s net income and diluted ear nings per Common Share would have been reduced by $21.6 million and $0.08 per share, respectively, for fiscal 2000, $83.1 mil - lion and $0.29 per share, respectively, for fiscal 1999, and $33.6 million and $0.12 per shar e, respectively, for fiscal 1998. During fiscal 1999, stock option grants under the previous Allegiance and Scherer plans vested immediately on the merger date. These accelerated grants increased the fiscal 1999 pro forma effect on net income and diluted earnings per Common Share by $32.9 million and by $0.12 per share, respectively. Because the SFAS 123 method of accounting has not been applied to options granted prior to July 1, 1995, the r esulting pro forma compensation cost may not be r epresentative of that to be expected in futur e years. 

The following summarizes all stock option transactions for the Company under the plans fr om July 1, 1997 thr ough June 30, 2000, giving retroactive effect to conversions 

Information relative to stock options outstanding as of June 30, 2000: 

of options in connection with mer ger transactions and stock splits (in millions, except per shar e amounts): 

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Giving retroactive effect to conversion of stock options related to mergers and stock splits, the weighted average fair value of options granted during fiscal 2000, 1999, and 1998 was $17.64, $22.55, and $14.19, r espectively. 

The fair values of the options granted to Company employees and directors were estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for grants in the r espective periods: 

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