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Shares surrendered upon exercise of stock options: 2001 – 269,771; 2000 – 235,386; 1999 – 88,188. 

Share Repurchases - The Board of Directors has authorized the repurchase of a total of 5.05 million of the Company’s common shares. At June 30, 2001, the remaining authorization to repurchase was 3.28 million shares. Repurchases are made on the open market, at prevailing prices, and are funded from operating cash flows. The shares are initially held as treasury stock. 

## Note 11 Stock Incentive Plans 

Employees’ Stock Options — The Company's stock option and stock incentive plans provide for the granting of nonqualified options to officers and key employees to purchase shares of common stock at a price not less than 100 percent of the fair market value of the stock on the dates options are granted. Outstanding options generally are exercisable either one or two years after the date of grant and expire no more than ten years after grant. 

The Company derives a tax deduction measured by the excess of the market value over the option price at the date nonqualified options are exercised. The related tax benefit is credited to Additional capital. 

As permitted by SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company continues to account for its stock option and stock incentive plans in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and makes no charges against capital with respect to options granted. SFAS No. 123 does, however, require the disclosure of pro forma information regarding Net Income and Earnings per share determined as if the Company had accounted for its stock options under the fair value method. For purposes of this pro forma disclosure the estimated fair value of the options is amortized to expense over the options’ vesting period. 

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The fair value for the significant options granted in 2001, 2000 and 1999 were 

estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: 

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Options exercisable and shares available for future grant on June 30: 

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A summary of the status and changes of shares subject to options and the related average price per share follows: 

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The "Assumed" line identifies the options the Company assumed in the merger with Commercial Intertech and converted to options to purchase Parker Hannifin common stock. The exercise prices of the assumed options range from $11.53 to $49.75 after conversion into equivalent exercise prices of Parker Hannifin common stock. All other terms of the assumed options were unchanged. 

The range of exercise prices and the remaining contractual life of options as of June 30, 2001 were: 

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(Dollars in thousands, except per share amounts) 

