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values of awards (the method described in FASB Statement No. 123), reported net income and earnings per common share would have been reduced to the pro forma amounts shown below: 

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## Stock option and restricted stock plans: 

The Company has reserved 4,910,000 shares of Common Stock for issuance to key employees under an incentive and nonstatutory stock option and restricted stock plan approved by stockholders. Options have been granted at a price equal to the fair market value on the date of grant, and are exercisable in cumulative installments over a ten-year period. The fair value of each grant is estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions for grants in 2000, 1999, and 1998, respectively: dividend rates of 2.00% to 2.52%, 2.06%, and 1.95%; price volatility of 18.5% to 19.4%, 18.5%, and 14.5%; risk-free interest rates based upon the life of the option ranging from 6.03% to 6.72%, 4.84% to 6.03%, and 5.29% to 5.77%; and expected lives based upon the life of the option ranging from .7 to 8 years. 

A summary of the stock option plan is as follows: 

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A further summary of options outstanding as of September 30, 2000, is as follows: 

<img src='content_image/70061.jpg'>

Restricted stock is subject to an agreement requiring forfeiture by the employee in the event of termination of employment within three years of the grant date for reasons other than normal retire - ment, death or disability. In 2000, 1999, and 1998, the Company granted 46,000, 39,000, and 26,000 shares, respectively, of restricted stock to employees. As of September 30, 2000, 92,000 shares of restricted stock were outstanding. 

At September 30, 2000, 3,732,000 shares were available for granting of stock options or issuance of restricted stock. 

## Stock purchase plan: 

The Company has 1,072,000 shares of Common Stock avail- able for issuance pursuant to an employee stock purchase plan. April 30, 2001 is the exercise date for the current offering. The purchase price is the lower of 85% of the fair market value at the date of the grant or the exercise date, which is one year from the date of the grant. The weighted-average fair values per share of purchase rights granted in 2000, 1999, and 1998 computed using the Black-Scholes option-pricing model were $5.32, $6.34, and $6.65, respectively. 

In 2000, 1999, and 1998 employees purchased 124,000, 97,000, and 95,000 shares, respectively, at a per share price of $19.31 in 2000, $24.78 in 1999, and $20.98 in 1998. 

## NOTE 9: 

## Income Tax Matters 

Components of income tax expense consist of the following: 

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