25  Notes to Consolidated Financial Statements (dollars in thousands, except per share data) - continued -  The following table sets forth the computation of basic and diluted earnings per share from continu- ing operations: (1)  No adjustments needed in the numerator for diluted calculations. (2) Includes Common and Class B Common shares in thousands. (3)  Because their effects are anti-dilutive, excludes shares under restricted stock plans and shares issuable under stock option, and stock subscription plans, whose grant price is greater than the average market price of Common Shares outstanding at the end of the relevant period, and excludes shares issuable on conversion of subordinated debentures into shares of Common Stock. Aggregate shares excluded were 1,927 shares in 2001, 3,687 shares in 2000 and 2,835 shares in 1999. The Company’s 2000 Incentive Stock Plan reserved 436,500 shares of Common Stock for sale or award to key associates or to the outside directors of the Company under stock options, stock appre- ciation rights, restricted stock performance grants, or other awards. Outstanding options are generally exercisable at a cumulative rate of 25% per year after the second year from the date the options are granted and generally expire after ten years from the date of grant. Options outstanding were granted at prices at or above market price on the date of grant. In October 2001, the Company canceled outstanding options previously issued under its 1990 Incentive Stock Plan which had exercise prices ranging from $6.00 to $14.30 per share. The Company advised affected option holders that it intended to issue a reduced number of options to each holder based on a specific exchange scale and at an exercise price equal to the market price of the Company's Common Stock on the date such options are issued which would be at least six months, plus one day, subsequent to the cancellation date. Issuance of the replacement options will require a waiver of the provision in the Company's 2000 Stock Incentive Plan which limits the maxi- mum number of shares that may be subject to awards to any one individual during a single year, and will require an amendment of such plan to increase the maximum number of shares of the Company's Common Stock which may be issued pursuant to awards thereunder. These actions with respect to the 2000 Stock Incentive Plan are being submitted for approval by the Company's share- holders at the 2002 Annual Meeting. In 1993, the Company issued options for the purchase of 83,044 shares of Common Stock, which were immediately exercisable at prices ranging from $3.19 - $5.27 per share, in connection with the THE DIXIE GROUP  / 2001 ANNUAL REPORT NOTE K – STOCK PLANS 2001 2000 1999 Income (loss) from continuing operations (1) $ 517 $ (10,150) $ 12,399 Denominator for calculation of basic earnings per  share – weighted average shares (2) 11,669 11,473 11,355 Effect of dilutive securities: Stock options (3) 25 – 206 Stock subscriptions  (3) 33 – 121 Restricted stock grants (3) 21 – – Denominator for calculation of diluted earnings  per share – weighted average shares adjusted  for potential dilution  (2) (3) 11,748 11,473 11,682 Earnings (loss) per share: Basic $ 0.04 $ (0.88) $ 1.09 Diluted $ 0.04 $ (0.88) $ 1.06