A further summary of options outstanding as of September 30, 2000, is as follows: 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: 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. 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: 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. Components of income tax expense consist of the following: Stock purchase plan: NOTE 9: Income Tax Matters LEE ENTERPRISES / 2000 Annual Report 21 Year Ended September 30, 2000 1999 1998 (In Thousands) Paid or payable on currently  taxable income: Federal . . . . . . . . . . . . . .  $ 36,036 $ 30,633 $ 29,943 State . . . . . . . . . . . . . . . .  6,612 5,652 5,525 Net increase due to deferred income taxes. . . . . . . . . . . .  7,524 2,277 2,431 $ 50,172 $ 38,562 $ 37,899 Average Price 2000 1999 1998 (In Thousands) Granted during the year . . . .  $ 29.11 $ 27.62 $ 27.18 Exercised during the year. . .  14.15 15.45 15.88 Under option, end of year. . .  22.72 19.09 17.15 Weighted-average fair value per option of options granted . . . . . . . . . . . . . . . .  7.75 6.55 6.95 Number of Shares 2000 1999 1998 (In Thousands) Under option, beginning of year. . . . . . . . . . . . . . . . .  1,258 1,491 1,509 Granted . . . . . . . . . . . . . . .  282 185 190 Terminated and canceled. .  (26) (21) (5) Exercised. . . . . . . . . . . . . .  (336) (397) (203) Under option, end of year. . .  1,178 1,258 1,491 Options exercisable, end of year. . . . . . . . . . . . . .  767 945 1,110 Options Options  Outstanding Exercisable ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------- -----------------------------------------------------------------------------------------  Number Average Weighted- Weighted- Range of Out- Remaining Average Number Average Exercise standing Contractual Exercise Exercisable Exercise Prices (’000s) Life (Years) Price (’000s) Price -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------  $11 to $14 106 1.1  $11.04 106 $11.04 $15 to $20 371 3.8 17.38 371 17.38 $20 to $23 102 6.3 21.58 95 21.49 $25 to $30 582 7.9 28.16 178 27.01 $31 to $34 17 2.1 32.46 17 32.46 --------------------------------- --------------------------------- 1,178 5.8 22.72 767 19.58 --------------------------------- --------------------------------- 2000 1999 1998 (In Thousands, Except Per Share Data) Net income: As reported. . . . . . . . . . . . .  $ 83,663 $ 67,973 $ 62,233 Pro forma. . . . . . . . . . . . . .  82,035 66,600 60,945 Earnings per share: Basic:  As reported. . . . . . . . . . . .  $ 1.90 $ 1.54 $ 1.39 Pro forma. . . . . . . . . . . . .  1.86 1.50 1.36 Diluted:  As reported. . . . . . . . . . . .  $ 1.89 $ 1.52 $ 1.37 Pro forma. . . . . . . . . . . . .  1.85 1.49 1.34 Stock option and restricted stock plans: