Notes to Consolidated Financial Statements The following table summarizes EMCOR’s stock option activity since December 31, 1997: At December 31, 2000, 1999 and 1998, approximately 1,005,000, 943,000 and 642,000 options were exercisable, respectively. The weighted average exercise price of exercisable options at December 31, 2000, 1999 and 1998 was approximately $12.77, $12.28 and $8.43, respectively. The following table summarizes information about EMCOR’s stock options at December 31, 2000: The weighted average fair value of options granted during 2000, 1999 and 1998 were $19.18, $18.41 and $15.18, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted- average assumptions used for grants in 2000, 1999 and 1998: risk-free interest rates of 4.6% to 6.6% (representing the risk-free interest rate at the date of the grant); expected dividend yields of zero percent; expected terms of 3.3 to 6.5 years; and expected volatility of 71.2%, 73.6%, 87.3% and 79.8% for options granted during 2000, 1999, 1998 and 1997, respectively. Options Outstanding Options Exercisable Range of Weighted-Average Weighted-Average Weighted-Average Exercise Price Number Remaining Life Exercise Price Number Exercise Price $4.75–$5.13 424,600 4.26 Years $4.95 424,600 $4.95 $9.38–$9.63 12,000 4.88 Years $9.51 12,000 $9.51 $14.13–$20.00 801,868 7.33 Years $18.62 544,204 $18.55 $20.38–$22.13 48,666 8.45 Years $21.64 24,668 $21.66 $27.13 18,000 9.57 Years $27.13 – – 1997 1997 Other Directors’ Stock Directors’ Stock 1994 Plan 1995 Plan Option Plan Stock Plan Option Grants Weighted Weighted Weighted Weighted Weighted Average Average Average Average Average Shares Price Shares Price Shares Price Shares Price Shares Price Balance, December 31, 1997 918,377 $ 11.12 67,500  $ 11.53 – – – – – – Granted 90,000 $ 20.06 18,000 $ 19.63 35,785 $ 19.94 1,800 $ 20.00 – – Forfeited (205,000) $ 19.73 – – – – – – – – Exercised (81,676) $ 5.29 – – – – – – – – Balance, December 31, 1998 721,701 $ 10.44 85,500 $ 13.24 35,785 $ 19.94 1,800 $ 20.00 – – Granted – – 18,000 $ 22.13 40,968 $ 16.19 330 $ 19.63 315,000 $ 18.49 Forfeited – – – – – – – – – – Exercised (16,933) $ 9.13 (10,500) $ 6.34 – – (1,200) $ 20.00 – – Balance, December 31, 1999 704,768 $ 10.47 93,000 $ 15.74 76,753 $ 17.94 930 $ 19.87 315,000 $ 18.49 Granted – – 18,000 $ 27.13 45,612 $ 17.56 – – 94,000 $ 18.44 Forfeited – – – – – – – – – – Exercised (23,001) $ 7.54 (10,500) $ 6.34 (6,828) $ 16.19 (600) $ 20.00 (2,000) $ 16.50 Balance, December 31, 2000 681,767 $ 10.57 100,500 $ 18.76 115,537 $ 17.89 330 $ 19.63 407,000 $ 18.49 EMCOR, 2000 Annual Report 34