04-HP-876_newMDA.qxd 12/15/04 3:04 PM Page 69 days after a person acquires 15 percent or mor of the outstanding common stock or ten business days following the commencement of a tender offer or exchange offer that would result in a person owning 15 percent or more of the outstanding common stock. In the event the Company is acquired in a merger or certain other business combination transactions (including one in which the Company is the surviving corporation), or more than 50 percent of the Company’ assets or earning power is sold or transferred, each holder of a Right shall have the right to receive, upon exercise of the Right, common stock of the acquiring company having a value equal to two times the exercise price of the Right. The Rights are r edeemable under certain circumstances at $0.01 per Right and will expire, unless earlier redeemed, on January 31, 2006. As long as the Rights are not separately transferrable, the Company will issue one half of one Right with each new share of common stock issued. A reconciliation of the weighted-average common shar es outstanding on a basic and diluted basis is as follows: At September 30, 2004, options to purchase 1,027,680 shares of common stock at a weighted-average price of $27.84 were outstanding, but were not included in the computation of diluted earnings per common share. Inclusion of these shares would be antidilutive. At September 30, 2003, options to purchase 1,030,791 shares of common stock at a weighted-average price of $27.86 were outstanding but wer not included in the computation of diluted earnings per common share. Inclusion of these shares would be antidilutive. Restricted stock of 44,675 shares at a weighted-average price of $30.38 and options to purchase 451,421 shares of common stock at a weighted-average price of $27.98 were outstanding at September 30, 2002,  but wer not included in the computation of diluted earnings per common share. Inclusion of these shares would be antidilutive. NOTE 7 EARNINGS PER SHARE 2004 2003 2002 (in thousands) Basic weighted-average shares 50,312 50,039 49,825 Effect of dilutive shares: Stock options 521 555 508 Restricted stock  — 2 12 521 557 520 Diluted weighted-average shares  50,833 50,596 50,345 70