(Dollars in thousands, except per share amounts) estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: Options exercisable and shares available for future grant on June 30: A summary of the status and changes of shares subject to options and the related average price per share follows: Shares surrendered upon exercise of stock options: 2001 – 269,771; 2000 – 235,386; 1999 – 88,188. Share Repurchases -  The Board of Directors has authorized the repurchase of a total of 5.05 million of the Company’s common shares. At June 30, 2001, the remaining authorization to repurchase was 3.28 million shares. Repurchases are made on the open market, at prevailing prices, and are funded from operating cash flows. The shares are initially held as treasury stock. Employees’ Stock Options —  The Company's stock option and stock incentive plans provide for the granting of nonqualified options to officers and key employees to purchase shares of common stock at a price not less than 100 percent of the fair market value of the stock on the dates options are granted. Outstanding options generally are exercisable either one or two years after the date of grant and expire no more than ten years after grant. The Company derives a tax deduction measured by the excess of the market value over the option price at the date nonqualified options are exercised. The related tax benefit is credited to Additional capital. As permitted by SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company continues to account for its stock option and stock incentive plans in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and makes no charges against capital with respect to options granted. SFAS No. 123 does, however, require the disclosure of pro forma information regarding Net Income and Earnings per share determined as if the Company had accounted for its stock options under the fair value method. For purposes of this pro forma disclosure the estimated fair value of the options is amortized to expense over the options’ vesting period. The "Assumed" line identifies the options the Company assumed in the merger with Commercial Intertech and converted to options to purchase Parker Hannifin common stock. The exercise prices of the assumed options range from $11.53 to $49.75 after conversion into equivalent exercise prices of Parker Hannifin common stock. All other terms of the assumed options were unchanged. The range of exercise prices and the remaining contractual life of options as of June 30, 2001 were: The fair value for the significant options granted in 2001, 2000 and 1999 were Note 11 Stock Incentive Plans Common Stock in Treasury 2001 2000 1999 Balance July 1 $ (8,434)  $ (1,836) $ (83,472) Shares purchased at cost  (2000 - 288,543;  1999 - 1,538,633) (11,132) (48,734) Shares issued under stock  option plans (2001 - 82,047; 2000 - 122,957; 1999 - 369,847) 3,226 4,964 14,420 Shares issued for purchase  acquisition (17) 166 Restricted stock issued  (surrendered) 1,276 (413) (1,532) Shares sold to ESOP 117,316 Balance June 30 $ (3,932)  $ (8,434) $ (1,836) 2001 2000 1999 Net income: As reported $ 340,792 $ 368,232 $ 310,501 Pro forma $ 329,776  $ 361,753 $ 308,028 Earnings per share: Basic As reported $ 2.98  $ 3.34 $ 2.85 Pro forma $ 2.89  $ 3.28 $ 2.83 Diluted As reported $ 2.96 $ 3.31 $ 2.83 Pro forma $ 2.87 $ 3.25 $ 2.81 Range of exercise prices $11-$22 $24-$38 $41-$50 Options outstanding: Outstanding as of June 30, 2001 584,183 3,404,498 1,204,535 Weighted-average remaining contractual life 2.7 yrs 7.4 yrs 7.7 yrs Weighted-average exercise price $ 17.51  $ 32.06  $ 44.56 Options exercisable: Outstanding as of June 30, 2001 584,183 1,965,308 707,214 Weighted-average remaining contractual life 2.7 yrs 6.1 yrs 7.5 yrs Weighted-average exercise price $ 17.51  $ 29.23  $ 44.30 Shares Subject Average Option To Options Price Per Share Outstanding June 30, 1999 4,252,846 $ 24.77 Granted 1,078,799 44.48 Assumed 429,485 26.44 Exercised (689,764) 18.96 Canceled (101,464) Outstanding June 30, 2000 4,969,902 $ 30.03 Granted 1,464,311 36.00 Exercised (1,159,111) 21.70 Canceled (81,886)  Outstanding June 30, 2001 5,193,216 $ 33.33 2001 2000 1999  Options exercisable 3,256,705 3,483,071 3,065,577 Weighted-average  option price per share  of options exercisable $ 30.40 $ 25.51 $ 22.48 Weighted-average  fair value of options granted  during the year $ 12.44 $ 14.62 $ 8.35 Shares available for grant 1,436,436 2,225,012 2,053,189 Aug/00 Aug/99 Jan/99 Aug/98 Risk-free interest rate 6.1% 6.1% 4.7% 5.3% Expected life of option 4.6 yrs 4.6 yrs 4.3 yrs 4.3 yrs Expected dividend  yield of stock 1.6% 1.7% 1.9% 1.9% Expected volatility of stock 36.2% 33.8% 30.7% 28.4% 33