On May 5, 1999, the Board of Directors declared a 2-for-1 stock split, effected in the form of a stock dividend of one share of common stock for every share outstanding, and increased the authorized common stock to 160,000,000 shares. The stock dividend was distributed on May 31, 1999 to shareholders of record on May 17, 1999. All share and per share information, except par value, has been adjusted for all years to reflect the stock split.

The Company has a Non-Discretionary Stock Repurchase Plan under which management is authorized to repurchase up to 5,000,000 shares of the Company’s common stock in the open market with the proceeds received from the exercise of Employee and Director Stock Options. As of December 31, 2001, the Company had repurchased and retired 2,346,196 shares of common stock at an average price of $20.82 per share over the period from 1994 through 2001.

In September 2001, the Board of Directors approved a Discretionary Stock Repurchase Plan to repurchase and retire 1,000,000 shares of common stock. As of October 11, 2001, all 1,000,000 shares had been repurchased and retired under the plan at an average price of $45.12 per share. In November 2001, the Board of Directors expanded the Company’s Discretionary Stock Repurchase Plan to allow for the repurchase of such shares as may be necessary to reduce the issued and outstanding stock to 50,000,000 shares of common stock. As of December 31, 2001, no shares had been repurchased under the amended discretionary plan.

The Company has two stock option plans (the “1985 Plan” and the “1997 Plan”) for employees under which the Board of Directors may grant officers and key employees options to purchase common stock at prices equal to or greater than market value on the date of grant. The 1985 Plan provides for non-qualified grants at exercise prices equal to or greater than the market value on the date of grant. Outstanding options generally vest and become exercisable over periods up to five years from the date of grant and expire no more than 10 years from the date of grant. The 1997 Plan provides for qualified and non-qualified grants of options to purchase shares, limited to not more than 100,000 per person per year. Grants less than or equal to 20,000 shares in any fiscal year, are granted at or above common stock prices on the date of grant. Any 1997 Plan grants in excess of the initial 20,000 shares granted per person per year (“Excess Grants”) require an exercise price of not less than 120% of the common stock price on the date of grant. Excess Grants expire no later than 5 years from the date of grant. Excess Grants under the 1997 Plan vested completely, 3 years from the date of grant.

The Company also has a stock option plan (“Directors’ Plan”) under which non-employee directors elected at each annual meeting are granted non-qualified options to purchase 8,000 shares of common stock on the first business day of the month following the meeting.

Upon the exercise of non-qualified stock options, the Company derives a tax deduction measured by the excess of the market value over the option price at the date of exercise. The related tax benefit is credited to additional paid-in capital.

Details regarding the plans are as follows:

The Company applies APB Opinion No. 25 and related interpretations in accounting for its stock option and its employee stock purchase rights plans. Accordingly, no compensation cost has been recognized for its fixed stock option or employee stock purchase rights plans. Had compensation cost for the Company’s three stock based compensation and employee stock purchase rights plans been determined consistent with SFAS No. 123, the Company’s net earnings, basic earnings per share and diluted earnings per share would have been decreased to the pro forma amounts indicated below:

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants:

The following table summarizes information about fixed-price stock options outstanding at December 31, 2001:

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings per share in 2001, 2000 and 1999.

The Company’s 1988 Employee Stock Purchase Plan provides for 2,800,000 shares of the Company’s common stock to be reserved for issuance upon exercise of purchase rights granted to employees who elect to participate through regular payroll deductions beginning August 1 of each year. The purchase rights are exercisable on July 31 of the following year at a price equal to the lesser of (1) 85% of the fair market value of the Company’s stock on July 31 or (2) 85% of the fair market value of the Company’s stock on the preceding August 1. At December 31, 2001, 2000 and 1999, an aggregate of 2,544,167 shares, 2,373,253 shares, and 2,169,235 shares, respectively, had been issued under the plan, and at December 31, 2001, $4,337 had been withheld in connection with the plan year ending July 31, 2002.