Franklin Covey 2000 Annual Report 76 Proposals to Ratify Stock Purchase Plan Amendment is approved, the Purchase Plan will remain in effect until August 31, 2004 unless terminated earlier by the Board in accordance with the terms of the Purchase Plan.  ment (the “Amendment”) is being submitted to the shareholders for their approval. The following descrip- tion of the Purchase Plan contains, among other information, summaries of certain provisions of the Purchase Plan, a copy of which will be provided to any employee eligible to participate in the Purchase Plan upon request. The information set forth in this document with respect to the Purchase Plan is qualified in its entirety by reference to the complete text of the Purchase Plan. Upon approval of the Amendment, the maximum number of shares of Common Stock that may be issued under the plan is 1,300,000 shares. If the total number of shares for which options are exer- cised on the termination date of any Offering exceeds the maximum number of shares under the Purchase Plan, the Company shall make a pro-rata allocation of the shares available in as nearly a uniform manner as shall be practicable and the balance of payroll deduc- tions credited to the account of each participant under the Purchase Plan shall be returned to him/her as promptly as possible together with interest accrued thereon. (See — “Withdrawal from Purchase Plan” for determination of the applicable rate of interest). For purposes of calculating interest, the payroll deductions shall be allocated so that the earliest payroll deductions shall apply to purchase of the stock and the most recent payroll deductions shall be deemed to be the deductions that are to be returned. The purpose of the Purchase Plan is to provide a method whereby employees of the Company and its subsidiary corporations will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of Common Stock. The Purchase Plan has been structured to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). The Purchase Plan is not a qualified retirement plan under Section 401 of the Code, nor is it subject to any provision of the Employee Retirement Income Security Act of 1974, as amended. Shares Subject to the Purchase Plan Administration of the Incentive Plan In the event the outstanding shares of Common Stock of the Company increase, decrease, change into, or are exchanged for a different number or kind of security of the Company through reorganization, merger, recapitali- zation, reclassification, stock split, reverse stock split or similar transaction (“Changes in Capital”), the number and/or kind of shares which may be offered in the Offerings shall be proportionately adjusted. No adjust- ments will be made for stock dividends. Any distribution of shares to shareholders aggregating less than twenty percent (20 percent) of the outstanding shares of Common Stock shall be deemed to be a stock dividend. Any distribution of shares to shareholders aggregating twenty percent (20 percent) or more shall be deemed to be a stock split. The Purchase Plan is administered by a committee appointed by the Board of Directors (the “Board”) consisting of three or more disinterested members of the Board (the “Committee”). Members of the Committee are ineligible to purchase stock under the Purchase Plan. The Board may, in its sole discretion, remove or add members to the Committee from time to time and fill any vacancy, however caused. Members of the Committee serve until the expiration or termination of the Purchase Plan unless they resign or are removed by the Board before the expiration or termination of the Purchase Plan.  The Committee has plenary authority in its discretion  to interpret and construe any and all provisions of the Purchase Plan, to adopt rules and regulations for admin- istering the Purchase Plan, to appoint custodians, accountants and other advisors, and to make all other determinations deemed necessary or advisable for administering the Purchase Plan. All determinations and decisions of the Committee are made by a majority of its members, whether by a vote in a meeting of the Committee or by the written consent of a majority of the Committee. The Committee’s determination on the foregoing matters shall be conclusive. Any employee who completes 90 days employment is eligible to participate in any Offerings under the Purchase Plan which commences on or after such 90 day period and for so long thereafter as such employee remains continuously employed by the Company. For purposes of participation in the Purchase Plan, a person on leave of absence shall be deemed to be an employee for the first 90 days of such leave of absence and such employee’s employment shall be deemed to have terminated at the close of business on the 90th day  of such leave of absence.  The Purchase Plan became effective as of March 30, 1992 and currently expires August 31, 2000. If the Eligibility Duration of the Purchase Plan