78 Proposals to Ratify Stock Purchase Plan Franklin Covey 2000 Annual Report which the Company is not the surviving corporation, or upon a sale of substantially all of the property or stock of the Company to another corporation (the “Reorgani- zation Transactions”), the holder of each Option then outstanding under the Purchase Plan will thereafter be entitled to receive at the next Offering Termination Date upon the exercise of such Option for each share as to which such Option shall be exercised as nearly as reasonably may be determined, the cash, securities and/or property which a holder of one share of the Common Stock was entitled to receive upon and at the time of such Reorganization Transaction. The Board shall take such steps in connection with any Reorgani- zation Transaction, as the Board shall deem necessary, to assure that holders of Options under the Purchase Plan shall be entitled to receive, as nearly as reasonably may be determined, the cash, securities and/ or property as described above. Payment for shares issued under the Purchase Plan shall be made solely by payroll deductions except in the case of a leave of absence and then only in accordance with the terms of the Purchase Plan. All payroll deductions made for a Participant shall be credited to the Partici- pant’s account under the Purchase Plan.  At the time a Participant files an authorization for payroll deduction, the Participant may elect to have a payroll deduction of any whole percentage amount up to 15 percent of his/her Base Pay in effect at the Commencement Date of the Offering made from his/her pay on each payday during an Offering. The rate of payroll deduction under the Purchase Plan can in no event exceed 15 percent. Payroll deductions shall commence on the Commencement Date for the Offering for which an authorization for payroll deduction has been received. Payroll deductions for a Participant shall automatically continue for all subsequent Offerings unless the Participant withdraws from an Offering or delivers written notice of his/her election not to participate in the subsequent Offering to the Company. Such notice must be delivered to the Office of General Counsel of the Company prior to the Election Date for the subsequent Offering. Payroll deductions will be terminated for a Participant during  an Offering if the Participant elects to withdraw from  the Offering in accordance with the terms of the Purchase Plan. See “— Withdrawal from Purchase  Plan.” A Participant’s decision not to participate in any given Offering will not prevent him/her from participat- ing in any subsequent Offering under the Purchase Plan. Once a Participant has withdrawn from an Offering or elected not to participate in an Offering, he/she must file a new authorization for payroll deduction to participate in any subsequent Offering. A Participant may change the rate of payroll deduction for any subsequent Offering by filing a new authorization for payroll deduction prior to the Election Date for the subsequent Offering. A Participant may discontinue his/her participation in an Offering as provided below but may not make any other changes during an Offering, including without limitation, altering the amount of his/her payroll deductions during any Offering. If a Participant goes on a leave of absence, such Participant shall have the right to elect: (a) to withdraw the balance in his/her account; (b) to discontinue contributions to the Plan but remain a participant in the Purchase Plan; or (c) to remain a participant in the Plan during such leave of absence, authorizing deductions to be made from payments by the Company to such Partici- pant during his/her leave of absence and undertaking to make cash payments to the Purchase Plan at the end of each payroll period to the extent that amounts payable by the Company to such Participant are insufficient to meet his/her authorized payroll deductions. Notwith- standing the above, a Participant’s interest in the Purchase Plan and any Offering shall be terminated if such leave of absence extends beyond certain time periods. See “— Termination of Employment.” All payroll deductions received or held by the Company under the Purchase Plan may be used by the Company for any corporate purpose and the Company shall not be obligated to segregate such payroll deductions. Options granted to Participants for an Offering shall be deemed to have been exercised automatically on the Offering Termination Date unless the Participant has withdrawn from the Offering. Options will automatically be deemed to be exercised for the purchase of the number of shares of Common Stock which the accumu- lated payroll deductions in the Participant’s account will purchase at the applicable exercise price. Notwithstand- ing the above, the number of shares purchased shall in no event exceed the maximum number of shares for which the Option was granted on the Offering Com- mencement Date. Any excess funds in a Participant’s account after the purchase of the maximum number of shares will be promptly returned to the Participant without interest. The purchase of shares of Common Stock upon the exercise of Options under the Purchase Plan shall be conducted solely through Merrill, Lynch, Pierce, Fenner Payment Exercise of Options