Franklin Covey 2000 Annual Report The following information applies to options outstanding at August 31, 2000: The estimated fair value of options granted is subject to the assumptions made and if the assumptions were to change, the estimated fair value amounts could be significantly different. The weighted average fair value  of options exercised during fiscal years 2000, 1999, and 1998 was $8.40, $7.04, and $13.62, respectively. The Company has defined contribution profit sharing plans that qualify under Section 401(k) of the Internal Revenue Code. The plans provide retirement benefits for employees meeting minimum age and service require- ments. Participants may contribute up to 15 percent of their gross wages, subject to certain limitations. The plans provide for matching contributions by the Company. The matching contributions expensed in the years ended August 31, 2000, 1999, and 1998, were $1.8 million,  $1.7 million, and $1.7 million, respectively. The Company has an employee stock purchase plan whereby shares of common stock can be purchased by qualified employees at a price equal to 85 percent of the fair market value of common stock at the time of purchase. During fiscal 2000, the Company’s Board of Directors approved an additional 1,000,000 shares of common stock for issuance through the employee stock purchase plan. A total of 142,327, 66,019, and 46,934 shares were issued under this plan for the fiscal years ended August 31, 2000, 1999, and 1998, respectively. Shares available for issuance under this plan at August 31, 2000 were 874,438. The Company accounts for its employee stock purchase plan under the provisions of APB Opinion 25 and related interpretations.  The weighted average fair value of option shares granted under the Company’s stock option plans during the fiscal years ended August 31, 2000, 1999, and 1998 was $3.03, $4.79, and $11.17, respectively. The Black-Scholes option-pricing model was used to calculate the weighted average fair value of options using the following assumptions for grants for fiscal years 2000, 1999, and 1998: During fiscal 2000, the Company incurred expenses primarily comprised of charges related to the stock option tender offer and other purchases of outstanding stock options (Note 12), and to relocate certain sales associates to eight new regional sales offices. These costs have been included as a separate expense component on the accompanying consolidated income statement for the fiscal year ended August 31, 2000. 14. STOCK OPTION PURCHASE AND RELOCATION COSTS YEAR ENDED  AUGUST 31, Employee Stock Purchase Plan Profit Sharing Plans 13. EMPLOYEE BENEFIT PLANS • A total of 434,054 options outstanding have exercise prices between $2.78 and $6.88 per share, with a weighted average exercise price of $6.05 and a weighted average remaining contractual life of 7.4 years. At August 31, 2000, 194,739 options were exercisable. • Options outstanding for 271,300 shares have exercise prices between $7.00 and $9.50 per share, with a weighted average exercise price of $7.58 and a weighted average remaining contractual life of 9.2 years of which 27,325 were exercisable at August 31, 2000. • A total of 561,000 options outstanding have an exercise price of $9.69 per share, with a weighted average remaining contractual life of 8.7 years. At August 31, 2000, 147,375 options were exercisable. • A total of 383,078 options outstanding have exercise prices between $11.83 and $24.38 per share, with a weighted average exercise price of $17.98 per share and a weighted average remaining contractual life of 5.12 years of which 292,142 were exercisable at August 31, 2000. • The remaining 98,575 options outstanding have exercise prices between $26.00 and $34.50 per share, with a weighted average exercise price of $33.29 per share and a weighted average remaining contractual life of 4.0 years. At August 31, 2000, 96,075 shares were exercisable. 2000 1999 1 998 Dividend yield None None No ne Volatility 55.3% 55.8% 57 .7% Expected life (years) 4.4 4.3 5 .2 Risk free rate of return 5.3% 5.3% 5.4% 48 Notes to Consolidated Financial Statements