Franklin Covey 2000 Annual Report Proposals to Ratify Stock Purchase Plan 77 Notwithstanding the above, no employee shall be granted an option under the Purchase Plan: The percentage rate selected by the Participant on his/her authorization for payroll deduction form shall be multiplied by the Participant’s base pay during the period of the Offering and then the product of such computation shall be divided by  85 percent of the market value of the Company’s Common Stock on the applicable Offering Commencement Date. The Purchase Plan provides for annual offerings of the Company’s Common Stock (the “Annual Offering(s)”) commencing on September 1 of each year covered under the Purchase Plan and ending on August 31 of the following year. Each Annual Offering, at the discretion of the Committee exercised prior to the commencement thereof, may be divided into four three-month offerings commencing, respectively on September 1, December 1, March 1 and June 1 and terminating on November 30, February 28/29, May 31 and August 31 respectively (the” Quarterly Offering(s)”) (Annual Offerings and Quarterly Offerings are sometimes collectively referred to as the “Offering(s)”). “Commencement Date” means the commencement date for any Annual or Quarterly Offering as described above and “Termination Date” means the termination date for any Annual or Quarterly Offering as described above.  Eligible employees have the opportunity to elect to participate in the Purchase Plan prior to every Offering. An eligible employee may become a participant in the Purchase Plan by completing an authorization for payroll deduction under the Purchase Plan on the form provided by the Company and filing it with the office of the General Counsel of the Company on or before the date set by the Committee (the “Election Date”). The Election Date shall always be prior to the Commence- ment Date for each Offering.  The market value of the stock shall be the average between the highest and lowest sale prices per share of the Company’s Common Stock on the New York Stock Exchange (“NYSE”) on the Offering Commencement Date or the nearest prior business day on which trading occurred on the NYSE. A Participant’s base pay during the period of an Offering shall be determined by multi- plying, in the case of an Annual Offering, the Participant’s normal weekly rate of pay (as in effect on the last day prior to the Commencement Date) by 52 or the hourly rate by 2,080, or in the case of a Quarterly Offering, by 13 or 520 as the case may be. “Base Pay” shall include base salary, adjusted compensation, incentive compensa- tion, overtime, bonuses and/or other regular payments, unless otherwise determined by the Committee. Base Pay does not include any payments for shift differential, reimbursement for expenses, deferred compensation in any form, or other non-regular payments unless other- wise determined by the Committee. In the case of a part- time hourly employee, the employee’s Base Pay during the period of an Offering shall be determined by multiplying the employee’s hourly rate by the number of regularly scheduled hours of work for the employee during such Offering. The exercise price of any Option granted during any given Offering shall be the average between the highest and lowest sale prices per share of the Company’s Common Stock on the NYSE on the Offering Termina- tion Date or the nearest prior business day on which trading occurred on the NYSE. If the Company’s Common Stock is not admitted to trading on any of the aforesaid dates for which closing prices of the Common Stock are to be determined, then reference shall be made to the fair market value of the Common Stock on that date, as determined on such basis as shall be established or specified for that purpose by the Committee. In the event of a Change in Capital (as defined above), appropriate and proportionate adjustments may be made by the Committee in the number and/or kind of shares which are subject to purchase under outstanding Options and in the exercise price or prices applicable to such outstanding Options. Upon the dissolution or liquidation of the Company, or upon reorganization, merger or consolidation of the Company with one or more corporations as a result of On the Commencement Date of each Offering, each employee who has elected to participate in the Offering (the “Participant”) is deemed to have been granted an option to purchase a maximum number of shares of the Company’s Common Stock (the “Option”). The maximum number of shares that can be purchased under an Option shall be equal to an amount (rounded down to a whole number) determined as follows: Granting of Options Election to Participate in the Plan (a) if immediately after the grant, such employee would own stock, and/or hold outstanding options to purchase stock, possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company as determined under the rules of Section 424 of the Code; or (b) which permits his/her rights to purchase stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $20,000 in fair market value of the stock (determined at the time such option is granted) for each calendar year in which such option is outstanding.