Document:

Unassociated Document

EXHIBIT
4.3

 

 

FRANKLIN
COVEY CO.

2004 EMPLOYEE
STOCK PURCHASE PLAN

Franklin Covey Co.
(the “Company”) hereby adopts the Franklin Covey Co. 2004 Employee Stock
Purchase Plan (the “Plan”) effective as of September 1, 2004, to read as
follows:

1. Purpose. The purpose of
the Plan is to provide employees of the Company and its Designated Subsidiaries
with an opportunity to purchase Common Stock of the Company. Subject to
Shareholder approval of the Plan within twelve (12) months after its date of
adoption, the Company intends that the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Code. The provisions of the Plan
shall, accordingly, be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the
Code.

2. Definitions.

(a) “Board” means the Board
of Directors of the Company.

(b) “Code” means the
Internal Revenue Code of 1986, as amended.

(c) “Committee” means a
committee of the Board designated pursuant to Section 12 below.

(d) “Common
Stock” means the $0.05
par value common stock of the Company.

(e) “Company” means Franklin
Covey Co., a Delaware corporation.

(f) "Compensation" means total base
cash compensation received by an Employee from the Company or a Designated
Subsidiary. By way of illustration, but not limitation, Compensation includes
regular base salary, wages, overtime, bonuses, commissions and incentive
compensation. Compensation does not include profit sharing, deferred
compensation, relocation allowances, expense reimbursements, tuition or other
reimbursements, contributions or imputed income under any 401(k) plan, insurance
plan, or other employee benefit plan, and income realized as a result of
participation in any stock option, stock purchase, or similar plan of the
Company or any Designated Subsidiary.

(g) “Continuous
Employment” means
uninterrupted employment with the Company or a Designated Subsidiary as an
Employee. Employment shall not be considered interrupted in the case of
(i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Administrator, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case
of transfers between locations of the Company or between the Company and its
Designated Subsidiaries.

(h) “Contributions” means all
amounts credited to the account of a Participant pursuant to the
Plan.

(i) “Corporate
Transaction” means a sale of
all or substantially all of the Company’s assets, or a merger, consolidation or
other capital reorganization of the Company with or into another corporation, or
any other transaction or series of related transactions in which the Company’s
stockholders immediately prior thereto own less than fifty percent (50%) of the
voting stock of the Company (or its successor or parent) immediately
thereafter.

(j) “Designated
Subsidiaries” means the
Subsidiaries that have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Plan; provided however that
the Board shall only have the discretion to designate Subsidiaries if the
issuance of options to such Subsidiary’s Employees pursuant to the Plan would
not cause the Company to incur adverse accounting charges. As of the date
hereof, the Designated Subsidiaries are Franklin Covey Printing Inc. and
Franklin Covey Canada, Ltd. The Board may revoke the designation of a Subsidiary
at any time and any previously Designated Subsidiary shall automatically cease
to be a Designated Subsidiary on the date it ceases to be a Subsidiary. If any
Subsidiary ceases to be Designated Subsidiary, all employees of that entity
shall be deemed to have terminated employment for purposes of this Plan on the
date Designated Subsidiary status ceases.

(k) “Employee” means any
person, including an Officer, who is an employee of the Company or a Designated
Subsidiary for federal withholding tax purposes.

(l) “Eligible
Employee” means an
Employee who is in a position requiring the Employee to work at least twenty
(20) hours per week for the Company or one of its Designated
Subsidiaries.

(m) “Exchange
Act” means the
Securities Exchange Act of 1934, as amended.

(n) “Fair
Market Value” means as of any
given date the average between the highest and lowest sale prices per share of
Common Stock on the NYSE (or, if the Common Shares cease to be traded on the
NYSE, on such other securities exchange or market system on which the Common
Stock is then listed or quoted) as reported in the Wall Street Journal or such
other source as the Board deems reliable. If no shares of Common Stock are
traded on such an exchange or market quotation system on the date in question,
Fair Market Value shall be the average between the highest and lowest sale
prices per share of Common Stock on the nearest prior business day on which
shares of Common Stock are so traded. In the event Common Shares cease to be
traded on any securities exchange or market system the Board shall determine the
Fair Market Value of Common Stock in good faith.

(o) “NYSE” means the New
York Stock Exchange.

(p) “Offering” means the grant
of Purchase Rights to purchase Common Stock to Eligible Employees under the
Plan.

(q) “Offering
Date” means the first
business day of each Offering Period of the Plan.

(r) “Offering
Period” means a period
of three (3) months commencing on September 1, December 1, March 1 and
June 1 of each year.

(s) “Officer” means a person
who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.

(t) “Participant” means with
respect to any Offering any Eligible Employee who has elected to participate in
the Offering.

(u) “Plan” means this 2004
Employee Stock Purchase Plan.

        

                        (v) “Purchase
Date” means as to any
Offering, the last day of the applicable Offering Period.

(w) “Purchase
Price” means with
respect to each Offering, an amount equal to eighty-five percent (85%) of the
Fair Market Value of a Share of Common Stock on the Purchase Date, rounded up to
the nearest whole cent per share.

(x) “Purchase
Rights” means options to
purchase Shares under the Plan.

(y) “Share” means a share of
Common Stock, as adjusted in accordance with Section 19 of the
Plan.

(z) “Subsidiary” means any
corporation, domestic or foreign, which is a “subsidiary of the Company within
the meaning of Section 424(f) of the Code, whether or not such corporation now
exists or is hereafter organized or acquired by the Company or a
Subsidiary.

3. Offerings.
The Plan shall be
generally implemented by a series of Offerings conducted over Offering Periods
of three calendar months’ duration, with new Offerings and related Offering
Periods commencing on or about September 1, December 1, March 1, and June 1 of
each year. The first Offering Period under the Plan shall commence on September
1, 2004. The Plan shall continue until terminated in accordance with
Section 18 below. The Committee may limit the aggregate number of Shares
available for purchase in each Offering by written notice to all Participants
given with sixty (60) days after the commencement of such Offering.

 

4. Eligibility
and Participation.

(a) Any person who is
an Eligible Employee as of the Offering Date of a given Offering shall be
eligible to participate in the Offering commencing on that date, subject to the
requirements of Section 5(a) below and the limitations imposed by
Section 423(b) of the Code. Persons who are not Eligible Employees on the
Offering Date with respect to a given Offering may not participate in that
Offering.

(b) Any provisions of
the Plan to the contrary notwithstanding, no Employee shall be granted Purchase
Rights under the Plan or be eligible to participate in an Offering if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own capital stock of the Company and/or hold outstanding options or
rights to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
subsidiary of the Company. For purposes of this limitation, the rules of Section
424(d) of the Code shall apply in determining the stock ownership of any
person.

(c) An Eligible
Employee may become a Participant in the Plan by completing a subscription
agreement on the form provided by the Company and filing it with the Company’s
Human Resources Department. The subscription agreement shall set forth the
percentage of the Participant’s Compensation (subject to Section 5(a) below) to
be paid as Contributions pursuant to the Plan.

(d) With respect to
each Offering, payroll deductions shall commence on the first full payroll
following the Offering Date and shall end on the last payroll paid on or prior
to the end of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the Participant as provided in
Section 9 below.

(e) Any provisions of
the Plan to the contrary notwithstanding, and in accordance with Section
423(b)(8) of the Code, all Purchase Rights granted to any Eligible Employee
hereunder shall be limited so that for any calendar year in which such Purchase
Rights are outstanding at any time, such Purchase Rights and all other options
and rights to purchase stock under all employee stock purchase plans (described
in Section 423 of the Code) of the Company and its Subsidiaries, do not
permit the Eligible Employee to purchase or otherwise accrue the right to
acquire Shares having a Fair Market Value in excess of $25,000, with all such
Share values to be determined at the time of grant of the Purchase Rights or
other options and rights in question.

 

      5. Method
of Payment of Contributions.

    (a) A Participant in
any Offering shall elect to have payroll deductions made on each payday during
the applicable Offering Period in an amount not less than one percent (1%)
and not more than fifteen percent (15%) (or such other percentage as the
Committee may establish from time to time before an Offering Date) of such
Participant’s Compensation on each payday during the Offering Period. All
payroll deductions made by a Participant shall be credited to his or her account
under the Plan. A Participant may not make any additional payments into such
account without the written consent of the Committee.

 

(b) A Participant may
discontinue his or her participation in any Offering as provided in
Section 9 below.

(c) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the
Code and Section 4(e) above, a Participant’s payroll deductions may be
decreased during any Offering Period scheduled to end during the current
calendar year to zero percent (0%). Payroll deductions shall re-commence at the
rate provided in such Participant’s subscription agreement at the beginning of
the first Offering Period that is scheduled to end in the following calendar
year, unless terminated by the Participant as provided in Section 9
below.

6. Grant
of Purchase Rights.
On the Offering
Date of each Offering, each Participant in such Offering shall be granted the
right to purchase on the Purchase Date at the conclusion of that Offering a
number of Shares of the Company’s Common Stock determined by dividing (a) the
Participant’s Contributions prior to the Purchase Date and retained in the
Participant’s account as of the Purchase Date, by (b) the applicable Purchase
Price; provided however that (i) the maximum number of Shares an Employee may
purchase during each Offering Period shall be twenty thousand (20,000) Shares
(subject to any adjustment pursuant to Section 17(a) below); (ii) such purchase
shall be subject to the limitations set forth in Sections 4(e) above and 11
below; (iii) in no event shall the Purchase Price be less than the lesser of
eighty-five percent (85%) of the Fair Market Value per share at the time the
Option is granted or eighty-five percent (85%) of the Fair Market Value per
Share at the time of exercise; and (iv) in the case of the Offering commencing
prior to shareholder approval of the Plan, the limitations and special rules of
Sections 8 and 21 below shall apply.

7. Exercise
of Option. Unless a
Participant withdraws from an Offering as provided in Section 9 below, his
or her right to purchase Shares in that Offering will be exercised automatically
on the Purchase Date at the conclusion of the applicable Offering Period, and
the maximum number of full Shares subject to the Purchase Right will be
purchased at the applicable Purchase Price with the accumulated Contributions in
his or her account. No fractional Shares shall be issued. Any payroll deductions
accumulated in a Participant’s account that are not sufficient to purchase a
full Share shall be retained in the Participant’s account for the subsequent
Offering Period, subject to earlier withdrawal by the Participant as provided in
Section 9 below. Any other amounts left over in a Participant’s account after a
Purchase Date shall be returned to the Participant. Except as provided in
Sections 8 and 21 below, the Shares purchased upon exercise of Purchase Rights
hereunder shall be deemed to be transferred to the Participant on the Purchase
Date. During his or her lifetime, a Participant’s right to purchase Shares
hereunder is exercisable only by him or her.

8. Delivery. As promptly as
practicable after the Purchase Date at the conclusion of an Offering Period, the
number of Shares purchased by each Participant upon exercise of his or her
Purchase Rights shall be deposited into an account established in the
Participant’s name with the Designated Broker. Notwithstanding the foregoing, no
certificates for Shares purchased in any Offering shall be issued unless and
until the shareholders of the Company have approved the Plan as provided in
Section 21 below.

9. Voluntary
Withdrawal; Termination of Employment.

(a) A Participant may
withdraw all but not less than all the Contributions credited to his or her
account under the Plan during an Offering Period at any time prior to the
Purchase Date at the conclusion of that offering Period by giving written notice
to the Company’s Human Resources Department. All of the Participant’s
Contributions credited to his or her account will be paid to him or her promptly
after receipt of his or her notice of withdrawal and his or her Purchase Rights
for the current Offering will be automatically terminated, and no further
Contributions for the purchase of Shares will be made during the Offering Period
in question.

(b) If an Eligible
Employee elects to participate in an Offering and his or her Continuous
Employment with the Company or a Designated Subsidiary subsequently terminates
for any reason, including retirement or death, during the applicable Offering
Period (but prior to the Purchase Date at the conclusion of that Offering), the
Contributions credited to his or her account during the Offering Period will be
returned to him or her or, in the case of his or her death, to the person or
persons entitled thereto under Section 13 below, and his or her Purchase
Rights with respect to that Offering will automatically terminate.

(c) A Participant’s
withdrawal from an Offering will not have any effect upon his or her eligibility
to participate in a succeeding Offering or in any similar plan that may
hereafter be adopted by the Company.

10. Interest. No interest shall
accrue on the Contributions of a Participant in the Plan.

11. Stock.

(a) Subject to
adjustment as provided in Section 17(a) below, the maximum number of Shares
which shall be made available for sale under the Plan shall be one million
(1,000,000) Shares. If the Committee determines that, on a given Purchase Date,
the number of Shares with respect to which Purchase Rights are to be exercised
may exceed the number of Shares available for sale under the Plan on such
Purchase Date, the Committee may in its sole discretion provide that the Company
shall make a pro rata allocation of the Shares of Common Stock available for
purchase on such Purchase Date in as uniform a manner as shall be practicable
and as it shall determine in its sole discretion to be equitable among all
Participants exercising rights to purchase Common Stock on such Purchase Date.
The Company may make pro rata allocation of the Shares available pursuant to the
preceding sentence, notwithstanding any authorization of additional Shares for
issuance under the Plan by the Company’s stockholders subsequent to such
Offering Date.

(b) No Participant
shall have any interest or voting rights in Shares covered by his or her
Purchase Rights until such rights have been exercised and the Shares have been
issued.

(c) Shares to be
delivered to a Participant under the Plan will be registered in the name of the
Participant or in the name of the Participant and his or her
spouse.

12. Administration. The Board, or a
Committee of the Board named by the Board, shall supervise and administer the
Plan and shall have full power to adopt, amend and rescind any rules deemed
desirable and appropriate for the administration of the Plan and not
inconsistent with the Plan, to construe and interpret the Plan, and to make all
other determinations necessary or advisable for the administration of the Plan.
To the extent the Board has delegated authority to a Committee, the Board may
revoke that delegation at any time. Unless the context otherwise requires, if
the Board has delegated authority to a Committee, all references in this Plan to
the Board shall be deemed to include the Committee.

13. Designation
of Beneficiary.

(a) A Participant may
designate a beneficiary who is to receive any Shares and cash, if any, from the
Participant’s account under the Plan in the event of such Participant’s death on
or subsequent to the close of an Offering Period but prior to delivery to the
Participant of such Shares and cash. In addition, a Participant may designate a
beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death prior to the Purchase Date of an
Offering. Beneficiary designations under this Section 13(a) shall be made in
writing as directed by the Company’s Human Resources Department, and shall not
be effective unless delivered to the Company's Human Resources Department within
ten (10) days of the Participant's date of death.

(b) Such Beneficiary
designations may be changed by the Participant at any time by written notice
delivered to the Company’s Human Resources Department within ten (10) days after
the Participant’s date of death.

(c) In the event of
the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant’s death,
the Company shall deliver such Shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the Company,
in its discretion, may deliver such Shares and/or cash to the spouse or to any
one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

(d) No beneficiary
shall, prior to the death of the Participant by whom such beneficiary has been
designated, acquire any interest in the Shares or cash credited to the
Participant under the Plan.

14. Transferability. Neither
Contributions credited to a Participant’s account nor any Purchase Rights or
other rights to receive Shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution, or as provided in Section 13 above) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Section 9
above.

15. Use of
Funds. All Contributions
received or held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate such
Contributions.

16. Account
Maintenance and Reports. For
administrative convenience, the Company will establish non-interest bearing,
individual accounts for each Participant in the Plan with one or more brokerage
firms designated by the Company (the “Designated Broker”). All Shares purchased
by a Participant under the Plan and all earnings from or with respect to those
Shares will be credited to the Participant’s account under the Plan. Each
Participant’s account will be reduced by all distributions and expenditures from
the account and any account-related expenses not paid by the Company. Unless and
until the Board otherwise determines, the Company will pay all annual fees and
other costs of maintaining such accounts (“Account Fees”) on behalf of each
Participant while they remain an Employee, excluding commissions on sales of
Shares from the account which shall be the sole responsibility of the selling
Participant. Upon termination of a Participant’s Continuous Employment with the
Company or a Designated Subsidiary, the Company shall no longer pay any Account
Fees, transfer costs or other fees and costs with respect to such Participant’s
account and the Participant may either (a) continue the account in his or her
own name and at his or her sole expense (including the liability for all Account
Fees); or (b) at his or her sole expense transfer the cash and whole Shares held
in such account to an account at another brokerage firm or financial institution
designated by the Participant. To consummate such a transfer, a former Employee
must submit a transfer request to the Designated Broker in accordance with such
transfer procedures as are established by that Designated Broker from time to
time. If a former Employee requests a transfer of the assets from his or her
account to another brokerage firm or financial institution, any fractional
shares held in the account shall if requested by the Company be sold to or
otherwise cashed out by the Company for their Fair Market Value as soon as
reasonably practicable following receipt of the transfer request, such that only
whole Shares and cash may be transferred. Statements of account will be provided
to Participants by the Company or the Designated Broker at least annually, which
statements will set forth the amounts of Contributions, the number of Shares
purchased and the remaining cash balance, if any. The Company has no fiduciary
or other obligations with respect to the investment or custody of the
accounts.

17. Adjustments
Upon Changes in Capitalization; Corporate Transactions.

(a) Adjustment. Subject to any
required action by the stockholders of the Company, the number of Shares covered
by each Purchase Right under the Plan that has not yet been exercised and the
number of Shares that have been authorized for issuance under the Plan but have
not yet been placed under Purchase Rights (collectively, the “Reserves”), as well as the
maximum number of Shares of Common Stock that may be purchased by a Participant
in an Offering Period, the number of shares of Common Stock set forth in Section
11(a) above, and the price per Share of Common Stock covered by each Purchase
Right under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares during an
Offering Period resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock (including any
such change in the number of Shares of Common Stock effected in connection with
a change in domicile of the Company), or any other increase or decrease in the
number of Shares effected without receipt of consideration by the Company;
provided however that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares subject to
Purchase Rights.

(b) Corporate
Transactions.
In the event of a
dissolution or liquidation of the Company, the Offering and Offering Period then
in progress will terminate immediately prior to the consummation of such action,
unless otherwise provided by the Board. In the event of a Corporate Transaction,
each Purchase Right outstanding under the Plan shall be assumed or an equivalent
option shall be substituted by the successor corporation or a parent or
Subsidiary of such successor corporation. In the event that the successor
corporation refuses to assume or substitute for outstanding options, the
Offering and Offering Period then in progress shall be shortened and a new
Purchase Date shall be set (the “New Purchase
Date”), as of which
date the Offering and Offering Period then in progress will terminate. The New
Purchase Date shall be on or before the date of consummation of the transaction
and the Board shall notify each Participant in writing, at least ten (10) days
prior to the New Purchase Date, that the Purchase Date for his or her Purchase
Right has been changed to the New Purchase Date and that his or her Purchase
Right will be exercised automatically on the New Purchase Date, unless prior to
such date he or she has withdrawn from the Offering as provided in
Section 9 above. For purposes of this Section 17, Purchase Rights
granted under the Plan shall be deemed to be assumed, without limitation, if, at
the time of issuance of the stock or other consideration upon a Corporate
Transaction, each holder of Purchase Rights under the Plan would be entitled to
receive upon exercise of those rights the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the
holder had been, immediately prior to the transaction, the holder of the number
of Shares of Common Stock covered by the Purchase Rights at such time (after
giving effect to any adjustments in the number of Shares covered by the rights
as provided for in this Section 17); provided however that if the
consideration received in the transaction is not solely common stock of the
successor corporation or its parent (as defined in Section 424(e) of the Code),
the Board may, with the consent of the successor corporation, provide for the
consideration to be received upon exercise of Purchase Rights to be solely
common stock of the successor corporation or its parent equal in Fair Market
Value to the per Share consideration received by holders of Common Stock in the
transaction.

(c) The Board may, if
it so determines in the exercise of its sole discretion, also make provision for
adjusting the Reserves, as well as the Purchase Price per Share of Common Stock
covered by each outstanding Purchase Right, in the event that the Company
effects one or more reorganizations, recapitalizations, rights offerings or
other increases or reductions of Shares of its outstanding Common Stock, and in
the event of the Company’s being consolidated with or merged into any other
corporation.

18. Amendment
or Termination.

(a) The Board may at
any time and for any reason terminate or amend the Plan. Except as provided in
Sections 17 and 21, no such termination of the Plan may affect Purchase
Rights previously granted, provided that the Plan or an Offering may be
terminated by the Board on a Purchase Date or by the Board’s setting a new
Purchase Date with respect to an Offering then in progress if the Board
determines that termination of the Plan and/or the Offering is in the best
interests of the Company and the stockholders or if continuation of the Plan
and/or the Offering would cause the Company to incur adverse accounting charges
as a result of a change after the effective date of the Plan in the generally
accepted accounting rules applicable to the Plan. Except as provided in Section
17 above and in this Section 18, no amendment to the Plan shall make any change
in any Purchase Right previously granted that adversely affects the rights of
any Participant. In addition, to the extent necessary to comply with the rules
of the NYSE or any other securities exchange or market system on which Shares
are listed or quoted, or under Section 423 of the Code (or any successor
rule or provision or any applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as so
required.

(b) Without
stockholder consent and without regard to whether any Participant rights may be
considered to have been adversely affected, the Board (or its committee) shall
be entitled to change the Offering Periods, permit payroll withholding in excess
of the amount designated by a Participant in order to adjust for delays or
mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each Participant properly correspond with amounts withheld from
the Participant’s Compensation, and establish such other limitations or
procedures as the Board (or its Committee) determines in its sole discretion
advisable that are consistent with the Plan.

19. Notices. All notices or
other communications by a Participant to the Company under or in connection with
the Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.

20. Conditions
Upon Issuance of Shares. Shares shall not
be issued under the Plan with respect to any Purchase Rights unless the exercise
of such rights and the issuance and delivery of such Shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, applicable state
securities laws and the requirements of the NYSE and any stock exchange upon
which the Shares may then be listed or quoted, and shall be further subject to
the approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of rights and issuance or Shares, the Company may
require the person exercising such rights to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law. Any provision herein to the
contrary notwithstanding, no Shares shall be issued upon exercise of Purchase
Rights at the conclusion of an Offering unless and until the Shareholders of the
Company have approved the Plan as provided in Section 21 below.

21. Term of
Plan; Shareholder Approval. The Plan
commenced as of the date first above written and shall continue in effect for a
term of ten (10) years from that date unless sooner terminated under
Section 18 above; provided, however, that notwithstanding any provision of
this Plan to the contrary, in the event the shareholders of the Company fail to
approve the Plan by March 31, 2005 in a manner that satisfies the requirements
of Section 423(b) of the Code, the Plan shall terminate on March 31, 2005, no
Shares shall be issued under the Plan and all account balances shall be returned
to the Plan Participants without interest.

22. Additional
Restrictions of Rule 16b-3. The terms and
conditions of Purchase Rights granted hereunder to, and the purchase of Shares
by, persons subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3. This Plan shall be deemed to contain,
and such rights shall contain, and the Shares issued upon exercise thereof shall
be subject to, such additional conditions and restrictions as may be required by
Rule 16b-3 to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.

23. Governing
Law and Choice of Law. This Plan and all
Purchase Rights hereunder shall be interpreted and construed according to the
laws of the State of Utah, without giving effect to any conflict of laws
provisions. In the event any person initiates legal action based upon a dispute
or claim arising out of this Plan or any Award Agreement, such action shall be
exclusively brought before and decided by a state court or U.S. District Court
in the State of Utah.

24. Non-U.S.
Participants. Subject to the
limitations contained in this Plan document, the Committee may establish
additional or different terms and conditions for the grant of Purchase Rights to
persons who are residents or citizens of countries other than the United States
to comply with the local laws, tax policies and customs of such other countries,
and may adopt sub-plans or supplements under this Plan to implement those
different terms and conditions. To the extent required by, or deemed advisable
by the Company under, Canadian federal or provincial law, such additional terms
and conditions include a require that no Canadian resident employee shall
participate in the Plan absent a written acknowledgement that he or she has not
been induced to purchase shares by expectation of employment or continued
employment.

IN WITNESS
WHEREOF, the Company has caused this Plan document to be executed by its duly
authorized officer this 12th day of November,
2004.

FRANKLIN COVEY
CO.       
                                                           

 

	
      By:
	 /s/
      VAL J. CHRISTENSEN
	
      Name:
	 Val J.
      Christensen
	
      Title:
	 Executive
      Vice PresidentExhibit 4.4

EXHIBIT
4.4

Franklin
Covey Co.

2004
Non-Employee Directors’ Stock Incentive Plan

	
      1.
	
      Establishment
      and Purpose of the Plan.  Franklin
      Covey Co. 2004 Non-Employee Directors' Stock Incentive Plan (the "Plan")
      is established upon the following terms and conditions. The purposes of
      the Plan are to advance the interests of Franklin Covey Co. (the
      "Company") through the attraction, motivation and retention of qualified
      non-employee Directors. The Plan will provide a means for non-employee
      Directors to increase their equity ownership of the Company consistent
      with the Company's guidelines for stock ownership by non-employee
      Directors. By increasing their ownership interest in the Company, the
      economic interests of the non-employee Directors will more closely align
      with those of all other stockholders of the Company. 

       

	
      2.
	
      Definitions.

       

	
      2.01
	
          Award: A grant of
      Options, Restricted Stock, and/or Deferred Stock to an
      Awardee.

       

	
      2.02
	
          Awardee: An Eligible
      Director to whom an Award is made.

       

	
      2.03
	
          Award
      Agreement: Each Award
      of Options, Restricted Stock or Deferred Stock shall be evidenced by an
      Option Agreement, a Restricted Stock Agreement or a Deferred Stock
      Agreement. Such Award Agreement shall conform to the provisions of the
      Plan and shall specify the Date of Grant, the Option Price for grants of
      Options, vesting provisions, restrictions for grants of Restricted Stock
      or Deferred Stock, and such other terms and conditions as the Organization
      and Compensation Committee (“Committee”) deems appropriate.

       

	
      2.04
	
          Basic
      Annual Award: An Award
      granted to each Eligible Director once each year based upon the formulas
      described in Section 13.

       

	
      2.05
	
          Board: The Board
      of Directors of the Company.

       

	
      2.06
	
          Change
      of Control: A Change of
      Control of the Company of a nature that would be required to be reported
      in response to Item 403(c) of Regulation S-K whether or not the Company is
      then subject to such reporting requirement; provided that, without
      limitation, a Change of Control shall be deemed to have occurred if (a)
      any individual, partnership, firm, corporation, association, trust,
      unincorporated organization or other entity, or any syndicate or group
      deemed to be a person under Section 14(d)(2) of the Securities Exchange
      Act of 1934 ("Exchange Act"), is or becomes the "beneficial owner" (as
      defined in Rule 13d-3 of the General Rules and Regulations under the
      Exchange Act), directly or indirectly, of securities of the Company
      representing 20 percent or more of the combined voting power of the
      Company's then outstanding securities entitled to vote in an election of
      Directors of the Company; or (b) during any period of two (2) consecutive
      years (not including any period prior to the adoption of this Plan),
      individuals who at the beginning of such period constitute the Board of
      Directors and any new Directors, whose election by the Board of Directors
      or nomination for election by the Company's stockholders was approved by a
      vote of at least three quarters (3/4) of the Directors then still in
      office who either were Directors at the beginning of the period or whose
      election or nomination for election was previously so approved, cease for
      any reason to constitute a majority thereof.

       

	
      2.07
	
          Common
      Stock: The Common
      Stock of the Company, par value $0.05 per share, or such other class or
      kind of share or other securities as may be applicable under Section
      6.

       

	
      2.08
	
          Company: Franklin
      Covey Co., a Utah corporation, or any successor to substantially all its
      business.

       

	
      2.09
	
          Date of
      Grant: The date an
      Award is granted to an Eligible Director. The Date of Grant with respect
      to Basic Annual Awards will be March 31 of each year during the life of
      the Plan and the Date of Grant for any Supplemental Grant, shall be a date
      determined by the Board. If the New York Stock Exchange ("NYSE") is not
      open on such date, the Date of Grant will be the next subsequent day on
      which the NYSE is open. 

       

	
      2.10
	
          Deferred
      Stock: Deferred
      Stock is Common Stock of the Company to vest and be issued to an Awardee
      under the Plan in one or more installments beginning at such time in the
      future as the Committee shall determine. Prior to the vesting and issuance
      of Deferred Stock, the Company shall pay to or accrue on behalf of the
      Awardee an amount equivalent to the dividends that would have been paid on
      that Deferred Stock had it been issued on the Date of Grant. Awards of
      Deferred Stock shall be made pursuant to a Deferred Stock Agreement
      between the Company and each Awardee that may contain additional terms
      specified by the Committee.

       

	
      2.11
	
          Deferred Stock
      Agreement: The written
      agreement between the Company and the Awardee for a grant of Deferred
      Stock.

       

	
      2.12
	
          Eligible
      Director: Any person
      who on the Date of Grant is a member of the Board of Directors of the
      Company and is not an employee of the Company or of any Subsidiary as
      defined in Section 2.20. An individual shall be treated as an employee of
      the Company or a Subsidiary only if he is on the payroll of the Company or
      a Subsidiary and treated as an employee under the Company’s or a
      Subsidiary’s system of personnel classification.

       

	
      2.13
	
          Fair
      Market Value: As applied
      to a specific date, the average of the highest and lowest market prices of
      Common Stock, as reported on the consolidated transaction reporting system
      for the NYSE on such date, or, if the Common Stock was not traded on the
      NYSE such date, on the next preceding day on which the Common Stock was
      traded. In the event shares of Common Stock cease to be traded on the
      NYSE, but are traded or listed on another securities exchange or market
      quotation system, the Fair Market Value of shares of Common Stock on a
      specified date shall be the average of the highest and lowest market
      prices of Common Stock, as reported on that exchange or market system on
      such date, or, if the Common Stock was not traded on that date, on the
      next preceding day on which the Common Stock was traded. If the Common
      Stock ceases to be traded on any exchange or market quotation system, Fair
      Market Value shall be determined in good faith by the Board.

       

	
      2.14
	
          Option: Any option
      or options providing for the purchase of a stated number of whole, not
      fractional, shares of Common Stock pursuant to Section 5.

       

	
      2.15
	
          Option
      Agreement: The written
      agreement between the Company and Awardee for the grant of an
      Option.

       

	
      2.16
	
          Option
      Price: The price
      at which Common Stock of the Company may be purchased upon the exercise of
      an Option which price shall be the Fair Market Value on the Date of
      Grant.

       

	
      2.17 
	
          Plan: Franklin
      Covey Co. 2004 Non-Employee Directors' Stock Incentive Plan.

       

	
      2.18
	
          Restricted
      Stock: Restricted
      Stock under the Plan is Common Stock of the Company restricted as to sale
      for such time and subject to such other conditions and risks of
      forfeiture, as the Committee shall determine. Prior to vesting and the
      lifting of the restrictions, the Awardee will nevertheless be entitled to
      receive dividends from and to vote the shares of Restricted Stock. Awards
      of Restricted Stock shall be made pursuant to a Restricted Stock Agreement
      between the Company and each Awardee that may contain additional terms
      specified by the Committee.

       

	
      2.19
	
          Restricted
      Stock Agreement: The written
      agreement between the Company and the Awardee for a grant of Restricted
      Stock.

       

	
      2.20
	
          Subsidiary: Any
      business association (including a corporation or a partnership other than
      the Company) in an unbroken chain of such associations beginning with the
      Company if each of the associations other than the last association in the
      unbroken chain owns equity interests (including stock or partnership
      interests) possessing fifty (50) percent or more of the total combined
      voting power of all classes of equity interests in one or the other
      associations in such chain.

       

	
      2.21
	
          Supplemental
      Grant: A grant of
      Options, Restricted Stock, or Deferred Stock that is in addition to the
      Basic Annual Award and is granted to an Eligible Director as a result of
      that Eligible Director taking on additional responsibilities as a member
      of the Board of Directors of the Company. No Director shall have any
      entitlement to a Supplemental Grant except as approved by the Board in its
      sole discretion.

       

	
      3.
	
       Stock Subject to the
      Plan.  The total
      number of shares of Common Stock which may be awarded under the Plan is
      300,000, subject to adjustment under Section 6 below. If any shares
      subject to any Award granted hereunder are forfeited or such Award
      otherwise terminates without the issuance of such shares or of other
      consideration in lieu of such shares, the shares subject to such Award, to
      the extent of such termination or forfeiture, shall again be available for
      grant under the Plan during the term of the Plan.

       

	
      4.
	
      Duration
      of Plan.  The Plan
      shall have duration of ten (10) years commencing on March 31, 2005, unless
      sooner terminated by the Board under Section 12 below. Notwithstanding
      termination of the Plan, any Award granted prior to termination of the
      Plan shall remain outstanding until expiration of its term as set forth in
      the applicable Award Agreement. No additional grants will be made after
      March 31, 2015 unless the Board of Directors the stockholders of the
      Company approve an extension.

       

	
      5.
	
      Grants
      of Awards.

       

	
      5.01
	
          Frequency of
      Grants. Basic
      Annual Awards of Options and Restricted Stock shall be made on an annual
      basis on the Date of Grant as defined in Section 2.09. Supplemental Grants
      may be made by the Company at any time in the discretion of the Board of
      Directors. 

       

	
      5.02
	
          Size of
      Grants. The size of
      each Basic Annual Award shall be calculated as described in Section 13.
      The size of any Supplemental Grant shall be determined by the Board in its
      sole discretion. 

       

	
      5.03
	
          Individual
      Limits. An annual
      aggregate limit of shares (including Options, Restricted Stock, and
      Deferred Stock) having an aggregate fair market value of $37,500 is set
      for grants during each calendar year to any individual Director, which
      limit shall apply to both the Basic Annual Award and any Supplemental
      Grant made during any given calendar year.

       

	
      5.04
	
          Types
      of Grants. Basic
      Annual Awards shall consist of Options and Restricted Stock. Supplemental
      Grants may consist of Options, Restricted Stock, or Deferred Stock or a
      combination of Options, Restricted Stock and Deferred Stock.

       

	
      5.05
	
          Terms
      of Grants. 

	 	
       (a) 
      Stock Options are non-qualified Options to
      purchase a designated number of shares of Common Stock of the Company. The
      term of each Option shall be ten (10) years from the Date of Grant,
      subject to earlier expiration as provided in the applicable Award
      Agreement. The per share Option Price shall be the per share Fair Market
      Value of Common Stock on the Date of Grant. Each Option shall be subject
      to the vesting schedule set forth in the applicable Award Agreement, as
      determined by the Committee, and may be exercised only to the extent
      vested on the date of exercise. Under no circumstances shall any Option
      vest or become exercisable in less than one year from the Date of Grant.
      Shares purchased upon exercise of an Option must be paid for in full at
      the time of exercise either in cash or with currently owned shares.
      Neither the Organization and Compensation Committee nor the Board of
      Directors may reprice any Option that is "underwater." Except as otherwise
      provided in the applicable Award Agreement, vesting and exercisability
      will be accelerated in the event of a Change of Control as defined in
      Section 2.06.

       

	 	
       (b) 
      Restricted Stock is Common Stock of the Company restricted as to sale and
      subject to a risk of forfeiture in such fashion and according to such
      vesting schedule as the Committee shall determine and specify in the
      applicable Award Agreement. Prior to vesting and the lifting of the
      restrictions, the Awardee will be entitled to receive dividends from and
      to vote the shares of Restricted Stock. Except as otherwise provided in
      the applicable Award Agreement, vesting and lifting of restrictions will
      be accelerated in the event of a Change of Control as defined in Section
      2.06. Share certificates evidencing Restricted Stock may be held in escrow
      by the Company pending vesting of such shares and shall bear such legends
      as the Committee deems appropriate to reflect the restrictions applicable
      under the Plan and Award Agreement.

       

	 	
       (c)  Deferred Stock is Common Stock of the Company
      to be issued to an Awardee under the Plan in one or more installments
      beginning at such time in the future and on such vesting conditions as the
      Committee shall determine and specify in the applicable Award Agreement.
      Prior to vesting and the issuance of Deferred Stock, the Company shall pay
      to or accrue on behalf of the Awardee an amount equivalent to the
      dividends on that Deferred Stock from the Date of Grant. Except as
      otherwise provided in the applicable Award Agreement, vesting and delivery
      of the Deferred Stock will be accelerated in the event of a Change in
      Control as defined in Section 2.06.

       

	
      5.06
	
          Termination of
      Membership on the Board of Directors. 

       

      (a)
      Notwithstanding the provisions of Section 5.05 but subject to Section 8
      below, an Option whose term has not yet expired or been forfeited shall
      become fully vested and immediately exercisable upon the Awardee's
      termination of Board membership on account of death or voluntary
      retirement after attainment of age 59 (“Retirement”). Any such Options of
      a deceased or retired Director may be exercised (a) within five (5) years
      from such termination of Board membership or (b) within the original term
      of the Option, whichever time is less, or such Option shall thereafter
      automatically terminate. Options held by an Awardee whose membership on
      the Board of Directors terminates for reasons other than death or
      Retirement, unless subject to the provisions of Section 8 of the Plan,
      shall expire six (6) months from Board termination and are exercisable
      only to the extent they have vested, as provided for under Section 5.05,
      prior to expiration. 

       

      (b)
      Notwithstanding the provisions of Section 5.05 but subject to Section 8
      below, in the event of an Awardee’s termination of Board membership on
      account of death or Retirement, (i) all Restricted Stock held by such
      Awardee shall immediately vest and cease to be subject to the restrictions
      of this Plan, and (ii) all Awards of Deferred Stock shall automatically
      vest and be issued. In such event, certificates for the Common Stock
      related to such Award shall be delivered to the retired Director or such
      Director's beneficiary as soon as administratively feasible after such
      event.

       

	
      6.
	
      Adjustments
      upon Changes in Capitalization.  In the event
      of a reorganization, recapitalization, stock split, stock dividend,
      combination of shares, merger, consolidation or any other change in
      corporate structure of the Company affecting Common Stock, or a sale by
      the Company of all or a substantial part of its assets, or any
      distribution to stockholders other than a cash dividend, the Board will
      make appropriate adjustment in the number and kind of shares authorized
      for issuance under the Plan, and will make such adjustments to the number
      and kind of shares, and exercise prices payable under, all outstanding
      Awards as the Board in good faith deems appropriate to prevent inequitable
      increase or deceases in the rights of the Awardees. However, no fractional
      shares of Common Stock will be issued pursuant to any such adjustment, and
      the Fair Market Value of any fractional shares resulting from adjustments
      will be paid in cash to the Awardee.

       

	
      7.
	
      General
      Provisions.

       

       (a)  Each Award
      shall be made pursuant to a written Award Agreement between the Company
      and the Awardee. Nothing contained in the Plan, or in any Award
      granted pursuant to the Plan, shall confer upon any Awardee any right with
      respect to continuance as a Director.

       

       (b)  To the extent
      of any conflict between the Plan and the Award Agreement, the provisions
      of the Plan shall control.

       

	
      8.
	
      Forfeiture.

      Any
      provision herein to the contrary notwithstanding, all Options, Restricted
      Stock, and Deferred Stock granted to an Awardee shall automatically
      terminate and be null and void as of the date an Eligible Director's
      service on the Board of Directors terminates if the directorship is
      terminated as a result of any act of (a) fraud or intentional
      misrepresentation, or (b) embezzlement, misappropriation, or conversion of
      assets or opportunities of the Company or any Subsidiary.

       

	
      9.
	
      Non-Assignability.

      Awards may
      not be pledged, assigned, or transferred for any reason during the
      Awardee's lifetime, and any attempt to do so shall be void and
      notwithstanding any contrary provision contained herein, the relevant
      Award shall be immediately forfeited whether or not otherwise
      vested.

       

	
      10.
	
      Beneficiary
      upon Awardee's Death.

      Notwithstanding
      the provisions of Section 9, an Awardee's Award shall be transferable at
      his or her death to the beneficiary designated by the Awardee on forms
      prescribed by and filed with the Company prior to the Awardee’s death.
      Upon the death of an Awardee, such beneficiary shall succeed to the rights
      of the Awardee. If no such designation of a beneficiary has been made, the
      Awardee's Award(s) shall succeed to his or her legal representative and
      shall be transferable by will or pursuant to the laws of descent and
      distribution.

       

	
      11.
	
      Plan
      Administration and Share Issuance.

       

      (a)  
      Except as otherwise provided herein, the Plan shall be administered by the
      Committee. Subject to Section 13 below and the other express
      provisions of this Plan, the Committee
      has full authority and discretion to determine the terms and provisions of
      any Awards made pursuant to the Plan, to prescribe, amend and rescind
      rules and regulations relating to the Plan and Awards granted under it, to
      define terms not otherwise defined herein, and to make all other
      determinations that it may determine to be necessary or advisable for the
      administration of the Plan. All decisions, determinations and
      interpretations by the Board and the Committee regarding this Plan or any
      Award shall be final and binding on all persons.

       

      (b) The
      Committee may impose such restrictions, conditions or limitations as it
      determines appropriate as to the timing and manner of any Option
      exercises, share issuances and/or of any resales or other transfers of
      shares issued hereunder, including without limitation (i) restriction
      under an insider trading policy, (ii) restrictions as to the use of a
      specified brokerage firm for such resales or other transfers, (iii)
      restrictions during any period when the Administrator determines that the
      prospectus relating to such Award may not contain all required
      information, (iv) restrictions under any applicable federal or state
      securities law; and (iv) restrictions requested by an underwriter engaged
      in a registered offering of the Company's securities, not to exceed 180
      days following the pricing of securities for sale in such offering.
      

       

      (c) Shares
      of Common Stock shall not be issued under the Plan with respect to any
      Award unless the exercise of such Award, if applicable, and the issuance
      and delivery of such Shares pursuant thereto shall comply with all
      applicable provisions of law, domestic or foreign, including, without
      limitation, the Securities Act of 1933, as amended, the Securities
      Exchange Act of 1934, the rules and regulations promulgated thereunder,
      applicable state securities laws and the requirements of the NYSE and any
      stock exchange upon which the Shares may then be listed or quoted, and
      shall be further subject to the approval of counsel for the Company with
      respect to such compliance. As a condition to the exercise of Options and
      issuance of Awards or shares of Common Stock, the Company may require the
      Awardee or person exercising such rights to represent and warrant that any
      shares are being purchased only for investment and without any present
      intention to sell or distribute such shares if, in the opinion of counsel
      for the Company, such a representation is required by any of the
      aforementioned applicable provisions of law. 

       

	
      12.
	
      Amendment
      and Termination of the Plan.  The Board
      shall have the power to amend or terminate the Plan at any time without
      further action of the stockholders; provided, however that stockholder
      approval shall be required of any amendment that:(a) increases the number
      of shares available under the Plan (other than an increase solely to
      reflect a reorganization, recapitalization, stock split, stock dividend,
      combination of shares, merger, consolidation or any other change in
      corporate structure of the Company affecting the Common Stock, or a sale
      by the Company of all or a substantial part of its assets, or any
      distribution to stockholders other than a cash dividend); (b) withdraws
      administration of the Plan from the Committee; (c) changes the types of
      awards available under the Plan; (d) extends the term of the Plan; (e)
      constitutes a "material revision" to the Plan requiring stockholder
      approval pursuant to the New York Stock Exchange Corporate Governance
      Listing Standards; or (f) deletes or limits the scope of the Plan
      provision prohibiting the repricing of Options that are "underwater."
      The
      Committee may not amend, alter or discontinue the any Award Agreement
      under the Plan in a manner that would materially impair the rights of the
      holder of an Award without such holder's consent; provided that no such
      consent shall be required if the Committee determines in its sole
      discretion and prior to the date of any Change of Control that such
      amendment or alteration either (a) is required or advisable in order for
      the Company, the Plan or the Award to satisfy any law or regulation, to
      meet the requirements of any accounting standard or to avoid any adverse
      accounting treatment, or (b) is not reasonably likely to significantly
      diminish the benefits provided under such Award, or that any such
      diminishment has been or will be adequately compensated.

       

	
      13.
	
      Annual
      Grant of Restricted Stock.  The Company
      will award to each director on March 31, of each year a number of
      Restricted Shares having an aggregate fair market value of $27,500,
      rounded up to the nearest whole share. 

       

	 14.	 Governing
      Law and Choice of Law.  This
      Plan and all Award Agreements shall be deemed to have been adopted in the
      State of Utah, and shall be interpreted and construed according to the
      laws of the State of Utah, without giving effect to any conflict of laws
      provisions. In the event any person initiates legal action based upon a
      dispute or claim arising out of this Plan or any Award Agreement, such
      action shall be exclusively brought before and decided by a state court or
      U.S. District Court in the State of Utah.

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