Spok Holdings, Inc. Annual Report 2017

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FY2017 Annual Report · Spok Holdings, Inc.

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A N N U AL
REPORT
2 0 17
M U NIC ATIO N S. BETTER O UTC O M ES.

S M A RTER CLINIC AL C O M

UNIVERSITY

OF UTAH

CASE STUDY

20%

reduction in sepsis mortality
rate for patients with
MEWS 7-11

“That’s the magical part
of this—the alert that
automatically goes from
Epic as a message to the
charge nurse or rapid
response team.”

– Dr. Devin Horton
Hospitalist and Assistant
Professor in the Division of
Internal Medicine
University of Utah Health

UNIVERSITY OF UTAH - University of Utah Health
is the mountain west’s only academic health system,
combining excellence in patient care, the latest in
medical research, and teaching to provide leading-edge
medicine in a caring and personal setting. The system
provides care for residents of Utah and five surrounding
states in a referral area encompassing more than
10 percent of the continental U.S. University of Utah
Health is frequently ranked among U.S. News & World
Report’s Best Hospitals and is consistently ranked No. 1
in quality in the nation among academic medical centers.

- Sepsis, a

life-threatening
THE CHALLENGE
complication of an infection, occurs when chemicals
released into the bloodstream to fight the infection
trigger inflammatory responses throughout the body. It
is one of the leading causes of death in the U.S., and costs
hospitals nearly $24 billion annually. Sepsis is treatable,
but the condition must be identified and treated quickly.
As part of its ongoing care quality improvement program,
University of Utah Health launched a sepsis initiative to
evaluate their sepsis response workflow and determine
how they could both better identify when patients are
showing signs of sepsis, and more quickly rally the rapid
response team for treatment, with the goal to reduce
their sepsis mortality rates.

THE SOLUTION - A longtime customer of the Spok
healthcare communication platform, Spok Care
Connect®, University of Utah Health recognized that
there may be a way to use Spok to automate sepsis
alert notifications. The health system used a Best
Practice Alert (BPA) within their EHR (Epic®) to trigger
the Modified Early Warning Score (MEWS) alert, which
was then automatically sent to the rapid response team
via Spok, their healthcare communication platform.

THE OUTCOME
- University of Utah Health
implemented the new process in its acute care units in
May 2016 and began seeing results: From May through
December 2016, mortality rates for most MEWS scores
began to improve. However, they realized that even
people with lower MEWS scores would benefit from
the rapid response team protocol. This step, along with
more time using the new process, indicates promising
results. In preliminary analysis, there was a mortality
reduction of 20 percent for MEWS scores from pre- to
post-implementation.

To Our Stockholders:

In 2017, Spok continued moving toward our long-term strategic goal to deliver industry-leading
healthcare communication solutions, transitioning from a telecom-based wireless company to a
software provider. When we outlined our 2017 guidance early last year, I spoke about the need
to invest in our future and take our solution set to the next level to reflect our commitment to
long-term success. We undertook these additional investments to support four key objectives:

1. Accelerate development
2. Build a stronger infrastructure
3. Align resources and focus where most needed
4. Increase our long-term growth potential

I am pleased to report that in 2017 Spok continued to make strong progress on these objectives.
Additionally, we met, or exceeded, the majority of our key operating metrics for the full year,
including revenue levels, operating expense management, cash flow and subscriber retention.
We achieved these results while investing in our future, as well as enhancing and upgrading our
operating platforms and sales infrastructure — all steps that help position Spok for sustainable
growth.

A couple of years ago, we undertook a new plan,
which marked a shift in our strategic direction for
healthcare, our largest customer segment. This
five-year plan signaled a very intentional move
from offering our customers “point,” or single-
product, solutions for call center software, alarm
management and secure messaging to offering
them a single integrated platform called Spok
Care Connect®. We believe this approach is the
right use of our capital and will create sustainable
and long-term value for our stockholders, as Spok
takes advantage of the large market opportunity
in the U.S. healthcare market.

Most of our revenues still come from our wireless
paging base. While this base has slowed in its
year -over -year erosion and outperformed our
own forecasts on a regular basis, we still believe
it will continue to shrink over time and that we
need to invest in the growth potential of our
healthcare software portfolio. In the near-term, our
software investments have resulted in diminished
margins. However, the investments also resulted
in stabilizing our top line revenue in the last three
quarters of 2017, where software revenue growth
exceeded paging revenue decline for the first
time since Spok acquired the software business
in 2011.

Spok’s consolidated 2017 revenues were on plan
and totaled $171.2 million, down less than 5 percent
from 2016, reflecting continued, planned erosion in
our paging base. We continued to operate profitably,
enhance our product offerings and maintain a strong
balance sheet. At year end, our cash balance was
$107.2 million with no debt. Our ability to generate
healthy cash flow allowed us to make key strategic
investments for long-term growth and execute against
our capital allocation.

In 2017, Spok returned $25.2 million to stockholders in
the form of dividends and share repurchases, including
the special dividend that was declared in December
2016 and paid in January 2017. Spok also generated
nearly $16 million in net cash from operating activities
during 2017 that partially offset cash returned to
stockholders and capital expenditures.

Cash Returned to Shareholders
Dividends and Share Repurchases

$29.0

$25.2

$12.3

$15.1

$16.8

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

$0.0

2013

2014

2015

2016

2017

Dividend Distribu�on to Shareholders

Share Repurchases

2017 dividends: Includes the $5.2 million special dividend that was declared in December 2016 and paid in January 2017

Business Review:

In 2017, we invested to grow our software solutions
capability, while maintaining our valuable wireless
revenue stream. Software revenues were consistent
with 2016, totaling approximately $70 million for the
year. Full-year software revenue reflects a continuing
trend of greater than 99 percent renewal rates on
software maintenance contracts. This provides us
with a recurring and stable revenue stream. In fact,
when you consider our wireless revenue base, more
than 75 percent of our total revenue is recurring in
nature.

Our backlog grew more than 10 percent from the prior
year, totaling $42.3 million at year end. Our pipeline of
marketing qualified sales leads also remained strong.
Demand for our solutions remained strongest in
North American markets, specifically among hospitals
and other healthcare organizations where we sold
solutions for smartphone communications, call center
management, secure texting, clinical alerting, and
emergency notification to both new and existing
customers. Although we are greatly encouraged by
the revenue momentum we saw in 2017, and the
sequential growth we saw for the last three quarters
of the year, we expect it will take more time for the
Company to grow meaningfully on an annual basis.

Wireless subscriber and revenue trends continued to
improve in 2017 as we again exceeded our expectations
for gross additions, net unit churn, revenue, and
average revenue per unit (ARPU). Our year -over -year
rate of paging unit erosion was consistent with 2016
levels, as the net number of units lost during the year
was unchanged from the prior period.

Our year -over -year rate of wireless revenue erosion
was 7.7 percent for 2017, a 20-basis point improvement
from the prior year and a sharp reduction from the 10.1
percent we had in 2015. We were especially pleased
to see these positive trends continue in the healthcare
segment, our best performing market segment, with
the highest rate of gross placements and lowest rate
of unit disconnects.

Other key operating metrics for 2017 included:

• Total software bookings were approximately $77.7
million, up 5 percent from $73.9 million in 2016.
Maintenance bookings totaled $38.8 million and
were in line with prior year bookings of $40.3 million.
• Annual paging unit losses totaled 62,000 units,
or 5.6 percent, in 2017. This performance was
unchanged from the prior year level of unit erosion.
• Total paging ARPU was $7.51 in 2017, compared to

$7.67 in the prior year.

• Consolidated operating expenses

(excluding
depreciation, amortization and accretion) were
$148.8 million, up from $144.4 million in 2016, as
we were able to partially offset increased product
development costs with disciplined expense
management in other expense categories.

• EBITDA was $22.3 million, or 13.0 percent of
revenue, compared to $35.1 million, or 19.6 percent
of revenue, in the prior year, reflecting the higher
level of investments in our infrastructure and
product offering.

• Adjusted net income* for 2017 was $8.9 million, or
$0.44 per diluted share, compared to net income
of $14.0 million, or $0.68 per diluted share, in the
prior year.

• Capital expenses totaled $9.2 million, compared to

$6.3 million in 2016.

• Cash balance at December 31, 2017, was $107.2
million, compared to $125.8 million at December
31, 2016.

• The number of full-time equivalent employees at
December 31, 2017, totaled 596, compared to 587
at year-end 2016.

Overall, we are pleased with Spok’s operating
performance and our solid financial platform. In 2017,
we continued to transform Spok into a company
positioned to achieve long-term growth.

*In the fourth quarter of 2017, net income included a non-cash income tax
charge of $24.2 million. The income tax charge resulted from the reduction
of the deferred tax asset, or DTA, subsequent to the company’s fourth
quarter analysis of the impact of the changes from The Tax Cuts and Jobs
Act of 2017. Including this charge, the 2017 net loss totaled $15.3 million or
$0.76 per share.

Strategic Focus:

Our strategy is simple — create beautiful
software that delights our customers,
retain our wireless subscribers and
revenue for as long as possible, and
demonstrate a path to long-term top
line growth and profitability. Spok is
proud to be a leader in healthcare
communications. We support the critical
function of delivering information to
care teams when and where it matters
most to improve patient outcomes.
We believe that in the near term,
the U.S. healthcare market offers
the greatest opportunity for growth.

In 2017, we welcomed more than 100
new customers, who join a prestigious
list of more than 1,900 hospitals and
health systems in the U.S. who rely on
Spok for their communications. For the
fifth consecutive year, this customer list
includes all of the U.S. News and World
Report’s Best Hospitals Honor Roll
for both adult and children’s hospitals.
These hospitals rely on our solutions to
help them provide the best care. Our healthcare customers are an important part of our future
growth, as they continue to expand their enterprise communications, and add more of our
services and solutions. Secure text messaging remains one of our best-performing solutions,
with 2017 sales up from the prior year.

Customers like The University of Utah have confirmed the value of our Spok platform and our
strategic vision. For the past two years, we have invested in the additional talent, resources,
and tools to implement this vision. We recruited experts for Product Strategy and Development,
created additional work teams, and devised the plan to map our existing products to the
newly envisioned clinical communication and collaboration platform. We recruited people with
experience in enterprise healthcare sales, while providing training and certification for our
existing teams to increase their focus on the new approach. We have added Clinical expertise
to build on our communications legacy. With the help of our loyal employees, we have made
excellent progress.

In 2017 we continued to take steps to further strengthen our leadership team. During the year,
we announced the addition of our senior vice president of Professional Services, Mark Costanza,
whose mission is to accelerate the conversion of our strong backlog into our revenue stream as
we continue to take advantage of the large market opportunity in the healthcare IT market. And
our focus in creating a best-in-class leadership team continues in 2018.

In early 2018, we were happy to further
upgrade our management talent by appointing
a new chief technology officer, John LaLonde.
LaLonde is an industry veteran who brings to
Spok a strong passion for innovation along with
his extensive clinical and technical expertise.
He will lead his team to focus on scaling and
performance,
driving innovation around
clinical communication solutions, patient
care workflow, and creative new features
that support the company’s existing and new
business models.

And, while we have enhanced our human
resources, we have also invested in technology
to support our operations and the development
of our solutions. We have also invested in
our sales support and back office operations.
Our goals have been to increase not only our
effectiveness but our efficiency.

Additionally, we took our Spok Care Connect
message to the market. Our strategy of offering
a single platform, single database, and single
technology that creates an enterprise solution
for our healthcare customers has now been
validated and endorsed by both customers and
industry analysts. We are confident we are on
the right path for our future.

We are able to demonstrate tremendous
value and return on investment (ROI) for
our customers. As a result, Spok has many
loyal, satisfied customers and strengths as
an organization. This is evidenced by our
extremely high maintenance renewal rates
and positive customer feedback. However,
our goal is to be the best we can be in a very
competitive environment and the only way to
do that is to invest in our future and take our
solution set to the next level.

In 2017, we also demonstrated meaningful
thought
solidified our
reputation in this industry. We completed
our seventh annual survey on mobility in

leadership

and

healthcare, conducted numerous webinars on clinical
communications from our CMO, Dr. Andrew Mellin
and our CNO, Dr. Nat’e Guyton, and continued to build
our reputation with healthcare C-suite executives by
participating in multiple industry events. During the
year, there were many other examples of the leadership
position we took. These ranged from our work helping
the Federal Communications Commission identify a
robocall scammer, the company’s role in supporting
healthcare institutions in the regions affected by recent
hurricanes, to handling communication volume spikes in
the aftermath of the Las Vegas shootings. I am proud of
our team and their efforts in 2017 and look forward to
their achievements in 2018.

2018 Objectives:

As I mentioned in the beginning of this letter, about two
years ago we embarked on a transformation that was a tidal
shift in our strategic direction for healthcare, our largest
customer segment. Our decision to make this shift and
focus on the Spok Care Connect platform resulted from:

• Customer needs, as our healthcare customers were
telling us they needed a more unified approach to
communications across their enterprise.

• The large potential market opportunity, to expand
our offering with the more than 1,900 hospitals we
currently serve and introduce our solutions to the
two-thirds of the North American healthcare market
we are currently not working with.

• Business simplification, as we move away from
offering our customers too many different products in
multiple versions on several different platforms.
• Competitive positioning, as we concluded that
no one else offers a single, integrated platform
healthcare
as
communications.

comprehensive

ours

for

While we look to build on the momentum Spok generated
in the second half of last year, in 2018 we will continue
to make the necessary investments in our products and
infrastructure. We believe these investments are critical
in supporting our strategy to deliver our industry-leading
clinical communication and collaboration platform, Spok
Care Connect, and drive sustainable growth and long-
term stockholder value.

As a backdrop, in 2016, R&D expenses totaled approximately $13.5 million, an increase of nearly
one-third from prior year levels, and in 2017 R&D expenses totaled $18.7 million, an increase
of nearly 40 percent from 2016. We have continued to increase the level of investment in our
planning as reflected in our expense and capital expenditure guidance ranges, supporting our
strategic plan. In 2018, we anticipate that R&D expenses could increase 30 to 40 percent from
prior year levels, in order to support the full year impact of the hires we made in 2017, and as we
add the necessary human resources in 2018 to execute our strategy.

This is not a short-term plan. We do not undertake this commitment lightly, and there is risk.
However, we have confirmed that the market is there and that we are starting to see the benefits,
opportunities, sales growth and other business efficiencies as we enhance our platform and
bring it fully to market.

Finally, with respect to our capital allocation strategy, our overall goal has been to achieve
sustainable business growth, while maximizing long-term stockholder value through our multi-
faceted capital allocation strategy, that has included:

• Dividends and share repurchases
• Key strategic investments to improve our operating platform and infrastructure and drive

long-term organic growth

• Potential acquisitions that could provide additional revenue streams, solution functionality

and are accretive to long-term earnings

We believe the potential in the clinical communication and collaboration market is large and that
our best path to creating long-term stockholder value is to succeed in enhancing and accelerating
our Spok Care Connect Platform.

We have not ruled out possible acquisitions and will continue to evaluate opportunities. However,
given the continued high premium expectations relative to integration risks, for now we believe
the best use of our capital and management focus is to invest more aggressively in our own
product, research and development resources. We will accelerate our progress toward creating
an industry-leading healthcare focused clinical communication and collaboration platform that
capitalizes on our current solutions portfolio and large customer base.

“Spok is easy to manage, economical, and flexible. In
care delivery, you’re dealing with critical information.
Spok helps us make sure we can send a meaningful
message in the most effective way possible.”

– Dr. Chris Snyder
Chief Medical Information Officer and Chief Quality Officer
Peninsula Regional Medical Center

For 2018 we are committed to
continue paying our 12.5 cents
per share quarterly dividend and
repurchasing up to $10 million of our
company stock, while we aggressively
increase our investments in research
and development to benefit the future
and create
long-term stockholder
value. We will continue to evaluate
our capital allocation strategy on
a quarterly basis with our board
and advisors and communicate our
plans to stockholders with respect
to dividends, share repurchases and
other uses of capital.

In conclusion, we remain committed
to our core values of putting the
customer first, providing solutions that
matter, innovation and accountability.
We believe our past results and future
plans reflect these values.

talented

thank our

I want to take this opportunity
to
team of
employees and our loyal customers
and strategic partners. Together, we
made enormous progress in 2017. We
also want to thank our stockholders
for your continued support as we take
this journey together.

ROI OF HEALTHCARE
COMMUNICATIONS

There is no doubt that a clinical communication and
collaboration platform is a major investment. Any smart
healthcare leader will want to know: What’s the ROI
for my hospital, our staff, and most importantly, our
patients? Our customers rely on Spok every day at an
essential operations level. They have also achieved
tangible cost savings, enhanced patient safety, increased
patient satisfaction, ensured regulatory compliance, and
improved staff efficiency. Following is a snapshot of
some of our customers’ most significant improvements
and wins.

Goshen Health

61 minutes

reduction in average door-to-balloon time

Presbyterian Healthcare Services

85%

cut in formal complaints about delayed response to call light

Peninsula Regional Medical Center

20%

reduction in sepsis mortality
rate for patients with
MEWS 7-11

70%

reduction in code blue rate

UnityPoint Health – Meriter

67%

reduction in time spent updating department on-call schedules

VCU Health

80%

reduction in false ﬁre alarms (every false alarm costs $5,000)

Vincent D. Kelly
President and Chief Executive Officer
April 2018

Union Hospital

50%

reduction in time spent updating department on-call schedules

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2017
or

For the transition period from to

Commission file number 001-32358

SPOK HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

6850 Versar Center, Suite 420
Springfield, Virginia
(Address of principal executive offices)

16-1694797
(I.R.S. Employer
Identification No.)

22151-4148
(Zip Code)

(800) 611-8488
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock, par value $0.0001 per share

Name of each exchange on which registered

NASDAQ National Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). YES

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”,
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company)

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES

The aggregate market value of the common stock held by non-affiliates of the registrant was $348.1 million based on the closing price
of $17.43 per share on the NASDAQ National Market® on June 30, 2017.
The number of shares of registrant’s common stock outstanding on February 26, 2018 was 20,018,377.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Definitive Proxy Statement for the 2017 Annual Meeting of Stockholders of the registrant, which will be filed
with the Securities and Exchange Commission pursuant to Regulation 14A no later than May 1, 2018, are incorporated by reference into
Part III of this Report.

Item 1.

Business

Risk Factors

Item 1A.
Item 1B. Unresolved Staff Comments
Item 2.

Properties

Item 3.

Item 4.

Legal Proceedings

Mine Safety Disclosures

TABLE OF CONTENTS

Part I

Part II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Item 6.

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Statement of Operations

Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8
Financial Statements and Supplementary Data

Item 9.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.
Item 9B. Other Information

Controls and Procedures

Directors, Executive Officers and Corporate Governance

Executive Compensation

Part III

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions and Director Independence

Principal Accounting Fees and Services

Exhibits and Financial Statement Schedules

Part IV

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Signatures

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements and information relating to Spok Holdings, Inc. and its subsidiaries
(“Spok” or the “Company”) that set forth anticipated results based on management’s current plans, known trends and assumptions. These
statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are
predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “will,” “target,” “forecast” and similar expressions, as they relate to Spok are forward-looking statements.

Although these statements are based upon current plans, known trends and assumptions that management considers reasonable, they are
subject to certain risks, uncertainties and assumptions, including but not limited to the following:

•

•
•

•
•
•

•

•
•
•

Continuing decline in the number of paging units we have in service with customers, commensurate with a continuing decline
in our wireless revenue
The sales cycle of our software solutions and services can run from six to eighteen months, making it difficult to plan for and
meet our sales objectives and bookings on a steady basis quarter-to-quarter and year-to-year
Our ability to manage network rationalization to lower our costs without causing disruption of service to our customers
Our ability to design and develop an integrated critical communications platform to address mobile communications, clinical
alerting, nursing and workflow functions at state of the art hospitals that gains market acceptance and wide-spread use by
customers
Our ability to address changing market conditions with new or revised software solutions
Our ability to retain key management personnel and to attract and retain talent within the organization
Our ability to manage change related to regulation, including laws and regulations affecting hospitals and the healthcare industry
generally
Competition for our services and products from new technologies or those offered and/or developed from firms that are
substantially larger and have much greater financial and human capital resources
The reliability of our networks and servers and our ability to prevent cyber-attacks and other security issues and disruptions
Unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services
Those matters discussed in this Annual Report under Item 1A “Risk Factors.”

Should known or unknown risks or uncertainties materialize, known trends change, or underlying assumptions prove inaccurate, actual
results or outcomes may differ materially from past results and those described herein as anticipated, believed, estimated, expected,
intended, targeted or forecasted. Investors are cautioned not to place undue reliance on these forward-looking statements.

The Company undertakes no obligation to update forward-looking statements. Investors are advised to consult all further disclosures the
Company makes in its subsequent reports on Form 10-Q and Form 8-K that it will file with the United States Securities and Exchange
Commission (“SEC”). Also note that, in the risk factors section, the Company provides a cautionary discussion of risks, uncertainties
and possibly inaccurate assumptions relevant to its business. These are factors that, individually or in the aggregate, could cause the
Company’s actual results to differ materially from past results as well as those results that may be anticipated, believed, estimated,
expected, intended, targeted or forecasted. It is not possible to predict or identify all such risk factors. Consequently, investors should not
consider the risk factor discussion to be a complete discussion of all of the potential risks or uncertainties that could affect Spok’s business,
statement of operations or financial condition, subsequent to the filing of this Annual Report.

The terms "we," "us," "our," "Company" and "Spok" refer to Spok Holdings, Inc. and its direct and indirect wholly-owned subsidiaries.

PART I

ITEM 1. BUSINESS

Overview

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), is proud to be the global leader in healthcare
communications. We deliver clinical information to care teams when and where it matters most to improve patient outcomes. Top hospitals
rely on the Spok Care Connect suite to enhance workflows for clinicians, support administrative compliance, and provide a better
experience for patients. Our customers send over 100 million messages each month through their Spok solutions.

Our headquarters is located at 6850 Versar Center, Suite 420, Springfield, Virginia 22151, and our telephone number is 800-611-8488.
We maintain an Internet website at http://www.spok.com. (This website address is for information only and is not intended to be an active
link or to incorporate any website information into this 2017 Annual Report on Form 10-K ("2017 Form 10-K").)

We are a provider of paging services and selected software solutions in the United States and abroad, on a limited basis, in Europe,
Canada, Australia, Asia and the Middle East. We offer our services and products to three major market segments: healthcare, government,
and large enterprise, with a greater emphasis on the healthcare market segment.

Industry Overview

We deliver smart, reliable critical communication solutions to help protect the health, well-being, and safety of people around the globe,
primarily in the United States. Our customers rely on Spok for workflow improvement, secure texting, paging services, contact center
optimization, and public safety response.

We develop, sell, and support enterprise-wide systems primarily for healthcare and other organizations needing to automate, centralize,
and standardize their approach to critical communications. Our solutions can be found in prominent hospitals; large government agencies;
leading public safety institutions, colleges and universities; large hotels, resorts and casinos; and well-known manufacturers.

Due to the focused nature of our software solutions there is no single competitor that matches our portfolio (additional details can be
found under “Competition”). Our primary market is healthcare providers, particularly hospitals. We have identified hospitals with 200
or more beds as the primary targets for our software solutions as well as our paging services. Within this market we have identified the
following dynamics and have focused our efforts to address these dynamics:

•
•
•
•
•
•

a heightened awareness of the ubiquitous, critical role of communications in healthcare;
an increased focus within hospitals on quality of care and patient safety initiatives;
the importance of confidentiality when sharing information;
increased regulations that may result in process changes, increased documentation and reporting and increased costs;
a continuing focus within hospitals to reduce labor and administrative costs while increasing productivity; and
a broader proliferation of information technology in healthcare as hospitals strive to apply technology to solve their business
problems.

Sales and Marketing

Sales. We market and distribute our critical communication solutions through a direct sales force and an indirect sales channel.

The direct sales force contracts or sells products, solutions, messaging services and other services directly to customers ranging from
small and medium-sized businesses to companies in the Fortune 1000; healthcare and related businesses; and Federal, state, and local
government agencies. We will continue to market primarily to commercial enterprises, with a focus on healthcare organizations, interested
in our communication solutions. We maintain a sales presence in key markets throughout the United States, and in limited markets
internationally including our European-Middle East-Africa ("EMEA") and Asia-Pacific ("APAC") sales teams, in an effort to gain new
customers and to retain and increase sales to existing customers. We also maintain several corporate sales groups, such as our Key Account
Management team, focused on retaining and selling additional products and services to our key healthcare accounts as well as a team
selling primarily to national accounts. The direct sales force targets leadership responsible for the procurement of critical communications
solutions such as chief information officers, chief technology officers, chief medical officers, chief nursing officers, information technology
directors, telecommunications directors, and contact center managers. The timing for a direct sale varies, but may take from six to 18
months depending on the type and scope of software solution.

The indirect sales force complements our direct sales force. Through relationships with alliance partners we are able to sell our solutions
to a wider customer base. For paging services that we do not provide directly, we contract with and invoice an intermediary for airtime
services. For our software sales, our relationships with alliance partners assist us in broadening the distribution of our products and further
diversifying into markets outside healthcare.

Marketing. We have a centralized marketing function, which is focused on supporting our solutions and sales efforts by strengthening
our corporate brand, generating sales leads, and facilitating the sales process. Our principal marketing programs include:

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Content marketing (eBriefs, case studies, brochures, videos, infographics, and more) as an underlying foundation of all marketing
campaigns or initiatives;

• Website development and maintenance, which provides product and Company information, customer support options, paging

•

capabilities, as well as thought leadership and engagement;
Participation at trade shows and industry events, such as Healthcare Information and Management Systems Society, College of
Healthcare Information Management Executives, Association of Medical Directors of Information Systems, American
Organization of Nurse Executives, Becker's Healthcare Conference, and many other Healthcare Information technology related
shows and conferences;

• Webinars about customer success, current industry trends, and our solutions;
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Social media involvement to provide information regarding upcoming educational events or new product offerings;
Industry analyst relationships;
Newsletters and blog posts to provide information about industry trends and our solutions to customers, prospects, and alliances;
and
Annual customer conferences that solicit feedback on our solutions and services.

•

Licenses and Messaging Networks

In order to provide our wireless services, we hold licenses to operate on various frequencies in the 900 MHz narrowband. We are licensed
by the United States Federal Communications Commission (the “FCC”) to operate Commercial Mobile Radio Services (“CMRS”). These
licenses are required to provide one-way and two-way messaging services over our networks.

We operate local, regional and nationwide one-way networks, which enable subscribers to receive messages over a desired geographic
area. One-way networks operating in 900 MHz frequency bands utilize the FLEX™ protocol developed by Motorola Mobility, Inc.
(“Motorola”). The FLEX™ protocol has advantages of functioning at higher network speeds (which increases the volume of messages
that can be transmitted over the network) and of having more robust error correction (which facilitates message delivery to a device with
fewer transmission errors).

Our two-way networks utilize the ReFLEX 25™ protocol, also developed by Motorola. ReFLEX 25™ promotes spectrum efficiency
and high network capacity by dividing coverage areas into zones and sub-zones. Messages are directed to the zone or sub-zone where
the subscriber is located, allowing the same frequency to be reused to carry different traffic in other zones or sub-zones. As a result, the
ReFLEX 25™ protocol allows the two-way network to transmit substantially more messages than a one-way network using the FLEX™
protocols. The two-way network also provides for assured message delivery. The network stores, for a limited amount of time, messages
that could not be delivered to a device that is out of coverage for any reason, and when the unit returns to service, those messages are
delivered. The two-way paging network operates under a set of licenses called narrowband Personal Communications Service, which
uses 900 MHz frequencies. These licenses require certain minimum five and ten-year build-out commitments established by the FCC,
which have been satisfied.

Although the capacities of our networks vary by geographic area, we have excess capacity at a consolidated level. We have implemented
a plan to manage network capacity and to improve overall network efficiency by consolidating subscribers onto fewer, higher capacity
networks with increased transmission speeds. This plan is referred to as network rationalization. Network rationalization will result in
fewer networks and therefore fewer transmitter locations, which we believe will result in lower operating expenses due primarily to lower
site rent expenses. As we continue to implement our network rationalization plan, we expect to have fewer transmitters that can be removed
efficiently from our networks and still maintain the level of service required for our customers, and thus the benefits of network
rationalization will decline. Our messaging networks and related infrastructure are located exclusively in the United States.

Generally, our software solutions do not require licenses or permits from Federal, state and/or local government agencies in order to be
sold to customers. However, certain of our software products are subject to regulation by the United States Food and Drug Administration
("FDA") and are subject to certification by the Joint Interoperability Test Command to be sold to the branches of the armed services of
the Unite States and the United States government. (see “Regulation” below).

Our Strategy

Our goal is to continue to execute on our vision of integrated communications and collaboration enterprise solutions. In doing so, we
will strengthen our core product offerings and offer new solutions as we continue to focus on serving the mission critical needs of our
customers, while operating an efficient and profitable business strategy.

Critical aspects of our strategy include:

Growth of our software revenue and bookings — We expect to continue to substantially increase our investment in sales and marketing,
product implementation, product development and customer support to drive software, services and maintenance bookings and revenue
growth. We will continue to focus our sales and marketing efforts in the healthcare market in order to identify opportunities for sales and
close those opportunities in the form of bookings. We have established software revenue and software operations bookings as key
performance objectives for our consolidated operations in 2018.

We have an ongoing initiative to further penetrate the hospital segment in the United States and while we believe there is a significant
opportunity to sell critical communication solutions to hospitals located outside the United States our focus is on the domestic market.
We intend to leverage the strength of our market presence and the breadth of our product offerings to further expand our customer base
in healthcare.

Retention of our wireless subscribers and revenue stream — We will continue to focus on reducing the rate of subscriber disconnects
and minimize the rate of wireless revenue erosion. We continue to have a valuable wireless presence in the healthcare market, particularly
in larger hospitals. We offer a comprehensive suite of wireless messaging products and services focused on healthcare and “campus”
type environments and critical mission notification. We will continue to focus on network reliability and customer service to help minimize
the rate of subscriber disconnects. We have established wireless revenue as a key performance objective for our consolidated operations
in 2018.

We recognize that the number of our wireless subscribers, our units in service and the related revenue will continue to decline. We intend
to continue reducing our underlying cost structure impacting this wireless revenue stream. We will reduce payroll and related expenses
as well as network related expenses as necessary in light of the declining wireless revenue. We will integrate and consolidate operations
as necessary to ensure the lowest cost operational platform for our consolidated business. We have established operating and capital
expenditures as a key performance objective for our consolidated operations in 2018.

Invest in our future solutions — The market for communication and collaboration solutions is expected to grow as healthcare continues
to change. Focus on patient satisfaction, population health management, reimbursement changes and emphasis on quality improvement
and care coordination are all driving an evolution in communication and collaboration between previously disparate departments and
systems within and outside hospitals and across the healthcare ecosystem. Maintaining our position as a leader in healthcare communication
and collaboration requires us to continue development of our integrated platform and invest in the key areas of customer need including:
1) mobility, 2) integrated platform, 3) nursing and physician solutions and 4) alerting. We will continue to increase our spending on
product development and strategy in 2018 and beyond to develop these solutions and compete in the changing marketplace. Investment
in our future solutions is discussed in further detail under "Research and Development". We have established specific product development
related activities as a key performance objective for our consolidated operations in 2018.

Return capital to our stockholders — We understand that our primary objective is to create long-term stockholder value. We will continue
to evaluate how best to deploy our capital resources to support sustainable business growth and maximize stockholder value. We expect
to continue to pay a quarterly dividend of $0.125 per share of common stock or $0.50 annually in 2018. We will continue to evaluate
both market and Company factors to determine whether a common stock repurchase program is an appropriate method to return capital
to our stockholders.

Long-term revenue growth through business diversification — We believe that add-on acquisitions of companies or technologies could
be an important part of our future growth. We believe add-on acquisitions of complementary companies or technologies in the healthcare
market could enhance our position with current customers and expand our overall addressable markets. Rapidly and successfully
integrating strategic acquisitions and improving operational efficiencies is a focus of our management team. Given the nature of our
solutions, new technologies can be integrated to accelerate cross-selling opportunities. We evaluate these potential businesses or
technologies to determine if they can be acquired at a reasonable valuation and will be profitably accretive and accelerate our revenue
goals.

To ensure focus on our business strategy we establish specific performance objectives and develop short-term and long-term incentive
plans (“STIP” and "LTIP," respectively) for our management that include a combination of these operating objectives and priorities.

Our Products and Services

Wireless Products and related Services. We offer subscriptions to one-way or two-way messaging services for a periodic (monthly,
quarterly, semi-annual, or annual) service fee. The level of service fees is generally based upon the type of service provided, the geographic
area covered, the number of devices provided to the customer and the period of commitment. A subscriber to one-way messaging services
may select coverage on a local, regional, or nationwide basis to best meet their messaging needs. Two-way messaging is generally offered
on a nationwide basis. In addition, subscribers either contract for a messaging device from us for an additional fixed monthly fee or they
own a device, having purchased it either from us or from another vendor. We also sell devices to resellers who lease or resell them to
their subscribers and then sell messaging services utilizing our networks. We offer ancillary services, such as voicemail and equipment
loss or maintenance protection, which help increase the monthly recurring revenue we receive along with these traditional messaging
services. In 2015 and 2016 we launched new and exclusive one-way (T5) and two-way (T52) alphanumeric pagers, respectively. Both
pagers are configurable to support un-encrypted or encrypted operation. When configured for encryption, they utilize AES-128 bit
encryption, screen locking and remote wipe capabilities. With encryption enabled these new secure paging devices enhance our service
offerings to the healthcare community by adding Health Insurance Portability and Accountability Act ("HIPAA") security capabilities to
the low cost, highly reliable and availability benefits of paging.

The demand for one-way and two-way messaging services declined during the years ended December 31, 2017, 2016 and 2015 and we
believe demand will continue to decline for the foreseeable future. Wireless products and services revenue represented 59%, 61% and
63% of total consolidated revenue for the years ended December 31, 2017, 2016 and 2015, respectively. As demand for one-way and
two-way messaging has declined, we have developed or added service offerings in order to increase our revenue potential and mitigate
the decline in our wireless revenues. We will continue to evaluate opportunities to provide customers the highest value possible.

Software. Dependable critical communications are paramount for individuals in healthcare and a host of other industries. We offer a
number of solutions, providing our customers with the ability to communicate anywhere, anytime across a number of situations. Our
solutions are used for contact centers, clinical alerting and notification, mobile communications and messaging, and for public safety
notifications. We offer critical communication solutions in four major product categories:

Contact Center

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Spok® Healthcare Console: Provides operators with the information needed to process calls using their computers, with just
a few keystrokes. This solution integrates with the customers’ existing phone systems and is used by the operator group to answer
incoming calls to the contact center. Operators can quickly and accurately perform directory searches and code calls, as well as
messaging and paging by individual, groups, and roles using the Spok Healthcare Console’s computer telephony integration
("CTI") and directory capabilities.
Spok® Web-Based Directory: Makes employee contact information more accessible and enables staff to send messages quickly
right from the directory. Authenticated users can log on anywhere, anytime to perform a variety of important updates to contact
information and on-call schedules, search the directory, and send important messages.
Spok® Web-Based On-Call Scheduling: Keeps personnel, calendars and on-call scheduling information updated, even with
thousands of staff, using a secure web portal to maintain and allow password-protected access to the latest on-call schedules
and personnel information.
Spok® Speech: Enables the organization to process routine phone requests, including transfers, directory assistance, messaging
and paging without live operators and with more ease-of-use than touchtone menus.
Spok® Call Recording and Quality Management: Records, monitors, and scores operators’ conversations to allow for better
management of calls, helping improve customer service.

Clinical Alerting

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Spok® Messenger: Provides an intelligent, FDA, 510(k)-cleared solution that connects virtually all crucial alert systems,
including nurse call, fire, security, patient monitoring, and building management to mobile staff via their wireless communication
devices. This solution provides the ability to reach mobile team members within seconds of an alert, improving overall workflow,
staff productivity, and the comfort and safety of everyone in the facility.
Spok® e.Notify: Enables organizations to quickly and reliably notify and confirm team member availability during emergency
situations without relying on calling trees, thereby reducing confusion that may arise in an emergency situation. This solution
automatically delivers messages, collects responses, escalates issues to others, and logs all activities for reporting and analysis
purposes.
Spok® Critical Test Results Management: Automates and streamlines the process of delivering critical test results to the right
clinicians to help ensure patient safety. This solution can send messages from the cardiology, laboratory and radiology departments
by means of encrypted smartphone communications, two-way paging, secure email, secure text, images, annotations, and voice
to a variety of endpoints such as workstations, laptops, tablets, smartphones, pagers, and other wireless devices.

Mobile Communications

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Spok Mobile®: Simplifies communications and strengthens care by using smartphones and tablets for secure code alerts, patient
updates, results, consult requests, and much more. Allows users to access the full directory of accurate contact information to
send messages/photos/videos to smartphones and other devices, and to ensure critical communications are logged, all with
security, traceability, and reliability.
Spok® Device Preference Engine: Facilitates voice conversations among doctors and caregivers by enabling users to choose
the desired communication method based on factors such as message priority.

Public Safety

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Spok® pc/psap: Speeds emergency dispatch by giving Public Safety Answering Point ("PSAP") call-takers an easy-to-use,
standards-based, graphical interface that integrates the underlying phone system, mapping systems, and other resources for
critical information availability. 9-1-1 call-takers are able to instantly involve police, fire, EMT, and hazardous material personnel
with a single click of the mouse or touch of the screen.
Spok® Enterprise Alert: Directs emergency personnel to a 9-1-1 caller’s exact location (building, floor, room), helping to
ensure speed, accuracy, and reliability of response. The E9-1-1 software provides real-time, onsite notification when 9-1-1 is
dialed, and works to decrease emergency response time.

Services. We offer a variety of professional services to assist our customers in the successful implementation of, and to maximize the
benefits obtained from the use of, our software solutions. We also offer support services to enhance and refine the customers experience
throughout their relationship with Spok.

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Professional Services: We offer a full suite of professional services which are provided by a dedicated group of professional
service employees. Our professional services include consultation, implementation, and training services. For software solution
implementations, our professional services staff uses a branded, consistent methodology that provides a comprehensive phased
work plan for both new software installations and/or upgrades. In support of our implementation methodology, we manage the
various aspects of the process through a professional services automation tool. We may also use third-party professional services
firms to implement our solutions for customers depending on the circumstances. Professional services revenue represented 10%
of total consolidated revenue for each of the years ended December 31, 2017, 2016 and 2015.
Software License Updates and Product Support (Maintenance): Software license updates and product support, which is
generally referred to as maintenance when sold to customers, is an important offering to customers who utilize our software
solutions. In order to support our products that provide mission critical solutions to our customer’s organizations, we have a
dedicated customer support organization. The customer support organization provides support 24 hours a day, 7 days a week,
365 days a year and the service can be accessed via telephone, email or the Internet via the Spok webpage. The Spok support
service is augmented by third party services where needed. Software license updates and product support are generally priced
together as a percentage of the software licenses for which these services will be provided. Largely all of our customers purchase
maintenance when they purchase new software licenses after which renewals generally occur on an annual basis and are paid
in advance. Software license updates provide customers with rights to unspecified product upgrades as well as maintenance and
patch releases that are released during the term of the support period. Software license updates and product support revenue (i.e.
maintenance revenue) represented 23%, 21% and 18% of total consolidated revenue for the years ended December 31, 2017,
2016 and 2015 respectively.

Sources of Equipment

We do not manufacture the messaging devices our customers need to take advantage of our services or the network equipment we use to
provide messaging services. We have relationships with several vendors to purchase new messaging devices. Used messaging devices
are available in the secondary market from various sources. We believe existing inventory, returns of devices from customers that canceled
services, and purchases from other available sources of new and reconditioned devices will be sufficient to meet expected messaging
device requirements for the foreseeable future. We negotiate contractual terms with our vendors that do not directly relate to the
manufacturing of the network equipment or messaging devices. The network equipment and messaging devices are generic on which we
may place our logo or label.

We sell third party equipment for use with our software solutions. The third party equipment that we sell is generally available and does
not require any specialty manufacturing to accommodate our software solutions.

We currently have inventory and network equipment on hand that we believe will be sufficient to meet our wireless and software equipment
requirements for the foreseeable future.

Intellectual Property

As of December 31, 2017, we held 66 trademarks and 19 patents which we believe are important to protect our intellectual property. We
believe our intellectual property distinguishes our business from our competition and are integral to our continued success in the area of
critical communication solutions. The expiration dates of these trademarks range from 2018 to 2032 and can be extended for 10 year
periods upon renewals.

Customers

Our customers include businesses and employees who need to be accessible to their offices or customers, first responders who need to
be accessible in emergencies, and third parties, such as other telecommunication carriers and resellers that pay our Company to use our
networks. Customers include businesses, professionals, management personnel, medical personnel, field sales personnel and service
forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations,
specialty trade organizations, manufacturing organizations and government agencies.

We offer our communication services and products primarily in the United States and to three major market segments: healthcare,
government and large enterprise, but with a greater emphasis on the healthcare market segment. For the years ended December 31, 2017,
2016 and 2015, revenues from healthcare customers accounted for approximately 74.6%, 70.3% and 68.2% of our total revenues,
respectively. We expect the trend of an increasing percentage of our total revenue to come from the health care segment to continue, even
as our total revenue declines due to our subscriber erosion from our wireless services. No single customer accounted for more than 10%
of our total revenues in 2017, 2016 or 2015. For the years ended December 31, 2017, 2016 and 2015, foreign sales represented
approximately 2.6%, 3.2% and 2.0% of our consolidated revenue, respectively.

We pursue close, long-term relationships with our customers because we believe strong customer relationships enable us to retain our
current customer base and expand our services and revenue to that customer base.

Backlog

Our backlog of undelivered or in-progress orders was $42.3 million and $38.3 million at December 31, 2017 and 2016, respectively. Of
the current backlog we expect to deliver and complete all but $6.9 million in 2018.

Competition

The competitors and degree of competition vary among our various product categories. Competition is particularly strong for our wireless
messaging services. Within the wireless industry, companies compete on the basis of price, coverage area, services offered, transmission
quality, network reliability, and customer service. We compete by maintaining competitive pricing for our products and services, by
providing broad coverage options through high-quality, reliable messaging networks and by providing quality customer service. Direct
competitors for wireless messaging services include American Messaging Service, LLC and a variety of other regional and local providers.
We also compete with a broad array of wireless messaging services provided by mobile telephone companies, including AT&T Mobility
LLC, Sprint Nextel Corporation, T-Mobile USA, Inc., and Verizon Wireless, Inc. This competition has intensified as prices for the services
of mobile telephone companies have declined and as those companies have incorporated messaging capabilities into their mobile phone
devices. Many of these companies possess far greater financial, technical and other resources than we do.

Most Personal Communications Service and other mobile phone devices currently sold in the United States are capable of sending and
receiving one-way and two-way messages. Most subscribers that purchase these services no longer need to subscribe to a separate
messaging service. As a result, many one-way and two-way messaging subscribers can readily switch to cellular, Personal Communications
Service and other mobile telephone services. The decrease in prices and increase in capacity and functionality for cellular, Personal
Communications Service, WiFi, and other mobile telephone services have led many subscribers to select combined voice and messaging
services from mobile telephone companies as an alternative to our stand-alone messaging services.

We also have a number of competitors whose software products compete with one or more modules of our critical communications
solutions. These competitors are a mix of privately held and public companies that offer a number of call center, alerting and mobile
communication products. Our primary competitive advantages include having:

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An integrated product suite;
A communication-driven workflow;
Certifications, such as those through the Joint Interoperability Test Command (See "Joint Interoperability Test Command" below)
and the FDA; and
A complete directory of contacts throughout the customer enterprise.

Although there are no competitors that offer a similar comprehensive set of software modules that match our product offerings, there are
several competitors who offer software similar to many of our solutions. Selected competitors for portions of our product portfolio include:

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Amtel Communications, Inc. (AMTELCO) - Contact center solutions;
Nuance Communications, Inc. - Clinical alerting solutions;
peerVue, Inc. - Clinical alerting solutions;
TigerText, Inc. - Mobile communication solutions;
Vocera Communications, Inc. (including Extension Healthcare)- Mobile communications solutions;
Imprivata, Inc. - Mobile communications solutions;
Voalte, Inc. - Mobile communications solutions;
Ascom Holding AG - Mobile Communications solutions;
Emergin, a Phillips Healthcare company - Alerting and notification;
DBA HipLink Software, Inc. - Mobile communications solutions; and
Veriphy Ltd - Critical test results management.

In addition, substantially larger companies in the electronic medical records ("EMR") space such as Epic Systems Corporation, Cerner
Corporation, Athenahealth, Inc. and Allscripts Healthcare Solutions, Inc. may choose to offer software related solutions similar to our
critical communications and work flow solutions, or may acquire one of our competitors.

Research and Development ("R&D")

We maintain a product development group, a substantial portion of which is focused on developing new software products, especially
with respect to developing an integrated platform for communications solutions and additional enhancements. Within our Research and
Development group is a separate task force focused on ongoing maintenance and enhancement of existing point-solution products. Our
product development group uses a methodology that balances enhancement requests from a number of sources including customers,
regulatory requirements, the professional services staff, customer support incidents, known defects, market and technology trends, and
competitive requirements. These requests are reviewed and prioritized based on criteria that include the potential for increased revenue,
customer/employee satisfaction, possible cost savings and development time and expense.

We continue to focus our product development activities on developing our unified communications solution, Spok Care Connect®. This
unified communication solution focuses on four key areas of customer need: mobility offerings, an integrated platform, alerting, and
nursing solutions. The development of Spok Care Connect requires a multi-year effort by a dedicated product development staff and will
be deployed in multiple phases which include planned development and enhancements. We believe that development of the Spok Care
Connect platform will drive long-term stockholder value and play an important role in determining the future success of our strategy.

Our expenses for research and development for the years ended December 31, 2017, 2016 and 2015 were $18.7 million, $13.5 million,
and $10.3 million, respectively, and we expect our research and development expenses to continue to grow throughout 2018. We plan to
continue to invest in our research and development efforts to build a fully integrated communications and workflow platform for hospitals
focused on mobility, critical alerting, and nursing care with full enterprise accessibility.

Employees

At December 31, 2017 and 2016 we had 596 and 587 full time equivalent (“FTE”) employees, respectively. Our employees are not
represented by labor unions or covered by a collective bargaining agreement. We believe that our employee relations are good.

Regulation

Federal Regulation

The FCC issues licenses to use radio frequencies necessary to conduct our business and regulate many aspects of the operations that
support our wireless revenue. Licenses granted to us by the FCC have varying terms, generally of up to ten years, at which time the FCC
must approve renewal applications. In the past, FCC renewal applications generally have been granted upon showing compliance with
FCC regulations and adequate service to the public. Other than those still pending, the FCC has thus far granted each license renewal
that we have requested.

The Communications Act of 1934, as amended (the “Communications Act”), requires radio licensees, including us, to obtain prior approval
from the FCC for the assignment or transfer of control of any construction permit or station license or authorization of any rights thereunder.
The FCC has thus far granted each assignment or transfer request we have made in connection with a change of control.

The Communications Act also places limitations on foreign ownership of CMRS licenses, which constitute the majority of our licenses.
These foreign ownership restrictions limit the percentage of stockholders’ equity that may be owned or voted, directly or indirectly, by
non-United States citizens or their representatives, foreign governments or their representatives, or foreign corporations. Our Amended
and Restated Certificate of Incorporation permits the redemption of our equity from stockholders where necessary to ensure compliance
with these requirements.

The FCC’s rules and regulations require us to pay a variety of fees that otherwise increase our costs of doing business. For example, the
FCC requires licensees, including Spok, to pay levies and fees, such as universal service fees, to cover the costs of certain regulatory
programs and to promote various other societal goals. These requirements increase the cost of the services provided. By law, we are
permitted to bill our customers for these regulatory costs and we typically do so.

Additionally, the Communications Assistance to Law Enforcement Act of 1994, (“CALEA”) and certain rules implementing CALEA
require some telecommunication companies, including Spok, to design and/or modify their equipment in order to allow law enforcement
personnel to “wiretap” or otherwise intercept messages. Other regulatory requirements restrict how we may use customer information
and prohibit certain commercial electronic messages, even to our own customers.

In addition, the FCC’s rules require us to pay other carriers for the transport and termination of some telecommunication traffic. As a
result of various FCC decisions over the last few years, we no longer pay fees for the termination of traffic originating on the networks
of local exchange carriers providing wireline services interconnected with our services. In some instances, we received refunds for prior
payments to certain local exchange carriers. We have entered into a number of interconnection agreements with local exchange carriers
in order to resolve various issues regarding charges imposed by local exchange carriers for interconnection.

Failure to follow the FCC’s rules and regulations can result in a variety of penalties, ranging from monetary fines to the loss of licenses.
Additionally, the FCC has the authority to modify licenses, or impose additional requirements through changes to its rules.

The FDA has determined software systems that connect to medical devices are subject to regulation as medical devices as defined by the
federal Food, Drug and Cosmetic Act (“the FDC Act”). Since our middleware software products connect to medical devices, we are
required to comply with the FDC Act’s requirements, including but not limited to: registration and listing, labeling, medical device
reporting (reporting of medical device-related adverse events), removal and correction, and good manufacturing practice requirements.
We have complied with the regulatory requirements of the FDC Act, and registered and received the necessary clearances for our products.
As we modify and/or enhance our software products (including our middleware product), we may be required to request FDA clearance
before we are permitted to market these products.

In addition, our software solutions may handle or have access to personal health information subject in the United States to the HIPAA,
the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and related regulations. These statutes and related
regulations impose numerous requirements regarding the use and disclosure of personal health information with which we help our
customers comply. Our failure to accurately anticipate or interpret these complex and technical laws could subject us to civil and/or
criminal liability. We believe that we are in compliance with these laws and their related regulations.

Although these and other regulatory requirements have not, to date, had a material adverse effect on our operating results, such requirements
could have a material impact on our operating results in the future. We monitor discussions at the FCC and FDA on pending changes in
regulatory policy or regulations; however, we are unable to predict what changes, if any, may occur in 2018 to regulatory policy or
regulations.

State Regulation

As a result of the enactment by the United States Congress of the Omnibus Budget Reconciliation Act of 1993 (“OBRA”) in August
1993, states are now generally preempted from exercising rate or entry regulation over any of our operations. States are not preempted,
however, from regulating “other terms and conditions” of our operations, including consumer protection and similar rules of general
applicability. Zoning requirements are also generally permissible, however, provisions of the OBRA prohibit local zoning authorities
from unreasonably restricting wireless services. States that regulate our services also may require us to obtain prior approval of (1) the
acquisition of controlling interests in other paging companies and (2) a change of control.

At this time, we are not aware of any proposed state legislation or regulations that would have a material adverse impact on our business.

Joint Interoperability Test Command ("JITC") Certification

JITC is a military organization that tests technology for use by the branches of the armed services of the United States and the United
States federal government. JITC certification is required of all systems with joint interfaces or joint information exchanges with other
systems used by these organizations and is done to ensure all systems operate effectively together. All information technology and national
security systems that exchange and use information to enable units or forces to operate effectively in joint, combined, coalition and
interagency operations and simulations must be certified. Once a system has been certified under this program, the certification must be
renewed every four years or after any changes that may affect interoperability. The interoperability certification process consists of four
basic steps, which are:

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Identify (interoperability) requirements;
Develop certification approach (planning);
Perform interoperability test and evaluation; and
Report certifications and statuses.

We submit and receive JITC certification for certain of our products through the Defense Information Systems Agency ("DISC"), which
allows us to sell and implement our solutions at federal government agencies. We currently certify a console, web, speech, mass
notification, public safety answering point, call recording and campus 911 product with JITC. We have a roadmap to renew the existing
certifications with new releases of existing products and to bring additional products to JITC to increase the products that can be sold
into Federal agencies.

Information about Segment and Geographic Revenue

Information regarding segment and geographic revenue can be found in Note 11, "Segments and Geographic Information". No country
other than the United States accounted for more than 10% of our total revenue, and we intend to focus our marketing and sales efforts
on customers in the United States due to lower margins on sales abroad and low volume relative to the cost of maintaining an international
sales team. Financial information regarding revenues from external customers and measure of profit and/or loss for the years ended
December 31, 2017, 2016 and 2015, and our total assets as of December 31, 2017 and 2016, are included in our Consolidated Financial
Statements.

Available Information

We make available on our website at http://www.spok.com, free of charge, our annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such reports are electronically
filed with, or furnished to, the United States Securities and Exchange Commission ("SEC"). The public may read and copy any materials
we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that
contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://
www.sec.gov. We also make available on our website, and in print, if any stockholder or other person so requests, our code of business
conduct and ethics entitled “Code of Ethics” which is applicable to all employees and directors, our “Corporate Governance Guidelines”
and the charters for all committees of our Board of Directors, including Audit, Compensation and Corporate Governance and Nominating.
Any changes to our Code of Ethics or waiver, if any, of our Code of Ethics for executive officers or directors will be posted on that
website.

ITEM 1A. RISK FACTORS

The following important factors, among others, could cause our actual operating results to differ materially from those indicated or
suggested by forward-looking statements made in this 2017 Form 10-K or presented elsewhere by management from time to time.

The rate of wireless subscriber and revenue erosion could exceed our ability to reduce operating expenses in order to maintain
overall positive operating cash flow.

Our wireless revenue is dependent on the number of subscribers that use our paging devices. Our customers may not renew their
subscriptions after the expiration of their subscription agreements. In addition, our customers may opt for a lower-priced edition of our
offerings or for fewer subscriptions. We have limited historical data with respect to rates of customer subscription renewals, so we cannot
accurately predict customer renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors,
including their level of satisfaction with our offerings and their ability to continue their operations and spending levels. Increasing
awareness and concern over HIPAA/HITECH compliance is causing healthcare organizations, our largest customer segment, to re-evaluate
paging subscriptions for clinical use cases when users are not equipped with our encrypted pager offerings.

We face intense competition for subscribers from other paging service providers and alternate wireless communications providers such
as mobile phone and mobile data service providers. There is a risk that our competitors’ products may provide better performance or
include additional features when compared to our offerings. Competitive pressures could also affect the prices we may charge or the
demand for our offerings, resulting in reduced profit margins and loss of market share. Our efforts to compete effectively may not be
sufficient, which may adversely affect our business, financial condition, operating results and cash flows.

In addition to competition, our customer base may be impacted by the introduction of new technologies. As mobile communications
technology evolves, competitors that provide wireless broadband data services may lower their prices to customers that approach, meet
or undercut our prices for paging services. We are unable to predict how customer perceptions of the value of our wireless services will
be impacted by the development of new wireless technologies. Our continued success will depend on our ability to adapt to rapidly
changing technologies and user preferences, to adapt our offerings to evolving industry standards, to predict user preferences and industry
changes in order to continue to provide value to our customers and to improve the performance and reliability of our offerings. Our failure
to adapt to such changes could harm our business, and our efforts to adapt to such changes could require substantial expenditures on our
part to modify our offerings or infrastructure. Delays in developing, completing or delivering new or enhanced offerings and technologies
could result in delayed or reduced revenue for those offerings and could also adversely affect customer acceptance of those offerings and
technologies. Even if we are able to enhance our existing offerings or introduce new offerings that are well perceived by the market, if
our marketing or sales efforts do not generate interest in or sales for these offerings, they may be unsuccessful.

We expect our subscriber numbers, units in service and revenue will continue to decline into the foreseeable future. As this revenue
erosion continues, maintaining positive cash flow is dependent on substantial and timely reductions in selected operating expenses.
Reductions in operating expenses require both the reduction of internal costs and negotiation of lower costs from outside vendors. As we
require fewer services and products from our vendors, our negotiating leverage to lower our costs is diminished. There can be no assurance
that we will be able to reduce our operating expenses commensurate with the level of revenue erosion. The inability to reduce operating
expenses would have a material adverse impact on our business, financial condition and statement of income including our continued
ability to remain profitable, produce positive operating cash flow, continue our research and development investment in our Spok Care
Connect platform, pay cash dividends to stockholders, and repurchase shares of our common stock.

We may be unable to effectively develop, introduce and deploy our integrated communications platform, Spok Care Connect, which
is the basis for our future growth.

Our future revenue growth depends on our ability to develop, introduce and effectively deploy our integrated communications suite. This
multi-year effort will require the coordination of multiple development teams dedicated to this task. Simultaneously with this new
development effort, we must continue to improve and support our existing suite of products to transition to the integrated critical
communications suite. We foresee the following risks inherent in our research and product development efforts:

•

Requirements Definition - Our plans for an integrated communications suite may not meet the market's needs or customer
expectations and could result in low market demand and/or acceptance.
Product Scope and Schedule - We may fail to manage the scope of our software development activities effectively, resulting in
delays to meet key milestones, achieve network solutions on a fully integrated basis, or solve coding problems in a timely and
efficient manner. In addition, the continuing software development efforts on our existing products could distract management
time and focus on developing our integrated communications platform.
Staffing and Organization - The development of the integrated communications suite requires the hiring of new staff. We may
be unable to attract, in a timely manner, the qualified staff to meet our requirements. The organizational changes and new hires
necessary to address our development requirements could create attrition risk for our current staff.

•

Operational Readiness - While the development of the integrated communications suite could occur as we have planned, we
may not be prepared or ready to sell, deliver and support the new platform technology.

Technical problems and higher costs may affect our product development initiatives.

Our future software revenue growth depends on our ability to develop, introduce and effectively deploy new solutions and features to
our existing software solutions. These new features and functionalities are designed to address both existing and new customer
requirements. We may experience technical problems and additional costs as these new features are tested and deployed. Failure to
effectively develop new or improved software solutions could adversely impact software revenue growth and could have a material
adverse effect on our operations, financial condition and statement of operations including our continued ability to remain profitable,
produce positive operating cash flow, pay cash dividends to stockholders, and repurchase shares of our common stock.

We are dependent on the U.S. healthcare provider market segment for most of our revenue.

Over 80 percent of our revenue for wireless services and software products comes from sales to hospitals and other healthcare provider
organizations in the United States. These customers, both non-profit and for-profit, are greatly affected by healthcare reform and the
reimbursement policies of the federal and state governments and health insurance companies, and any decline in revenue received by our
customers due to adverse economic conditions or legislative or regulatory changes could significantly affect the type and amount of
services and products they order from us. We do not anticipate any flexibility in increasing prices for our wireless services notwithstanding
general inflation due to an unrelenting focus by our customers on their cost structures, and our customers could be slow to invest in our
software products and professional services due to budgetary pressures.

If we are unable to retain key management personnel, we might not be able to find suitable replacements in a timely basis, or at all,
and our business could be disrupted.

Our success is largely dependent upon the continued service, availability and performance of key personnel, including our Chief Executive
Officer, senior management team and other highly skilled personnel, particularly in product development, product strategy and sales. We
believe that there is, and will continue to be, intense competition for qualified personnel in the telecommunication and software industries,
and there is no assurance that we will be able to attract, motivate and retain the personnel necessary for the management and development
of our business. Turnover, particularly among senior management, can also create distractions as we search for replacement personnel,
which could result in significant recruiting, relocation, training and other costs, and can cause operational inefficiencies as replacement
personnel become familiar with our business and operations. In addition, manpower in certain areas may be constrained, which could
lead to disruptions over time. The elimination or reconfiguration of employee responsibilities could impact retention decisions by key
executives and personnel. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been
improperly solicited, that they have divulged proprietary or other confidential information, or that their former employers own their
inventions or other work product. Moreover, the loss of these key employees, particularly to a competitor, some of which may be in a
position to offer greater compensation, and any resulting loss of customers could reduce our market share and diminish our brands.

In order to grow our software revenue and bookings and maintain our wireless revenue and subscribers we are dependent on our
ability to effectively manage our employee base in sales and marketing to achieve our sales productivity goals.

Growth in our software revenue and bookings and maintenance of our wireless revenue and subscriber base is dependent on the productivity
of our sales organization. From time to time it may be necessary to reorient our sales representatives to focus on specific market segments,
product lines or new software solutions or to remove underperforming individuals which may require additional resources to maintain
productivity. The impact of these changes could adversely impact our ability to achieve our sales productivity goals. We have also identified
the following risks that could impact our sales productivity:

•

Customer Dissatisfaction and Spok's Reputation - We may experience customer dissatisfaction with our solutions that could
result in lost opportunities for sales. Potential low ratings of our solutions may negatively impact our perception by future
prospects. In addition, fewer references for our solutions could impact our ability to prospect new sales.
Training - Training of our marketing and sales personnel as to the clinical requirements of our healthcare customers and the
complexity of our service offerings, takes time and requires a substantial, continuing investment in new hires as well as long
term employees.
Competitive Speed - Sales productivity can be impacted by the capabilities of our competitors. There is a risk that competitors
can innovate or partner faster than we do to deliver a unified communications platform.
Employee Retention - The impact of the elements noted above can challenge the ability of employees to make sales. This is
tough on morale and can affect employee retention.

We may experience a long sales cycle for our software products.

Our software revenue growth results from a long sales cycle that from initial contact to final sales order may take six to 18 months
depending on the type of software solution. Our software sales and marketing efforts involve educating our customers on the technical
capabilities of our software solutions and the potential benefits from the deployment of our software, as well as educating ourselves as
to the clinical needs of our customers. The inherent unpredictability of decision making resulting from customer budget constraints,
multiple approvals and administrative issues may result in fluctuating bookings and revenue from month to month, quarter to quarter and
year to year. Our bookings and corresponding revenue are dependent on actions that have occurred in the past. Each month we need to
spend substantial time, effort, and expense on our marketing and sales efforts that may not result in future revenue.

Undetected defects or bugs in our products could adversely affect the market acceptance of new products, damage our reputation
with current or prospective customers, and materially and adversely affect our operating costs.

Software products, such as those we offer, may contain defects and bugs when they are first introduced or as new versions are released,
or their release may be delayed due to unforeseen difficulties during product development. If any of our products, including products of
companies we have acquired, or third-party components used in our products, contain defects or bugs, or have reliability, quality or
compatibility problems, we may not be able to successfully design workarounds. Any defects we do not detect and fix in pre-release
testing could cause reduced sales and revenue, damage to our reputation, repair or remediation costs, delays in the release of new products
or versions, or legal liability. There can be no assurance that provisions in our license agreements that limit our exposure to liability will
be sufficient or withstand legal challenge.

Service to our customers could be adversely impacted by network rationalization.

We have an active program to consolidate the number of networks and related transmitter locations, which is referred to as network
rationalization. Network rationalization is necessary to match our technical infrastructure to our smaller subscriber base and to reduce
both site rent and telecommunication costs. The implementation of the network rationalization program could adversely impact service
to our existing subscribers, and there can be no assurance that any efforts to minimize that impact would be successful. This adverse
impact could increase the rate of gross subscriber cancellations and/or the level of wireless revenue erosion. Adverse changes in gross
subscriber cancellations and/or revenue erosion could have a material adverse effect on our business, financial condition and results of
operations.

We may be unable to find vendors able to supply us with paging equipment based on future demands.

We purchase paging equipment from third party vendors. This equipment is sold or leased to customers in order to provide wireless
messaging services. The reduction in industry demand for paging equipment has caused various suppliers to cease manufacturing this
equipment. There can be no assurance that we can continue to find vendors to supply paging equipment, or that the vendors will supply
equipment at costs that allow us to remain a competitive alternative in the wireless messaging industry. A lack of paging equipment could
impact our ability to provide certain wireless messaging services and could have a material adverse effect on our business, leading to
further wireless revenue erosion.

We may be unable to maintain successful relationship with our channel partners.

We use channel partners such as resellers, consulting firms, original equipment manufacturers, and technology partners to license and
support our products. We rely, to a significant degree, on each of our channel partners to select, screen and maintain relationships with
its distribution network and to distribute our offerings in a manner that is consistent with applicable law and regulatory requirements and
our quality standards. Contract defaults by any of these channel partners or the loss of our relationships with them may materially adversely
affect our ability to develop, market, sell, or support our communication solution offerings. If our indirect distribution channel is disrupted,
we may be required to devote more resources to distribute our offerings directly and support our customers, which may not be as effective
and could lead to higher costs, reduced revenue and growth that is slower than expected.

Recruiting and retaining qualified channel partners and training them in the use of our enterprise technologies requires significant time
and resources. If we fail to devote sufficient resources to support and expand our network of channel partners, our business may be
adversely affected. In addition, because we rely on channel partners for the indirect distribution of our enterprise technologies, we may
have little or no contact with the ultimate end-users of our technologies, thereby making it more difficult for us to establish brand awareness,
ensure proper delivery and installation of our software, support ongoing customer requirements, estimate end-user demand, respond to
evolving customer needs and obtain subscription renewals from end-users.

We may be unable to realize the benefits associated with our deferred income tax assets.

We have significant deferred income tax assets that are available to offset future taxable income and increase cash flows from operations.
The use of these deferred income tax assets is dependent on the availability of taxable income in future periods. The availability of future
taxable income is dependent on our ability to profitably manage our operations to support a growing base of software revenue offset by
declining wireless subscribers and revenue. To the extent that anticipated reductions in operating expenses do not occur or sufficient
revenue is not generated, we may not achieve sufficient taxable income to allow for use of our deferred income tax assets. The accounting
for deferred income tax assets is based upon an estimate of future results, and any valuation allowance we may apply to our deferred tax
assets may be increased or decreased as conditions change or if we are unable to implement certain tax planning strategies. If we are
unable to use these deferred income tax assets, our financial condition and statement of operations may be materially affected. In addition,
a significant portion of our deferred income tax assets relate to net operating losses. If our ability to utilize these losses is limited, due to
Internal Revenue Code (“IRC”) Section 382, our financial condition and statement of operations may be materially affected.

Our wireless products are regulated by the FCC and, to a lesser extent, state and local regulatory authorities. Changes in
regulation could result in increased costs to us and our customers.

We are subject to regulation by the FCC and, to a lesser extent, by state and local authorities. Changes in regulatory policy could increase
the fees we must pay to the government or to third parties, and could subject us to more stringent requirements that could cause us to
incur additional capital and/or operating costs. To the extent additional regulatory costs are passed along to customers, those increased
costs could adversely impact subscriber cancellations.

For example, the FCC issued an order in October 2007 that mandated paging carriers (including the Company) along with all other CMRS
providers serving a defined minimum number of subscribers to maintain an emergency back-up power supply at all cell sites to enable
operation for a minimum of eight hours in the event of a loss of commercial power (the “Back-up Power Order”). Ultimately, after a
hearing by the DC Circuit Court and disapproval by the Office of Management and Budget (the “OMB”) of the information collection
requirements of the Back-Up Power Order, the FCC indicated that it would not seek to override the OMB’s disapproval. Rather the FCC
indicated that it would issue a Notice of Proposed Rulemaking with the goal of adopting revised back-up power rules. To date, there has
been no Notice of Proposed Rulemaking by the FCC and we are unable to predict what impact, if any, a revised back-up power rule could
have on our operations, cash flows, ability to continue payment of cash dividends to stockholders, and ability to repurchase shares of our
common stock.

As a further example, the FCC continues to consider changes to the rules governing the collection of universal service fees. The FCC is
evaluating a flat monthly charge per assigned telephone number as opposed to assessing universal service contributions based on
telecommunication carriers’ interstate revenue. There is no timetable for any rulemaking to implement this numbers-based methodology.
If the FCC adopts a numbers-based methodology, our attempt to recover the increased contribution costs from our customers could
significantly diminish demand for our services, and our failure to recover such increased contribution costs could have a material adverse
impact on our business, financial condition and results of operations.

Certain of our software products are regulated by the FDA. The application of or changes in regulations could impact our ability
to market new or revised software products to our customers.

Certain of our software products are regulated by the FDA as medical devices. The classification of our software products as medical
devices means that we are required to comply with certain registration and listing, labeling, medical device reporting, removal and
correction, and good manufacturing practice requirements. Updates to these products or the development of new products could require
us to seek clearance from the FDA before we are permitted to market or sell these software products. In addition, changes to FDA
regulations could impact existing software products or updates to existing products. The impact of delays in FDA clearance or changes
to FDA regulations could impact our ability to market or sell our software products and could have a material adverse effect on our
software sales, financial condition and results of operations, including our continued ability to remain profitable, produce positive operating
cash flow, pay cash dividends to stockholders and repurchase shares of our common stock.

We have investigated potential acquisitions and may not be able to identify an opportunity at favorable terms or have the ability to
close on financing necessary to consummate the transaction.

We cannot provide any assurances that we will be successful in finding such acquisitions or consummating future acquisitions on favorable
terms. We anticipate that our acquisitions will be financed through a combination of methods, including but not limited to the use of
available cash on hand, and, if necessary, borrowings from third party financial institutions. Disruptions in credit markets and an
unwillingness to lend may limit our ability to finance acquisitions.

We have investigated potential acquisitions and may be unable to successfully integrate such acquisitions into our business and
may not achieve all or any of the operating synergies or anticipated benefits of those acquisitions.

We continue to evaluate acquisitions of other businesses where we believe such acquisitions will yield increased cash flows, improved
market penetration and/or identified operating efficiencies and synergies. We may face various challenges with our integration efforts,
including the combination and simplification of product and service offerings, sales and marketing approaches and establishment of
combined operations.

We may have limited or no history of owning and operating any business that we acquire. If we were to acquire these businesses, there
can be no assurance that:

•
•
•

•

such businesses will perform as expected;
such businesses will not incur unforeseen obligations or liabilities;
such businesses will generate sufficient cash flow to support the indebtedness, if incurred, to acquire them or the expenditures
needed to develop them; and/or
the rate of return from such businesses will justify the decision to invest the capital to acquire them.

There can be no assurance that we will manage these challenges and risks successfully. Moreover, if we are not successful in completing
transactions that we have pursued or may pursue, our business may be adversely affected, and we may incur substantial expenses and
divert significant management time and resources. In addition, in pursuing and completing such transactions, we could use substantial
portions of our available cash as all or a portion of the purchase price for these transactions or as retention incentives to employees of
the acquired business, or we may incur substantial debt. We could also issue additional securities as all or a portion of the purchase price
for these transactions or as retention incentives to employees of the acquired business, which could cause our stockholders to suffer
significant dilution. Any transaction may not generate additional revenue or profit for us, or may take longer to do so than expected,
which may adversely affect our business, financial condition, operating results and cash flows.

We may experience litigation claiming intellectual property infringement by us, and we may not be able to protect our rights in
intellectual property that we own and develop.

Intellectual property infringement litigation has become commonplace, particularly in the wireless and software industries in which we
operate. This litigation can be protracted, expensive, and time consuming. There is no assurance that we will remain immune to this type
of predatory litigation. Any such claims, whether meritorious or not, could be time consuming and costly in terms of both resources and
management time.

Third parties may claim we infringe their intellectual property rights. We may receive claims that we have infringed the intellectual
property rights of others, including claims regarding patents, copyrights, and trademarks. As noted below in Part I, Item 3, on February
1, 2018, GroupChatter, LLC filed a complaint against us in the U.S. District Court for the Eastern District of Texas, Civ. A. No. 6:18-
cv-00048, alleging that we have infringed four U.S. patents. The number and types of these claims may grow as a result of constant
technological change in the segments in which our wireless services and software products compete, the extensive patent coverage of
existing technologies, and the rapid rate of issuance of new patents.

Third parties may claim we infringe their intellectual property rights. We may receive claims that we have infringed the intellectual
property rights of others, including claims regarding patents, copyrights, and trademarks. The number of these claims may grow as a
result of constant technological change in the segments in which our software products compete, the extensive patent coverage of existing
technologies, and the rapid rate of issuance of new patents.

Our patents, trademarks, copyrights and trade secrets relating to our wireless services and networks, and our software solutions, are
important assets. The efforts we undertake to protect our proprietary rights may not be sufficient or effective. Any significant impairment
to our intellectual property rights could harm our business and our ability to compete effectively. Protecting our intellectual property
rights can be costly and time consuming.

We seek to maintain certain of our intellectual property rights as trade secrets, including the source code for many of our software solutions
and innovations. Our source code and system architecture may be reverse engineered by our competitors, or the secrecy of our solutions
and designs could be compromised through a security breach or otherwise, or by our employees or former employees, intentionally or
accidentally. Any compromise of our trade secrets could cause us to lose any competitive advantage our software solutions have and the
investment we have made in developing our products and services.

Our portfolio of issued patents and copyrights may be insufficient to defend ourselves against intellectual property infringement claims,
and the validity and scope of our patents could be challenged by third parties were we to seek to enforce them.

We may encounter issues with privacy and security of personal information.

A substantial portion of our revenue comes from healthcare customers. As part of our business, we (or third parties with whom we contract)
may receive, store and process our data, as well as our customers’ and partners’ private data and personal information. As such, our
business is subject to a variety of federal, state and international laws and regulations that apply to the collection, use, retention, protection,
disclosure, transfer and processing of personal data.

Our software solutions may handle or have access to personal health information subject in the United States to HIPAA, HITECH and
related regulations as well as legislation and regulations in foreign countries. These statutes and related regulations impose numerous
requirements regarding the use and disclosure of personal health information with which we and our software solutions must comply.
Our failure to accurately anticipate or interpret these complex and technical laws and regulations could subject us to civil and/or criminal
liability. Such failure could adversely impact our ability to market and sell our software solutions to healthcare customers, and have a
material adverse impact on our software sales.

In addition, customers may use our wireless services to transmit patient health information subject to HIPAA and other regulatory
requirements. While we offer encrypted pagers to our customers, many customers use pager devices provided by us that do not encrypt
text messages. While we disclaim liability for customer non-compliance with HIPAA and other privacy requirements, there remains
some risk we could be held responsible for privacy violations by our customers.

There can be no assurance that the security and testing measures we take relating to our offerings and operations will prevent all security
breaches and data loss that could harm our business or the businesses of our customers and partners. These risks may increase as we
continue to grow our services and offerings and as we receive, store and process more of our customers’ data. Actual or perceived
vulnerabilities may lead to regulatory investigations, claims against us by customers, partners or other third parties, or costs, such as
those related to providing customer notifications and fraud monitoring. There can be no assurance that any provisions in our customer
agreements limiting our liability will be enforceable or effective under applicable law. In addition, the cost and operational consequences
of implementing further data protection measures could be significant.

The data privacy- and protection-related laws and regulations to which we subject are evolving, with new or modified laws and regulations
proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. Any failure by us to
comply with data privacy- and protection-related laws and regulations could result in enforcement actions, significant penalties or other
legal actions against us or our customers or suppliers. An actual or alleged failure to comply, which could result in negative publicity,
reduce demand for our offerings, increase the cost of compliance, require changes in business practices that result in reduced revenue,
restrict our ability to provide our offerings in certain locations, result in our customers’ inability to use our offerings and prohibit data
transfers or result in other claims, liabilities or sanctions, including fines, could have an adverse effect on our business, financial condition,
operating results and cash flows.

System disruptions and security threats to our computer networks, satellite control or telecommunications systems could have a
material adverse effect on our business.

The performance and reliability of our computer network and telecommunications systems infrastructure, as well as the technology
infrastructure of third parties, is critical to our operations. This technology infrastructure may be vulnerable to damage or interruption
from natural disasters, power loss, telecommunication failures, terrorist attacks, software errors and other events. Any computer system
or satellite network error or failure, regardless of cause, could result in a substantial outage that materially disrupts our operations. In
addition, we face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code,
organized cyber-attacks and other security problems and system disruptions. Our satellite network connections for our wireless services
depend upon VSAT terminals, many of which are based on decades-old technology or equipment that could fail resulting in a loss of
service to our customers. With respect to our Enterprise Reporting and Management systems and data storage we rely on third party
data centers and services with whom we are dependent for maintaining accessibility, reliability and uninterrupted connectivity.

Our satellite network connections for our wireless services depend upon VSAT terminals, many of which are based on decades-old
technology or equipment that could fail resulting in a loss of service to our customers. With respect to our Enterprise Reporting and
Management systems and data storage we rely on third party data centers and services with whom we are dependent for maintaining
accessibility, reliability and uninterrupted connectivity.

A significant number of the systems making up this infrastructure are not redundant, and our disaster recovery planning may not be
sufficient for every eventuality. We may not carry business interruption insurance sufficient to protect us from all losses that may result
from interruptions in our services as a result of technology infrastructure failures or to cover all contingencies. We may be required to
expend significant resources to protect against the threat of these system disruptions or to alleviate problems caused by these disruptions.
Any interruption in the availability of our websites and on-line interactions with customers or partners may cause a reduction in customer
or partner satisfaction levels, which in turn could cause additional claims, reduced revenue or loss of customers or partners. There can
be no assurance that any precautions we may take will prove successful, and such problems could result in, among other consequences,
a loss of data, loss of confidence in the stability and reliability of our offerings, damage to our reputation, and legal liability, all of which
may adversely affect our business, financial condition, operating results and cash flows.

Unauthorized breaches or failures in cybersecurity measures adopted by us and/or included in our products and services could have
a material adverse effect on our business.

Our security systems are designed to maintain the physical security of our facilities and protect our customers’, suppliers’ and employees’
confidential information, as well as our own proprietary information. However, we are also dependent on a number of third-party providers
of critical corporate infrastructure services relating to, among other things, human resources, electronic communication services and
certain finance functions, and we are, of necessity, dependent on the security systems of these providers. Accidental or willful security
breaches or other unauthorized access by third parties or our employees or contractors of our facilities, our information systems or the
systems of our third party providers, or the existence of computer viruses or malware in our or their data or software could expose us to
a risk of information loss and misappropriation of proprietary and confidential information, including information relating to our products
or customers and the personal information of our employees. We utilize a costly, multilayered security framework including detailed
security policies and procedures, security appliances and software, third party vulnerability testing and detailed Business Continuity Plans
that could be disrupted at any time.

In addition, we have, from time to time, also been subject to unauthorized network intrusions and malware on our own IT networks. Any
theft or misuse of confidential, personal or proprietary information as a result of such activities could result in, among other things,
unfavorable publicity, damage to our reputation, loss of our trade secrets and other competitive information, difficulty in marketing our
products, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible
financial obligations for liabilities and damages related to the theft or misuse of such information, as well as fines and other sanctions
resulting from any related breaches of data privacy regulations, any of which could have a material adverse effect on our reputation,
business, profitability and financial condition. Since the techniques used to obtain unauthorized access or to sabotage systems change
frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement
adequate preventative measures.

General economic conditions that are largely out of our control may adversely affect our financial condition and statement of
operations.

Our business is sensitive to changes in general economic conditions, both in the United States and foreign markets. Recessionary economic
cycles, higher interest rates, inflation, higher levels of unemployment, higher tax rates and other changes in tax laws, or other economic
factors that may affect business spending or buying habits could adversely affect the demand for our services. This adverse impact could
increase the rate of gross subscriber cancellations and/or the level of revenue erosion.

A significant portion of our revenue is derived from healthcare customers and we are impacted by changes in the healthcare economic
environment. The healthcare industry is highly regulated and is subject to changing political, legislative, regulatory, and other economic
developments. These developments can have a dramatic effect on the decision-making and the spending by our customers for information
technology and software. This economic uncertainty can add to the unpredictability of decision-making and lengthen our sales cycle.

Further, the consequences of the implementation of changes to healthcare reform legislation continue to impact both the economy in
general and the healthcare market in particular. The uncertainty created by possibility of changes to the legislation is impacting customer
decision making and information technology plans in our key healthcare market. We are unable to predict the full consequences of this
uncertainty on our operations. Adverse changes in the economic environment could adversely impact our ability to market and sell our
wireless and software solutions to healthcare customers.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We had no unresolved SEC staff comments as of March 1, 2018.

ITEM 2. PROPERTIES

Our corporate headquarters is located in Springfield, Virginia, and consists of approximately 18,000 square feet of space under a lease
that expires on March 31, 2021. At December 31, 2017, we leased facility space, including our executive headquarters, sales offices,
technical facilities, warehouse and storage facilities in 67 locations in 30 states in the United States, one facility in Australia and one
facility in the Middle East. The total leased space is approximately 172,000 square feet. At December 31, 2017, we owned three small
parcels of land in three states in the United States.

At December 31, 2017, we leased transmitter sites on commercial broadcast towers, buildings and other fixed structures in approximately
3,369 locations throughout the United States. These leases are for our active transmitters and are for various terms and provide for periodic
lease payments at various rates.

At December 31, 2017, we had 4,030 active transmitters on leased sites which provide service to our customers.

ITEM 3. LEGAL PROCEEDINGS

We are involved, from time to time, in lawsuits arising in the normal course of business. We believe these pending lawsuits will not have
a material adverse impact on our financial condition or results of operations.

On February 1, 2018, we learned of a complaint filed naming us and our subsidiary, Spok, Inc., as defendants in GroupChatter, LLC v.
Spok Holdings, Inc., et. al., Civ. A. No. 6:18-cv-00048, U.S. District Court for the Eastern District of Texas, alleging infringement of
U.S. Patent Nos. 7,969,959; 9,699,637; 9,615,239; and 9,294,888. We are evaluating the allegations asserted in this complaint and intend
to defend against the claims vigorously. At this time we are unable to predict the outcome of this litigation, though we do not believe it
will have a material adverse effect on our financial condition.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES

Market Information

Our sole class of common equity is our $0.0001 par value common stock, which is listed on the NASDAQ National Market® and is traded
under the symbol “SPOK.”

The following table sets forth the high and low sales prices per share of our common stock, based on the last daily sale, for the periods
indicated, which correspond to our quarterly fiscal periods for financial reporting purposes. Prices for our common stock are as reported
on the NASDAQ National Market® from January 1, 2016 through December 31, 2017.

For the Three Months Ended
March 31,
June 30,
September 30,
December 31,

Holders of Common Stock

2017

2016

High

Low

High

Low

22.40
19.95
18.00
18.45

17.50
16.65
14.50
15.50

18.01
19.29
20.56
21.30

15.85
16.17
16.34
16.40

As of February 23, 2018, there were 3,180 holders of record of our common stock.

Dividends

The Company declared dividends totaling $10.3 million and $15.8 million during 2017 and 2016, respectively, and expects to pay dividends
of $0.125 per common share each quarter, subject to declaration by the Board of Directors, in 2018. Cash dividends declared for the years
ended December 31, 2017 and 2016, respectively, include dividends related to unvested restricted stock units (“RSUs”) and shares of
unvested restricted common stock (“restricted stock”) granted under the Spok Holdings, Inc. Equity Incentive Plan (“Equity Plan”) to
executives and non-executive members of our Board of Directors. Cash distributions on RSUs and restricted stock are accrued and paid
when the applicable vesting conditions are met. Accrued cash distributions on forfeited RSUs and restricted stock are also forfeited.

The following table details information on our dividends declared and cash distributions since the formation of the Company through
the year ended December 31, 2017:

Year

2005
2006(2)
2007(3)
2008(4)
2009(3)
2010(3)
2011
2012(5)
2013
2014
2015(6)
2016(7)
2017

Dividends Declared
Per Share
Amount

Total
Payment

(1)

(Dollars in
thousands)

1.500
3.650
3.600
1.400
2.000
2.000
1.000
0.750
0.500
0.500
0.625
0.750
0.500
18.775

$
$

40,691
98,904
98,250
39,061
45,502
44,234
22,121
16,512
12,312
10,826
13,333
10,287
15,234
467,267

Total
(1) The total payment reflects the cash distributions paid in relation to common stock, vested RSUs and vested shares of restricted stock.
(2) On August 8, 2006, we announced the adoption of a regular quarterly cash distribution of $0.65 per share of common stock.
(3) The cash distribution includes an additional special one-time cash distribution to stockholders of $1.00 per share of common stock.
(4) On May 2, 2008, our Board of Directors reset the quarterly cash distribution rate to $0.25 per share of common stock from $0.65 per share of

common stock.

(5) On July 30, 2012, our Board of Directors reset the quarterly cash distribution rate to $0.125 per share of common stock from $0.25 per share

of common stock.

(6) The cash distribution includes an additional special one-time cash distribution to stockholders of $0.125 per share of common stock.
(7) The per share amount includes a special one-time dividend of $0.25 per share of common stock declared in 2016 but payable to stockholders

in 2017.

On February 28, 2018, our Board of Directors declared a regular quarterly cash dividend of $0.125 per share of common stock, with a
record date of March 16, 2018, and a payment date of March 30, 2018. This cash dividend of approximately $2.6 million is expected to
be paid from available cash on hand.

Performance Graph

We began trading on the NASDAQ National Market® on November 17, 2004. The chart below compares the relative changes in the
cumulative total return of our common stock for the period December 31, 2012 to December 31, 2017, against the cumulative total return
of the NASDAQ Composite Index®, the NASDAQ Telecommunications Index® and the S&P Health Care Technology Index for the same
period.

The chart below assumes that on December 31, 2012, $100 was invested in our common stock and in each of the indices. The comparisons
assume that all cash distributions were reinvested. The chart indicates the dollar value of each hypothetical $100 investment based on
the closing price as of the last trading day of each fiscal year from December 31, 2012 to December 31, 2017.

Spok Holdings, Inc.

NASDAQ Composite Index

NASDAQ Telecommunications Index

S&P Health Care Technology Index

2012

2013

2014

2015

2016

100.00

126.80

159.28

174.22

205.77

December 31,

100.00

141.63

141.28

143.59

162.09

145.43

166.56

173.33

140.97

155.00

187.19

150.94

122.02

2017

159.80

242.29

184.81

173.60

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table presents information with respect to common stock repurchased by us (excluding the purchase of common stock for
tax withholdings) during the year ended December 31, 2017.

For the Three Months Ended

March 31, 2017

June 30, 2017

September 30, 2017

December 31, 2017

Total Number
of Shares
Purchased

Average
Price Paid
Per Share(1)

Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs

Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Publicly
Announced Plans or
Programs(2)
(Dollars in thousands)

— $

—

572,550

17.47

— $

—

572,550

—

10,000

—

Total
(1) Average price paid per share excludes commissions of approximately $23,000.
(2) On April 26, 2017 the Board of Directors authorized the repurchase of up to $10.0 million of the Company's common stock through December 31,
2017.

572,550

17.47

Repurchased shares of our common stock were accounted for as a reduction to common stock and additional paid-in-capital in the period
in which the repurchase occurred. On February 28, 2018 the Company's Board of Directors reset the repurchase authority under the share
repurchase program to $10.0 million which is set to expire on December 31, 2018.

Transfer Restrictions on Common Stock

In order to reduce the possibility that certain changes in ownership could impose limitations on the use of our deferred income tax assets,
our Amended and Restated Certificate of Incorporation contains provisions that generally restrict transfers by or to any 5% stockholder
of our common stock or any transfer that would cause a person or group of persons to become a 5% stockholder of our common stock.
After a cumulative indirect shift in ownership of more than 45% since our emergence from bankruptcy proceedings in May 2002 through
a transfer of our common stock, any transfer of our common stock by or to a 5% stockholder of our common stock or any transfer that
would cause a person or group of persons to become a 5% stockholder of such common stock, will be prohibited unless the transferee
or transferor provides notice of the transfer to us and our Board of Directors determines in good faith that the transfer would not result
in a cumulative indirect shift in ownership of more than 47%.

Prior to a cumulative indirect ownership change of more than 45%, transfers of our common stock will not be prohibited, except to the
extent that they result in a cumulative indirect shift in ownership of more than 47%, but any transfer by or to a 5% stockholder of our
common stock or any transfer that would cause a person or group of persons to become a 5% stockholder of our common stock requires
notice to us. Similar restrictions apply to the issuance or transfer of an option to purchase our common stock, if the exercise of the option
would result in a transfer that would be prohibited pursuant to the restrictions described above. These restrictions will remain in effect
until the earliest of (1) the repeal of IRC Section 382 (or any comparable successor provision) and (2) the date on which the limitation
amount imposed by IRC Section 382 in the event of an ownership change would not be less than the tax attributes subject to these
limitations. Transfers by or to us and any transfer pursuant to a merger approved by our Board of Directors or any tender offer to acquire
all of our outstanding stock where a majority of the shares have been tendered will be exempt from these restrictions.

Based on publicly available information and after considering any direct knowledge we may have, our combined cumulative change in
ownership was an insignificant amount as of December 31, 2017 and 2016.

ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with “Item 7. Management’s Discussion and Analysis
of Financial Condition and Statement of Operations” (“MD&A”), the consolidated financial statements and notes thereto, and other
financial information appearing elsewhere in this 2017 Form 10-K.

Statements of Operations Data:

Revenues

Operating expenses

Operating income

Net (loss) income

Basic and diluted net (loss) income per common share

Cash dividends declared per common share

Balance Sheets Data:

Current assets

Total assets

Long-term debt

Long-term liabilities, excluding deferred revenue

Stockholders’ equity

For the Year Ended December 31,

2017

2016

2015

2014

2013

(Dollars in thousands except per share amounts)

171,175

179,561

189,628

160,469

157,408

164,528

10,706
(15,306)
(0.76)
0.50

22,153

13,979

0.68

0.75

25,100

80,246

3.74

0.625

200,273

172,122

28,151

20,745

0.96

0.50

209,752

164,258

45,494

27,530

1.27

0.50

December 31,

2017

2016

2015

2014

2013

(Dollars in thousands)

146,860

155,862

141,613

142,761

116,779

350,561

388,087

386,433

337,890

326,898

—

8,075

—

8,921

—

8,972

—

8,131

—

9,259

290,529

322,087

329,564

279,059

269,950

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND STATEMENT OF

OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes and the
discussion under “Organization and Significant Accounting Policies” (refer to Note 1), which describes key estimates and assumptions
we make in the preparation of our consolidated financial statements; the cautionary language that appears under the title "Forward Looking
Statements" immediately following the Table of Contents;“Item 1. Business,” which describes our operations; and “Item 1A. Risk
Factors,” which describes key risks associated with our operations and markets in which we operate. A reference to a “Note” in this
section refers to the accompanying Notes to Consolidated Financial Statements.

Overview and Highlights

We are a comprehensive provider of critical communication solutions for enterprises. We offer a suite of unified critical communication
solutions that include call center operations, clinical alerting and notifications, one-way and advanced two-way wireless messaging
services, mobile communications and public safety response. Our customers rely on Spok for workflow improvement, secure texting,
paging services, contact center optimization and public safety response. Our product offerings are capable of addressing a customer’s
mission critical communications needs. We develop, sell and support enterprise-wide systems for healthcare and other organizations
needing to automate, centralize and standardize their approach to critical communications. Our solutions can be found in prominent
hospitals; large government agencies; leading public safety institutions, colleges and universities; large hotels, resorts and casinos; and
well-known manufacturers. Our primary market has been the healthcare industry, particularly hospitals. We have identified hospitals with
200 or more beds as the primary targets for our software and wireless solutions.

Revenue generated by wireless messaging services (including voice mail, personalized greeting, message storage and retrieval) and
equipment loss and/or maintenance protection to both one-way and two-way messaging subscribers is presented as wireless revenue in
our statements of operations. Revenue generated by the sale of our software solutions, which includes software license, professional
services (installation, consulting and training), equipment procured by us from third parties (to be used in conjunction with our software)
and post-contract support (on-going maintenance), is presented as software revenue in our statements of operations. Our software is
licensed to end users under an industry standard software license agreement.

2017 Highlights

Net sales declined by 4.7% or $8.4 million during 2017 compared to 2016, driven primarily by a continued and expected decline in
wireless revenue while software revenue remained relatively flat for the same period. This is a $1.7 million improvement in the decrease
of consolidated revenues period over period as compared to the year ended December 31, 2016. We continue to see a trend in wireless
revenue as the decline year over year has decreased for the past five consecutive years. Our operating expenses increased by 1.9% or
$3.1 million during 2017 compared to 2016, driven primarily by our continued investment in the development of Spok Care Connect
and the related research and development costs. While we expect research and development will continue to be an area of focus going
into 2018, we do anticipate those costs will begin to level off. As future sales related to our research and development efforts begin to
materialize we expect those costs will decrease as a percentage of total revenues and begin to return to normalized levels.We returned
approximately $20.3 million of capital to stockholders in the form of cash dividends and share repurchases.

2016 Highlights

Net sales declined by 5.3% or $10.1 million during 2016 compared to 2015, driven primarily by a continued and expected decline in
wireless revenue while software revenue decreased slightly for the same period. Our operating expenses declined by 4.3% or $7.1 million
during 2016 compared to 2015, driven primarily by reduction in all functional categories partially offset by an increase in research and
development expenses attributable to our continued investment in the development of Spok Care Connect. We returned approximately
$22.0 million of capital to our stockholders in the form of cash dividends and share repurchases which includes the special dividend
declared in December 2016 but was paid in January 2017.

Wireless Revenue

Wireless revenue consists of two primary components: Paging revenue and product and other revenue. Paging revenue consists primarily
of recurring fees associated with the provision of messaging services and fees for paging devices and is net of a provision for service
credits. Product and other revenue reflects system sales, the sale of devices and charges for paging devices that are not returned and are
net of anticipated credits. Our core offering includes subscriptions to one-way or two-way messaging services for a periodic (monthly,
quarterly, semiannual, or annual) service fee. This is generally based upon the type of service provided, the geographic area covered, the
number of devices provided to the customer and the period of commitment. A subscriber to one-way messaging services may select
coverage on a local, regional or nationwide basis to best meet their messaging needs. Two-way messaging is generally offered on a
nationwide basis. In addition, subscribers either contract for a messaging device from us for an additional fixed monthly fee or they own
a device, having purchased it either from us or from another vendor. We also sell devices to resellers who lease or resell devices to their
subscribers and then sell messaging services utilizing our networks. We offer ancillary services, such as voicemail and equipment loss
or maintenance protection, which help increase the monthly recurring revenue we receive along with these traditional messaging services.
In 2015 and 2016 we launched new and exclusive one-way (T5) and two-way (T52) alphanumeric pagers, respectively. Both pagers are
configurable to support un-encrypted or encrypted operation. When configured for encryption, they utilize AES-128 bit encryption, screen
locking and remote wipe capabilities. With encryption enabled these new secure paging devices enhance our service offerings to the
healthcare community by adding Health Insurance Portability and Accountability Act ("HIPAA") security capabilities to the low cost,
highly reliable and availability benefits of paging. (See Item 1. “Business” for more details.)

Software Revenue

Software revenue consists of two primary components: operations revenue and maintenance revenue. Operations revenue consists of
license revenue, professional services revenue, and equipment revenue. Maintenance revenue is for ongoing support of a software
application or equipment (typically for one year). We recognize equipment revenue when it is shipped or delivered to the customer
depending on the delivery method of Free on Board ("FOB") shipping or FOB destination, respectively. License, professional services
and maintenance revenue is recognized ratably over the longer of the period of professional services delivery to the customer or the
contractual term of the maintenance agreement. If the period of delivery to the customer is not known, license and professional services
revenue will be recognized when software and professional services are fully delivered to the customer and the maintenance revenue will
be recognized ratably over the remaining contractual term of the agreement.

Operations - Consolidated

Our operating expenses are presented in functional categories. Certain of our functional categories are especially important to overall
expense control and management. These operating expenses are categorized as follows:

•

Cost of revenue. These are expenses primarily for hardware, third-party software, outside service expenses and payroll and
related expenses for our professional services, logistics, customer support and maintenance staff.
Research and Development. These expenses relate primarily to the development of new software products and the ongoing
maintenance and enhancement of existing products. This classification consists primarily of employee payroll and related
expenses, outside services related to the design, development, testing and enhancement of our solutions and to a lesser extent
hardware equipment.
Service, rental and maintenance. These are expenses associated with the operation of our paging networks. Expenses consist
largely of site rent expenses for transmitter locations, telecommunication expenses to deliver messages over our paging networks,
and payroll and related expenses for our engineering and pager repair functions. We actively pursue opportunities to consolidate
transmitters and other service, rental and maintenance expenses in order to maintain an efficient network while simultaneously
ensuring adequate service for our customers. We believe continued reductions in these expenses will occur as our networks
continue to be consolidated for the foreseeable future.
Selling and marketing. The sales and marketing staff are involved in selling our communication solutions primarily in the United
States. These expenses support our efforts to maintain gross placements of units in service, which mitigated the impact of
disconnects on our wireless revenue base, and to identify business opportunities for additional or future software sales. We have
a centralized marketing function, which is focused on supporting our products and vertical sales efforts by strengthening our
brand, generating sales leads and facilitating the sales process. These marketing functions are accomplished through targeted
email campaigns, webinars, regional and national user conferences, monthly newsletters and participation at industry trade
shows. Expenses consist largely of payroll and related expenses, commissions and other costs such as travel and advertising
costs.
General and administrative. These are expenses associated with information technology and administrative functions which
includes finance and accounting, human resources and executive management. This classification consists primarily of payroll
and related expenses, outside service expenses, taxes, licenses and permit expenses, and facility rent expenses. The Company
reclassified $0.1 million from severance to the general and administrative operating expense classification. Corresponding
reclassifications of $1.4 million and $2.7 million were made to the Consolidated Statement of Operations for the years ended
December 31, 2016 and 2015. The Company had previously reported severance as a separate item on the Consolidated Statement
of Operations.

Results of Operations

The following table is a summary of our Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and
2015.

(Dollars in thousands)
Revenues:

Wireless

Software

Total revenue

Operating expenses:

Cost of revenue

Research and development

Service, rental and maintenance

Selling and marketing

General and administrative

Depreciation, amortization and accretion
Total operating expenses

Operating income

Interest income

Other income

Income before income tax (expense) benefit

Income tax (expense) benefit

Net (loss) income

Supplemental information

FTEs

Active transmitters

2017

Change

2016

Change

2015

$ 101,188

69,987

171,175

(8,402)
16
(8,386)

(7.7)% $ 109,590

— %

69,971

(4.7)% 179,561

$ (9,424)
(643)
(10,067)

(7.9)% $ 119,014

(0.9)%

70,614

(5.3)% 189,628

28,418

31,502

18,702

22,823

47,400

11,624
160,469

(2,231)
5,235
(1,232)
(1,945)
4,573
(1,339)
3,061
(11,447)
444
(409)
(11,412)
(17,873)
$ (15,306) $ (29,285)

(26,865)

11,559

10,706

134

719

(7.3)%

38.9 %

(3.8)%

(7.9)%

10.7 %

30,649

13,467

32,734

24,768

42,827

(10.3)%

12,963
1.9 % 157,408

(51.7)%

22,153

161.5 %

(75.3)%

275

543

(49.7)%

22,971
(8,992)
(209.5)% $ 13,979

198.8 %

(3,202)
3,187
(1,387)
(2,678)
(2,033)
(1,007)
(7,120)
(2,947)
259
(639)
(3,327)
(62,940)
$ (66,267)

(9.5)%

31.0 %

(4.1)%

(9.8)%

(4.5)%

33,851

10,280

34,121

27,446

44,860

13,970
(7.2)%
(4.3)% 164,528

(11.7)%
1,618.
8
(54.1)%

(12.7)%

(116.7)%

25,100

1,182

26,298

53,948

(82.6)% $ 80,246

596

4,030

9
(129)

1.5 %

(3.1)%

587

4,159

(13)
(84)

(2.2)%

(2.0)%

600

4,243

Revenue

The table below details total revenue for the periods stated:

(Dollars in thousands)
Revenue - wireless
Paging revenue
Product and other revenue
Total wireless revenue

Revenue - software
Subscription
License
Services
Equipment

Operations revenue
Maintenance revenue

Total software revenue
Total revenue

2017

Change

2016

Change

2015

$ 97,296
3,892
101,188

$ (7,752)
(650)
(8,402)

(7.4)% $ 105,048
4,542
(14.3)%
(7.7)% 109,590

$ (9,059)
(365)
(9,424)

(7.9)% $ 114,107
(7.4)%
4,907
(7.9)% 119,014

2,303
7,238
17,630
4,147
31,318
38,669
69,987
$ 171,175

191
518
(964)
(1,325)
(1,580)
1,596
16
$ (8,386)

9.0 %
7.7 %
(5.2)%
(24.2)%
(4.8)%
4.3 %
— %

2,112
6,720
18,594
5,472
32,898
37,073
69,971
(4.7)% $ 179,561

431
(3,076)
(243)
(401)
(3,289)
2,646
(643)
$ (10,067)

1,681
25.6 %
9,796
(31.4)%
18,837
(1.3)%
5,873
(6.8)%
36,187
(9.1)%
34,427
7.7 %
(0.9)%
70,614
(5.3)% $ 189,628

The decrease in wireless revenue during 2017 compared to both 2016 and 2015, respectively, reflects the decrease in demand for our
wireless services. Wireless revenue is generally based upon the number of units in service and the monthly Average Revenue Per User
("ARPU"). On a consolidated basis ARPU is affected by several factors, including the mix of units in service and the pricing of the various
components of our services. The number of units in service changes based on subscribers added, referred to as gross placements, less
subscriber cancellations, or disconnects. ARPU for the years ended December 31, 2017, 2016 and 2015 was $7.51, $7.67 and $7.83,
respectively, while total units in service were 1.0 million, 1.1 million and 1.2 million, respectively. While demand for wireless services
continues to decline it has done so at a slower rate for each of the periods presented. While we are encouraged that this trend will continue
in future periods, we believe that demand will continue to decline for the foreseeable future in line with recent and historical trends. As
our wireless products and services are replaced with other competing technologies, such as the shift from narrow band wireless service
offerings to broad band technology services, our wireless revenue will continue to decrease.

The following reflects the impact of subscribers and ARPU on the change in wireless revenue:

Units in Service As of December 31,

Revenue For the Year Ended December 31,

Change Due To:

2017

2016

Change

2017

2016

Change

ARPU

Units

Total

1,049

1,111

(62) $

97,296

(Units in thousands)

(Dollars in thousands)
(7,752) $

$ 105,048

(1,979) $

(5,773)

Units in Service as of December 31,

Revenue For the Year Ended December 31,

Change Due To:

2016

2015

Change

2016

2015

Change

ARPU

Units

Total

1,111

1,173

(62) $ 105,048

(Units in thousands)

(Dollars in thousands)
(9,059) $

$ 114,107

(1,886) $

(7,173)

As demand for one-way and two-way messaging has declined, we have developed or added service offerings such as encrypted paging
and Spok Mobile with a pager number in order to increase our revenue potential and mitigate the decline in our wireless revenue. We
will continue to explore ways to innovate and provide customers the highest value possible.

The decrease in software operations revenue during 2017 when compared to 2016 primarily reflects a decrease in the number and size
of projects completed during 2017 as compared to the same period in 2016. Starting in late 2015, we began a reorganization of the sales
staff and related sales territories, which realigned territories and replaced lower performing sales employees with new staff. The decrease
in operational bookings during 2015 and 2016 also factored into the decrease in operational revenue for the same period. The decrease
in operations revenue during 2016 when compared to 2015 primarily reflects lower sales of software to new customers which was reflected
in the decrease in license revenue.

The continued increase in maintenance revenue for each of the periods stated reflects our continuing success in renewals of our maintenance
support for existing software solutions and in maintenance support for sales of new solutions. The renewal rates for maintenance revenue,
including the annual uplifts, for the years ended December 31, 2017, 2016 and 2015 were in excess of 99%. We achieve very high
maintenance renewal rates compared to many companies that have software offerings, and we may experience a downward trend in
maintenance renewal as communications technology and services continue to advance, and customers have more choices and opportunities
to shift to newer solutions for their communication and work flow needs.

Operating Expenses

Certain immaterial prior period amounts, within individual operating expense categories, have been reclassified to conform to the current
period's presentation. These reclassifications had no effect on the reported results of operations nor did they have any effect on the total
operating expense amounts they are a part of.

Cost of revenue. Cost of revenue consisted primarily of the following items:

Cost of revenue

(Dollars in thousands)
Payroll and related

Cost of sales
Stock based compensation
Other

Total cost of revenue

FTEs

2017

Change

2016

Change

2015

$ 17,806

8,118

179
2,315

$ 28,418

185

(310)
(1,992)
123
(52)
$ (2,231)
4

(1.7)% $ 18,116

(19.7)%

10,110

219.6 %
(2.2)%

56
2,367

(7.3)% $ 30,649

2.2 %

181

990
(3,373)
(78)
(741)
$ (3,202)
(10)

5.8 % $ 17,126

(25.0)%

(58.2)%
(23.8)%

13,483

134
3,108

(9.5)% $ 33,851

(5.2)%

191

Cost of revenue expense decreased for the year ended December 31, 2017 compared to December 31, 2016 primarily due to the reduction
in cost of sales. Of the $2.0 million reduction in cost of sales, $1.2 million was attributable to a decrease in cost of sales directly related
to the decrease in equipment revenue over the same periods and the remaining $0.8 million related to lower average FTE's and reduction
in the usage of third party professional service resources.

Cost of revenue expense decreased for the year ended December 31, 2016 compared to December 31, 2015 primarily due to the reduction
in cost of sales. Of the $3.4 million reduction in cost of sales, $2.6 million was attributable to a decrease in the sale of third party software,
less usage of third party resources for software implementation related work, a reduction in billable travel costs and a one-time charge
of $0.8 million related to adjustments made to our inventory balances in 2015.

Research and development. Research and development consisted primarily of the following items:

Research and development

(Dollars in thousands)
Payroll and related

Outside services
Stock based compensation

Other

2017

Change

2016

Change

2015

$ 14,737

3,761

34.3% $ 10,976

3,240

41.9 % $

7,736

3,386

1,298

487

136

62.2%

76.9%

38.7%

2,088

351

55
(33)
(75)
3,187

2.7 %

2,033

(38.8)%

(17.6)%

426

31.0 % $ 10,280

Total research and development

$ 18,702

5,235

38.9% $ 13,467

FTEs

111

26.1%

46.7 %

We intend to continue the focus on our research and development efforts associated with our software solutions due to its importance to
our continued success. The Company is investing in the development of products in the areas of: 1) mobility, 2) a unified software
platform, 3) nursing solutions, and 4) alerting. The Company plans to continue to increase its staffing, including staff augmentation as
represented by outside services, to develop its integrated communications solution portfolio. This increase in staffing will substantially
impact margins and our cash flow from operations as the benefits from this development effort will not immediately be realized for at
least two years. Based on this emphasis we expect the number of FTEs to increase in this area, impacting future payroll and related
expenses.

Service, rental and maintenance. Service, rental and maintenance consisted primarily of the following items:

Service, rental and maintenance

2017

Change

2016

Change

2015

(Dollars in thousands)
Payroll and related

Site rent

Telecommunications

Stock based compensation
Other

Total service, rental and maintenance

FTEs

$ 10,267

14,229

4,123

2,804

$ 31,502

(445)
(343)
(484)
66
(26)
$ (1,232)
(5)

(4.2)% $ 10,712

(2.4)%

14,572

(10.5)%

507.7 %

4,607

(0.9)%

2,830

(3.8)% $ 32,734

(5.2)%

(160)
(404)
(699)
(16)
(108)
$ (1,387)
(1)

(1.5)% $ 10,872

(2.7)%

14,976

(13.2)%

(55.2)%

(3.7)%

5,306

2,938

(4.1)% $ 34,121

(1.0)%

Service, rental and maintenance expense has decreased during each of the periods presented primarily due to reductions in payroll, site
rent and telecommunications expense. The number of active transmitters declined 3.1% from December 31, 2016 to December 31, 2017
and 2.0% from December 31, 2015 to December 31, 2016. The number of active transmitters directly relates to the amount of site rent
and telecommunications expenses we generally incur on an annual basis. Site rent and telecommunications expense are expected to
continue to decrease as part of our efforts to rationalize and consolidate our networks for the foreseeable future.

Selling and marketing. Selling and marketing consisted primarily of the following items:

Selling and marketing

(Dollars in thousands)
Payroll and related

Commissions
Stock based compensation

Other

Total selling and marketing

FTEs

2017

Change

2016

Change

2015

$ 11,796

5,191

377

5,459

$ 22,823

$ (2,370)
(458)
310

573
$ (1,945)
(14)

(16.7)% $ 14,166

(8.1)%

5,649

462.7 %

11.7 %

4,886

(7.9)% $ 24,768

(13.1)%

107

(883)
(1,590)
(44)
(161)
$ (2,678)
(23)

(5.9)% $ 15,049

(22.0)%

(39.6)%

(3.2)%

7,239

111

5,047

(9.8)% $ 27,446

(17.7)%

130

Selling and marketing expense decreased for the year ended December 31, 2017 compared to December 31, 2016 primarily due to the
reduction in payroll and commissions expense partially offset by increases in stock compensation, conferences and trade show expenses.
The increase in stock compensation was largely due to additional grants made during the year ended December 31, 2017 and the reduction
in stock compensation during the year ended December 31, 2016 due to the estimated outcome of the 2015 and 2016 grants being reduced
to 50 percent of the original awards.

Selling and marketing expense decreased for the year ended December 31, 2017 compared to December 31, 2016 primarily due to the
reduction in payroll and commissions expense for the above mentioned reasons.

The reduction in payroll, for all periods presented, reflects the reorganization of the sales staff, which included the replacement of
underperforming sales employees and the realignment of sales territories. The reduction in commissions for all periods presented was
primarily due to lower operations revenue.

General and administrative. General and administrative consisted primarily of the following items:

General and administrative

(Dollars in thousands)
Payroll and related

Stock based compensation

Facility rent

Outside services
Taxes, licenses and permits

Other

2017

Change

2016

Change

2015

$ 17,078

2,961

3,459

9,385

4,221

10,296

(72)
2,295

144

1,327
(33)
912

(0.4)% $ 17,150

344.6 %

4.3 %

16.5 %

(0.8)%

9.7 %

666

3,315

8,058

4,254

9,384

(457)
(843)
(191)
844
(222)
(1,164)
$ (2,033)
(7)

(2.6)% $ 17,607

(55.9)%

(5.4)%

11.7 %

(5.0)%

1,509

3,506

7,214

4,476

(11.0)%

10,548

(4.5)% $ 44,860

(5.8)%

121

Total general and administrative

$ 47,400

4,573

10.7 % $ 42,827

FTEs

115

0.9 %

114

General and administrative expense increased for the year ended December 31, 2017 compared to December 31, 2016 primarily due to
an increase in stock compensation, outside services and other expenses. The increase in stock compensation was largely due to additional
grants made during the year ended December 31, 2017 and a reduction in stock compensation during the year ended December 31, 2016
due to the estimated outcome of the 2015 and 2016 grants being reduced to fifty percent of the original awards. The increase in outside
services was largely due to the use of consultants related to the implementation of a new accounting system as well as general staff
augmentation throughout 2017. The increase in other was primarily related to increased placement fees for recruiting new hires, PC
refresh costs and various other immaterial expenses.

General and administrative expense decreased for the year ended December 31, 2016 compared to December 31, 2015 primarily due to
reductions in payroll, stock based compensation and other expenses partially offset by outside services expense. The decrease in stock
compensation was largely due to the estimated outcome of the 2015 and 2016 grants being reduced to fifty percent of the original awards.
The decrease in other was primarily due to a decrease in severance costs. The increase in outside services was primarily due to an increase
in information technology and system related costs as well as corresponding consulting and implementation costs.

Depreciation, amortization and accretion. For the year ended December 31, 2017 compared to the same period in 2016 depreciation,
amortization and accretion expenses decreased by $1.3 million due primarily to the full amortization of trademark costs during the first
quarter of 2017 and other various intangible costs that were fully amortized during 2016.The decrease of $1.0 million in depreciation,
amortization and accretion expenses for the year ended December 31, 2016 compared to the same period in 2015 was due primarily to
$0.6 million related to the amortization of our acquired technology and non-compete arrangements which were included for the year
ended December 31, 2015 but were completely amortized during the year ended December 31, 2016 and $0.5 million related to lower
depreciation expense because of a lower balance of pagers for the year ended December 31, 2016 partially offset by $0.1 million in other
changes.

Interest income, Other income, and Income tax expense (benefit)

Interest income. For the year ended December 31, 2017, compared to the same period in 2016, interest income increased by $0.4 million
primarily due to higher interest rates earned on the company's cash balances. The increase of $0.3 million in interest expense for the year
ended December 31, 2016 compared to the same period in 2015 was primarily due to an increase in funds held in interest bearing accounts.

Other income. For the year ended December 31, 2017 compared to the same period in 2016 other income, net decreased by $0.4 million
due to a variety of immaterial transactions. The decrease of $0.6 million in other income, net for the year ended December 31, 2016
compared to the same period in 2015, due primarily to $0.8 million related to the sale of two land parcels in 2015 that did not occur in
2016 partially offset by $0.2 million related to a reduction in the total estimated royalty liability for the purchase of IMCO in 2012.

Income tax expense (benefit). The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") was signed into law on December 22, 2017. The 2017
Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate
from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries,
introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended
through 2026 the option to claim accelerated depreciation deductions on qualified property. We have not completed our determination
of the accounting implications of the 2017 Tax Act on our tax accruals. However, we have reasonably estimated the effects of the 2017
Tax Act and recorded provisional amounts in our financial statements as of December 31, 2017. We recorded a provisional tax expense
for the impact of the 2017 Tax Act of approximately $24.2 million. This amount is primarily comprised of the remeasurement of net
deferred tax assets resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%. Changes that impact
foreign earnings are not expected to have a material effect. As we complete our analysis of the 2017 Tax Act, collect and prepare necessary
data, and interpret any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may
make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes in the period in
which the adjustments are made.

The effects of foreign taxes are immaterial for all periods presented. The following is the effective tax rate reconciliation for the years
ended December 31, 2017, 2016 and 2015, respectively (See Note 7, "Income Taxes", for further discussion on our income taxes):

Effective tax rate reconciliation

2017

2016

2015

(Dollars in thousands)
Income before income tax expense (benefit)
Income taxes computed at the Federal statutory rate

State income taxes, net of Federal benefit

Impact of 2017 Tax Act
Research and development and other tax credits
Change in valuation allowance
Other

Income tax expense (benefit)

$ 11,559
4,046
$

472
24,235
(1,775)
—
(113)
$ 26,865

$ 22,971
8,040

35.0 % $

4.1 %
209.7 %
(15.4)%
— %
(1.0)%
232.4 % $

867
—
—
—
85
8,992

$ 26,298
9,204

35.0% $

1,021
3.8%
—
—%
—
—%
(64,159)
—%
(14)
0.4%
39.1% $ (53,948)

35.0 %

3.9 %
— %
— %
(244.0)%
(0.1)%
(205.1)%

Income tax expense increased by $17.9 million for the year ended December 31, 2017 compared to the same period in 2016 due primarily
to the write-off of DTA's as a result of the 2017 Tax Act partially offset by research and development and other tax credits. Our investment
in research and development qualifies for the research and development income tax credit under Section 41 of the Internal Revenue Code.
Unused research and development tax credits have a 20-year carryover and will provide future tax benefits once Spok’s net operating
losses are fully utilized. The Company first applied this credit during 2017 and as a result has certain credits related to past periods.
Research and development tax credits totaled $1.4 million in 2017 of which $0.6 million related to prior periods.

The pro-forma effective tax rate excludes the effects of the change in the valuation allowance and the changes related to the 2017 Tax
Act to provide a more comparable effective tax rate. The following are the pro-forma effective tax rates for the years ended December
31, 2017, 2016 and 2015, respectively:

Pro forma effective tax rate

(Dollars in thousands)
Effective tax rate
Impact of 2017 Tax Act
Change in valuation allowance

Pro-forma effective tax rate

2017

2016

2015

232.4%
(209.7%)
—%
22.7%

39.1%
—%
—%
39.1%

(205.1%)
—%
244.0%
38.9%

Due to the changes in federal tax law resulting from the 2017 Tax Act, which is effective beginning on January 1, 2018, Spok anticipates
a positive impact on 2018 cash flows resulting from the elimination of the Alternative Minimum Tax ("AMT") for corporations.
Additionally, Spok anticipates an increase in future cash flows after the Company fully utilizes all remaining NOL’s as a result of the
decrease in corporate tax rates. Refer to Note 7, "Income Taxes", for additional discussion.

Liquidity and Capital Resources

Cash and Cash Equivalents

At December 31, 2017, we had cash and cash equivalents of $107.2 million. The available cash and cash equivalents are held in accounts
managed by third-party financial institutions and consist of invested cash and cash in our operating accounts. The invested cash is invested
in interest bearing funds managed by third-party financial institutions. These funds invest in direct obligations of the government of the
United States. To date, we have experienced no loss or lack of access to our invested cash or cash equivalents; however, we can provide
no assurance that access to our invested cash and cash equivalents will not be impacted by adverse market conditions.

We maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short-term and long-term. At any point in time,
we have approximately $7.0 to $12.0 million in our operating accounts that are with third-party financial institutions. While we monitor
daily the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances could be impacted if
the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, we have experienced
no loss or lack of access to cash in our operating accounts.

We intend to use our cash on hand to provide working capital, to support operations, to invest in our business and to return value to
stockholders through cash dividends and possible repurchases of our common stock. We may also consider using cash to fund or complete
opportunistic investments and acquisitions that we believe will provide a measure of growth or revenue stability while supporting our
existing operations. Because we intend to increase substantially our investment in developing our integrated communications platform
over the next two or three years commensurate with declining revenues from our wireless business, we anticipate that our cash on hand
will decrease significantly during that period and possibly longer until revenues from our Spok Care Connect platform begin to be realized.

Overview

In the event that net cash provided by operating activities and cash on hand are not sufficient to meet future cash requirements, we may
be required to reduce planned capital expenses, reduce or eliminate our cash dividends to stockholders, not resume our common stock
repurchase program, and/or sell assets or seek additional financing. We can provide no assurance that reductions in planned capital
expenses or proceeds from asset sales would be sufficient to cover shortfalls in available cash or that additional financing would be
available on acceptable terms.

Based on current and anticipated levels of operations, we anticipate net cash provided by operating activities, together with the available
cash on hand at December 31, 2017, should be adequate to meet anticipated cash requirements for the foreseeable future.

The following table sets forth information on our net cash flows from operating, investing, and financing activities for the periods stated:

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

For the Year Ended December 31,

2017

2016

2015

Change Between
2017 and 2016

15,556
(9,214)
(25,001)

(Dollars in thousands)

37,461
(6,254)
(16,723)

41,837
(5,565)
(32,809)

(21,905)

(2,960)

(8,278)

Net Cash Provided by Operating Activities. As discussed above, we are dependent on cash flows from operating activities to meet our
cash requirements. Cash from operations varies depending on changes in various working capital items, including deferred revenues,
accounts payable, accounts receivable, prepaid expenses and various accrued expenses. Net cash provided by operating activities decreased
$21.9 million for the year ended December 31, 2017 compared to the same period in 2016 due primarily to a decrease in net income, net
of adjustments related to deferred income tax benefit, of $10.8 million (decrease in cash flow), a decrease of $1.3 million in depreciation,
amortization and accretion expenses (decrease in cash flow) and a decrease of $0.3 million in other non-cash items (decrease in cash
flow), partially offset by an increase of $2.8 million in stock based compensation expenses (increase in cash flow). With respect to changes
in assets and liabilities the net cash provided by operating activities reflects a $4.4 million greater decrease in accounts payable, accrued
liabilities and other (decrease in cash flow) and a net $8.4 million greater increase to assets (decrease in cash flow)partially offset by a
$0.5 million increase in deferred revenue (increase in cash flow).

Net Cash Used in Investing Activities. Net cash used in investing activities increased $3.0 million for the year ended December 31, 2017
compared to the same period in 2016 due primarily to an increase in the purchase of property and equipment related to our research and
development efforts.

Net Cash Used in Financing Activities. Net cash used in financing activities increased $8.3 million for the year ended December 31, 2017
from the same period in 2016 due primarily to the payment of $5.0 million related to the special dividend that was declared in December
2016 and an increase of $3.3 million in common stock repurchases, net of proceeds from the issuance of common stock.

Cash Dividends to Stockholders. For the year ended December 31, 2017, we paid a total of $15.2 million in cash dividends compared to
$10.3 million in cash dividends for the same period in 2016. Cash dividends paid to stockholders in 2017 increased by $4.9 million
primarily due to the $5.0 million related to a special dividend of $0.25 per common stock which was declared in 2016 and paid in 2017.

Future Cash Dividends to Stockholders. On February 28, 2018, our Board of Directors declared a regular quarterly cash dividend of
$0.125 per share of common stock, with a record date of March 16, 2018, and a payment date of March 30, 2018. This cash dividend of
approximately $2.6 million is expected to be paid from available cash on hand.

Common Stock Repurchase Program. For the year ended December 31, 2017, we purchased 572,550 shares of our common stock under
the repurchase program for $10 million. The repurchase authority allows us, at management’s discretion, to selectively repurchase shares
of our common stock from time to time in the open market depending upon market price and other factors. On February 28, 2018 the
Company's Board of Directors reset the repurchase authority under the share repurchase program to $10.0 million which is set to expire
on December 31, 2018. (See Note 6, "Stockholders' Equity", for further discussion on our common stock repurchase program.)

Other. For 2018, the Board of Directors currently expects to pay dividends of $0.125 per common share each quarter, subject to declaration
by the Board of Directors, in 2018.

Commitments and Contingencies

Contractual Obligations. The following table provides the Company's significant commitments and contractual obligations as of
December 31, 2017.

(Dollars in thousands)
Operating lease obligations

Total contractual obligations

Total

Less than 1 Year

1 to 3 years

3 to 5 years

More than 5 years

17,411

6,126

6,797

3,603

885

Payments Due By Period

As of December 31, 2017, our contractual payment obligations under our operating leases for office and transmitter locations are indicated
in the table above. For purposes of the table above, purchase obligations are defined as agreements to purchase goods or services that
are enforceable, legally binding, noncancelable, has a remaining term in excess of one year and that specify all significant terms, including:
fixed or minimum quantities to be purchased; fixed, minimum or variable pricing provisions; and the approximate timing of transactions.
The amounts are based on our contractual commitments; however, it is possible that we may be able to negotiate lower payments if we
choose to exit these contracts before their expiration date. Refer to Note 8, "Commitments and Contingencies", for further discussion on
commitments and contingencies.

Off-Balance Sheet Arrangements. We do not have any relationships with unconsolidated entities or financial partnerships, such as entities
often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-
balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity,
market or credit risk that could arise if we had engaged in such relationships.

Related Parties

Refer to Note 10, "Related Parties", for further discussion on our related party transactions.

Inflation

Inflation has not had a material effect on our operations to date. System equipment and operating costs have not significantly increased
in price, and the price of wireless messaging devices has tended to decline in recent years. Our general operating expenses, such as
salaries, site rent for transmitter locations, employee benefits and occupancy costs, are subject to normal inflationary pressures.

Critical Accounting Policies and Estimates

Refer to Note 1, "Organization and Significant Accounting Policies", for a summary of significant accounting policies and estimates.

Refer to Note 2, "Recent and Pending Accounting Standards", for a summary of recent and pending accounting standards.

Non-GAAP Financial Measures

We use non-GAAP financial measures as key elements in determining performance for purposes of incentive compensation for our
annual STIP and the performance periods for our LTIPs. The non-GAAP financial measures include; (1) adjusted operating cash flow
(“OCF”), defined as EBITDA less purchases of property and equipment plus severance (the Company defines EBITDA as operating
income plus depreciation, amortization and accretion, each determined in accordance with GAAP; purchases of property and
equipment and severance are also determined in accordance with GAAP); and (2) the total of adjusted operating expenses and capital
expenses. Adjusted operating expenses are defined as operating expenses less depreciation, amortization and accretion less severance
less stock based compensation. Capital expenses are defined as the purchase of property and equipment. We believe that adjusted OCF
is useful to investors and management as a measure of the ability of our business to generate cash. Further, we believe that adjusted
operating and capital expenses is useful to investors and management as a measure of the ability of our business to responsibly
manage operational expenses that impact Company cash flows.

Adjusted OCF was as follows for the periods stated:

Non-GAAP Financial Measures

(Dollars in thousands)
Net (loss) income

Plus (Less): Income tax expense (benefit)
Less: Other income

Less: Interest income

Operating income

Plus: Depreciation, amortization and accretion

EBITDA (as defined by the Company)

Less: Purchases of property and equipment

Plus: Severance

OCF (as defined by the Company)

2017

2016

2015

(15,306) $
26,865
(134)
(719)
10,706

11,624

22,330
(9,200)
104

13,979

8,992
(543)
(275)
22,153

12,963

35,116
(6,256)
1,446

13,234

30,306

80,246

(53,948)

(1,182)

(16)

25,100

13,970

39,070

(6,374)

2,701

35,397

Adjusted operating and capital expenses were as follows for the periods stated:

Non-GAAP Financial Measures

2017

2016

2015

(Dollars in thousands)
Operating expenses
Less: Depreciation, amortization and accretion

Less: Severance

Less: Stock based compensation

Adjusted operating expenses (as defined by the Company)

Plus: Purchases of property and equipment

160,469
(11,624)
(104)
(3,688)
145,053

9,200

157,408
(12,963)
(1,446)
(854)
142,145

6,256

Adjusted operating and capital expenses (as defined by the Company)

154,253

148,401

164,528

(13,970)

(2,701)

(1,868)

145,989

6,374

152,363

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

At December 31, 2017, we had no outstanding borrowings or associated debt service requirements.

Foreign Currency Exchange Rate Risk

We conduct a limited amount of business outside the United States. The financial impact of transactions billed in foreign currencies is
immaterial to our financial results and, consequently, we do not have any material exposure to the risk of foreign currency exchange
rate fluctuations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements are included in this Report beginning on Page F-1.

Index to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

Selected Quarterly Financial Information (Unaudited)

Schedule II - Valuation and Qualifying Accounts

Page

F- 2

F- 4

F- 5

F- 6

F- 7

F- 8

F- 25

F- 26

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

There are no reportable events.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management carried out an evaluation, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), with the participation of our principal executive officer and our principal financial officer, of the effectiveness of our
disclosure controls and procedures, as of the end of our last fiscal year. Disclosure controls and procedures are defined under Rule
13a-15(e) under the Exchange Act as controls and other procedures of an issuer that are designed to ensure that the information required
to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the issuer’s management,
including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure. Based upon this evaluation, our principal executive officer and our principal financial
officer have concluded that our disclosure controls and procedures were effective as of December 31, 2017.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the
Exchange Act Rule 13a-15(f) and 15d-15(f). Management conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”).

Such internal controls include those policies and procedures that:

•

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of
the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management
and members of the Board of Directors of the Company; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

Based on our evaluation under the 2013 Internal Control — Integrated Framework, our management concluded that our internal control
over financial reporting was effective as of December 31, 2017.

The effectiveness of our internal control over financial reporting as of December 31, 2017 has been audited by Grant Thornton LLP, an
independent registered public accounting firm, as stated in their report which appears in this 2017 Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes made in the Company’s internal control over financial reporting during the year ended December 31, 2017 that
have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

Certain information called for by Items 10 through 14 is incorporated by reference from Spok’s definitive Proxy Statement for our 2018
Annual Meeting of Stockholders, which will be filed with the SEC no later than May 1, 2018.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following information required by this item is incorporated by reference from Spok’s definitive Proxy Statement for our 2018 Annual
Meeting of Stockholders:

•
•
•

•

information regarding directors is set forth under the caption “Election of Directors”;
information regarding executive officers is set forth under the caption “Executive Officers”;
information regarding our audit committee and designated “audit committee financial expert” is set forth under the caption
“Committees of the Board of Directors”; and
information regarding compliance with Section 16(a) of the Exchange Act is set forth under the caption “Section 16(a) Beneficial
Ownership Reporting Compliance."

We also make available on our website, and in print, if any stockholder or other person so requests, our code of business conduct and
ethics entitled “Code of Ethics” which is applicable to all employees and directors, our “Corporate Governance Guidelines,” and the
charters for all committees of our Board of Directors, including Audit, Compensation and Corporate Governance and Nominating. Any
changes to our Code of Ethics or waiver, if any, of our Code of Ethics for executive officers or directors will be posted on that website.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from the section of Spok’s definitive Proxy Statement for our 2018
Annual Meeting of Stockholders entitled “Compensation Discussion and Analysis.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The information required by this item is incorporated by reference from the section of Spok’s definitive Proxy Statement for our 2018
Annual Meeting of Stockholders entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.”

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item with respect to certain relationships and related transactions is incorporated by reference from the
section of Spok’s definitive Proxy Statement for our 2018 Annual Meeting of Stockholders entitled “Related Person Transactions and
Code of Conduct.” The information required by this item with respect to director independence is incorporated by reference from the
section of Spok’s definitive Proxy Statement for our 2018 Annual Meeting of Stockholders entitled “Board and Governance Matters.”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item is incorporated by reference from the section of Spok’s definitive Proxy Statement for our 2018
Annual Meeting of Stockholders entitled “Independent Registered Public Accounting Firm Fees.”

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report on Form 10-K:

(a) 1. Financial Statements

Index to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

Selected Quarterly Financial Information (Unaudited)

2. Financial Statement Schedules

Index to Consolidated Financial Statements
Schedule II - Valuation and Qualifying Accounts

(b) Exhibits

Page

F- 2

F- 4

F- 5

F- 6

F- 7

F- 8

F- 25

Page

F- 26

The exhibits listed in the accompanying index to exhibits, that follows the Signatures page, are filed as part of this Annual Report on

Form 10-K.

ITEM 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on our behalf by the undersigned, thereunto duly authorized.

Spok Holdings, Inc.

By:

/s/ Vincent D. Kelly
Vincent D. Kelly
President and Chief Executive Officer
March 1, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Vincent D. Kelly
Vincent D. Kelly

/s/ Michael W. Wallace

Michael W. Wallace

/s/ Royce Yudkoff

Royce Yudkoff

/s/ N. Blair Butterfield

N. Blair Butterfield

/s/ Stacia A. Hylton

Stacia A. Hylton

/s/ Brian O’Reilly

Brian O’Reilly

/s/ Matthew Oristano

Matthew Oristano

/s/ Samme L. Thompson

Samme L. Thompson

Director, President and Chief Executive
Officer (principal executive officer)

March 1, 2018

Chief Financial Officer (principal
financial officer and principal
accounting officer)

March 1, 2018

Chairman of the Board

March 1, 2018

Director

Index to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

Selected Quarterly Financial Information (Unaudited)

Schedule II - Valuation and Qualifying Accounts

Page

F- 2

F- 4

F- 5

F- 6

F- 7

F- 8

F- 25

F- 26

F- 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Spok Holdings, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Spok Holdings, Inc. (a Delaware corporation) and subsidiaries (the
“Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations, changes in shareholders’ equity, and
cash flows for each of the three years in the period ended December 31, 2017, and the related notes and schedule (collectively referred
to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the three years in
the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),
the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our
report dated March 1, 2018 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company's auditor since 2006.

Arlington, Virginia
March 1, 2018

F- 2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Spok Holdings, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Spok Holdings, Inc. (a Delaware corporation) and subsidiaries (the
“Company”) as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal
Control-Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),
the consolidated financial statements of the Company as of and for the year ended December 31, 2017, and our report dated March 1,
2018 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Arlington, Virginia
March 1, 2018

F- 3

SPOK HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except share and per share amounts)

ASSETS

Current assets:

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses and other

Inventory, net

Total current assets

Non-current assets:

Property and equipment, net

Goodwill

Intangible assets, net

Deferred income tax assets, net

Other non-current assets

Total non-current assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued compensation and benefits

Accrued dividends payable

Accrued taxes

Deferred revenue

Other current liabilities

Total current liabilities

Non-current liabilities:

Deferred revenue

Other non-current liabilities

Total non-current liabilities

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:

Preferred stock—$0.0001 par value; 25,000,000 shares authorized; no shares issued or outstanding

Common stock—$0.0001 par value; 75,000,000 shares authorized; 20,135,514 and 20,525,614 shares issued and
outstanding as of December 31, 2017 and December 31, 2016, respectively

Additional paid-in capital

Retained earnings

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

December 31,

2017

2016

107,157

32,279

5,752

1,672

146,860

13,399

133,031

7,917

47,679

1,675

203,701

350,561

1,305

11,018

384

2,547

31,414

4,226

50,894

1,063

8,075

9,138

60,032

—

98,731

191,796

290,529

350,561

125,816

23,666

4,384

1,996

155,862

12,818

133,031

10,803

73,068

2,505

232,225

388,087

1,032

13,268

5,140

4,132

29,145

3,610

56,327

752

8,921

9,673

66,000

—

104,810

217,275

322,087

388,087

The accompanying notes are an integral part of these consolidated financial statements.

F- 4

SPOK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except share and per share amounts)
Revenue:

Wireless
Software

Total revenue

Operating expenses:
Cost of revenue
Research and development
Service, rental and maintenance
Selling and marketing
General and administrative
Depreciation, amortization and accretion

Total operating expenses

Operating income

Interest income
Other income

Income before income tax (expense) benefit

Income tax (expense) benefit

Net (loss) income
Basic and diluted net (loss) income per common share
Basic and diluted weighted average common shares outstanding
Cash dividends declared per common share

For the Year Ended December 31,

2017

2016

2015

$
$

101,188
69,987
171,175

28,418
18,702
31,502
22,823
47,400
11,624
160,469
10,706
719
134
11,559
(26,865)
(15,306) $
(0.76) $

20,210,260
0.50

109,590
69,971
179,561

30,649
13,467
32,734
24,768
42,827
12,963
157,408
22,153
275
543
22,971
(8,992)
13,979
0.68
20,586,066
0.75

$
$

119,014
70,614
189,628

33,851
10,280
34,121
27,446
44,860
13,970
164,528
25,100
16
1,182
26,298
53,948
80,246
3.74
21,471,041
0.625

The accompanying notes are an integral part of these consolidated financial statements.

F- 5

SPOK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands except share amounts)
Balance, January 1, 2015

Net income

Purchase of common stock for tax withholding, net

Amortization of stock based compensation

Cash dividends declared

Common stock repurchase program

Issuance of restricted common stock under the
Equity Plan

Other

Balance, December 31, 2015

Net income

Issuance of common stock under the Employee
Stock Purchase Plan

Purchased and retired common stock

Amortization of stock based compensation

Cash dividends declared

Common stock repurchase program

Issuance of restricted common stock under the
Equity Plan
Other

Balance, December 31, 2016

Net loss

Issuance of common stock under the Employee
Stock Purchase Plan

Issuance of common stock for vested restricted
stock units under the Equity Plan

Amortization of stock based compensation

Cash dividends declared

Common stock repurchase program

Issuance of restricted common stock under the
Equity Plan

Other

Outstanding
Common
Shares

21,978,762

Common
Stock

—
(217,211)
—

—
(897,177)

21,887

—

20,886,261

—

3,961
(2)
—

—

(388,255)

23,649

—

20,525,614

—

17,760

143,394

—

—
(572,550)

21,296

—

Balance, December 31, 2017

20,135,514

Additional
Paid-In
Capital

Retained
Earnings

Total
Stockholders’
Equity

126,678

152,379

279,059

—
(3,824)
1,868

—
(15,008)

—

721

80,246

—

—
(13,498)
—

—

80,246

(3,824)

1,868

(13,498)

(15,008)

—

721

110,435

219,127

329,564

—

854

—

13,979

—

—
(15,766)

—

854

(15,766)

(6,489)

—

(6,489)

—
(43)
104,810

—

256

3,688

(10,023)

—

—
(65)
217,275
(15,306)

—

—
(10,332)
—

—

159

—

(108)

322,087

(15,306)

256

—

3,688

(10,332)

(10,023)

—

159

98,731

191,796

290,529

—

The accompanying notes are an integral part of these consolidated financial statements.

F- 6

SPOK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31,

2017

2016

2015

(15,306) $

13,979

80,246

(Dollars in thousands)
Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by
operating activities:

Depreciation, amortization and accretion

Deferred income tax expense (benefit)

Stock based compensation

Provisions for doubtful accounts, service credits and other

Adjustments of non-cash transaction taxes

(Gain) Loss on disposals of property and equipment

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses, intangible assets and other assets

Accounts payable, accrued liabilities and other

Deferred revenue

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment, net of proceeds from disposals
of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Cash distributions to stockholders

Purchase of common stock (including commissions)

Proceeds from issuance of common stock under the Employee Stock
Purchase Plan

Employee stock based compensation tax withholding

Net cash used in financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

Supplemental disclosure:

Income taxes paid

11,624

25,390

3,688

1,035
(807)
(6)

(9,648)
274
(3,267)
2,579

15,556

(9,214)
(9,214)

(15,234)
(10,023)

256

—
(25,001)
(18,659)
125,816

107,157

2,620

12,963

6,926

854

761
(270)
2

(1,790)
843

1,083

2,110

37,461

(6,254)
(6,254)

(10,287)
(6,489)

—
(16,723)
14,484

111,332

125,816

695

13,970

(55,018)

1,868

1,290

(686)

(793)

1,041

658

(3,556)

2,817

41,837

(5,565)

(13,976)

(15,008)

—

(3,825)

(32,809)

3,463

107,869

111,332

1,521

The accompanying notes are an integral part of these consolidated financial statements.

F- 7

SPOK HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK)("Spok" or the "Company"), is proud to be the global
leader in healthcare communications. We deliver clinical information to care teams when and where it matters most to improve patient
outcomes. Top hospitals rely on the Spok Care Connect platform to enhance workflows for clinicians, support administrative compliance,
and provide a better experience for patients. Our customers send over 100 million messages each month through their Spok solutions.

We offer a focused suite of unified critical communication solutions that include call center operations, clinical alerting and notifications,
one-way and advanced two-way wireless messaging services, mobile communications and public safety solutions.

We provide one-way and advanced two-way wireless messaging services including information services throughout the United States.
These services are offered on a local, regional and nationwide basis employing digital networks. One-way messaging consists of numeric
and alphanumeric messaging services. Numeric messaging services enable subscribers to receive messages that are composed entirely
of numbers, such as a phone number, while alphanumeric messages may include numbers and letters, which enable subscribers to receive
text messages. Two-way messaging services enable subscribers to send and receive messages to and from other wireless messaging
devices, including pagers, personal digital assistants and personal computers. We also offer voice mail, personalized greeting, message
storage and retrieval, and equipment loss and/or maintenance protection to both one-way and two-way messaging subscribers. These
services are commonly referred to as wireless messaging and information services.

We also develop, sell and support enterprise-wide systems for hospitals and other organizations needing to automate, centralize and
standardize mission critical communications. These solutions are used for contact centers, clinical alerting and notification, mobile
communications and messaging and for public safety notifications. These areas of market focus compliment the market focus of our
wireless services outlined above.

Basis of Presentation

The accompanying consolidated financial statements include our accounts and the accounts of our wholly owned direct and indirect
subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules
and regulations of the United States Securities and Exchange Commission (the “SEC”). In management's opinion, the consolidated
financial statements include all adjustments and accruals that are necessary for a fair presentation of the results of all periods reported
herein and all such adjustments are of a normal, recurring nature (except for the reduction of deferred income tax assets described in
further detail in Note 7 "Income Taxes").

Amounts shown on the consolidated statements of operations within the operating expense categories of cost of revenue; research and
development; service, rental and maintenance; selling and marketing; and general and administrative are recorded exclusive of severance,
depreciation, amortization and accretion. These items are shown separately on the consolidated statements of operations within operating
expenses to the extent that they are considered material for the periods presented. Foreign currency translation adjustments were immaterial
and are not presented separately in our consolidated statements of stockholders’ equity and balance sheets, and consequently no statements
of comprehensive income are presented.

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period's presentation.
These reclassifications had no effect on the reported results of operations or the statement of financial position. In the fourth quarter of
2017, the Company reclassified $1.0 million from accounts payable to other current liabilities. Corresponding reclassifications of $0.9
million were made to the Consolidated Balance Sheets for the year ended December 31, 2016. The Company also reclassified $0.1 million
from severance to the general and administrative operating expense classification. Corresponding reclassifications of $1.4 million and
$2.7 million were made to the Consolidated Statement of Operations for the years ended December 31, 2016 and 2015. The Company
had previously reported severance as a separate item on the Consolidated Statement of Operations.

F- 8

Use of Estimates

The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, expenses and related disclosures. On an on-going basis, we evaluate estimates and assumptions,
including but not limited to those related to the impairment of long-lived assets, intangible assets subject to amortization and goodwill,
accounts receivable allowances, revenue recognition, depreciation expense, asset retirement obligations, severance and income taxes.
We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

We recognize revenue when four basic criteria have been met:

•
•
•
•

there is persuasive evidence that an arrangement exists;
delivery has occurred or services rendered;
the fee is fixed or determinable; and
collectability is reasonably assured.

Amounts billed to customers, but not meeting the above revenue recognition criteria are deferred until all four criteria have been met.

Signed agreements are used as evidence of an arrangement. If a contract signed by the customer does not exist, we use a purchase order
as evidence of an arrangement. If both a signed contract and a purchase order exist, we consider the signed contract to be the final
persuasive evidence of an arrangement. At the time a contract is executed, we evaluate the contract to assess whether the fee is fixed or
determinable. If the fee is assessed as not being fixed or determinable, revenue recognition is delayed until this assessment can be made.
Additionally, we review customer creditworthiness and our historical ability to collect payments when due.

Our wireless revenue consists primarily of service, rental and maintenance fees charged to customers on a monthly, quarterly or annual
basis. Revenue also includes the sale of messaging devices directly to customers and other companies that resell our services. With respect
to revenue recognition for multiple deliverables, we evaluated these revenue arrangements and determined that two separate units of
accounting exist, paging service revenue and product sales. We recognize paging service revenue over the period the service is performed;
revenue from product sales is recognized at the time of shipment or installation. We have a variety of billing arrangements with our
customers resulting in deferred revenue from advance billings and accounts receivables for billing in-arrears arrangements.

Our software revenue consists primarily of the sale of software (license fees), professional services (primarily installation and training),
equipment (to be used in conjunction with the software) and maintenance support (post-contract support). The software is licensed to
end users under an industry standard software license agreement. Our software products are considered to be “off-the-shelf software” as
the software is marketed as a stock item that customers can use without customization.

Software revenue consists of two primary components: (1) operations revenue consisting of software license revenue, professional services
revenue and equipment revenue, and (2) maintenance support revenue.

We generally sell software licenses, professional services, equipment and maintenance in multiple-element arrangements. At inception
of the arrangement, we allocate the arrangement consideration to the software deliverables (software licenses, professional services and
maintenance) as a group and to the non-software deliverables (equipment and maintenance on equipment, when applicable) using the
relative selling price method. When performing this allocation, the estimated selling price for each deliverable is based on vendor specific
objective evidence of fair value (“VSOE”), third party evidence of fair value (“TPE”), or if VSOE and TPE are not available, the best
estimated selling price (“BESP”) for selling the element on a stand-alone basis. We have determined that TPE is not a practical alternative
due to differences in our service offerings compared to other parties and the availability of relevant third-party pricing information. The
amount of revenue allocated to delivered items is limited by contingent revenue, if any.

F- 9

Our standard post-contract support is allocated using VSOE as an input in the relative selling price allocation. For software licenses,
professional services, equipment and premium maintenance we have determined that neither VSOE nor TPE is available and as such,
we have used BESP as an input in order to allocate our arrangement fees. We determine BESP by considering our overall pricing objectives
and market conditions. Significant pricing practices take into consideration our discounting practices, the size and volume of our
transactions, the customer demographic, the geographic area where our services are sold, our price lists, our go-to-market strategy,
historical standalone sales and contract prices. The determination of BESP is made through consultation with and approval by management,
taking into consideration the go-to-market strategy. As our go-to-market strategies evolve, we may modify our pricing practices in the
future, which could result in changes in relative selling prices, including both VSOE and BESP.

In multiple-element arrangements, the arrangement consideration allocated to our non-software deliverables (equipment) is generally
recognized upon shipment or delivery to the customer depending on delivery method of Free on Board ("FOB") shipping or FOB
destination, respectively.

For our software deliverables, which include software licenses, professional services, and post-contract support, we further allocate
arrangement consideration using the residual method. As noted above, we have not established VSOE for our software licenses,
professional services and premium maintenance. However, we have established, and continue to maintain, VSOE for our standard post-
contract support. We recognize contract revenue ratably over the longer of the estimated services delivery period or the maintenance
term. If delivery of the software and services is completed before the end of the maintenance period, then the remaining revenue associated
with these elements is recognized in full at this time. Any unrecognized revenue related to maintenance continues to be recognized ratably
over the remaining term of the maintenance period. If the period of delivery to the customer is not known, license and professional services
revenue will be recognized when software and professional services are fully delivered to the customer and the maintenance revenue will
be recognized ratably over the remaining contractual term of the agreement. The defined services period for most of our projects is shorter
than the maintenance term.

The Company recognizes deferred revenue when it receives payments in advance of the delivery of products or the performance of
services. Our deferred balance represents the contractual obligation for maintenance, software license equipment, professional services
and wireless services for which we have received payment in advance of meeting the revenue recognition criteria. We will recognize
revenue when the goods or services meet our revenue recognition criteria.

Impairment of Long-Lived Assets, Intangible Assets Subject to Amortization and Goodwill

We are required to evaluate the carrying value of our long-lived assets, amortizable intangible assets and goodwill. Amortizable intangible
assets include customer-related and acquired technology intangibles that resulted from previous acquisitions. Such intangibles are
amortized over periods up to ten years. Quarterly, we assess whether circumstances exist which suggest that the carrying value of long-
lived and amortizable intangible assets may not be recoverable. When applicable, we assess the recoverability of the carrying value of
our long-lived assets and certain amortizable intangible assets based on estimated undiscounted cash flows to be generated from such
assets. In assessing the recoverability of these assets, we forecast estimated enterprise-level cash flows based on various operating
assumptions such as revenue forecasted by product line and in-process research and development cost. If the forecast of undiscounted
cash flows does not exceed the carrying value of the long-lived and amortizable intangible assets, we record an impairment charge to the
extent the carrying value exceeded the fair value of such assets.

Goodwill is not amortized but is evaluated for impairment at least annually, or when events or circumstances suggest a potential impairment
has occurred. We generally perform this annual impairment test in the fourth quarter of the fiscal year. We evaluate goodwill for impairment
between annual tests if indicators of impairment exist. The impairment test involves comparing the fair value of the reporting unit with
its carrying value. An impairment charge is recognized for the amount that the carrying value exceeds the reporting unit's fair value. For
purposes of the goodwill impairment evaluation, the Company as a whole is considered the reporting unit. The fair value of the reporting
unit is estimated under a market based approach using the fair value of the Company's common stock. A confirmatory discounted cash
flow analysis is also used to assess whether impairment exists. This calculation requires significant judgments, including estimation of
future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the
useful life over which cash flows will occur and determination of our weighted average cost of capital.

We did not record any impairment of long-lived assets, definite lived intangible assets or goodwill for the years ended December 31,
2017, 2016 and 2015.

F- 10

Accounts Receivable Allowances

Our two most significant allowance accounts are: an allowance for doubtful accounts and an allowance for service credits. Provisions
for these allowances are recorded on a monthly basis and are included as a component of general and administrative expenses, respectively.
Accounts receivable was recorded net of $1.0 million allowance for the periods ended December 31, 2017 and 2016, respectively.

Estimates are used in determining the allowance for doubtful accounts and are based on historical collection experience and current and
forecasted trends. In determining these estimates, we review historical write-offs, including comparisons of write-offs to provisions for
doubtful accounts and as a percentage of revenues. We compare the ratio of the allowance to gross receivables to historical levels, and
monitor amounts collected and related statistics. We write off receivables when they are deemed uncollectible. While write-offs of customer
accounts have historically been within our expectations and the provisions established, we cannot guarantee that the future write-off
experience will be consistent with historical experience, which could result in material differences when compared to the allowance for
doubtful accounts and related provisions.

The allowance for service credits related provisions is based on historical credit percentages, current credit and aging trends, historical
actual payment trends and actual credit experience. We analyze our past credit experience over several time frames. Using this analysis
along with current operational data including existing experience of credits issued and the time frames in which credits are issued, we
establish an appropriate allowance for service credits. This allowance also reduces accounts receivable for lost and non-returned pagers
to the expected realizable amounts and for free wireless services. In addition, this allowance reduces software maintenance revenue.
While credits issued have been within our expectations and the provisions established, we cannot guarantee that future credit experience
will be consistent with historical experience, which could result in material differences when compared to the allowance for service
credits and maintenance related provisions.

Inventory

Inventories are stated at the lower of cost or net realizable value. Cost is computed using a weighted average cost approach which blends
the prices at which goods are purchased from vendors. We evaluate our ending inventories for shrinkage and estimated obsolescence.
Any shrinkage identified is written off to cost of goods sold in the period in which the shrinkage is identified. Further, we assess the
impact of changing technology on our inventories and we write off inventories that are considered obsolete in the period in which the
analysis takes place. Inventory consists primarily of finished goods. We do not account for inventory as work-in-process or raw materials
as any such inventory would be immaterial to the consolidated financial statements.

Property and Equipment

Property and equipment are reported at cost and are depreciated using the straight-line method based on estimated useful lives which
range from one to five years.

Transmitter assets are grouped into tranches based on our transmitter decommissioning forecast and are depreciated using the group life
method on a straight-line basis. Depreciation expense is determined by the expected useful life of each tranche of the underlying transmitter
assets. The expected useful life is based on our forecasted usage of those assets and their retirement over time and aligns the useful lives
of these transmitter assets with their planned removal from service. Disposals are charged against accumulated depreciation with no gain
or loss recognized. This rational and systematic method matches the underlying usage of these assets to the underlying revenue that is
generated from these assets. Depreciation expense for these assets is subject to change based upon revisions in the timing of transmitter
deconstruction resulting from our long-range planning and network rationalization process.

Asset Retirement Obligations

We recognize liabilities and corresponding assets for future obligations associated with the retirement of assets. We have paging equipment
assets, principally transmitters, which are located on leased locations. The underlying leases generally require the removal of equipment
at the end of the lease term; therefore, a future obligation exists. Asset retirement costs are reflected in paging equipment assets with
depreciation expense recognized over the estimated lives, which range between one and five years. The asset retirement costs and the
corresponding liabilities that have been recorded to date generally relate to either current plans to consolidate networks or to the removal
of assets at a future terminal date. When an asset retirement obligation arises, the liabilities and corresponding assets are recorded at their
present value using a discounted cash flow approach and the liabilities are accreted using the interest method.

F- 11

The recognition of an asset retirement obligation requires that management make numerous assumptions regarding such factors as the
cost and timing of deconstruction; the credit-adjusted risk-free rate to be used; inflation rates; and future advances in technology. The
fair value estimate of contractor fees to remove each asset is assumed to escalate by 4% each year through the terminal date. The total
estimated liability is based on the estimated future value of those costs and the timing of deconstruction.

We believe these estimates are reasonable at the present time, but we can give no assurance that changes in technology, our financial
condition, the economy or other factors would not result in higher or lower asset retirement obligations. Any variations from our estimates
would generally result in a change in the assets and liabilities in equal amounts, and operating results would differ in the future by any
difference in depreciation expense and accretion expense (see Note 3, "Consolidated Financial Statement Components", and Note 5,
"Asset Retirement Obligations", for additional details).

Income Taxes

We file a consolidated U.S. Federal income tax return and income tax returns in state, local and foreign jurisdictions as required. The
provision for current income taxes is calculated and accrued on income and expenses expected to be included in current year U.S. and
foreign income tax returns. The provision for current income taxes may also include interest, penalties and an estimated amount reflecting
uncertain tax positions.

Deferred income tax assets and liabilities are computed based on temporary differences between the financial statement values and the
tax bases of assets and liabilities including net operating loss and tax credit carryforwards at the enacted tax rates expected to apply to
taxable income when taxes are actually paid or recovered. Changes in deferred income tax assets and liabilities are included as a component
of deferred income tax expense. Deferred income tax assets represent amounts available to reduce future income taxes payable. We
provide a valuation allowance when we consider it “more likely than not” (greater than a 50% probability) that a deferred income tax
asset will not be fully recovered. Adjustments to the valuation allowance are a component of the deferred income tax expense or benefit
in the statements of operations.

Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such
positions fail to meet the “more likely than not” threshold based on the technical merits of the positions. We assess whether previously
unrecognized tax benefits may be recognized when the tax position is (1) more likely than not of being sustained based on its technical
merits, (2) effectively settled through examination, negotiation or litigation, or (3) settled through actual expiration of the relevant tax
statutes (see Note 7, "Income Taxes", for additional details).

Research and Development

Development costs incurred in the research and development of new software products and enhancements to existing software products
for external use are charged to operations and expensed as incurred. Until technological feasibility has been established, research and
development costs are expensed as incurred. Material costs incurred after technological feasibility is established and before the product
is ready for general release are capitalized and amortized on a straight-line basis over the estimated remaining economic life of the product
or the ratio of current revenues to total projected product revenues, whichever is greater. To date, the time between technological feasibility
and general release to the public has been extremely short and consequently expenses available for capitalization have been immaterial.
Accordingly, all research and developments costs incurred to date have been expensed as incurred.

Commissions Expenses

We pay a sales commission for each contract executed with a customer. We capitalize the commissions paid at contract execution and
recognize the related expense as the revenue from the underlying contract is recognized. Commission expense was $5.2 million, $5.6
million and $7.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. Commission expense is classified within
the selling and marketing operating expenses category.

Shipping and Handling Costs

We incur shipping and handling costs to send and receive messaging devices and other equipment to/from our customers. Amounts billed
to customers related to shipping and handling are classified as revenue and the Company's shipping and handling costs are classified as
cost of revenue. These costs are expensed as incurred.

Advertising Expenses

Advertising costs are charged to operations when incurred because they occur in the same period as the benefit is derived. Advertising
costs are classified as selling and marketing expenses. We do not incur any direct response advertising costs. Advertising expenses were
$2.3 million, $1.8 million and $1.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

F- 12

Stock Based Compensation

We account for share-based payments to employees, including restricted stock units ("RSUs"), restricted common stock ("restricted
stock") and the option to purchase common stock under the Employee Stock Purchase Plan ("ESPP") based on their fair value and the
estimated number of shares we expect will vest based on the performance metrics associated with the award, if applicable. Fair value is
measured based on the closing fair market value of the Company's common stock on the date of grant. Compensation expense is recognized
on a straight-line basis over the requisite service period. Forfeitures and withdrawals are accounted for on an as incurred basis.

Changes in our estimates of the expected attainment of performance targets are reflected in the amount of compensation expense that we
recognize for the related instruments' during the interim reporting period when the change in estimate is determined and may cause the
amount of compensation expense that we record for each period to vary. Further information regarding stock based compensation can
be found in Note 6, "Stockholders' Equity".

Concentration of Credit Risk

Our financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash, cash equivalents, and
accounts receivable. While our cash and cash equivalents are managed by reputable financial institutions, deposits at these institutions
and funds may, at times, exceed federally insured limits. Management believes that these financial institutions and funds are financially
sound and, accordingly, that minimal credit risk exists.

Accounts receivable are typically unsecured and are derived from revenue earned from customers across different geographic locations,
primarily within the U.S. We perform ongoing credit evaluations of our customers, and generally do not require collateral. We maintain
an allowance for estimated credit losses. During the years ended December 31, 2017, 2016, and 2015, our bad debt expenses were $1.0
million, $0.8 million, and $1.3 million, respectively. In the event that accounts receivable collection cycles deteriorate, our operating
results and financial position could be adversely affected. No customer represented 10% or more of total revenue or accounts receivable
during the years ended December 31, 2017, 2016, and 2015.

Cash Equivalents

Cash and cash equivalents consist primarily of cash on deposit with banks and investments in money market funds with maturities of 90
days or less from the date of purchase.

Sales and Use Taxes

Sales and use taxes imposed on the ultimate consumer are excluded from revenue where we are required by law or regulation to act as
collection agent for the taxing jurisdiction.

Fair Value of Financial Instruments

Our financial instruments include our cash, letters of credit ("LOCs"), accounts receivable and accounts payable. The fair value of these
instruments approximate their carrying values at December 31, 2017 and 2016 due to their short maturities.

Earnings Per Common Share

The calculation of earnings per common share is based on the weighted-average number of common shares outstanding during the
applicable period. The calculation for diluted earnings per common share recognizes the effect of all potential dilutive common shares
that were outstanding during the respective periods, unless the impact would be anti-dilutive. Further information regarding earnings per
common share can be found in Note 6, "Stockholders' Equity".

NOTE 2 - RECENT AND PENDING ACCOUNTING STANDARDS

Recently Adopted

Revenue - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09,
Revenue from Contracts with Customers. Since this ASU was issued, the FASB has issued several updates including ASU No. 2015-14
in July 2015 which delayed the effective date, ASU No. 2016-08 in March 2016 which updated guidance related to principal versus agent
considerations, ASU No. 2016-10 in April 2016 which updated guidance related to the identification of performance obligations, ASU
No. 2016-12 in May 2016 which updated guidance related to scope improvements and practical expedients and ASU No. 2016-20 which
provided technical corrections and improvements but did not update guidance issued in prior updates. The effective date is January 1,
2018, and while early adoption to the original effective date of January 1, 2017 is permitted, we have elected not to early adopt.

F- 13

ASU No. 2014-09 creates a five-step model that requires companies to exercise judgment when considering all relevant facts and
circumstances in the determination of when and how revenue is recognized. The two permitted transition methods under the new standard
are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified
retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application.
We have completed our review of the acceptable transition methods and have selected the modified retrospective approach. We currently
believe the modified retrospective approach will have a material impact on both deferred revenue and retained earnings in our 2018
consolidated financial statements. While we continue to finalize our adjustment to beginning balances as of January 1, 2018, we currently
estimate that the impact to retained earnings will be an increase between $4.0 and $7.0 million with an offsetting decrease to deferred
revenue of approximately $4.0 to $6.0 million and an increase in pre-paid commission expense for the remaining balance. This adjustment
is primarily a result of the acceleration of license revenue for which we previously recognized over the combined services period as well
as certain contract costs (primarily commission expenses) which are expected to be recognized over a longer amortization period than
before. This estimate is subject to change given the ongoing review of contracts outstanding at December 31, 2017 and the highly complex
nature of ASC 606.

We currently believe the standard will materially impact our revenue recognition on a going-forward basis once adopted. While we
continue to assess and finalize the impacts of this standard, which we anticipate disclosing beginning with our 2018 filings, we currently
believe that the most significant impacts relate to our accounting for software license revenue and certain contract costs. We expect
software license revenue to be recognized when it is made available to the customer rather than over a combined service or subscription
period. Additionally, certain contract costs (primarily commissions expense), are expected to be amortized over a longer period of time
as those costs are related to the future renewal of maintenance. We anticipate that contract costs attributable to maintenance will be
amortized over a period between 36 and 60 months as compared to recognition over the implementation period as done today. Amortization
of commissions expense related to other revenues (e.g. software license, equipment, services revenues etc.) are not expected to materially
change. Due to the nuances of certain contracts the actual revenue recognition treatment required under the standard will be dependent
on contract-specific terms and may vary in some instances from recognition at the time of shipment.

Goodwill - In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill
Impairment. The new standard simplifies how an entity tests for goodwill by eliminating Step 2 from the goodwill impairment test. Step
2 measured a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of
that goodwill. By eliminating Step 2 an entity must now record an impairment to goodwill based on an analysis of the fair value of a
reporting unit as compared to its carrying amount. An impairment charge is recognized for the amount that the carrying value exceeds
the reporting unit's fair value.

ASU No. 2017-04 will be effective beginning on January 1, 2020, including interim periods within that fiscal year, and early adoption
as of January 1, 2017 is permitted. All changes are to be accounted for on a prospective basis upon adoption. We do not anticipate a
material impact on our consolidated financial statements from the adoption of ASU No. 2017-04. We have chosen to early adopt ASU
No. 2017-04 to be effective as of January 1, 2017.

Pending Adoption

Leases - In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right of use (“ROU”) model that
requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months.
Leases will be classified as either financing or operating with the classification affecting the pattern of expense recognition in the operating
statement.

ASU No. 2016-02 will be effective beginning on January 1, 2019, including interim periods within that fiscal year, and early adoption
is permitted at any time. A modified retrospective transition approach is required for capital and operating leases existing at, or entered
into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available.
While we are still evaluating the impact of the potential new standard on our consolidated financial statements, we expect that upon
adoption we will recognize ROU assets and lease liabilities and that the amounts could be material.

NOTE 3 - CONSOLIDATED FINANCIAL STATEMENT COMPONENTS

Depreciation, Amortization and Accretion

Depreciation, amortization and accretion consisted of the following for the periods stated:

F- 14

(Dollars in thousands)
Depreciation

Leasehold improvements
Asset retirement costs
Paging and computer equipment
Furniture, fixtures and vehicles

Total depreciation

Amortization
Accretion

Total depreciation, amortization and accretion expense

For the Year Ended December 31,

2017

2016

2015

234
(388)
8,024
306
8,176
2,886
562
11,624

189
(277)
7,974
294
8,180
4,160
623
12,963

233
(505)
8,489
353
8,570
4,735
665
13,970

F- 15

Property and Equipment, net

Property and equipment, net consisted of the following for the periods stated:

(Dollars in thousands)
Leasehold improvements
Asset retirement costs
Paging and computer equipment
Furniture, fixtures and vehicles

Total property and equipment

Accumulated depreciation

Total property and equipment, net

Useful Life
(In Years)
lease term
1-5
1-5
3-5

For the Year Ended December 31,

2017

4,107
3,228
103,520
4,545
115,400
(102,001)
13,399

2016

3,843
3,263
113,175
2,852
123,133
(110,315)
12,818

For purposes of assessing our asset retirement costs, we completed a review of the estimated useful life of our transmitter assets during
the fourth quarter of 2017 (that are part of paging and computer equipment). This review was based on the results of our long-range
planning and network rationalization process and indicated that the expected useful life of the last tranche of the transmitter assets was
no longer appropriate. As a result of that review, the expected useful life of the final tranche of transmitter assets was extended from 2021
to 2022. This change resulted in a revision of the expected future depreciation expense for the transmitter assets and an immaterial impact
to the consolidated financial statements beginning in the fourth quarter of 2017. We believe these estimates remain reasonable at the
present time, but we can give no assurance that changes in technology, customer usage patterns, our financial condition, the economy or
other factors would not result in changes to our transmitter decommissioning plans. Any further variations from our estimates could result
in a change in the expected useful lives of the underlying transmitter assets and operating results could differ in the future by any difference
in depreciation expense. The extension of the depreciable life was accounted for as a change in accounting estimate.

Other Current Liabilities

Other current liabilities consisted of the following for the periods stated:

(Dollars in thousands)
Accrued network costs, asset retirement obligations and other
Accrued outside services

Total other current liabilities

Other Non-Current Liabilities

Other non-current liabilities consisted of the following for the periods stated:

(Dollars in thousands)
Asset retirement obligations
Other

Total other non-current liabilities

NOTE 4 - INTANGIBLE ASSETS, NET

Intangible Assets

December 31,

2017

2016

2,173
2,053
4,226

$
$

December 31,

2017

2016

7,174
901
8,075

2,168
1,442
3,610

7,472
1,449
8,921

$
$

Amortizable intangible assets at December 31, 2017 and 2016 related primarily to customer relationships and trademarks that resulted
from our acquisition of Amcom Software, Inc. in 2011. Such intangibles are being amortized over a period of ten years and six years
respectively. We have not recorded an impairment of our intangible assets during the years ended December 31, 2017, 2016 and 2015.

F- 16

The net consolidated balance of intangible assets consisted of the following at December 31, 2017 and 2016:

As of December 31,

2017

2016

(Dollars in thousands)
Customer relationships
Trademarks

Useful Life
(In Years)
10
6

Total amortizable intangible
assets

6 - 10

Gross Carrying
Amount

25,002
5,754

Accumulated
Amortization
$

(17,085) $
(5,754)

Net Carrying
Amount

Gross Carrying
Amount

7,917
—

25,002
5,754

Accumulated
Amortization
$

(14,585) $
(5,368)

Net Carrying
Amount

10,417
386

30,756

(22,839) $

7,917

30,756

(19,953) $

10,803

Estimated amortization of intangible assets for future periods was as follows:

For the year ending December 31,
2018
2019
2020
2021

Total

(Dollars in
thousands)

2,500
2,500
2,500
417
7,917

NOTE 5 - ASSET RETIREMENT OBLIGATIONS

The components of the changes in the asset retirement obligation liabilities for the periods stated were as follows:

(Dollars in thousands)

Balance at January 1, 2016

Accretion

Amounts paid

Reductions

Reclassifications

Balance at December 31, 2016

Accretion

Amounts paid

Increases and reductions

Reclassifications

Balance at December 31, 2017

Short-Term Portion

Long-Term Portion

Total

296

7,543

36
(213)
(134)
100

8
(248)
5

384

234

587

—
(558)
(100)
7,472

554

—
(468)
(384)
7,174

7,839

623

(213)

(692)

—

7,557

562

(248)

(463)

—

7,408

Increases and reductions other than accretion, reclassification and amounts paid primarily relate to changes in estimate of the underlying
liability, specifically as it relates to updates in estimated costs to remove a transmitter and the estimated timing of removal. The cost
associated with the estimated removal costs and timing refinements due to ongoing network rationalization activities is expected to accrete
to a total liability of $9.3 million. The total estimated liability is based on the transmitter locations remaining after we have consolidated
the number of networks we operate and assume the underlying leases continue to be renewed to that future date.

Accretion expense related solely to asset retirement obligations and was recorded based on the interest method utilizing the following
discount rates for the specified periods:

F- 17

Period
2017 – January 1 through September 30 – Additions(2)
2017 – December 31 Additions(2) and Incremental Estimates
2016 – January 1 through December 31 – Additions(2)
2016 – December 31 - Incremental Estimates
2015 – January 1 through September 30 – Additions(2)
2015 – December 31 Additions(2) and Incremental Estimates

Discount Rate

11.50%
14.00%
11.50%
12.09% (1)
10.48%
11.50%

(1) Weighted average credit adjusted risk-free rate used to discount downward revision to estimated future cash flows.
(2) Transmitters moved to new sites resulting in additional liability.

Additional information regarding asset retirement costs, depreciation expense, accretion and liabilities can be found in Note 3,
"Consolidated Financial Statement Components".

NOTE 6 - STOCKHOLDERS' EQUITY

General

Our authorized capital stock consists of 75 million shares of common stock, par value $0.0001 per share, and 25 million shares of preferred
stock, par value $0.0001 per share.

At December 31, 2017 and 2016, we had no stock options outstanding.

At December 31, 2017 and 2016, there were 20,135,514 and 20,525,614 shares of common stock outstanding, respectively, and no shares
of preferred stock outstanding.

Dividends

For the three years ending December 31, 2017, 2016 and 2015 our Board of Directors declared cash dividends of $0.50, $0.750 and
$0.625 per share of our outstanding common stock, respectively. An immaterial amount of dividends declared were related to unvested
RSUs and unvested shares of restricted stock which are accrued for and paid when the applicable vesting conditions are met. Accrued
cash dividends on forfeited RSUs and restricted stock are also forfeited. Cash dividends paid as disclosed in the statements of cash flows
for the years ended December 31, 2017, 2016 and 2015 included previously declared cash dividends on vested RSUs and on shares of
vested restricted stock issued to non-executive members of our Board of Directors.

Common Stock Repurchase Program

On July 31, 2008, our Board of Directors approved a program to repurchase our common stock in the open market. This program has
been extended at various times, most recently through December 31, 2018, with a repurchase authority of $10.0 million as of February
28, 2018.

We use available cash on hand and net cash provided by operating activities to fund the common stock repurchase program. This
repurchase authority allows us, at management’s discretion, to selectively repurchase shares of our common stock from time to time in
the open market depending upon market price and other factors.

Repurchased shares of our common stock were accounted for as a reduction to common stock and additional paid-in-capital in the period
in which the repurchase occurred. All repurchased shares of common stock are returned to the status of authorized, but unissued, shares
of the Company.

F- 18

Common stock purchased in 2017, 2016 and 2015 (excluding the purchase of common stock for tax withholdings) was as follows:

For the Three Months Ended

(dollars in thousands)
March 31,

June 30,

September 30,

December 31,

Total

Shares
Purchased

Amount

Shares
Purchased

Amount

Shares
Purchased

Amount

2017

— $

572,550

—

10,000

—

2016

291,861 $

65,791

13,884

16,719

572,550 $

10,000

388,255 $

4,893

1,078

228

274

6,473

2015

27,467 $

177,330

502,942

189,438

465

3,002

8,309

3,196

897,177 $

14,972

Net (Loss) Income per Common Share

Basic net (loss) income per common share is computed on the basis of the weighted average common shares outstanding. Diluted net
(loss) income per common share is computed on the basis of the weighted average common shares outstanding plus the effect of all
potentially dilutive common shares including unvested and outstanding equity awards. The components of basic and diluted net (loss)
income per common share were as follows for the periods stated:

(in thousands, except for share and per share amounts)
Numerator:

Net (loss) income

Denominator:

Basic and diluted weighted average outstanding shares of common stock

Basic and diluted net (loss) income per common share

For the Year Ended December 31,

2017

2016

2015

(15,306) $

13,979

80,246

20,210,260

(0.76) $

20,586,066
0.68

21,471,041
3.74

For the years ended December 31, 2017, 2016 and 2015, the following securities were not included in the calculation of diluted shares
outstanding as the effect would have been anti-dilutive:

Restricted stock units

Share-based Compensation Plans

For the Year Ended December 31,

2017

90,665

2016

2015

—

On March 23, 2012, our Board of Directors adopted the Spok Holdings, Inc. 2012 Equity Incentive Award Plan (the “2012 Equity Plan”)
that was subsequently approved by our stockholders on May 16, 2012. A total of 2,194,986 shares of common stock have been reserved
for issuance under this plan.

Awards under the 2012 Equity Plan may be in the form of stock options, common stock, restricted stock, RSUs, performance awards,
dividend equivalents, deferred stock, deferred stock units, or stock appreciation rights.

Restricted stock awards generally vest one year from the date of grant. Related dividends accumulate during the vesting period and are
paid at the time of vesting.

Contingent RSU's generally vest over a three year performance period upon successful completion of the performance objectives. Non-
contingent RSU's generally vest in thirds, annually, over a three year period. Dividend equivalents rights generally accompany each RSU
award and those rights accumulate and vest along with the underlying RSU.

F- 19

The following table summarizes the activities under the 2012 Equity Plan from January 1, 2015 through December 31, 2017:

Total equity securities available at January 1, 2015

Less: RSU and restricted stock awarded to eligible employees, net of forfeitures

Total equity securities available at December 31, 2015

Less: RSU and restricted stock awarded to eligible employees, net of forfeitures

Total equity securities available at December 31, 2016

Less: RSU and restricted stock awarded to eligible employees, net of forfeitures

Total equity securities available at December 31, 2017

Activity

1,747,586
(264,355)
1,483,231
(236,292)
1,246,939
(106,281)
1,140,658

The following table details activities with respect to outstanding RSUs and restricted stock for the year ended December 31, 2017 and
has been reclassified to conform to current period's presentation which includes restricted stock activity:

Weighted-
Average Grant
Date Fair Value

17.10

20.37

18.14

17.71

451,493

249,435
(143,394)
(164,450)
393,084

Unvested at January 1, 2017(1)
Granted

Vested
Forfeited(2)
Unvested at December 31, 2017(1)

18.54
(1)Approximately 100,767 RSUs from the 2016 grant are not expected to vest based on the Company's current assessment of the related
performance obligations.
(2)107,616 RSUs did not vest based on the Company's actual performance at December 31, 2017 as compared to the related performance
obligations.

Of the 393,084 unvested RSUs and restricted stock outstanding at December 31, 2017, 308,960 RSUs include contingent performance
requirements for vesting purposes. At December 31, 2017, there was $3.2 million of unrecognized net compensation cost related to RSUs
and restricted stock, which is expected to be recognized over a weighted average period of 1.57 years.

Employee Stock Purchase Plan

In 2016 our Board of Directors adopted the Spok Holdings, Inc. Employee Stock Purchase Plan ("ESPP") that was subsequently approved
by our stockholders on July 25, 2016. A total of 250,000 shares of common stock have been reserved for issuance under this plan.

The Company's ESPP allows employees to purchase shares of common stock at a discounted rate, subject to plan limitations. Under the
ESPP, eligible participants can voluntarily elect to have contributions withheld from their pay for the duration of an offering period,
subject to the ESPP limits. At the end of an offering period, contributions will be used to purchase the Company's common stock at a
discount to the market price based on the first or last day of the offering period, whichever is lower. Participants are required to hold
common stock for a minimum period of two years from the grant date. Participants will begin earning dividends on shares after the
purchase date. Each offering period will generally last for no longer than six months. Once an offering period begins, participants cannot
adjust their withholding amount. If a participant chooses to withdraw, any previously withheld funds will be returned to the participant,
with no stock purchased, and that participant will be eligible to participate in the ESPP at the next offering period. If the participant
terminates employment with the Company during the offering period, all contributions will be returned to the employee and no stock
will be purchased at a discounted rate.

The Company uses the Black-Scholes model to calculate the fair value of each offering period on their offer date. The Black-Scholes
model requires the use of estimates for the expected term, the expected volatility of the underlying common stock over the expected term,
the risk-free interest rate and the expected dividend payment.

For the year ended December 31, 2017, employees purchased 17,760 shares of common stock for a total price of $0.3 million. For the
year ended December 31, 2016, employees purchased 3,961 shares of common stock for a total price of $0.1 million.

F- 20

The following table summarizes the activities under the ESPP from January 1, 2017 through December 31, 2017:

Total ESPP equity securities available at January 1, 2016

Plus: Registration of 2016 ESPP

Less: common stock purchased by eligible employees

Total ESPP equity securities available at January 1, 2017

Less: common stock purchased by eligible employees

Total ESPP equity securities available at December 31, 2017

Activity

—

250,000

(3,961)

246,039

(17,760)

228,279

Amounts withheld from participants will be classified as a liability on the balance sheet until funds are used to purchase shares. This
liability amount is immaterial to the consolidated financial statements.

Stock-based Compensation Expense

Compensation expense associated with common stock, RSUs and restricted stock was recognized based on the fair value of the instruments,
over the instruments’ vesting period. Stock based compensation expense increased by $2.8 million for the year ended December 31, 2017
from the same period in 2016 primarily due to a one-time reversal of $2.0 million in stock compensation expense related to the 2015 and
2016 awards during 2016 which was not subsequently incurred during 2017 and the amortization of more awards in 2017 as compared
to 2016. As of December 31, 2017, we do not currently believe it is probable that 50% of the awards issued in 2016 will vest based on
the related performance criteria and our assessment of the anticipated future performance applied to the performance criteria. The remaining
50% of awards expected to vest will continue to be expensed accordingly over the remaining applicable service periods.

Stock based compensation expense decreased by $1.0 million for the year ended December 31, 2016 from the same period in 2015
primarily due to a one-time reversal of $2.0 million in stock compensation expense related to the 2015 and 2016 awards which did not
occur during 2015 partially offset by the amortization of more awards in 2016 as compared to 2015.

The following table reflects stock based compensation expense for the periods stated:

Operating Expense Category

(Dollars in thousands)
Performance-based RSUs
Time-based RSUs and restricted stock
ESPP

Total stock based compensation

NOTE 7 - INCOME TAXES

For the Year Ended December 31,

2017

2016

2015

1,762
1,862
64
3,688

413
418
23
854

1,498
370
—
1,868

The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") was signed into law on December 22, 2017. The 2017 Tax Act significantly revises
the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain
deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and
changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended through 2026 the option to claim
accelerated depreciation deductions on qualified property. We have not completed our determination of the accounting implications of
the 2017 Tax Act on our tax accruals. However, we have reasonably estimated the effects of the 2017 Tax Act and recorded provisional
amounts in our financial statements as of December 31, 2017. We recorded a provisional tax expense for the impact of the 2017 Tax Act
of approximately $24.2 million. This amount is primarily comprised of the remeasurement of deferred income tax assets ("DTA's")
resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%. Changes that impact foreign earnings
are not expected to have a material effect. As we complete our analysis of the 2017 Tax Act, collect and prepare necessary data, and
interpret any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make
adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes in the period in which
the adjustments are made.

F- 21

The significant components of our income tax expense (benefit) attributable to current operations for the periods stated were as
follows:

(Dollars in thousands)
Income before income tax expense (benefit)
Current:
Federal tax
State tax
Foreign tax

Total current

Deferred:
Federal tax
State tax
Foreign tax

Total deferred
Total income tax expense (benefit)

For the Year Ended December 31,

2017

2016

2015

11,559

199
1,006
270
1,475

26,348
(787)
(171)
25,390
26,865

22,971

669
1,294
103
2,066

6,811
41
74
6,926
8,992

26,298

432
622
16
1,070

(55,716)
1,020
(322)
(55,018)
(53,948)

Foreign income before income tax (expense) benefit is immaterial to consolidated income before income tax (expense) benefit.

The following table summarizes the principal elements of the difference between the United States Federal statutory rate of 35% and
our effective tax rate:

Effective tax rate reconciliation

2017

2016

2015

(Dollars in thousands)
Income before income tax expense (benefit)
Income taxes computed at the Federal statutory rate
State income taxes, net of Federal benefit

Impact of 2017 Tax Act
Research and development and other tax credits
Change in valuation allowance
Other

Income tax expense (benefit)

$ 11,559
4,046
$
472
24,235
(1,775)
—
(113)
$ 26,865

$ 22,971
8,040
867
—
—
—
85
8,992

35.0 % $
4.1 %
209.7 %
(15.4)%
— %
(1.0)%
232.4 % $

$ 26,298
9,204
35.0% $
1,021
3.8%
—
—%
—
—%
(64,159)
—%
(14)
0.4%
39.1%% $ (53,948)

35.0 %
3.9 %
— %
— %
(244.0)%
(0.1)%
(205.1)%

The anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate primarily due to the effect of
state income taxes, the use of the research and development tax credit, permanent differences between book and taxable income and
certain discrete items. The earnings of non-US subsidiaries are deemed to be indefinitely reinvested in non-US operations.

Income tax expense increased by $62.9 million for the year ended December 31, 2016 compared to the same period in 2015 due primarily
to a reduction of the DTA valuation allowance of $64.2 million during 2015 that did not occur in 2016. During the year ended December
31, 2016, the US Court of Appeals for the Second Circuit affirmed a Tax Court Decision, unrelated to Spok, regarding the allocation of
cancellation of debt income to tax attributes for a company that filed a Federal consolidated income tax return. This impacted the ultimate
realization of certain of our net operating loss ("NOL") carryovers. Therefore, during the year ended December 31, 2016, we wrote off
our valuation allowance of $50.0 million against the related Federal and State NOL DTAs. This had no impact on the 2016 income tax
provision or net income.

F- 22

The components of deferred income tax assets at December 31, 2017 and 2016 were as follows:

(Dollars in thousands)
Net operating losses and tax credits

Property and equipment

AMT minimum tax receivable

Accruals and accrued loss contingencies

Intangible assets

Gross deferred income tax assets

Deferred income tax liabilities:

Prepaid and other expenses

Gross deferred income tax liabilities

Net deferred income tax assets

Net Operating Losses

December 31,

2017

2016

26,296

8,289

2,489

4,833

6,033

47,940

(261)
(261)
47,679

45,947

12,995

2,199

6,723

5,886

73,750

(682)

73,068

As of December 31, 2017, we had approximately $106.1 million of NOLs available to offset future taxable income. The Federal NOLs
begin expiring in 2025 and will fully expire in 2029. We have an immaterial amount of foreign NOLs and tax credits available for future
use.

Valuation Allowance

We assess the recoverability of our deferred income tax assets, which represent the tax benefits of future tax deductions, NOLs and tax
credits, by considering the adequacy of future taxable income from all sources, including prudent and feasible tax planning strategies.
This assessment is required to determine whether based on all available evidence, it is “more likely than not” (which means a probability
of greater than 50%) that all or some portion of the DTAs will be realized in future periods. As of December 31, 2017 and 2016 we believe
it is more likely than not that our DTAs will be realized in future periods and thus did not have a valuation allowance.

Income Tax Audits

Our Federal income tax returns have been examined by the Internal Revenue Service ("IRS") through December 31, 2008. The audits of
the Federal returns for the years ended 2005 through 2008 resulted in no changes. The IRS also audited Amcom’s 2009 Federal tax return
(pre-acquisition) with no changes. The 2015, 2016 and 2017 income tax returns of the Company have not been audited by the IRS and
are within the statute of limitations (“SOL”).

We operate in all states and the District of Columbia and are subject to various state income and franchise tax audits. The states’ SOL
varies from three to four years from the later of the due date of the return or the date filed. We usually file our Federal and all state and
local income tax returns on or before September 15 of the following year; therefore, the SOL for those states with a three-year SOL is
open for calendar years ending 2014 through 2017, and for the four year SOL states, the SOL is open for years ending from 2013 through
2017.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Contractual Obligations

We had no significant commitments and contractual obligations as of December 31, 2017.

Other Commitments

We have various LOCs outstanding with multiple state agencies which are considered to be immaterial to the consolidated financial
statements. The LOCs typically have one to three-year contract requirements and contain automatic renewal terms.

F- 23

Legal Contingencies

Operating Leases

We have operating leases for office and transmitter locations. Substantially all of these leases have lease terms ranging from one month
to five years. We continue to review our office and transmitter locations, and intend to replace, reduce or consolidate leases, where
possible.

Future minimum lease payments under non-cancelable operating leases at December 31, 2017 were as follows:

For the Year Ended December 31,
2018
2019
2020
2021
2022
Thereafter
Total

(Dollars in thousands)

6,126
3,873
2,924
2,538
1,065
885
17,411

These leases typically include renewal options and escalation clauses. Where material, we recognize rent expense on a straight-line basis
over the lease period. The difference between rent paid and rent expense is recorded as accrued other and other long-term liabilities on
the consolidated balance sheets.

Total rent expense under operating leases for the years ended December 31, 2017, 2016 and 2015, was approximately $17.7 million,
$17.9 million and $18.5 million, respectively.

NOTE 9 - EMPLOYEE BENEFIT PLANS

Spok Holdings, Inc. Savings and Retirement Plan

The Company has a savings plan in the U.S. that qualifies qualifies under Section 401(k) of the IRC. Participating U.S. employees may
elect to contribute a percentage of their salary, subject to certain limitations. Matching contributions under the savings plan were
approximately $1.1 million for each of the years ended December 31, 2017, 2016 and 2015.

NOTE 10 - RELATED PARTIES

A member of our Board of Directors also serves as a director for an entity that leases transmission tower sites to the Company. For the
years ended December 31, 2017, 2016 and 2015, we incurred $3.8 million, $3.9 million and $4.1 million, respectively, in site rent expenses
from the entity on which the individual serves as a director. These amounts are included in service, rental and maintenance expenses.

F- 24

NOTE 11 - SEGMENTS AND GEOGRAPHIC INFORMATION

Effective January 1, 2014, the Company was structured as a single operating (and reportable) segment, a critical communication business.
The Chief Executive Officer (who is also the chief operating decision maker as defined by ASC 280) views the business as one operation
and assesses performance and allocates resources on the basis of consolidated operations.

The U.S. was the only country that accounted for more than 10% of the Company's total revenue for the years ended December 31, 2017,
2016 and 2015. Revenue by geographic region consisted of the following for the periods stated:

(Dollars in thousands)

Revenue

United States

International

Total revenue

December 31,

2017

2016

2015

166,790

4,385

171,175

173,852

5,709

179,561

185,741

3,887

189,628

An immaterial amount of long-lived assets were held outside of the United States for the years ended December 31, 2017, 2016 and
2015.

NOTE 12 - SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Quarterly financial information for the years ended December 31, 2017 and 2016 is summarized below:

For the Year Ended December 31, 2017

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Revenues(2)
Operating income(2)
Net income (loss)(2)(3)
Basic and diluted net income (loss) per common share(1)

(Dollars in thousands except per share amounts)

41,444

42,325

43,636

1,382

854

0.04

2,410

1,498

0.07

3,325

3,727

0.19

43,770

3,589

(21,384)

(1.07)

For the Year Ended December 31, 2016

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter(4)

Revenues(2)
Operating income(2)
Net income(2)
Basic and diluted net income per common share(1)

45,388
5,800
3,444
0.17

(Dollars in thousands except per share amounts)
$

44,635
5,620
3,451
0.17

45,355
6,029
4,058
0.20

44,184
4,703
3,026
0.15

(1) Basic and diluted net income (loss) per common share is computed independently for each period presented. As a result, the sum of the quarterly
basic and diluted net income (loss) per common share for the years ended December 31, 2017 and 2016 may not equal the total computed
for the year.
Slight variations in totals are due to rounding.
Fourth quarter 2017 net loss includes $24.2 million from the write-off of the deferred income tax asset related to the 2017 Tax Act (refer to
Note 8, "Income Taxes").

(3)

(2)

F- 25

SPOK HOLDINGS, INC.
VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

Allowance for Doubtful Accounts,
Service Credits and Other

Year ended December 31, 2017
Year ended December 31, 2016
Year ended December 31, 2015

Deferred Income Tax Asset Valuation
Allowance

Year ended December 31, 2017
Year ended December 31, 2016
Year ended December 31, 2015

Balance at the
Beginning of
the Period

Charged to
Operations

Write-offs

(Dollars in thousands)

Balance at the
End of the
Period

1,056
1,286
1,300

$
$
$

1,035
761
1,290

$
$
$

(1,026)
(991)
(1,304)

$
$
$

1,065
1,056
1,286

Balance at the
Beginning of
the Period

— $
$
$

50,031
114,190

Additions

Deductions

(Dollars in thousands)
— $
— $
— $

— $
$
$

(50,031)
(64,159)

Balance at the
End of the
Period

—
—
50,031

$
$
$

F- 26

EXHIBIT INDEX

Incorporated by Reference

Exhibit
Number

3.1

3.2

4.1*

Exhibit Description

Form

File No.

Exhibit

Filing Date

Amended and Restated Certificate of Incorporation

Second Amended and Restated Bylaws

Specimen of common stock certificate, par value
$0.0001 per share

8-K

001-32358

S-4/A

333-115769

3.1

4.1

7/8/2014

12/20/2016

10/6/2004

Filed/
Furnished
Herewith

10.1*

10.2*

10.3*

10.4*

10.5†

10.6*

10.7

10.8*

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17*

10.18†

10.19†

31.1

31.2

32.1

32.2

Form of Indemnification Agreement for directors and
executive officers of USA Mobility, Inc.

USA Mobility, Inc. Equity Incentive Plan Restricted Stock
Agreement (For Board of Directors) (amended)

Form of Director’s Indemnification Agreement

8-K

001-32358

10.4

11/17/2004

10-Q

001-32358

10.18

10.24

11/1/2007

10/30/2008

3/28/2012

USA Mobility, Inc. 2012 Equity Incentive Award Plan

DEF 14A 001-32358

Third Amended and Restated Employment Agreement,
between Spok Holdings, Inc. and Vince D. Kelly, dated as of
December 28, 2016

Restricted Stock Unit Grant Notice for the USA Mobility,
Inc. 2012 Equity Incentive Award Plan

Restricted Stock Unit Grant Notice for the Spok Holdings,
Inc. 2015 Long-Term Incentive Plan

Spok Holdings, Inc. Severance Pay Plan and Summary Plan
Description (For certain C-Level, not including CEO)
(amended and restated)

Spok Holdings, Inc. 2015 Short-Term Incentive Plan

Spok Holdings, Inc. 2015 Long-Term Incentive Plan

8-K

001-32358

10.1

12/28/2016

10-K

001-32358

10.16

3/2/2017

10-K

001-32358

10.17

3/2/2017

10-K

001-32358

10.18

10.35

3/2/2017

2/25/2016

Spok Holdings, Inc. 2016 Short-Term Incentive Plan

10-K

001-32358

10.11

3/2/2017

10-K

001-32358

10.38

2/25/2016

10-K

001-32358

10.15

3/2/2017

DEF 14A 001-32358

10-Q

8-K

001-32358

10.2

10.1

4/27/2017

3/27/2017

Exhibits to Spok Holdings, Inc., 2015 Long-Term Incentive
Plan for the 2016 - 2018 performance period(1)

Spok Holdings, Inc. 2017 Short-Term Incentive Plan

Exhibits to Spok Holdings, Inc., 2015 Long-Term Incentive
Plan for the 2017 - 2019 performance period(1)

Spok Holdings, Inc. 2018 Short-Term Incentive Plan(1)

Spok Holdings, Inc. 2018 Long-Term Incentive Plan(1)

Amendment to the USA Mobility, Inc. 2012 Equity
Incentive Award Plan

NEO Severance and Change in Control Document

Offer Letter to Michael Wallace

Subsidiaries of the Company

Consent of Grant Thornton LLP

Certification of President and Chief Executive Officer
pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities
Exchange Act of 1934, as amended

Certification of Chief Financial Officer pursuant to
Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange
Act of 1934, as amended

Certification of President and Chief Executive Officer
pursuant to 18 U.S.C. Section 1350

Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350

101.INS

XBRL Instance Document**

101.SCH

XBRL Taxonomy Extension Schema**

101.CAL

XBRL Taxonomy Extension Calculation**

101.DEF

XBRL Taxonomy Extension Definition**

101.LAB

XBRL Taxonomy Extension Labels**

101.PRE

XBRL Taxonomy Extension Presentation**

Filed

Furnished

*
**
†
(1)

On July 8, 2014, the Company changed its name from USA Mobility, Inc. to Spok Holdings, Inc.
The financial information contained in these XBRL documents is unaudited.
Denotes a management contract or compensatory plan or arrangement.
Portions of this document have been omitted and filed separately with the Securities and Exchange Commission
pursuant to requests for confidential treatment pursuant to Rule 24b-2.

Exhibit 10.10

SPOK HOLDINGS, INC.

2015 LONG-TERM INCENTIVE PLAN

Adopted by the Board of Directors

Upon Recommendation of the Compensation Committee

on December 9, 2014

To Be Effective as of January 1, 2015

SECTION 1.

BACKGROUND, PURPOSE AND DURATION

SECTION 2.

1.1

1.2

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10
2.11

2.12

2.13

2.14

2.15

2.16

2.17

2.18

2.19

2.20

Effective Date

Purposes of the Plan

DEFINITIONS

Actual Award

Affiliate

Award Agreement

Board

Cause

Change of Control

Code

Committee

Common Stock

Company
Effective Date

Employee

Participant

Performance Goals

Performance Period

Person

Plan

Restricted Stock Unit

Separation from Service

Target Award

SECTION 3.

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS

SECTION 4.

SECTION 5.

SECTION 6.

3.1

3.2

3.3

3.4

4.1

4.2

4.3

4.4

5.1

5.2

5.3

5.4

6.1

6.2

6.3

6.4

Selection of Participants

Determination of Target Awards

Award Agreements

Dividend Equivalent Rights

VESTING AND PAYMENT OF AWARDS

Attainment of Performance Goals

Vesting

Time and Form of Payment

Proration or Forfeiture of Target Award

ADMINISTRATION

Committee is the Administrator

Committee Authority

Decisions Binding

Delegation by the Committee

GENERAL PROVISIONS
Unsecured General Creditor

Tax Withholding

No Rights as Employee

Participation

4
4

9
9

SECTION 7.

SECTION 8.

6.5

6.6

6.7

7.1

7.2

8.1

8.2

8.3

8.4

8.5

8.6

Successors

Payment in the Event of Death

Nontransferability of Awards

AMENDMENT, TERMINATION AND DURATION

Amendment, Suspension or Termination

Duration of the Plan

LEGAL CONSTRUCTION

Code Section 409A

Gender and Number

Severability

Requirements of Law

Governing Law

Captions

SPOK HOLDINGS, INC.

2015 LONG-TERM INCENTIVE PLAN

SECTION 1.

BACKGROUND, PURPOSE AND DURATION

1.1

Effective Date. The Board of Directors (the “Board”) adopted the Plan upon the

recommendation of the Compensation Committee of the Board of Spok Holdings, Inc., (the “Company”)
to be effective as of January 1, 2015.

1.2

Purposes of the Plan. The purposes of the Plan are to promote the success of the

Company’s business, advance the interests of the Company, attract and retain the best available personnel
for positions of substantial responsibility at the Company, and provide additional incentives to selected
key employees of the Company for outstanding performance. The Plan permits the award of Restricted
Stock Units to key employees as the Committee may determine. Upon attainment of Performance Goals
for the Performance Period, Restricted Stock Units granted to Participants will convert and be paid in
Common Stock, and dividend equivalent rights (if any) with respect to vested Restricted Stock Units will
be paid in cash. Actual Awards to “Covered Employees” under the Plan (within the meaning of section
162(m) of the Code) are intended to qualify as Performance Based Compensation pursuant to Article 5 of
the Spok Holdings, Inc. 2012 Equity Incentive Award Plan, as it may be amended or restated from time to
time (“Equity Incentive Award Plan”).

SECTION 2.

DEFINITIONS

The following words and phrases shall have the following meanings unless a different meaning is

plainly required by the context:

2.1
Participant.

“Actual Award” means the vested portion of the Target Award (if any) payable to a

2.2

“Affiliate” means any corporation or other entity (including, but not limited to,

partnerships and joint ventures) controlled by, controlling, or under common control with, the Company
where “control” means the right to elect or appoint at least fifty percent (50%) of the directors, managing
members, general partners, trustees or entities exercising similar powers with respect to the Company or
the applicable entity whether by beneficial ownership of securities or other interests, by proxy or
agreement, or both. Notwithstanding the preceding, an Affiliate that is not an affiliate within the meaning
of the regulations under Code section 409A shall not constitute an Affiliate under this Plan.

2.3

“Award Agreement” means any written agreement, contract or other instrument or

document evidencing a Target Award, including through an electronic medium.

2.4

Board” means the Board of Directors of the Company.

2.5

“Cause” unless otherwise defined in an employment agreement between the Participant

period of time after a written demand for substantial performance is delivered to the Participant by the
Board, which demand specifically identifies the manner in which the Board believes that the Participant
has not substantially performed his or her duties; or (d) the willful engaging by the Participant in conduct
that is demonstrably and materially injurious to the Company, monetarily or otherwise. No act or failure to
act on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the
Participant not in good faith and without reasonable belief that such action or omission was in the
reasonable best interests of the Company. Disability as used herein means a condition or circumstance
such that the Participant has become totally and permanently disabled as defined or described in the
Company’s long term disability benefit plan applicable to executive officers as in effect at the time the
Participant incurs a disability.

2.6

“Change of Control” shall mean and includes each of the following:

(a)

A transaction or series of transactions (other than an offering of Common Stock to

the general public through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries,
an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that,
prior to such transaction, directly or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more
than 50% of the total combined voting power of the Company’s securities outstanding
immediately after such acquisition; or

(b)

During any period of two consecutive years, individuals who, at the beginning of

such period, constitute the Board together with any new Director(s) (other than a Director
designated by a person who shall have entered into an agreement with the Company to effect a
transaction described in Section 2.6(a) or Section 2.6(c)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least two-
thirds of the Directors then still in office who either were Directors at the beginning of the two-
year period or whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or

(c)

The consummation by the Company (whether directly involving the Company or

indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of all or
substantially all of the Company’s assets in any single transaction or series of related transactions
or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

(i)

Which results in the Company’s voting securities outstanding immediately

before the transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result of the
transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all
or substantially all of the Company’s assets or otherwise succeeds to the business of the
Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at
least a majority of the combined voting power of the Successor Entity’s outstanding voting
securities immediately after the transaction, and

(ii)

After which no person or group beneficially owns voting securities

representing 50% or more of the combined voting power of the Successor Entity; provided,

however, that no person or group shall be treated for purposes of this Section 2.6(c)(i) as
beneficially owning 50% or more of combined voting power of the Successor Entity solely
as a result of the voting power held in the Company prior to the consummation of the
transaction; or

(d)

The Company’s stockholders approve a liquidation or dissolution of the Company.

In addition, if a Change in Control constitutes a payment event or a toggle event with

respect to any Award which provides for the deferral of compensation and is subject to Section
409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect
to such Award must also constitute a “change in control event,” as defined in Treasury Regulation
§1.409A-3(i)(5) to the extent required by Section 409A.

The Committee shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has occurred
pursuant to the above definition, and the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

2.7

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and

other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.8

“Committee” means the committee appointed by the Board to administer the Plan. Until

otherwise determined by the Board, (a) the Company’s Compensation Committee of the Board shall
constitute the Committee, and (b) for administrative convenience, the independent, non-employee
members of the Board also may act as the Committee from time to time. With respect to awards intended
to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code, each
member of the Committee shall qualify as an "outside director" under Section 162(m) of the Code.

2.9

“Common Stock” means the common stock of the Company, par value $0.0001 per share.

2.10

“Company” means Spok Holdings, Inc., and Affiliates or any successor thereto.

2.11

“Effective Date” means January 1, 2015.

2.12

“Employee” means any key employee of the Company or Affiliate, whether such

individual is so employed at the time the Plan is adopted or becomes so employed subsequent to the
adoption of the Plan.

2.13

“Participant” means an Employee who has been selected by the Committee for
participation in the Plan. Employees who have been selected to participate as of January 1, 2015 are listed
on Exhibit A.

2.14

“Performance Goals” means the Minimum Performance Goals based on one or more

performance criteria defined in the Equity Incentive Award Plan for the applicable Performance Period, as
approved by the Committee, in writing, no later than the 90th day of the applicable Performance Period.
The Performance Goals for each Performance Period shall be included on Exhibit B upon approval by the
Committee. Subject to any applicable limitations for “performance-based compensation” as described in
Section 162(m)(4)(C) of the Code, the Committee may revise the Performance Goals in the event of a
Change of Control or other corporate reorganization, merger, or similar transaction, to take into account
extraordinary events or as the Committee determines is in the best interests of the Company. Such
extraordinary events shall include the implementation of changes in generally accepted accounting

principles resulting from new accounting standards issued by the Financial Accounting Standards Board,
Securities and Exchange Commission and/or other regulatory bodies responsible for the establishment of
accounting standards applicable to the Company. (As an example, a new revenue recognition standard is
expected to be effective January 1, 2017 that could require adjustment to the performance goals as
established by the Compensation Committee.)

2.15

“Performance Period” means the applicable three-year period commencing on each of

January 1, 2015, January 1, 2016 and January 1, 2017, and ending on December 31, 2017, December 31,
2018 and December 31, 2019, respectively, unless otherwise determined by the Committee or specified in
an Award Agreement or an employment agreement between the Participant and the Company.

2.16

“Person” shall have the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act;

provided, however, that Person shall exclude (i) the Company and (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or Affiliate.

2.17

“Plan” means the Spok Holdings, Inc. 2015 Long-Term Incentive Plan, as set forth in this

instrument and as hereafter amended from time to time.

2.18

“Restricted Stock Unit” means the right to receive a share of Company Common Stock

upon the attainment of the Performance Goals.

2.19

“Separation from Service” means separation from service as defined in the Treasury

Regulations under Code section 409A. “Separates from Service” shall have a consistent meaning.

2.20

“Target Award” means the target award, at one hundred percent (100%) achievement of the

Performance Goals payable under the Plan, as determined by the Committee in its sole discretion.

SECTION 3.

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS

3.1

Selection of Participants. The Committee, in its sole discretion, shall select the Employees

who shall be Participants in the Plan and the Committee may, in its sole discretion, select Employees to
participate in the Plan at any time during any Performance Period.

3.2

Determination of Target Awards. The Committee, in its sole discretion, shall establish and

grant a Target Award that may be earned by each Participant. A Participant’s Target Award shall be
established by the Committee in writing no later than the 90th day of the Performance Period, or, for
employees newly hired or promoted to become eligible during a Performance Period, before 25% of the
remaining Performance Period has elapsed as measured from the date of hire or promotion, as applicable.
The Committee may establish Target Awards in a different manner for different groups of Participants.
The Target Award shall be granted in the form of Restricted Stock Units. Unless otherwise determined by
the Committee, the number of Restricted Stock Units granted shall be based on the fair market value of
the Company’s Common Stock as of the effective date of the grant; provided, for purposes of determining
the number of Restricted Stock Units granted to an Employee who becomes a Participant after the
beginning of an applicable Performance Period, the number of Restricted Stock Units may be determined,
in the sole discretion of the Committee, based on (a) the fair market value of the Company’s Common
Stock as of the effective date of the initial grants to Participants for the applicable Performance Period,
reduced by the value of any cash dividends or cash distributions (regular or otherwise) that are paid with
respect to the Company’s Common Stock from that date to the date of grant, (b) the fair market value of
the Company’s Common Stock on the date on which the Participant commenced participation in the Plan,

or (c) such other manner as the Committee may determine in its sole discretion. Restricted Stock Units
shall be granted pursuant to the Equity Incentive Award Plan. Further, if at any time the Common Stock
ceases to be registered as a class of equity securities under the Exchange Act, whether as a result of a
Change of Control or otherwise, the Committee may in its sole discretion convert any Restricted Stock
Units into a right to receive cash in lieu of shares of Common Stock based upon the fair market value of a
share of Common Stock at the time of or immediately prior to the time the Common Stock was no longer
registered under the Exchange Act.

3.3

Award Agreements. Target Awards granted pursuant to the Plan shall be evidenced by

Award Agreements. Award Agreements may be amended by the Committee with the consent of the
germane Participant from time to time and need not contain uniform provisions.

3.4

Dividend Equivalent Rights. A Participant shall be entitled to dividend equivalent rights
with respect to Restricted Stock Units to the extent that any cash dividends or cash distributions (regular
or otherwise) are paid with respect to the Company’s Common Stock during the Performance Period. The
dividend equivalent rights will be subject to the vesting restrictions and the other terms and conditions
under this Plan that are applicable to the Restricted Stock Units until such time, if ever, as the Restricted
Stock Units with respect to which the dividend equivalent rights are paid vest.

SECTION 4.

VESTING AND PAYMENT OF AWARDS

4.1

Attainment of Performance Goals. In order for Actual Awards to be earned and paid for an

applicable Performance Period, the Company must attain the Performance Goals for the applicable
Performance Period and the Committee must certify the attainment of such Performance Goals in writing.

4.2

Vesting.

(a)

Subject to Section 4.2(b) below, Target Awards shall vest upon the Committee’s

reasonable determination that the Performance Goals have been achieved at the end of the
Performance Period. If the Performance Goals are met and certified by the Committee in writing,
Participants will be entitled to the vested portion of a Target Award unless the Participant has
otherwise forfeited a portion or all of the Target Award as set forth in Section 4.4 .

(b)

In the event of a Change of Control, vesting shall be accelerated as follows,

provided that the Company is on track to meet the Performance Goals as reasonably determined by
the Committee (as comprised immediately prior to the Change of Control).

(i)

If a Change of Control occurs during the first year of the applicable

Performance Period, fifty percent (50%) of the Participant’s Target Award shall vest.

(ii)

If a Change of Control occurs during the second year of the applicable

Performance Period, seventy-five percent (75%) of the Participant’s Target Award shall
vest.

(iii)

If a Change of Control occurs during the final year of the applicable

Performance Period, the Participant’s Target Award shall vest in full.

With respect to an employee who becomes a Participant after the beginning of an
applicable Performance Period, the accelerated vesting described above will apply on a prorated
basis based on the number of days worked during the Performance Period, unless otherwise

determined by the Committee. For clarity, if an employee becomes a Participant in the second
year of the applicable Performance Period and a Change in Control occurs later during that second
year of the applicable Performance Period, accelerated vesting of his Target Award (prorated as
described in section 4.4, below) will be calculated as follows: seventy-five percent (75%) of a
Participant’s unvested Target Award will be multiplied by a fraction, the numerator of which is the
number of days the Employee was a Participant in the Plan during the applicable Performance
Period, and the denominator of which is the total number of days in the applicable Performance
Period.

(c)

All Actual Awards including pro-rated awards will be paid at the time provided in

Section 4.3.

4.3

Time and Form of Payment.

(a)

Each Actual Award shall be paid in Common Stock pursuant to the Award

Agreements, subject to any required withholding for income and employment taxes. Dividend
equivalent rights shall be paid in cash in a single lump sum to the extent earned.

(b)

Actual Awards will be paid on or after the third business day after the Company’s
annual audit for the last fiscal year of the applicable Performance Period has been completed and
the Company’s annual report on Form 10-K for such fiscal year has been filed with the Securities
and Exchange Commission, but in no event later than the last day of the calendar year that begins
immediately following the end of the applicable Performance Period.

(c)

Notwithstanding 4.3(b), in the event of a Participant’s death, the Participant’s estate

will be eligible to receive an amount not greater than one-hundred percent (100%) of the
Participant’s Target Award, prorated to reflect the number of days he or she worked during the
applicable Performance Period, and such amount, which will be determined in the Committee’s
sole discretion, will be paid in the year following Participant’s death. For clarity, prorated awards
will be calculated as follows: one-hundred percent (100%) of a Participant’s Target Award will be
multiplied by a fraction, the numerator of which is the number of days the Participant was
continuously providing services to the Company during the applicable Performance Period
through the date immediately prior to the Participant’s death, and the denominator of which is the
total number of days in the applicable Performance Period.

(d)

Notwithstanding anything to the contrary in this Plan, no payments contemplated
by this Plan will be paid during the six-month period following a Participant’s Separation from
Service unless the Company determines, in its good faith judgment, that paying such amounts at
the times indicated in paragraphs 4.3(b) and (c) would not cause the Participant to incur an
additional tax under Code section 409A, in which case the Actual Award shall be paid on the first
day of the seventh month following the Participant’s Separation from Service.

(e)

The Compensation Committee of the Board may require forfeiture or a clawback of any
incentive compensation awarded or paid under this Plan in excess of the compensation actually earned
based on a restatement of the Company’s financial statements as filed with the Securities and Exchange
Commission for the period covered by this Plan.

4.4

Proration or Forfeiture of Target Award.

(e)

Newly hired or promoted employees who are selected to participate in the Plan

after the beginning of an applicable Performance Period will participate in the Plan on a prorated

basis based on the number of days worked during the applicable Performance Period after being
selected to participate in the Plan. The prorated award will be calculated as follows: one-hundred
percent (100%) of a Participant’s unvested Target Award will be multiplied by a fraction, the
numerator of which is the number of days the Employee was a Participant in the Plan during the
applicable Performance Period, and the denominator of which is the total number of days in the
applicable Performance Period.

(f)

If the Participant involuntarily Separates from Service without Cause or due to

disability, he or she will be eligible to receive a prorated Target Award if the Performance Goals
for the applicable Performance Period are met provided that, in the event Participant involuntarily
Separates from Service without Cause, he or she has executed a release, any waiting period in
connection with such release has expired, he or she has not exercised any rights to revoke the
release and he or she has followed any other applicable and customary termination procedures, as
determined by the Company in its sole discretion. The unvested Target Award will be prorated to
the date of Separation from Service, and the prorated award will be calculated as follows: one-
hundred percent (100%) of a Participant’s unvested Target Award will be multiplied by a fraction,
the numerator of which is the number of days the Participant was continuously providing services
to the Company during the applicable Performance Period through the date immediately prior to
the Participant’s Separation from Service, and the denominator of which is the total number of
days in the applicable Performance Period. Prorated awards will be paid to the Participant at the
time provided in Sections 4.3.

(g)

Notwithstanding Section 4.4(b), any Participant who involuntarily Separates from

Service without Cause during his or her first year of participation in the Plan shall forfeit any right
to receive an Actual Award.

(h)

Any Participant whose employment is terminated for Cause or who voluntarily

Separates from Service prior to the date Actual Awards are paid shall forfeit any right to receive an
Actual Award, unless otherwise authorized by the Committee in its sole discretion.

SECTION 5.

ADMINISTRATION

5.1

Committee is the Administrator. The Plan shall be administered by the Committee. The

Committee shall consist of not less than two (2) members of the Board, and no member of the Committee
shall be a Participant. The members of the Committee shall be appointed from time to time by, and serve
at the pleasure of, the Board.

5.2

Committee Authority. It shall be the duty of the Committee to administer the Plan in

accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees shall be granted awards, (b) prescribe the terms and conditions of awards,
(c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or
appropriate to permit participation in the Plan by Employees who are foreign nationals or employed
outside of the United States, (e) adopt rules or principles for the administration, interpretation and
application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules or
principles. No member of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to an award granted pursuant to this Plan.

5.3

Decisions Binding. All determinations and decisions made by the Committee, the Board,
and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and
binding on all persons, and shall be given the maximum deference permitted by law.

5.4

Delegation by the Committee. The Committee, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or
more directors and/or officers of the Company.

SECTION 6.

GENERAL PROVISIONS

6.1

Unsecured General Creditor. Actual Awards shall be paid solely from the general assets of

the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any
Participant’s claim of any right other than as an unsecured general creditor having the status of an
employee of the Company or an Affiliate thereof with respect to any payment to which he or she may be
entitled.

6.2

Tax Withholding. The Company shall be entitled to withhold from, or in respect of, any

payment to be made an amount sufficient to satisfy all federal, state, local or foreign tax withholding
requirements (including, but not limited to, the Participant’s FICA and Social Security obligations). The
Committee may permit a Participant to satisfy all or part of his or her tax withholding obligations by
having the Company withhold an amount from any cash amounts otherwise due or to become due from
the Company to the Participant or, with respect to Restricted Stock Units, having the Company withhold a
number of shares of Common Stock that become vested having a fair market value equal to the tax
withholding obligations. The fair market value of the shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.

6.3

No Rights as Employee. Nothing in the Plan or any documents relating to the Plan shall

(a) confer on a Participant any right to continue in the employ of the Company; (b) constitute any contract
or agreement of employment; or (c) interfere in any way with the Company’s right to terminate the
Participant’s employment at any time, with or without cause. For purposes of the Plan, transfer of
employment of a Participant between the Company and any one of its Affiliates (or between Affiliates)
shall not be deemed a Separation from Service.

6.4

Participation. No Employee shall have the right to be selected to receive an award under

this Plan. Participation in the Plan in one Performance Period does not connote any right to participate in
the Plan in any future Performance Period.

6.5

Successors. This Plan shall be binding upon and inure to the benefit of the Company and

any successor to the Company and the Participant’s heirs, executors, administrators and legal
representatives.

6.6

Payment in the Event of Death. In the event of a Participant’s death, any vested benefits

remaining unpaid shall be paid to the Participant’s estate.

6.7

Nontransferability of Awards. No award granted under the Plan may be sold, transferred,

pledged, assigned, or otherwise alienated or hypothecated, other than by the laws of descent and
distribution. All rights with respect to an award granted to a Participant shall be available during his or
her lifetime only to the Participant.

SECTION 7.

AMENDMENT, TERMINATION AND DURATION

7.1

Amendment, Suspension or Termination. The Board, in its sole discretion and without

prior notice to Participants, may amend or terminate the Plan, or any part thereof, at any time and for any
reason, to the extent such action will not cause adverse tax consequences to a Participant under Code
section 409A. Except as provided in Section 2.18, the amendment, suspension or termination of the Plan
shall not, without the consent of the Participant, alter or materially impair any rights or obligations under
any Award Agreement. No award may be granted during any period of suspension or after termination of
the Plan.

7.2

Duration of the Plan. The Plan shall commence on January 1, 2015 and, subject to Section

7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect thereafter.

SECTION 8.

LEGAL CONSTRUCTION

8.1

Code Section 409A. The Plan is intended to be a nonqualified deferred compensation plan

within the meaning of Code section 409A and shall be interpreted to meet the requirements of Code
section 409A. To the extent that any provision of the Plan would cause a conflict with the requirements of
Code section 409A, or would cause the administration of the Plan to fail to satisfy Code section 409A,
such provision shall be deemed null and void to the extent permitted by applicable law. Nothing herein
shall be construed as a guarantee of any particular tax treatment to a Participant.

8.2

Gender and Number. Except where otherwise indicated by the context, any masculine term

used herein also shall include the feminine; the plural shall include the singular and the singular shall
include the plural.

8.3

Severability. In the event any provision of the Plan shall be held illegal or invalid for any

reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been included.

8.4

Requirements of Law. The granting of awards under the Plan shall be subject to all

applicable laws, rules and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

8.5

Governing Law. The Plan and all awards shall be construed in accordance with and
governed by the laws of the State of Delaware, but without regard to its conflict of law provisions.

8.6

Captions. Captions are provided herein for convenience only, and shall not serve as a basis

for interpretation or construction of the Plan.

Exhibit A

List of Spok Holdings, Inc., Participants (as of January 1, 2015)

Name
Executives
KELLY, VINCE
BALMFORTH, COLIN
ENDSLEY, SHAWN
SAINE, THOMAS
GOEL, HEMANT
CULP, BONNIE
ASH, GARY

Title

CEO*
PRESIDENT*
CFO
CIO
COO
EVP, Human Resources
EVP, SALES

Senior Vice Presidents
BROGAN, DANIELLE
WOODS, SHARON
SCOTT, DONNA
COLLINS, SEAN

Vice Presidents
OLSON-STEPP, TERRI
LING, MICHAEL
VELDBOOM, KATHY
EDDS, BRIAN
GUNDERSON, KYLE

Other Key Management
WAX, JONATHAN
STEIN, JAMES
BOEHLY, BRET
CHARLAND, ROBERT
ROBINSON, DONNA
JORDAN, JOHN
DITTMER, GARY

Controller
Corp Secretary/Treasurer
SVP, Marketing
SVP, Sales - Americas

VP, Professional Services
VP, Maintenance Business
VP, Technical Support
VP, Product Strategy
VP, Development

Regional Vice President, East
Regional Vice President, West
Regional Vice President, Sales
Regional Vice President, Sales
Regional Vice President, Sales
Regional Vice President, Sales - APAC
Sr. Tax Director

*The Chief Executive Officer and the President participate in the Plan pursuant to their respective
employment agreements.

Exhibit B

Performance Goals

2015-2017 Performance Period

Spok Holdings, Inc.
2017 Short-Term Incentive Plan
(Effective January 1, 2017)

Exhibit 10.13

I. Effective Date. The 2017 Short-Term Incentive Plan (the “Plan”) for Spok Holdings, Inc., was adopted by
the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Spok Holdings,
Inc., (the “Parent” or the “Company”), a Delaware corporation for the employees of Spok, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of the Parent (“Spok”) on November 21, 2016. (The
Plan is effective as of January 1, 2017 and supersedes and replaces all former management short-term incentive
plans, including the Spok Holdings, Inc., 2016 Short-Term Incentive Plan.

II. Purpose. The Plan is designed to attract, motivate, retain and reward key employees for their performance
during the calendar year, from January 1 through December 31, 2017 (the “Performance Period”). The Plan
rewards key employees by allowing them to receive cash bonuses based on how well the Company performs
against the performance objectives selected by the Compensation Committee and set forth in Exhibit A (the
“Performance Objectives”), as may be adjusted by the Compensation Committee in the event of a Change of
Control or other corporate reorganization, merger, similar transaction, to take into account extraordinary
events or as the Compensation Committee determines is in the best interests of the Company. In order for
bonuses to be earned, the Company must meet the Performance Objectives as outlined in Exhibit A on
December 31, 2017. Performance Objectives are based solely on the consolidated performance of the
Company. For clarity, Performance Objectives and the attainment thereof does not include revenue or expenses
related to acquisitions or due diligence expenses occurring after the Effective Date of this Plan except as
directed by the Compensation Committee.

III. Eligibility. Participation in the Plan is limited to those key employees who are selected for participation in
the Plan by the Compensation Committee, in its sole discretion (each such individual, a “Participant”).
Individuals selected by the Compensation Committee to participate as of January 1, 2017 are listed on Exhibit
B. Newly hired or promoted employees, or employees who otherwise become eligible to participate, who
are selected to participate in the Plan after January 1, 2017 but before October 1, 2017 will participate in the
Plan on a prorated basis based on the number of days worked during the performance period after becoming
bonus eligible. Employees who are newly hired or promoted on or after October 1, 2017 will not be eligible
to participate in the Plan.

IV. Target Bonus. The target bonus for each Participant is based on a percentage of the Participant’s annual (or
prorated, if applicable) salary as of January 1, 2017 (or date of hire or promotion to an eligible position, if
later). The applicable percentage is determined by the Compensation Committee with respect to executives
earning $250,000 or more and by the CEO for other management and need not be identical among Participants.
The earned bonus may be greater than or less than the target bonus depending on the level at which the
Performance Objectives are attained.

V. Payment of Earned Bonus.

a. Except as provided herein, each earned bonus under the Plan will be calculated based on the attainment
of the Performance Objectives and will be paid in a lump sum (subject to any required withholding
for income and employment taxes) after the 2017 annual audit of the Parent’s consolidated financial
statement has been completed and the Parent’s 2017 Annual Report on Form 10-K has been filed
with the Securities and Exchange Commission but in no event later than December 31, 2018.

If the Participant involuntarily Separates from Service without Cause or due to disability or dies prior
to December 31, 2017, he or she will be eligible to receive a prorated bonus provided that the Company
is on track to attain the Performance Objectives as reasonably determined by the Compensation
Committee and provided further that, in the event Participant involuntarily Separates from Service
without Cause, he or she has executed a release, any waiting period in connection with such release
has expired, he or she has not exercised any rights to revoke the release and he or she has followed
any other applicable and customary termination procedures, as determined by the Parent in its sole
discretion. The bonus will be prorated to the date of Participant’s Separation from Service or death,
calculated as follows: one-hundred percent (100%) of a Participant’s target bonus will be multiplied
by a fraction, the numerator of which is the number of days the Participant was continuously providing
services to the Company from January 1, 2017 through the date immediately prior to the Participant’s
Separation from Service or death, and the denominator of which is 365 days. Prorated bonuses will
be paid to the Participant, or in the event of Participant’s death, the Participant’s estate, on the sixty-
fifth (65th) day following the date of Participant’s Separation from Service or death.

i. For purposes of the Plan, “Separation from Service” shall have the meaning provided in the
Treasury Regulations under section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and “Separates from Service” shall have a consistent meaning. Unless otherwise
defined in an employment agreement between the Participant and the Parent or the Company,
for purposes of the Plan, “Cause” means (i) dishonesty of a material nature that relates to the
performance of services for the Company by Participants; (ii) criminal conduct (other than
minor infractions and traffic violations) that relates to the performance of services for the
Company by Participant; (iii) the Participant’s willfully breaching or failing to perform his
or her duties as an employee of the Company (other than any such failure resulting from the
Participant having a disability (as defined herein)), within a reasonable period of time after
a written demand for substantial performance is delivered to the Participant by the
Compensation Committee, which demand specifically identifies the manner in which the
Compensation Committee believes that the Participant has not substantially performed his
duties; or (iv) the willful engaging by the Participant in conduct that is demonstrably and
materially injurious to the Parent, Company or an Affiliate, monetarily or otherwise. No act
or failure to act on the Participant’s part shall be deemed “willful” unless done, or omitted
to be done; by the Participant not in good faith and without reasonable belief that such action
or omission was in the reasonable best interests of the Parent, Company and Affiliates. For
this purpose, “disability” means a condition or circumstance such that the Participant has
become totally and permanently disabled as defined or described in the Parent’s long term
disability benefit plan applicable to executive officers as in effect at the time the Participant
incurs a disability.

c. Notwithstanding anything to the contrary in this Plan, no payments contemplated by this Plan will
be paid during the six-month period following a Participant’s Separation from Service unless the
Company determines, in its good faith judgment, that paying such amounts at the time indicated in
paragraph b above would not cause the Participant to incur an additional tax under Code section 409A
(a)(2)(B)(i), in which case the bonus payment shall be paid in a lump sum on the first day of the
seventh month following the Participant’s Separation from Service.

VI. Forfeiture. Any Participant whose employment is terminated for Cause or who voluntarily Separates from

Service prior to the date bonuses are paid shall forfeit any right to receive a bonus award.

VII. Clawback. The Compensation Committee of the Board may require forfeiture or a clawback of any incentive
compensation awarded or paid under this Plan in excess of the compensation actually earned based on a
restatement of the Company’s financial statements as filed with the Securities and Exchange Commission for
the period covered by this Plan.

VIII. Administrator. The Compensation Committee shall administer the Plan in accordance with its terms, and
shall have full discretionary power and authority to construe and interpret the Plan; to prescribe, amend and
rescind rules and regulations, terms, and notices hereunder; and to make all other determinations necessary
or advisable in its discretion for the administration of the Plan. Any actions of the Compensation Committee
with respect to the Plan shall be conclusive and binding upon all persons interested in the Plan. The
Compensation Committee, in its sole discretion and on such terms and conditions as it may provide, may
delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the
Parent or the Company.

IX. Amendment; Termination. The Compensation Committee, in its sole discretion, without prior notice to
Participants, may amend or terminate the Plan, or any part thereof, including the Performance Objectives as
described in Section II, at any time and for any reason, to the extent such action will not cause adverse tax
consequences to a participant under Code section 409A. Any amendment or termination must be in writing
and shall be communicated to all Participants. No award may be granted during any period of suspension or
after termination of the Plan.

X. Miscellaneous.

a. No Rights as Employee. Nothing contained in this Plan or any documents relating to this Plan shall
(a) confer on a Participant any right to continue in the employ of the Company; (b) constitute any
contract or agreement of employment; or (c) interfere in any way with the Company’s right to terminate
the Participant’s employment at any time, with or without Cause.

b. Tax Withholding. To the extent required by applicable federal, state, local or foreign law, the Company
shall withhold all applicable taxes (including, but not limited to, the Participant’s FICA and Social
Security obligations) from any bonus payment.

c. Transferability. A Participant may not sell, assign, transfer or encumber any of his or her rights under

the Plan.

d. Unsecured General Creditor. Participants (or their beneficiary) may seek to enforce any rights or
claims for payment under the Plan solely as an unsecured general creditor of the Parent or Spok.

e. Successors. This Plan shall be binding upon and inure to the benefit of the Parent, Company and any
successor to the Company and the Participant’s heirs, executors, administrators and legal
representatives.

f. Code Section 409A. The Plan is intended to be a nonqualified deferred compensation plan within
the meaning of Code section 409A and shall be interpreted to meet the requirements of Code section
409A. To the extent that any provision of the Plan would cause a conflict with the requirements of
Code section 409A, or would cause the administration of the Plan to fail to satisfy Code section 409A,
such provision shall be deemed null and void to the extent permitted by applicable law. Nothing
herein shall be construed as a guarantee of any particular tax treatment to a Participant.

g. Governing Law. All questions pertaining to the validity, construction and administration of the Plan
shall be determined in accordance with the laws of the State of Delaware, without regard to conflicts
of law provisions.

Integration. This document and each exhibit hereto represent the entire agreement and understanding
between the Company and the Participants and supersede any and all prior agreements or
understandings, whether oral or written, with the Company relating to the subject matter covered by
this Plan.

Severability. In case any provision of this Plan shall be held illegal or invalid, such illegality or
invalidity shall be construed and enforced as if said illegal or invalid provision had never been inserted
herein and shall not affect the remaining provisions of this Plan, but shall be fully severable, and the
Plan shall be construed and enforced as if any such illegal or invalid provision were not a part hereof.

[Execution page follows]

IN WITNESS WHEREOF, Spok Holdings, Inc., by its duly authorized officer acting in accordance

with a resolution duly adopted by the Compensation Committee of the Board of Directors of Spok Holdings, Inc.,
has executed this Plan for the benefit of employees of Spok Holdings, Inc. and subsidiaries, effective as of January
1, 2017.

SPOK HOLDINGS, INC.

/s/ Vincent D. Kelly
Vincent D. Kelly, President & CEO

Exhibit A
Performance Objectives

• Performance Requirements

• Achievement of Project Catapult Milestones - 50% Weighting

•
•

Prototype Platform complete by April 30, 2017 - 25%
Platform ready for Alpha/Beta delivery by December 31, 2017 - 25%

• Achievement of Financial Metrics - 50% Weighting

(Based on 2017 Budget from 2016 LRP)

Operations Bookings - 25%

• Operating and Capital Expenses - 15%
• Wireless Revenue - 10%

• Payout Parameters:

• Achievement of Project Catapult Milestones

• All or nothing payout for Prototype Platform Completion
• All or nothing payout for platform ready for Alpha/Beta delivery

• Achievement of Financial Metrics

•

Scaled payout based on actual achievement

Spok 2017 Short Term Incentive Plan (STIP) Payout Scale
Based on LRP_16

Wireless Revenue (10%)

($ in millions)

Result

Performance

Payout

Operations Bookings (25%)

($ in millions)
Result

Performance

$106.539

$101.697

$99.275

$97.823
$96.854

$92.011

$87.169

$82.326

$77.483
<$77.483

110.0%

105.0%

102.5%

101.0%
100.0%

95.0%

90.0%

85.0%

80.0%
<80.0%

130.0%

120.0%

110.0%

105.0%
100.0%

95.0%

90.0%

85.0%

80.0%
0.0%

Over

Perform

Target

Under

Perform

$38.500

$36.750

$35.875

$35.350
$35.000

$33.250

$31.500

$29.750

$28.000
<$28.000

110.0%

105.0%

102.5%

101.0%
100.0%

95.0%

90.0%

85.0%

80.0%
<80.0%

Payout

150.0%

137.5%

125.0%

112.5%
100.0%

95.0%

90.0%

85.0%

80.0%
0.0%

Over

Perform

Target

Under

Perform

Operating and Capital Expenses (15%)(1)
($ in millions)

Result

Performance

Payout

Over

Perform

Target

Under

Perform

$128.870

$136.925

$144.979

$153.030
$161.088

$169.142

$177.197

$185.251

$193.306

80.0%

85.0%

90.0%

95.0%
100.0%

105.0%

110.0%

115.0%

120.0%

>$193.306

>120.0%

125.0%

120.0%

115.0%

107.5%
100.0%

95.0%

90.0%

85.0%

80.0%

0.0%

(1) Operating and Capital Expenses exclude severance and stock based compensation expense.
Amount is calculated as follows:

Operating Expenses

Capital Expenses

Less:

Severance

Operating and Capital Expenses

Stock Based Compensation

156,009

9,831
(216)
(4,536)
161,088

Exhibit B

List of Spok Participants

(as of January 1, 2017)

Name,

Corporate Employee

Executives

Kelly, Vince

Goel, Hemant

Endsley, Shawn

Saine, Tom

Woods, Sharon

Culp, Bonnie

Soucy, Don

Vice Presidents

Gunderson, Kyle

Ling, Mick

Title

CEO*

President

CFO

CIO

Corp Secretary/Treasurer

EVP, H.R. & CCO

EVP, Sales

VP, Development & CTO

VP, Maintenance Revenue

Olson-Stepp, Terri

VP, Professional Services

Edds, Brian

DeBoer, John

Czop, Mike

Scott, Donna

VP, Product Strategy

VP, Technical Engineering

VP, Technical Operations

SVP, Marketing

Van Wijk, Mathilde

VP, Customer Support

Giorgi, Vincent

Mellin, Andrew

Guyton, Nate’

VP, Alliances

CMO

CNO

Bonus Target as % of
Base Salary

100%

75%

50%

45%

50%

45%

35%

45%

35%

30%

25%

20%

* The Chief Executive Officer participates in the Plan pursuant to his employment agreement.

Spok Holdings, Inc.
2018 Short-Term Incentive Plan
(Effective January 1, 2018)

Exhibit 10.15

I. Effective Date. The 2018 Short-Term Incentive Plan (the “Plan”) for Spok Holdings, Inc., was adopted by the
Compensation Committee of the Board of Directors (the “Compensation Committee”) of Spok Holdings, Inc.,
(the “Parent” or the “Company”), a Delaware corporation for the employees of Spok, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of the Parent (“Spok”) on December 12, 2017. The Plan
is effective as of January 1, 2018 and supersedes and replaces all former management short-term incentive
plans, including the Spok Holdings, Inc., 2017 Short-Term Incentive Plan.

II. Purpose. The Plan is designed to attract, motivate, retain and reward key employees for their performance
during the calendar year, from January 1 through December 31, 2018 (the “Performance Period”). The Plan
rewards key employees by allowing them to receive cash bonuses based on how well the Company performs
against the performance objectives selected by the Compensation Committee and set forth in Exhibit A (the
“Performance Objectives”), as may be adjusted by the Compensation Committee in the event of a Change of
Control or other corporate reorganization, merger, similar transaction, to take into account extraordinary events
or as the Compensation Committee determines is in the best interests of the Company. In order for bonuses
to be earned, the Company must meet the quantitative Performance Objectives, representing 60% of the Plan,
as outlined in Exhibit A on December 31, 2018, and the Management by Objective criteria, representing 40%
of the Plan, as outlined in Exhibit A by the completion of our 2018 annual audit in February 2019. Performance
Objectives are based solely on the consolidated performance of the Company. For clarity, Performance
Objectives and the attainment thereof does not include revenue or expenses related to acquisitions or due
diligence expenses occurring after the Effective Date of this Plan except as directed by the Compensation
Committee.

III. Eligibility. Participation in the Plan is limited to those key employees who are selected for participation in the
Plan by the Compensation Committee, in its sole discretion (each such individual, a “Participant”). Individuals
selected by the Compensation Committee to participate as of January 1, 2018 are listed on Exhibit B. Newly
hired or promoted employees, or employees who otherwise become eligible to participate, who are selected
to participate in the Plan after January 1, 2018 but before October 1, 2018 will participate in the Plan on a
prorated basis based on the number of days worked during the performance period after becoming bonus
eligible. Employees who are newly hired or promoted on or after October 1, 2018 will not be eligible to
participate in the Plan.

IV. Target Bonus. The target bonus for each Participant is based on a percentage of the Participant’s annual (or
prorated, if applicable) salary as of January 1, 2018 (or date of hire or promotion to an eligible position, if
later). The applicable percentage is determined by the Compensation Committee with respect to executives
earning $250,000 or more and by the CEO for other management and need not be identical among Participants.
The earned bonus may be greater than or less than the target bonus depending on the level at which the
Performance Objectives are attained.

V. Payment of Earned Bonus.

a. Except as provided herein, each earned bonus under the Plan will be calculated based on the attainment
of the Performance Objectives and will be paid in a lump sum (subject to any required withholding
for income and employment taxes) after the 2018 annual audit of the Parent’s consolidated financial
statement has been completed and the Parent’s 2018 Annual Report on Form 10-K has been filed with
the Securities and Exchange Commission but in no event later than December 31, 2019.

If the Participant involuntarily Separates from Service without Cause or due to disability or dies prior
to December 31, 2018, he or she will be eligible to receive a prorated bonus provided that the Company
is on track to attain the Performance Objectives as reasonably determined by the Compensation
Committee and provided further that, in the event Participant involuntarily Separates from Service
without Cause, he or she has executed a release, any waiting period in connection with such release
has expired, he or she has not exercised any rights to revoke the release and he or she has followed
any other applicable and customary termination procedures, as determined by the Parent in its sole
discretion. The bonus will be prorated to the date of Participant’s Separation from Service or death,
calculated as follows: one-hundred percent (100%) of a Participant’s target bonus will be multiplied
by a fraction, the numerator of which is the number of days the Participant was continuously providing
services to the Company from January 1, 2018 through the date immediately prior to the Participant’s
Separation from Service or death, and the denominator of which is 365 days. Prorated bonuses will
be paid to the Participant, or in the event of Participant’s death, the Participant’s estate, on the sixty-
fifth (65th) day following the date of Participant’s Separation from Service or death.

i. For purposes of the Plan, “Separation from Service” shall have the meaning provided in the
Treasury Regulations under section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and “Separates from Service” shall have a consistent meaning. Unless otherwise
defined in an employment agreement between the Participant and the Parent or the Company,
for purposes of the Plan, “Cause” means (i) dishonesty of a material nature that relates to the
performance of services for the Company by Participants; (ii) criminal conduct (other than
minor infractions and traffic violations) that relates to the performance of services for the
Company by Participant; (iii) the Participant’s willfully breaching or failing to perform his or
her duties as an employee of the Company (other than any such failure resulting from the
Participant having a disability (as defined herein)), within a reasonable period of time after a
written demand for substantial performance is delivered to the Participant by the Compensation
Committee, which demand specifically identifies the manner in which the Compensation
Committee believes that the Participant has not substantially performed his duties; or (iv) the
willful engaging by the Participant in conduct that is demonstrably and materially injurious
to the Parent, Company or an Affiliate, monetarily or otherwise. No act or failure to act on
the Participant’s part shall be deemed “willful” unless done, or omitted to be done; by the
Participant not in good faith and without reasonable belief that such action or omission was
in the reasonable best interests of the Parent, Company and Affiliates. For this purpose,
“disability” means a condition or circumstance such that the Participant has become totally
and permanently disabled as defined or described in the Parent’s long term disability benefit
plan applicable to executive officers as in effect at the time the Participant incurs a disability.

c. Notwithstanding anything to the contrary in this Plan, no payments contemplated by this Plan will be
paid during the six-month period following a Participant’s Separation from Service unless the Company
determines, in its good faith judgment, that paying such amounts at the time indicated in paragraph b
above would not cause the Participant to incur an additional tax under Code section 409A (a)(2)(B)
(i), in which case the bonus payment shall be paid in a lump sum on the first day of the seventh month
following the Participant’s Separation from Service.

VI. Forfeiture. Any Participant whose employment is terminated for Cause or who voluntarily Separates from

Service prior to the date bonuses are paid shall forfeit any right to receive a bonus award.

VIII.

Administrator. The Compensation Committee shall administer the Plan in accordance with its terms,
and shall have full discretionary power and authority to construe and interpret the Plan; to prescribe, amend
and rescind rules and regulations, terms, and notices hereunder; and to make all other determinations necessary
or advisable in its discretion for the administration of the Plan. Any actions of the Compensation Committee
with respect to the Plan shall be conclusive and binding upon all persons interested in the Plan. The
Compensation Committee, in its sole discretion and on such terms and conditions as it may provide, may
delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the
Parent or the Company.

X. Miscellaneous.

c. Transferability. A Participant may not sell, assign, transfer or encumber any of his or her rights under

the Plan.

d. Unsecured General Creditor. Participants (or their beneficiary) may seek to enforce any rights or
claims for payment under the Plan solely as an unsecured general creditor of the Parent or Spok.

f. Code Section 409A. The Plan is intended to be a nonqualified deferred compensation plan within the
meaning of Code section 409A and shall be interpreted to meet the requirements of Code section 409A.
To the extent that any provision of the Plan would cause a conflict with the requirements of Code
section 409A, or would cause the administration of the Plan to fail to satisfy Code section 409A, such
provision shall be deemed null and void to the extent permitted by applicable law. Nothing herein
shall be construed as a guarantee of any particular tax treatment to a Participant.

[Execution page follows]

IN WITNESS WHEREOF, Spok Holdings, Inc., by its duly authorized officer acting in accordance

SPOK HOLDINGS, INC.

/s/ Vincent D. Kelly
Vincent D. Kelly, President & CEO

Exhibit A
Performance Objectives

•

60% of the STIP will be driven by quantitative measures:

Wireless Revenue (10%), Software Revenue (10%), Operations Bookings (25%), and
Operating/Capital Expenses (15%).

40% of the STIP will be driven through Management by Objective (“MBO”) related to CCP
Development.

****

**** Means that certain confidential information has been deleted from this document and filed separately with the
Securities and Exchange Commission.

Spok 2018 Short Term Incentive Plan (STIP) Payout Scale
Based on LRP_17

Wireless Revenue (10%)

($ in millions)

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Payout

***%

***%
***%

***%

Over

Perform

Target

Under

Perform

Operating and Capital Expenses (15%)(1)
($ in millions)

Over

Perform

Target

Under

Perform

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

>$******

>***%

(1) ****

Payout

***%

***%
***%

***%

Software Revenue (10%)

($ in millions)
Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Operations Bookings (25%)

($ in millions)

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Over

Perform

Target

Under

Perform

Over

Perform

Target

Under

Perform

Payout

***%

***%
***%

***%

Payout

***%

***%
***%

***%

**** Means that certain confidential information has been deleted from this document and filed separately with the
Securities and Exchange Commission.

Exhibit B

List of Spok Participants

(as of January 1, 2018)

Name,

Corporate Employee

Executives

Kelly, Vince

Goel, Hemant

Wallace, Michael

Saine, Tom

************

Culp, Bonnie

************

Vice Presidents

************

Title

CEO*

President

CFO

CIO

************

EVP, H.R. & CCO

************

Bonus Target as % of
Base Salary

100%

75%

**%

75%

**%

* The Chief Executive Officer participates in the Plan pursuant to his employment agreement.
****

**** Means that certain confidential information has been deleted from this document and filed separately with the
Securities and Exchange Commission.

Exhibit 10.16

SPOK HOLDINGS, INC.

2018 LONG-TERM INCENTIVE PLAN

Adopted by the Board of Directors

Upon Recommendation of the Compensation Committee

on December 12, 2017

To Be Effective as of January 1, 2018

Table of Contents

Page

SECTION 1.

BACKGROUND, PURPOSE AND DURATION

1.1 Effective Date

1.2 Purposes of the Plan

SECTION 2.

DEFINITIONS

2.1 Actual Award

2.2 Affiliate

2.3 Award Agreement

2.4 Board

2.5 Cause

2.6 Change of Control

2.7 Code

2.8 Committee

2.9 Common Stock

2.10 Company

2.11 Effective Date

2.12 Employee

2.13 Participant

2.14 Performance Goals

2.15 Performance period

2.16 Person

2.17 Plan

2.18 Restricted Stock Unit

2.19 Separation from Service

2.20 Target Award

SECTION 3.

SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS

3.1 Selection of Participants

3.2 Determination of Target Awards

3.3 Award Agreements

3.4 Dividend Equivalent Rights

Table of Contents

Page

SECTION 4.

VESTING AND PAYMENT OF AWARDS

4.1 Attainment of Performance Goals

4.2 Vesting

4.3 Time and Form of Payment

4.4 Proration or Forfeiture of Target Award

SECTION 5. ADMINISTRATION

5.1 Committee is the Administrator

5.2 Committee Authority

5.3 Decisions Binding

5.4 Delegation by the Committee

SECTION 6.

GENERAL PROVISIONS

6.1 Unsecured General Creditor

6.2 Tax Withholding

6.3 No Rights as Employee

6.4 Participation

6.5 Sucessors

6.6 Payment in the Event of Death

6.7 Nontransferability of Awards

SECTION 7.

AMENDMENT, TERMINATION AND DURATION

7.1 Amendment, Suspension or Termination

7.2 Duration of the Plan

SECTION 8.

LEGAL CONSTRUCTION

8.1 Code Section 409A

8.20 Gender and Number

8.3

Severability

8.4 Requirements of the Law

8.5 Governing Law

8.6 Captions

SPOK HOLDINGS, INC.

2018 LONG-TERM INCENTIVE PLAN

SECTION 1.
BACKGROUND, PURPOSE AND DURATION

1.1

Effective Date. The Board of Directors (the “Board”) adopted the Plan upon the

recommendation of the Compensation Committee of the Board of Spok Holdings, Inc., (the
“Company”) to be effective as of January 1, 2018.

1.2

Purposes of the Plan. The purposes of the Plan are to promote the success of the
Company’s business, advance the interests of the Company, attract and retain the best available
personnel for positions of substantial responsibility at the Company, and provide additional incentives
to selected key employees of the Company for outstanding performance. The Plan permits the award
of Restricted Stock Units to key employees as the Committee may determine. Upon attainment of
Performance Goals for the Performance Period, Restricted Stock Units granted to Participants will
convert and be paid in Common Stock, and dividend equivalent rights (if any) with respect to vested
Restricted Stock Units will be paid in cash. To the extent available, Actual Awards to “Covered
Employees” under the Plan (within the meaning of section 162(m) of the Code) are intended to qualify
as Performance Based Compensation pursuant to Article 5 of the Spok Holdings, Inc. 2012 Equity
Incentive Award Plan, as it may be amended or restated from time to time (“Equity Incentive Award
Plan”).

SECTION 2.
DEFINITIONS

The following words and phrases shall have the following meanings unless a different meaning

is plainly required by the context:

“Actual Award” means the vested portion of the Target Award (if any) payable to a

2.1
Participant.

2.2

“Affiliate” means any corporation or other entity (including, but not limited to,
partnerships and joint ventures) controlled by, controlling, or under common control with, the
Company where “control” means the right to elect or appoint at least fifty percent (50%) of the
directors, managing members, general partners, trustees or entities exercising similar powers with
respect to the Company or the applicable entity whether by beneficial ownership of securities or other
interests, by proxy or agreement, or both. Notwithstanding the preceding, an Affiliate that is not an
affiliate within the meaning of the regulations under Code section 409A shall not constitute an
Affiliate under this Plan.

2.3

“Award Agreement” means any written agreement, contract or other instrument or

document evidencing a Target Award, including through an electronic medium.

2.4

"Board” means the Board of Directors of the Company.

2.5

“Cause” unless otherwise defined in an employment agreement between the Participant

and the Company or an Affiliate, means (a) dishonesty of a material nature that relates to the
performance of services for the Company by Participants; (b) criminal conduct (other than minor
infractions and traffic violations) that relates to the performance of services for the Company by
Participant; (c) the Participant’s willfully breaching or failing to perform his or her duties as an
employee of the Company (other than any such failure resulting from the Participant having a
disability (as defined herein)), within a reasonable period of time after a written demand for substantial
performance is delivered to the Participant by the Board, which demand specifically identifies the
manner in which the Board believes that the Participant has not substantially performed his or her
duties; or (d) the willful engaging by the Participant in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise. No act or failure to act on the Participant’s part
shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that such action or omission was in the reasonable best interests of the
Company. Disability as used herein means a condition or circumstance such that the Participant has
become totally and permanently disabled as defined or described in the Company’s long term
disability benefit plan applicable to executive officers as in effect at the time the Participant incurs a
disability.

2.6

“Change of Control” shall mean and includes each of the following:

(a)

A transaction or series of transactions (other than an offering of Common Stock

to the general public through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or
a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than 50% of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or

(b)

During any period of two consecutive years, individuals who, at the beginning
of such period, constitute the Board together with any new Director(s) (other than a Director
designated by a person who shall have entered into an agreement with the Company to effect a
transaction described in Section 2.6(a) or Section 2.6(c)) whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of at least two-
thirds of the Directors then still in office who either were Directors at the beginning of the two-
year period or whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or

(c)

The consummation by the Company (whether directly involving the Company

or indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of all
or substantially all of the Company’s assets in any single transaction or series of related
transactions or (z) the acquisition of assets or stock of another entity, in each case other than a
transaction:

(i)

Which results in the Company’s voting securities outstanding

immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the person
that, as a result of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or otherwise
succeeds to the business of the Company (the Company or such person, the “Successor
Entity”)) directly or indirectly, at least a majority of the combined voting power of the
Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii)

After which no person or group beneficially owns voting securities
representing 50% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this Section
2.6(c)(i) as beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Company prior to the
consummation of the transaction; or

(d)
Company.

The Company’s stockholders approve a liquidation or dissolution of the

In addition, if a Change in Control constitutes a payment event or a toggle event with

respect to any Award which provides for the deferral of compensation and is subject to Section
409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with
respect to such Award must also constitute a “change in control event,” as defined in Treasury
Regulation §1.409A-3(i)(5) to the extent required by Section 409A.

The Committee shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has
occurred pursuant to the above definition, and the date of the occurrence of such Change in
Control and any incidental matters relating thereto.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and

2.7
other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.8

“Committee” means the committee appointed by the Board to administer the Plan.

Until otherwise determined by the Board, (a) the Company’s Compensation Committee of

the Board shall constitute the Committee, and (b) for administrative convenience, the independent,
non-employee members of the Board also may act as the Committee from time to time. With respect
to awards intended to qualify as “performance-based compensation” as described in Section 162(m)(4)
(C) of the Code, each member of the Committee shall qualify as an "outside director" under Section
162(m) of the Code.

2.9

“Common Stock” means the common stock of the Company, par value $0.0001 per

share.

2.10

“Company” means Spok Holdings, Inc., and Affiliates or any successor thereto.

2.11

“Effective Date” means January 1, 2018.

2.12

“Employee” means any key employee of the Company or Affiliate, whether such

individual is so employed at the time the Plan is adopted or becomes so employed subsequent to the
adoption of the Plan.

2.13

“Participant” means an Employee who has been selected by the Committee for

participation in the Plan.

2.14

“Performance Goals” means the Minimum Performance Goals based on one or more

performance criteria defined in the Equity Incentive Award Plan for the applicable Performance
Period, as approved by the Committee, in writing, no later than the 90th day of the applicable
Performance Period and communicated to each Participant. Subject to any limitations for
“performance-based compensation” pursuant to Section 162(m)(4)(C) of the Code to the extent
applicable, the Committee may revise the Performance Goals in the event of a Change of Control or
other corporate reorganization, merger, or similar transaction, to take into account extraordinary events
or as the Committee determines is in the best interests of the Company. Such extraordinary events
shall include the implementation of changes in generally accepted accounting principles resulting from
new accounting standards issued by the Financial Accounting Standards Board, Securities and
Exchange Commission and/or other regulatory bodies responsible for the establishment of accounting
standards applicable to the Company.

2.15

“Performance Period” means the applicable three-year period commencing on each of
January 1, 2018, January 1, 2019 and January 1, 2020, and ending on December 31, 2020, December
31, 2021 and December 31, 2022, respectively, or such other performance period as may be
determined by the Committee and specified in an Award Agreement or an employment agreement
between the Participant and the Company.

2.16

“Person” shall have the meaning set forth in Sections 13(d) and 14(d) of the Exchange

Act; provided, however, that Person shall exclude (i) the Company and (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or Affiliate.

2.17

“Plan” means the Spok Holdings, Inc. 2018 Long-Term Incentive Plan, as set forth in

this instrument and as hereafter amended from time to time.

2.18

“Restricted Stock Unit” means the right to receive a share of Company Common Stock

upon the attainment of the Performance Goals.

2.19

“Separation from Service” means separation from service as defined in the Treasury

Regulations under Code section 409A. “Separates from Service” shall have a consistent meaning.

2.20

“Target Award” means the target award, at one hundred percent (100%) achievement of
the Performance Goals payable under the Plan, as determined by the Committee in its sole discretion.

SECTION 3.
SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS

3.1

Selection of Participants. The Committee, in its sole discretion, shall select the

Employees who shall be Participants in the Plan and the Committee may, in its sole discretion, select
Employees to participate in the Plan at any time during any Performance Period.

3.2

Determination of Target Awards. The Committee, in its sole discretion, shall establish
and grant a Target Award that may be earned by each Participant. A Participant’s Target Award shall
be established by the Committee in writing no later than the 90th day of the Performance Period, or,
for employees newly hired or promoted during a Performance Period, before 25% of the remaining
Performance Period has elapsed as measured from the date of hire or promotion, as applicable. The
Committee may establish Target Awards in a different manner for different groups of Participants. The
Target Award shall be granted in the form of Restricted Stock Units. Unless otherwise determined by
the Committee, the number of Restricted Stock Units granted shall be based on the fair market value
of the Company’s Common Stock as of the effective date of the grant; provided, for purposes of
determining the number of Restricted Stock Units granted to an Employee who becomes a Participant
after the beginning of an applicable Performance Period, the number of Restricted Stock Units may be
determined, in the sole discretion of the Committee, based on (a) the fair market value of the
Company’s Common Stock as of the effective date of the initial grants to Participants for the
applicable Performance Period, reduced by the value of any cash dividends or cash distributions
(regular or otherwise) that are paid with respect to the Company’s Common Stock from that date to the
date of grant, (b) the fair market value of the Company’s Common Stock on the date on which the
Participant commenced participation in the Plan, or (c) such other manner as the Committee may
determine in its sole discretion. Restricted Stock Units shall be granted pursuant to the Equity
Incentive Award Plan. Further, if at any time the Common Stock ceases to be registered as a class of
equity securities under the Exchange Act, whether as a result of a Change of Control or otherwise, the
Committee may in its sole discretion convert any Restricted Stock Units into a right to receive cash in
lieu of shares of Common Stock based upon the fair

market value of a share of Common Stock at the time of or immediately prior to the time the Common
Stock was no longer registered under the Exchange Act.

3.3

Award Agreements. Target Awards granted pursuant to the Plan shall be evidenced by

Award Agreements. Award Agreements may be amended by the Committee with the consent of the
germane Participant from time to time and need not contain uniform provisions.

3.4

Dividend Equivalent Rights. A Participant shall be entitled to dividend equivalent

rights with respect to Restricted Stock Units to the extent that any cash dividends or cash distributions
(regular or otherwise) are paid with respect to the Company’s Common Stock during the Performance
Period, unless otherwise expressly set forth in an Award Agreement. The dividend equivalent rights
will be subject to the vesting restrictions and the other terms and conditions under this Plan that are
applicable to the Restricted Stock Units until such time, if ever, as the Restricted Stock Units with
respect to which the dividend equivalent rights are paid vest.

SECTION 4.
VESTING AND PAYMENT OF AWARDS

4.1

Attainment of Performance Goals. In order for Actual Awards to be earned and paid for
an applicable Performance Period, the Company must attain the Performance Goals for the applicable
Performance Period and the Committee must certify the attainment of such Performance Goals in
writing.

4.2

Vesting.

(a)

Subject to Section 4.2(b) below, Target Awards shall vest upon the Committee’s

reasonable determination that the Performance Goals have been achieved at the end of the
Performance Period. If the Performance Goals are met and certified by the Committee in
writing, Participants will be entitled to the vested portion of a Target Award unless the
Participant has otherwise forfeited a portion or all of the Target Award as set forth in Section
4.4.

(b)

In the event of a Change of Control, vesting shall be accelerated as follows,

provided that the Company is on track to meet the Performance Goals as reasonably
determined by the Committee (as comprised immediately prior to the Change of Control).

(i)

If a Change of Control occurs during the first year of the applicable

Performance Period, fifty percent (50%) of the Participant’s Target Award shall vest.

(ii)

If a Change of Control occurs during the second year of the applicable

Performance Period, seventy-five percent (75%) of the Participant’s Target Award shall
vest.

(iii)

If a Change of Control occurs during the final year of the applicable

Performance Period, the Participant’s Target Award shall vest in full.

With respect to an employee who becomes a Participant after the beginning of an

applicable Performance Period, the accelerated vesting described above will apply on a
prorated basis based on the number of days worked during the Performance Period, unless
otherwise determined by the Committee. For clarity, if an employee becomes a Participant in
the second year of the applicable Performance Period and a Change in Control occurs later
during that second year of the applicable Performance Period, accelerated vesting of his Target
Award (prorated as described in section 4.4, below) will be calculated as follows: seventy-five
percent (75%) of a Participant’s unvested Target Award will be multiplied by a fraction, the
numerator of which is the number of days the Employee was a Participant in the Plan during
the applicable Performance Period, and the denominator of which is the total number of days in
the applicable Performance Period.

(c)

All Actual Awards including pro-rated awards will be paid at the time provided

in Section 4.3.

4.3

Time and Form of Payment.

(a)

Each Actual Award shall be paid in Common Stock pursuant to the Award

Agreements, subject to any required withholding for income and employment taxes. Dividend
equivalent rights shall be paid in cash in a single lump sum to the extent earned.

(b)

Actual Awards will be paid on or after the third business day after the

Company’s annual audit for the last fiscal year of the applicable Performance Period has been
completed and the Company’s annual report on Form 10-K for such fiscal year has been filed
with the Securities and Exchange Commission, but in no event later than the last day of the
calendar year that begins immediately following the end of the applicable Performance Period.

(c)

Notwithstanding 4.3(b), in the event of a Participant’s death, the Participant’s

estate will be eligible to receive an amount not greater than one-hundred percent (100%) of the
Participant’s Target Award, prorated to reflect the number of days he or she worked during the
applicable Performance Period, and such amount, which will be determined in the Committee’s
sole discretion, will be paid in the year following Participant’s death. For clarity, prorated
awards will be calculated as follows: one-hundred percent (100%) of a Participant’s Target
Award will be multiplied by a fraction, the numerator of which is the number of days the
Participant was continuously

providing services to the Company during the applicable Performance Period through the date
immediately prior to the Participant’s death, and the denominator of which is the total number
of days in the applicable Performance Period.

(d)

Notwithstanding anything to the contrary in this Plan, no payments

contemplated by this Plan will be paid during the six-month period following a Participant’s
Separation from Service unless the Company determines, in its good faith judgment, that
paying such amounts at the times indicated in paragraphs 4.3(b) and (c) would not cause the
Participant to incur an additional tax under Code section 409A, in which case the Actual Award
shall be paid on the first day of the seventh month following the Participant’s Separation from
Service.

(e)

The Compensation Committee of the Board may require forfeiture or a

clawback of any incentive compensation awarded or paid under this Plan in excess of the
compensation actually earned based on a restatement of the Company’s financial statements as
filed with the Securities and Exchange Commission for the period covered by this Plan.

4.4

Proration or Forfeiture of Target Award.

(a)

Newly hired or promoted employees who are selected to participate in the Plan

after the beginning of an applicable Performance Period will participate in the Plan on a
prorated basis based on the number of days worked during the applicable Performance Period
after being selected to participate in the Plan. The prorated award will be calculated as follows
unless otherwise determined by the Committee: one-hundred percent (100%) of a Participant’s
unvested Target Award will be multiplied by a fraction, the numerator of which is the number
of days the Employee was a Participant in the Plan during the applicable Performance Period,
and the denominator of which is the total number of days in the applicable Performance Period.

(b)

If the Participant involuntarily Separates from Service without Cause or due to

disability, he or she will be eligible to receive a prorated Target Award if the Performance
Goals for the applicable Performance Period are met provided that, in the event Participant
involuntarily Separates from Service without Cause, he or she has executed a release, any
waiting period in connection with such release has expired, he or she has not exercised any
rights to revoke the release and he or she has followed any other applicable and customary
termination procedures, as determined by the Company in its sole discretion. The unvested
Target Award will be prorated to the date of Separation from Service, and the prorated award
will be calculated as follows: one-hundred percent (100%) of a Participant’s unvested Target
Award will be multiplied by a fraction, the numerator of which is the number of days the
Participant was continuously providing services to the Company during the applicable
Performance Period through the date immediately prior to the Participant’s Separation from
Service, and the

denominator of which is the total number of days in the applicable Performance Period.
Prorated awards will be paid to the Participant at the time provided in Sections 4.3.

(c)

Notwithstanding Section 4.4(b), any Participant who involuntarily Separates

from Service without Cause during his or her first year of participation in the Plan shall forfeit
any right to receive an Actual Award.

(d)

Any Participant whose employment is terminated for Cause or who voluntarily

Separates from Service prior to the date Actual Awards are paid shall forfeit any right to
receive an Actual Award, unless otherwise authorized by the Committee in its sole discretion.

SECTION 5.
ADMINISTRATION

5.1

Committee is the Administrator. The Plan shall be administered by the Committee.
The Committee shall consist of not less than two (2) members of the Board, and no member of the
Committee shall be a Participant. The members of the Committee shall be appointed from time to
time by, and serve at the pleasure of, the Board.

5.2

Committee Authority. It shall be the duty of the Committee to administer the Plan in

accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary
or appropriate to administer the Plan and to control its operation, including, but not limited to, the
power to (a) determine which Employees shall be granted awards, (b) prescribe the terms and
conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as
are necessary or appropriate to permit participation in the Plan by Employees who are foreign
nationals or employed outside of the United States, (e) adopt rules or principles for the administration,
interpretation and application of the Plan as are consistent therewith, and (f) interpret, amend or revoke
any such rules or principles. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to an award granted pursuant to this
Plan.

5.3

Decisions Binding. All determinations and decisions made by the Committee, the

Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference permitted by law.

5.4

Delegation by the Committee. The Committee, in its sole discretion and on such terms
and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to
one or more directors and/or officers of the Company.

SECTION 6.
GENERAL PROVISIONS

6.1

Unsecured General Creditor. Actual Awards shall be paid solely from the general assets

of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence
any Participant’s claim of any right other than as an unsecured general creditor having the status of an
employee of the Company or an Affiliate thereof with respect to any payment to which he or she may
be entitled.

6.2

Tax Withholding. The Company shall be entitled to withhold from, or in respect of, any

payment to be made an amount sufficient to satisfy all federal, state, local or foreign tax withholding
requirements (including, but not limited to, the Participant’s FICA and Social Security obligations).
The Committee may permit a Participant to satisfy all or part of his or her tax withholding obligations
by having the Company withhold an amount from any cash amounts otherwise due or to become due
from the Company to the Participant or, with respect to Restricted Stock Units, having the Company
withhold a number of shares of Common Stock that become vested having a fair market value equal to
the tax withholding obligations. The fair market value of the shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.

6.3

No Rights as Employee. Nothing in the Plan or any documents relating to the Plan

shall (a) confer on a Participant any right to continue in the employ of the Company; (b) constitute any
contract or agreement of employment; or (c) interfere in any way with the Company’s right to
terminate the Participant’s employment at any time, with or without cause. For purposes of the Plan,
transfer of employment of a Participant between the Company and any one of its Affiliates (or between
Affiliates) shall not be deemed a Separation from Service.

6.4

Participation. No Employee shall have the right to be selected to receive an award
under this Plan. Participation in the Plan in one Performance Period does not connote any right to
participate in the Plan in any future Performance Period.

6.5

Successors. This Plan shall be binding upon and inure to the benefit of the Company

and any successor to the Company and the Participant’s heirs, executors, administrators and legal
representatives.

6.6

Payment in the Event of Death. In the event of a Participant’s death, any vested

benefits remaining unpaid shall be paid to the Participant’s estate.

6.7

Nontransferability of Awards. No award granted under the Plan may be sold,

transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by the laws of
descent and distribution. All rights with respect to an award granted to a Participant shall be available
during his or her lifetime only to the Participant.

SECTION 7.
AMENDMENT, TERMINATION AND DURATION

7.1

Amendment, Suspension or Termination. The Board, in its sole discretion and without

prior notice to Participants, may amend or terminate the Plan, or any part thereof, at

any time and for any reason, to the extent such action will not cause adverse tax consequences to a
Participant under Code section 409A. Except as provided in Section 2.18, the amendment, suspension
or termination of the Plan shall not, without the consent of the Participant, alter or materially impair
any rights or obligations under any Award Agreement. No award may be granted during any period of
suspension or after termination of the Plan.

7.2

Duration of the Plan. The Plan shall commence on January 1, 2018 and, subject to

Section 7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect
thereafter.

SECTION 8.
LEGAL CONSTRUCTION

8.1

Code Section 409A. The Plan is intended to be a nonqualified deferred compensation

plan within the meaning of Code section 409A and shall be interpreted to meet the requirements of
Code section 409A. To the extent that any provision of the Plan would cause a conflict with the
requirements of Code section 409A, or would cause the administration of the Plan to fail to satisfy
Code section 409A, such provision shall be deemed null and void to the extent permitted by applicable
law. Nothing herein shall be construed as a guarantee of any particular tax treatment to a Participant.

8.2

Gender and Number. Except where otherwise indicated by the context, any masculine
term used herein also shall include the feminine; the plural shall include the singular and the singular
shall include the plural.

8.3

Severability. In the event any provision of the Plan shall be held illegal or invalid for

any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan
shall be construed and enforced as if the illegal or invalid provision had not been included.

8.4

Requirements of Law. The granting of awards under the Plan shall be subject to all

applicable laws, rules and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

8.5

Governing Law. The Plan and all awards shall be construed in accordance with and
governed by the laws of the State of Delaware, but without regard to its conflict of law provisions.

8.6

Captions. Captions are provided herein for convenience only, and shall not serve as a

basis for interpretation or construction of the Plan.

Exhibit A

List of Spok Holdings, Inc., Participants (as of January 1, 2018)

Employee Name

Kelly, Vincent*

Goel, Hemant

Job Title

President & CEO

President

Wallace, Michael W.

Chief Financial Officer

Saine, Thomas G.

Chief Information Officer

Culp-Fingerhut, Bonnie K.

EVP, HR & Admin

************

*The Chief Executive Officer participates in the Plan pursuant to his employment agreement.
****

**** Means that certain confidential information has been deleted from this document and filed separately with the
Securities and Exchange Commission.

Exhibit B

Performance Objectives

2018-2020 Performance Period

Spok 2018 Long Term Incentive Plan (LTIP) Payout Scale
Based on LRP_17

(Wireless Revenue - 20%; Software Revenue - 20%)
(Software Operations Bookings - 30%; Operating and Capital Expenses - 30%)

Wireless Revenue (20%)

($ in millions)

Result

Performance

Over

Perform

Target

Under

Perform

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Payout

***%

***%
***%

***%

Operating and Capital Expenses (30%)(1)
($ in millions)

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

>$******

>***%

Payout

***%

***%
***%

***%

Over

Perform

Target

Under

Perform

(1) ****

Software Revenue (20%)

($ in millions)

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Operations Bookings (30%)

($ in millions)

Result

Performance

$******

$******
$******

$******

***%

***%
***%

***%

<$******

<***%

Over

Perform

Target

Under

Perform

Over

Perform

Target

Under

Perform

Payout

***%

***%
***%

***%

Payout

***%

***%
***%

***%

**** Means that certain confidential information has been deleted from this document and filed separately with the
Securities and Exchange Commission.

Spok Holdings, Inc. and Subsidiaries
Legal Entity Chart

Exhibit 21

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Exhibit 23

We have issued our reports dated March 1, 2018, with respect to the consolidated financial statements, schedule, and
internal control over financial reporting included in the Annual Report of Spok Holdings, Inc. on Form 10-K for the
year ended December 31, 2017. We consent to the incorporation by reference of said reports in the Registration
Statements of Spok Holdings, Inc. on Forms S-8 (File No. 333-182444 and File No. 333-212724).

/s/ GRANT THORNTON LLP

McLean, Virginia

March 1, 2018

Exhibit 31.1

I, Vincent D. Kelly, certify that:

I have reviewed this Annual Report on Form 10-K of Sp k Holdings, Inc.;

CERTIFICATIONS

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.

Dated: March 1, 2018

/s/ Vincent D. Kelly
Vincent D. Kelly
President and Chief Executive Officer

I, Michael W. Wallace, certify that:

I have reviewed this Annual Report on Form 10-K of Sp k Holdings, Inc.;

CERTIFICATIONS

Exhibit 31.2

Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.

Dated: March 1, 2018

/s/ Michael W. Wallace
Michael W. Wallace
Chief Financial Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Sp k

Holdings, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)

the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2017 (the “Report”)
fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of
1934, as amended; and

(ii)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.

Dated: March 1, 2018

/s/ Vincent D. Kelly
Vincent D. Kelly
President and Chief Executive Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Sp k

Holdings, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 1, 2018

/s/ Michael W. Wallace
Michael W. Wallace
Chief Financial Officer

BOARD OF
DIRECTORS

Royce Yudkoff
Chairman of the Board, Spok
Holdings, Inc. and Co-Founder of ABRY Partners, LLC

Vincent D. Kelly
President and Chief Executive Officer

N. Blair Butterfield
Chairman of Wind River Advisory Group, LLC

Stacia A. Hylton
Retired Director of The United States Marshals Service

Brian O’Reilly
Consultant

Matthew Oristano
Chairman and Chief Executive Officer of Reaction Biology
Corporation

ANNUAL
MEETING

A formal notice of the meeting is being mailed
to each stockholder. The proxy statement, proxy
card and 2017 Annual Report on Form 10-K are
available at www.proxyvote.com.

2017 Annual Report on Form 10-K

This annual report contains the 2017 Form
10-K filed with the Securities and Exchange
Commission. Spok Holdings, Inc. will provide
without charge to each stockholder of record
additional copies of the Company’s 2017 Form
10-K. Please send your request to:

Investor Relations
Spok Holdings, Inc.
6850 Versar Center, Suite 420
Springfield, VA 22151

Investor and Media Information

Samme L. Thompson
President of Telit Associates, Inc.

CORPORATE
OFFICERS

Vincent D. Kelly
President and Chief Executive Officer

Hemant Goel
President, Spok, Inc.

Michael Wallace
Chief Financial Officer and
Chief Accounting Officer

Bonnie K. Culp
Executive Vice President, Human
Resources and Administration and
Chief Compliance Officer, Spok, Inc.

Sharon Woods Keisling
Corporate Secretary and Treasurer

Thomas G. Saine
Chief Information Officer, Spok, Inc.

the

from

Inquiries
financial
investors,
community, and news organizations should be
directed to Investor Relations and Corporate
Communications at the address noted above, by
calling (800) 611-8488, or by visiting our website
at www.spok.com.

Securities Listing

The common stock of Spok Holdings, Inc.,
trading symbol “SPOK,” trades on the NASDAQ
National Market®.

Transfer Agent and Registrar

Computershare
P.O. Box 505000
Louisville, KY 40233
Direct: (781) 575-2725
Toll Free: (877) 498-8865
Hearing Impaired: TDD (800) 952-9245
www.computershare.com/investor

Independent Public Accountants

Grant Thornton LLP
1000 Wilson Boulevard, Suite 1400
Arlington, VA 22209

Corporate Counsel

Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004-1304

Spok, Inc.
6850 Versar Center, Suite 420
Springfield, VA 22151

Telephone (800) 611-8488
Fax (866) 382-1662
www.spok.com

Spok, Inc., a wholly owned subsidiary of Spok Holdings, Inc. (NASDAQ: SPOK), headquartered
in Springfield, Virginia, is proud to be the global leader in healthcare communications. We
deliver clinical information to care teams when and where it matters most to improve patient
outcomes. Top hospitals rely on the Spok Care Connect® platform to enhance workflows for
clinicians, support administrative compliance, and provide a better experience for patients. Our
customers send over 100 million messages each month through their Spok® solutions. When
seconds count, count on Spok.