EXHIBIT 4.1
SMARTFORCE PUBLIC LIMITED COMPANY
2001 OUTSIDE DIRECTOR OPTION PLAN
1. Purposes of the Plan. The purposes of this 2001 Outside Director Option
Plan are to attract and retain the best available personnel for service
as Outside Directors (as defined herein) of the Company, to provide
additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board.
All options granted hereunder shall be nonstatutory stock options.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Attorney" means, in relation to an Optionee, a person who
acquires the right to manage the Optionee's affairs
generally as a result of the Optionee's Incapacity.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Company" means SmartForce Public Limited Company, a public
limited company organized under the laws of the Republic of
Ireland.
(e) "Director" means a member of the Board.
(f) "Disability" means total and permanent disability as
defined in section 22(e)(3) of the Code.
(g) "Employee" means any person, including officers and
Directors, employed by the Company or any Parent or
Subsidiary of the Company. The payment of a Director's fee
by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.
(h) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(i) "Fair Market Value" means, as of any date, the value of a
Share determined as follows:
(i) If the Shares are listed on any established
stock exchange or a national market system, including
without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such Shares (or
the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day
prior to the time of determination as reported in The Wall
Street Journal or such other source as the Board deems
reliable;
(ii) If the Shares are regularly quoted by a
recognized securities dealer but selling prices are not
reported, the Fair Market Value of a Share shall be the
mean between the high bid and low asked prices for the
Shares for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable; or
(iii) In the absence of an established market for
the Shares, the Fair Market Value thereof shall be
determined in good faith by the Board.
(j) "Incapacity" means in relation to an Optionee who has a
Disability, the inability to exercise an Option due to a
medically determinable physical or mental impairment that
has been proven to the satisfaction of the Board.
(k) "Inside Director" means a Director who is an Employee.
(l) "Option" means a share option granted pursuant to the Plan.
(m) "Optioned Shares" means Shares subject to an Option.
(n) "Optionee" means a Director who holds an Option.
(o) "Outside Director" means a Director who is not an Employee.
(p) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the
Code.
(q) "Plan" means this 2001 Outside Director Option Plan.
(r) "Share" means an ordinary share of EURO0.11 each in the
capital of the Company (each such ordinary share
representing one American Depositary Share of the Company
at the date hereof), as adjusted in accordance with Section
10 of the Plan.
(s) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the
Internal Revenue Code of 1986.
3. Shares Subject to the Plan. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned
and sold under the Plan is 350,000 Shares (the "Pool"). The Shares may be
authorized, but unissued, or (subject to compliance with the Companies
Acts, 1963 to 1999 of Ireland) reacquired.
If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless
the Plan has terminated). Shares that have actually been issued under the
Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.
4. Administration and Grants of Options under the Plan.
(a) Procedure for Grants. All grants of Options to Outside
Directors under this Plan shall be automatic and
nondiscretionary and shall be made strictly in accordance
with the following provisions:
(i) No person shall have any discretion to select
which Outside Directors shall be granted Options or to
determine the number of Shares to be covered by Options.
(ii) Each Outside Director shall be automatically
granted an Option to purchase 25,000 Shares (the "First
Option") on the date on which the later of the following
events occurs: (A) the effective date of this Plan, as
determined in accordance with Section 6 hereof, or (B) the
date on which such person first becomes an Outside
Director, whether through election by the shareholders of
the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be
an Inside Director but who remains a Director shall not
receive a First Option.
(iii) Each Outside Director shall be automatically
granted an Option to purchase 10,000 Shares (a "Subsequent
Option") on January 1 of each year provided he or she is
then an Outside Director and if as of such date, he or she
shall have served on the Board for at least the preceding
six (6) months.
(iv) The terms of a First Option granted hereunder
shall be as follows:
(A) the term of the First Option shall be ten
(10) years.
(B) the First Option shall be exercisable
only while the Outside Director remains a Director
of the Company, except as set forth in Sections 8
and 10 hereof.
(C) the exercise price per Share shall be one
hundred percent (100%) of the Fair Market Value per
Share on the date of grant of the First Option.
(D) subject to Section 10 hereof, the First
Option shall become exercisable as to twenty five
percent (25%) of the Shares subject to the First
Option on each anniversary of its date of grant,
provided that the Optionee continues to serve as a
Director on all such relevant dates.
Notwithstanding the foregoing, in connection with a
First Grant, the vesting commencement date shall be
the date on which the individual was appointed by
the Board of Directors to serve as an Outside
Director of the Company or the date on which the
Plan was approved by the Board of Directors,
whichever is later.
(v) The terms of a Subsequent Option granted
hereunder shall be as follows:
(A) the term of the Subsequent Option shall
be ten (10) years.
(B) the Subsequent Option shall be
exercisable only while the Outside Director remains
a Director of the Company, except as set forth in
Sections 8 and 10 hereof.
(C) the exercise price per Share shall be one
hundred percent (100%) of the Fair Market Value per
Share on the date of grant of the Subsequent Option.
(D) subject to Section 10 hereof, the
Subsequent Option shall become exercisable as to
twenty five percent (25%) of the Shares subject to
the Subsequent Option on each anniversary of its
date of grant, provided that the Optionee continues
to serve as a Director on all such relevant dates.
(vi) In the event that any Option granted under the
Plan would cause the number of Shares subject to
outstanding Options plus the number of Shares previously
purchased under Options to exceed the Pool, then the
remaining Shares available for Option grant shall be
granted under Options to the Outside Directors on a pro
rata basis. No further grants shall be made until such
time, if any, as additional Shares become available for
grant under the Plan through action of the Board or the
shareholders to increase the number of Shares which may be
issued under the Plan or through cancellation or expiration
of Options previously granted hereunder.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be granted automatically in accordance with the terms set
forth in Section 4 hereof.
The Plan shall not confer upon any Optionee any right with respect
to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the
Director or the Company may have to terminate the Director's relationship
with the Company at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the shareholders of the
Company as described in Section 16 of the Plan. It shall continue in
effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan.
7. Form of Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) consideration received by the
Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (iv) any combination of the foregoing
methods of payment.
8. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such
times as are set forth in Section 4 hereof; provided,
however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with
Section 16 hereof has been obtained.
An Option may not be exercised for a fraction
of a Share.
An Option shall be deemed to be exercised when
written notice of such exercise has been given to the
Company in accordance with the terms of the Option by
the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option
is exercised has been received by the Company. Full
payment may consist of any consideration and method of
payment allowable under Section 7 of the Plan. Until
the issuance (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized
transfer agent of the Company) of the share certificate
evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder shall
exist with respect to the Optioned Share,
notwithstanding the exercise of the Option. A share
certificate for the number of Shares so acquired shall
be issued to the Optionee or its nominee as soon as
practicable after exercise of the Option. No adjustment
shall be made for a dividend or other right for which
the record date is prior to the date the share
certificate is issued, except as provided in Section 10
of the Plan.
Exercise of an Option in any manner shall result
in a decrease in the number of Shares which thereafter
may be available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to
which the Option is exercised.
(b) Termination of Continuous Status as a Director. Subject
to Section 10 hereof, in the event an Optionee's status
as a Director terminates (other than upon the
Optionee's death or Disability), the Optionee may
exercise his or her Option, but only within three (3)
months following the date of such termination, and only
to the extent that the Optionee was entitled to
exercise it on the date of such termination (but in no
event later than the expiration of its ten (10) year
term). To the extent that the Optionee was not entitled
to exercise an Option on the date of such termination,
and to
the extent that the Optionee does not exercise such
Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
(c) Disability of Optionee. In the event Optionee's status
as a Director terminates as a result of Disability, the
Optionee or, in the event of Optionee's Incapacity, his
or her Attorney, may exercise his or her Option, but
only within twelve (12) months following the date of
such termination, and only to the extent that the
Optionee was entitled to exercise it on the date of
such termination (but in no event later than the
expiration of its ten (10) year term). To the extent
that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does
not exercise such Option (to the extent otherwise so
entitled) within the time specified herein, the Option
shall terminate.
(d) Death of Optionee. In the event of an Optionee's death,
the Optionee's estate or a person who acquired the
right to exercise the Option by bequest or inheritance
may exercise the Option, but only within twelve (12)
months following the date of death, and only to the
extent that the Optionee was entitled to exercise it on
the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent
that the Optionee was not entitled to exercise an
Option on the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to
exercise such Option does not exercise such Option (to
the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.
9. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee or,
in the event of the Optionee's Incapacity, by his or her Attorney.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of
Shares covered by each outstanding Option, the number of
Shares which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per Share
covered by each such outstanding Option, and the number of
Shares issuable pursuant to the automatic grant provisions
of Section 4 hereof shall be proportionately adjusted for
any increase or decrease in the number of issued Shares
resulting from a reorganization, bonus issue,
reclassification or the like, or any other increase or
decrease in the number of issued Shares effected without
receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without
receipt of consideration." Except as expressly provided
herein, no issuance by the Company of shares of any class,
or securities convertible into shares of any class, shall
affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of Shares subject to
an Option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the
Board shall notify each Optionee as soon as practicable
prior to the effective date of such proposed transaction.
Each Optionee shall have the right to exercise his or her
Option within fifteen (15) days prior to the proposed date
of such transaction as to all of the Optioned Shares
covered thereby. To the extent it has not been previously
exercised, an Option will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation or the sale of
substantially all of the assets of the Company, outstanding
Options may be assumed or equivalent options may be
substituted by the successor corporation or a Parent or
Subsidiary thereof (the "Successor Corporation"). If an
Option is assumed or substituted for, the Option or
equivalent option shall continue to be exercisable as
provided in Section 4 hereof for so long as the Optionee
serves as a Director or a director of the Successor
Corporation. If, at any time following such assumption or
substitution, the Optionee's status as a Director or
director of the Successor Corporation, as applicable, is
terminated other than upon a voluntary resignation by the
Optionee, the Option or substituted option shall become
fully exercisable. Following such termination, the Option
or substituted option shall remain exercisable in
accordance with Sections 8(b) through (d) above.
If the Successor Corporation does not assume an outstanding Option or
substitute for it an equivalent option, the Option shall become fully vested and
exercisable. In such event the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and upon the expiration of such period the Option shall terminate.
For the purposes of this Section 10(c), an Option shall be considered
assumed if, following the merger or sale of assets, the Option confers the right
to purchase or receive, for each Optioned Share subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
shares, cash, or other securities or property) received in the merger or sale of
assets by holders of Shares for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares). If
such consideration received in the merger or sale of assets is not solely
ordinary shares (or their equivalent) of the Successor Corporation or its
Parent, the Board may, with the consent of the Successor Corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Optioned Share, to be solely ordinary shares (or their equivalent) of the
Successor Corporation or its Parent equal in fair market value to the per share
consideration received by holders of ordinary shares in the merger or sale of
assets.
11. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the
rights of any Optionee under any grant theretofore made, without his or
her consent. In addition, to the extent necessary and desirable to comply
with any applicable law, regulation or stock exchange rule, the Company
shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not
been amended or terminated.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4 hereof.
13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, state securities laws, Irish Law and
the requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in
the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel
to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to
issue or sell such Shares as to which such requisite authority shall not
have been obtained.
14. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
15. Option Agreement. Options shall be evidenced by written option agreements
in such form as the Board shall approve.
16. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the
Plan is adopted by the Board. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law
and any stock exchange rules.