EXHIBIT 10.5
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WARNING
Granting options to directors and officers under this plan may violate NASD or
stock exchange rules if the plan does not meet the broad based plan
exemption from shareholder approval
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SKILLSOFT
1996 SUPPLEMENTAL STOCK PLAN
(AS AMENDED MARCH 2006)
1. Purposes of the Plan. The purposes of this Supplemental Stock Plan are to
(i) attract and retain the best available personnel for positions of
substantial responsibility, (ii) provide additional incentive to
Employees, Directors and Consultants, and (iii) promote the success of the
Company's business.
Options granted under the Plan will be Nonstatutory Stock Options.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under US state corporate laws,
US federal and state securities laws, the Code, any stock exchange
or quotation system on which the Ordinary Shares are listed or
quoted and the applicable laws of any foreign country or
jurisdiction where Options are, or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Ordinary Shares" means the Ordinary Shares and/or related American
Depositary Shares of the Company.
(g) "Company" means SkillSoft, a limited liability company organized
under the laws of the Republic of Ireland.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. Neither service as a Director nor
payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Ordinary
Shares determined as follows:
(i) If the Ordinary 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 stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the last market
day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Ordinary Shares are regularly quoted by a
recognized securities dealer but selling prices are not reported,
the Fair Market Value of an Ordinary Share shall be the mean between
the high bid and low asked prices for the Ordinary Shares on the day
of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the Ordinary
Shares, the Fair Market Value shall be determined in good faith by
the Administrator.
(n) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.
(o) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(p) "Option" means a nonstatutory stock option granted pursuant to the
Plan, that is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(q) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions
of the Plan.
(r) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower
exercise price.
(s) "Optioned Stock" means the Ordinary Shares subject to an Option.
(t) "Optionee" means the holder of an outstanding Option granted under
the Plan.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1996 Supplemental Stock Plan.
(w) "Service Provider" means an Employee including an Officer,
Consultant or Director.
(x) "Share" means a share of the Ordinary Shares, as adjusted in
accordance with Section 12 of the Plan.
(y) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
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3. Shares Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Ordinary Shares which may be
optioned and sold under the Plan is 10,101,554 Ordinary Shares (which will
be represented by 10,101,554 American Depositary Shares). The Shares may
be authorized, but unissued, or reacquired Ordinary Shares.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).
4. Administration of the Plan.
(a) The Plan shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall
have the authority, in its discretion:
(i) to determine the Fair Market Value of the Ordinary Shares;
(ii) to select the Service Providers to whom Options may be
granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Ordinary Shares to be
covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the
exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or the
shares of Ordinary Shares relating thereto, based in each
case on such factors as the Administrator, in its sole
discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the
Ordinary Shares covered by such Option shall have declined
since the date the Option was granted;
(viii) to institute an Option Exchange Program;
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of
qualifying for preferred tax treatment under foreign tax
laws;
(xi) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;
(xii) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or
previously granted by the Administrator;
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(xiii) to determine the terms and restrictions applicable to
Options;
(xiv) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right
that number of Shares having a Fair Market Value equal to
the amount required to be withheld. The Fair Market Value of
the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined.
All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or
advisable; and
(xv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.
5. Eligibility. Options may be granted to Service Providers; provided,
however, that notwithstanding anything to the contrary contained in the
Plan, Options may not be granted to Officers and Directors.
6. Limitation. Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for ten (10) years, unless sooner
terminated under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including
the method of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for
more than six months on the date of surrender, and (B) have a
Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option
shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with
the Plan;
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(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred
compensation program or arrangement;
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable
Laws; or
(viii) any combination of the foregoing methods of payment.
10. Exercise of Option.
a. Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. An Option may
not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of (i) the Optionee or,
if requested by the Optionee, in the name of the Optionee and his or her spouse,
or (ii) AIB Custodial Nominees Limited A/C BONY as Optionee's nominee to hold
the shares issued on exercise on Optionee's behalf and subject to Purchaser's
directions. (If selected, the share certificate shall be mailed at Optionee's
risk to AIB Custodial Nominees Limited, P.O. Box 518, IFSC Dublin 1, Ireland).
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter 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 Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option,
but only within such period of time as is specified in the Option
Agreement, and only to the extent that the Option is vested on the
date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for three (1) month following the
Optionee's termination. If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option
within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is
specified in the Option Agreement, to the extent the Option is
vested on the date of termination (but in no event later than the
expiration of the term of such Option as set
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forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, on the
date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee
does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration
of the term of such Option as set forth in the Notice of Grant), by
the Optionee's estate or by a person who acquires the right to
exercise the Option by bequest or inheritance, but only to the
extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the
Optionee's termination. If, at the time of death, the Optionee is
not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan.
The Option may be exercised by the executor or administrator of the
Optionee's estate or, if none, by the person(s) entitled to exercise
the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted
based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such
offer is made.
11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an 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. If the Administrator makes an
Option transferable, such Option shall contain such additional terms and
conditions as the Administrator deems appropriate.
12. 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 of Ordinary Shares
covered by each outstanding Option, and the number of shares of
Ordinary 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 of Ordinary Shares covered by
each such outstanding Option, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Ordinary
Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Ordinary Shares, or
any other increase or decrease in the number of issued shares of
Ordinary Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of
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any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Ordinary
Shares subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her
Option until ten (10) days prior to such transaction as to all of
the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option shall
lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated.
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, each outstanding Option shall be assumed or
an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.
In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable in
lieu of assumption or substitution in the event of a merger or sale
of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option shall be fully vested and exercisable
for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of
Optioned Stock, immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of
Ordinary 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); provided, however, that if such consideration
received in the merger or sale of assets is not solely Ordinary
Shares of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for
each Share of Optioned Stock to be solely Ordinary Shares 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.
13. Grant. The date of grant of an Option shall be, for all purposes, the date
on which the Administrator makes the determination granting such Option,
or such other later date as is determined by the Administrator. Notice of
the determination shall be provided to each Optionee within a reasonable
time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed
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otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the
Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it
hereunder with respect to options granted under the Plan prior to
the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. 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 shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
(b) Investment Representations. 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.
16. Inability to Obtain Authority. The 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.
17. 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.
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