EXHIBIT 10.3
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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 SEPTEMBER 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 day of determination (or on
the most recent market trading day if neither the closing sales price
nor the closing bid for the Ordinary Shares is quoted for 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
(or on the most recent market trading day if the bid and asked prices
for the Ordinary Shares are not quoted for 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 8,701,554 Ordinary Shares (which will be
represented by 8,701,554 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;
(xiii) to determine the terms and restrictions applicable to Options;
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(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
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set 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 any class, shall affect, and no adjustment by reason thereof
shall be
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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 otherwise between the Optionee and
the Administrator, which agreement must be in
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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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