EXHIBIT 10.4
SKILLSOFT PUBLIC LIMITED COMPANY
2001 OUTSIDE DIRECTOR OPTION PLAN
(as amended as of August 23, 2006)
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 SkillSoft 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 day of determination
(or for the most recent market trading day if neither the closing
sales price nor the closing bid for the Shares is quoted for the
day 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 day of determination (or for the
most recent market trading day if the bid and asked prices for
the Shares are not quoted for the day 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 E0.11 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 750,000 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.
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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 33.33% 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.
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(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 in full on the first anniversary of its
date of grant, provided that the Optionee continues to serve
as a Director on such relevant date.
(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.
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(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
Optionees'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.
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(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-Transferabilitv 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
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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
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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.
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