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.

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;

(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 € 0.11 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.

4.

Administration and Grants of Options under the Plan .

(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 50,000 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 20,000 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.

(v)

The terms of a Subsequent Option granted hereunder shall be as follows:

(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