EXHIBIT
10.16
 EMPLOYMENT
AGREEMENT
 
 This
Employment Agreement among Colm Darcy (the "EXECUTIVE") and SmartForce PLC, a
public company limited by shares formed under the laws of the Republic of
Ireland ("SMARTFORCE PLC") and its wholly-owned subsidiary, SmartForce, a
Delaware corporation ("SMARTFORCE"), is entered into as of September __, 2002.
The effectiveness of this Agreement is subject to the occurrence of the Closing
Date as that term is defined in the Agreement and Plan of Merger by and among
SmartForce, SkillSoft Corporation and Slate Acquisition Corp. (the "EFFECTIVE
DATE"). If such Agreement and Plan of Merger is terminated prior to the Closing
Date, this Agreement shall be null and void. For purposes of this Agreement, the
term "COMPANY" shall be used to refer to both SmartForce PLC and
SmartForce.
 
 WHEREAS,
the Company desires to employ the Executive and the Executive desires to
continue employment with the Company on the terms and conditions set forth
below;
 
 NOW,
THEREFORE, in consideration of the foregoing recital and the respective
covenants and agreements of the parties contained in this document, the Company
and the Executive agree as follows:
 
 1.       Employment
and Duties. The Executive shall be employed as Executive Vice President of
Content Development of the Company effective as of the Effective Date reporting
to the Chief Executive Officer, and assuming and discharging such
responsibilities as are mutually agreed upon by the Executive and the Chief
Executive Officer commensurate with such office and position. The Executive
shall perform faithfully the executive duties assigned to him to the best of his
ability.
 
 2.       Base
Salary. In consideration of the Executive's services, the Executive shall be
paid a minimum base salary at the rate of $200,000 per year during the period of
employment (the "BASE SALARY"), to be paid in installments in accordance with
the Company's standard payroll practices. This Base Salary shall be reviewed for
increases at least annually by the Board of Directors of the Company (the
"Board") on the same basis as the Board shall review the compensation of other
executive officers of the Company. In the event that the Board of Directors
deems it appropriate to decrease such base salary, the Executive hereby consents
to such change provided that the resulting reduced base salary is consistent
with the base salary of the other members of the executive management team
(ie..EVP, Software Development, Chief Financial Officer and Executive Vice
President, Sales).
 
 3.       Stock
Option. In addition to the Base Salary, Company shall recommend to the Board of
Directors or appropriate committee that Executive be garnted an option to
purchase a total of 50,000 shares of the Company on the Effective Date. The
option will vest as to 25% one year from the Effective Date and as to 1/48th of
the shares each month thereafter and will be evidenced by the Company's standard
form of share option agreement.
  
  4.       At-Will
Employment. The Company and the Executive acknowledge that the Executive's
employment is and shall continue to be at-will, as defined under applicable law.
If the Executive's employment terminates for any reason, the Executive shall not
be entitled to any
 payments,
benefits, damages, awards or compensation other than as provided by this
Agreement, or as may otherwise be available in accordance with the Company's
established employee plans and policies or other written agreements with the
Executive at the time of termination.
 
 5.       Benefits;
Expenses. The Executive, together with his spouse and dependent children, shall
be permitted, to the extent eligible, to participate at the Company's expense in
any group medical, dental, life insurance and disability insurance plans, or
similar benefit plans of the Company that are available to other executive
officers in each case pursuant to the terms and conditions of each such plan or
program. The Executive shall also be entitled to four (4) weeks' annual
vacation. Without limiting the generality of the foregoing, the Company shall
reimburse the Executive for all reasonable business and travel expenses actually
incurred or paid by the Executive in the performance of services on behalf of
the Company, in accordance with the Company's expense reimbursement policy as in
effect from time to time. The Company will fund two round trip economy class
tickets to Ireland each year for Executive's spouse, for so long as the
Executive is based in the United States. The Executive shall be entitled to
travel business class on coast-to-coast and international business trips. In
addition to any other rights set forth in the event of the Executive's
termination, Executive shall be reimbursed for actual, reasonable cost to
relocate self and family to Ireland in the event that the Company requests that
the Executive relocate to Ireland (and he does so) or an Involuntarily
Termination Event with respect to the Executive's employment occurs, and he
returns to Ireland within three months thereafter.
 
 6.       Voluntary
Termination and Termination for Cause. In the event that the Executive
terminates his employment with the Company voluntarily (other than for Good
Reason, as defined below) or the Company terminates the Executive's employment
for Cause, Sections 6(a), 6(b) and 6(c) below shall apply. For purposes of this
Agreement, termination for "CAUSE" shall mean (i) any act of personal dishonesty
taken by the Executive in connection with his responsibilities as an employee
which is intended to cause a material personal financial benefit for the
Executive and is intended to cause a material financial detriment to the
Company, (ii) the Executive's conviction of or plea of nolo contendere to a
felony, (iii) a willful act by the Executive which constitutes misconduct and is
injurious to the Company, and (iv) continued willful violations by the Executive
of the Executive's obligations to the Company under this Agreement.
 
 (a)      Covenant
Not to Solicit. Beginning with the effective date of the Executive's voluntary
termination (other than for Good Reason) or termination for Cause and until the
later of (i) six (6) months thereafter or (ii) the date that is one (1) year
after the Effective Date (the "NON-COMPETE PERIOD"), the Executive agrees that
he will not:
 
 (i)      solicit,
encourage, or take any other action which is intended to induce any other
employee of the Company to terminate his employment with the Company,
or
 
 (ii)     interfere
in any manner with the contractual or employment relationship between the
Company and any such employee of the Company.
 
 The
foregoing shall not prohibit the Executive or any entity with which the
Executive may be affiliated from hiring a former employee of the Company,
provided that such hiring results from
 such
employee's affirmative response to a general recruitment effort carried out
through a public solicitation or a general solicitation.
 
 (b)      Covenant
Not to Compete. During the Non-Compete Period, the Executive agrees that he will
not, directly or indirectly, own, manage, operate, join, control, advise or
participate in, as a shareholder (other than as a shareholder with less than one
percent (1%) of the outstanding stock of a company), officer, manager,
executive, partner, consultant or technical or business advisor (or any foreign
equivalents of the foregoing) any company that derives more than ten percent
(10%) of its revenues from a Restricted Business, or any company or entity
controlling, controlled by or under common control with any company that derives
more than ten percent (10%) of its revenues from a Restricted Business (any such
company, a "RESTRICTED COMPANY"). For the purposes of this Agreement, the term
"RESTRICTED BUSINESS" shall mean the business of developing or selling
computer-based training for information technology professionals, on-line
business degrees, or any other interactive education business in which the
Company is then involved.
   
 The
foregoing will not in any way affect the Executive's right to take any of the
foregoing positions if he is involved only in parts of a company that do not
derive any revenues from the Restricted Business.
 
 (i)      In
the event that the Executive intends to
 associate
with any Restricted Company during the Non-Compete Period, the Executive must
provide information in writing to the Chief Executive Officer of the Company
relating to the business engaged in or proposed to be engaged in by such
Restricted Company. All such current associations of the Executive are set out
in Exhibit A hereto.
 
 In
the event that the Chief Executive Officer authorizes the Executive to engage in
such activity in writing, any activity by the Executive described in the written
information furnished to the Chairman of the Board and so authorized shall be
conclusively deemed not to be a violation of Section 6(a) and (b)
hereof.
 
 (ii)     The
Executive acknowledges that the Company
 will be
irreparably injured if the provisions of this Section 6 are not specifically
enforced. If the Executive commits or, in the reasonable belief of the Company,
threatens to commit a breach of any of the provisions of this Section 6, the
Company and each of its subsidiaries and affiliates shall have the right and
remedy, in addition to any other remedy that may be available at law or in
equity, to have the provisions of this Section 6 specifically enforced by any
court having equity jurisdiction together with an accounting for any benefit or
gain by the Executive in connection with any such breach, it being acknowledged
and agreed that any such breach or threatened breach will cause irreparable
injury to the Company and its subsidiaries and that money damages will not
provide an adequate remedy therefor. Such injunction shall be available without
the posting of any bond or other security, and the Executive hereby consents to
the issuance of such injunction.
  
 
 (c)      The
Executive shall not receive any compensation or benefits under this Agreement on
account of his voluntary termination or termination for Cause. The Executive's
rights under the Company's benefit plans upon such a termination shall be
determined under the provisions of those plans.
 
 
 
 7.       Termination
without Cause and Involuntary Termination. If the Executive's employment with
the Company is involuntarily terminated by the Company other than for Cause or
by the Executive for Good Reason (an "INVOLUNTARY TERMINATION EVENT"), Sections
7(a) and 7(b) below shall apply. For purposes of this Agreement, the term "GOOD
REASON" shall mean (i) without the Executive's express written consent, the
assignment to the Executive of any duties, or the removal from or reduction or
limitation of the Executive's duties or responsibilities, which in either case
is a significant change in the Executive's position, title, organization level,
duties, responsibilities, compensation and status with the Company after the
Effective Date; (ii) without the Executive's express written consent, a
substantial reduction of the facilities and perquisites (including office space
and location), available to the Executive immediately prior to such reduction,
excluding those related to the potential relocation of the Executive to, at his
election, Dublin, Ireland or Nashua, New Hampshire; (iii) without the
Executive's express written consent, a reduction by the Company in the base
salary of the Executive as in effect immediately prior to such reduction; (iv)
without the Executive's express written consent, a reduction by the Company in
the kind or level of employee benefits to which the Executive is entitled
immediately prior to such reduction with the result that the Executive's overall
benefits package is significantly reduced; excluding changes to benefits that
are made in order to bring the Executive's benefits in line with other members
of the executive management team; (v) without the Executive's express written
consent, the relocation of the Executive to a facility or a location more than
twenty (20) miles from the Executive's then-present work location, excluding the
potential relocation of the Executive to, at his, Dublin, Ireland or Nashua, New
Hampshire; (vi) any purported termination of the Executive by the Company other
than for Cause or by reason of the Executive's death or Disability; (vii) the
failure of the Company to obtain the assumption of this Agreement by any
successor as required by Section 12 below; or (viii) any material breach by the
Company of any term of this Agreement.
 
 (a)      Severance.
The Company shall, in addition to paying the Executive all amounts accrued by
the Executive on or prior to the date of the Involuntary Termination Event, make
a lump sum payment to him equal to (i) his then base salary for a period equal
to the greater of (A) six (6) months or (B) the date of the Involuntary
Termination Event to the date that is one (1) year after the Effective Date plus
(ii) the greater of (A) $75,000 or (B) $150,000 multiplied by a fraction, the
numerator of which is the number of months remaining in the period from the date
of the Involuntary Termination Event to the date that is one (1) year after the
Effective Date and the denominator of which is 12.
 
 (b)      Stock
Options. Notwithstanding that above Sections 6(a) and 6(b) will otherwise not
apply to the Executive as a result of the Involuntary Termination Event, the
Executive may elect to be bound by above Sections 6(a) and 6(b) in exchange for
continued vesting of the stock options granted to him by the Company for the
period during which such Sections 6(a) and (b) apply (i.e., through the later of
(i) six (6) months following the Involuntary Termination Event or (ii) the date
that is one (1) year after the Effective Date); provided, however, that the
Executive has to notify the Company of said election within thirty (30) days of
such termination. Otherwise, the Executive's stock options will discontinue to
vest immediately upon termination of employment.
 
 
 
 
 8.       Death.
In the event of the Executive's death, except for obligations accrued at such
time, the Company shall have no obligation to pay or provide any compensation or
benefits under this Agreement. The Executive's rights under the Company's
benefit plans in the event of the Executive's death shall be determined under
the provisions of those plans.
 
 9.       Disability.
The Company may terminate the Executive's employment for Disability by giving
the Executive thirty (30) days' advance notice in writing. In the event that the
Executive resumes the performance of substantially all of his duties hereunder
before the termination of his employment under this Section 9 becomes effective,
the notice of termination shall automatically be deemed to have been revoked.
Except for such obligations that have accrued prior to the Executive's
Disability, no compensation or benefits will be paid or provided to the
Executive under this Agreement on account of termination for Disability. The
Executive's rights under the Company's benefit plans shall be determined under
the provisions of those plans. For all purposes under this Agreement,
"DISABILITY" shall mean that the Executive, at the time notice is given, has
been unable to substantially perform his duties under this Agreement for a
period of not less than six (6) consecutive months as the result of his
incapacity due to physical or mental illness.
 
 10.      Tax
Provisions. In the event that all or any part of the benefits provided for in
the Agreement, when aggregated with any other payments or benefits received by
the Executive, would (i) constitute "parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "CODE"), and
(ii) would be subject to the excise tax imposed by Section 4999 of the Code (the
"EXCISE TAX"), then the amount of the Executive's benefits to be paid or
delivered hereunder shall be either
 
 (a)      the
full amount of such benefits determined without regard to this Section 10,
or
 
 (b)      such
lesser amount which would result in no portion of such benefits being subject to
the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by the Executive on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Executive
otherwise agree in writing, any determination required under this paragraph
shall be made in writing by the Company's independent public accountants (the
"ACCOUNTANTS") whose determination shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this paragraph, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this paragraph. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this paragraph.
  
 
 11.      Proprietary
Information Agreement. In connection with commencement of the Executive's
employment with the Company, the Executive will sign the Company's standard
 executive
proprietary information agreement, provided that its provisions, if any,
concerning non-solicitation and non-competition shall be deleted in favor of the
provisions herein.
 
 12.      Successors.
The Company shall require any successor or assignee, in connection with any
sale, transfer or other disposition of all or substantially all of the assets or
business of SmartForce PLC, whether by purchase, merger, consolidation or
otherwise, expressly to assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken
place. In such event, the term SmartForce PLC as used in this Agreement, shall
mean SmartForce PLC as defined above and any successor or assignee to the
business and assets which by reason hereof becomes bound by the terms and
provisions of this Agreement.
 
 13.      Confidentiality.
Except as required by applicable laws, neither party shall disclose the contents
of this Agreement without first obtaining the prior written consent of the other
party, provided, however, that (i) the Executive may disclose this Agreement to
his attorney, financial planner and tax advisor if such persons agree to keep
the terms hereof confidential and (ii) the Company may disclose this Agreement
if its counsel advises that it is required to do so under applicable
law.
 
 14.      Arbitration.
Any claim, dispute or controversy arising out of this Agreement, the
interpretation, validity or enforceability of this Agreement or the alleged
breach thereof shall be submitted by the parties to binding arbitration before
the American Arbitration Association in San Francisco County, California;
provided, however, that this arbitration provision shall not preclude either
party from seeking injunctive relief from any court having jurisdiction with
respect to any disputes or claims relating to or arising out of this Agreement
or Executive's conduct as an officer, director or employee of the Company. All
costs and expenses of arbitration, excluding attorneys' fees, shall be paid by
the Company. The arbitrator shall have the power to award attorneys' fees where
provided by statute or rule. The arbitrator shall be neutral, and shall issue
all decisions in writing. Judgment may be entered on the award of the
arbitration in any court having jurisdiction.
 
 15.      Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of California applicable to agreements made and to be
performed entirely within such state.
 
 16.      Integration.
This Agreement, any written agreements or other documents evidencing matters
referred to herein and any written Company existing plans that are referenced
herein represent the entire agreement and understanding between the parties as
to the subject matter hereof and thereof and supersede all prior or
contemporaneous agreements as to the subject matter hereof and thereof, whether
written or oral. No waiver, alteration, or modification, if any, of the
provisions of this Agreement shall be binding unless in writing and signed by
duly authorized representatives of the parties hereto.
  
 
 17.      Voluntary
Execution; Conflict Waiver. The Executive has been advised to obtain independent
legal counsel regarding this Agreement. The Executive is signing this Agreement
knowingly and voluntarily. The Company and the Executive acknowledge that Wilson
Sonsini Goodrich & Rosati, Professional Corporation ("WSGR") has acted as
counsel to the Company in
 negotiating
this Agreement and will continue to serve as the Company's general counsel in
the future, and each acknowledges that each has received full disclosure of any
potential conflict of interest which may result from such representation, and
knowingly and voluntarily waive any such conflict of interest.
 
 18.      Notices.
Notices and all other communications contemplated by this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
when mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of the Executive, mailed notices shall be addressed
to him at the home address that he most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Secretary.
 
 19.      No
Mitigation. In the event the Executive's employment with the Company terminates,
the Executive shall not be required to mitigate damages or the amount of any
payment provided under this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided under this Agreement be reduced by
any compensation earned by the Executive as a result of employment by another
employer or by retirement benefits after such termination, or
otherwise.
 
 20.      Waiver.
If either party should waive any breach of any provisions of this Agreement, he
or it shall not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this Agreement.
 
 21.      Counterparts.
This Agreement may be executed in counterparts, which together will constitute
one instrument.
 
 [Remainder
of page intentionally left blank]
 
 
 
 
 EXECUTIVE                                             SMARTFORCE
PLC
 
 By: /s/
Colm
Darcy                                   By:  /s/
Charles E. Moran
 ---------------------                                ----------------------
 Name:
Charles E. Moran
 Title:
President & CEO
 
 SMARTFORCE
 
 By:  /s/
Charles E. Moran
 ----------------------
 Name:
Charles E. Moran
 Title:
President & CEO
   
  December
23, 2008
  Colm
Darcy
  SkillSoft
Corporation
  107
Northeastern Boulevard
  Nashua,
NH  03062
  Dear
Colm:
 
 To ensure
compliance with Section 409A of the Internal Revenue Code of 1986, as amended,
SkillSoft Public Limited Company, incorporated in the Republic of Ireland (the
“Company”), and you hereby agree to amend the employment agreement dated as of
September, 2002 by and between SmartForce PLC (as a predecessor to the Company),
SmartForce (as predecessor to SkillSoft Corporation, its subsidiary), and you
(the “Employment Agreement”) as follows:
 
 1.
                    Section
      5 is amended by inserting after the third sentence the
      following:
  “To
receive reimbursement or have expenses paid, the Executive must submit all
required substantiation no later than the 30th day following the later of the
date the Executive incurred the expense or the date such documentation related
to the expense was first available to the Executive.  The Company will
reimburse the Executive for expenses that fit its policy no later than the end
of the month following the month in which it receives such
substantiation.”
  2.
                    Section
      5 is further amended by inserting at the end the
  following:
  “The
Company will only reimburse any relocation expenses in connection with an
Involuntary Termination that are incurred within six months following the
Involuntary Termination and will pay such amounts no later than three months
thereafter.”
  3.
                    Section
      7(a) is amended by inserting at the end the
  following:
  “Payment
of any accrued amounts shall not be accelerated in a manner that would subject
them to extra taxation under Section 409A(a)(2) of the Code but shall instead be
paid in accordance with their terms.  The lump sum severance shall be
paid as provided in Section 22.”
  4.
                    Section
      9 is amended by inserting after the third sentence the
      following:
  “Payment
of any accrued amounts shall not be accelerated in a manner that would subject
them to extra taxation under Section 409A(a)(2) of the Code but shall instead be
paid in accordance with their terms.”
  5.
                    Section
      10 is amended by inserting after the first sentence the
      following:
  “If
necessary to carry out the preceding sentence, amounts payable under this
Agreement will be reduced or eliminated as follows, as determined by the
Company, in the following order:  (i) nonacceleration of any stock
options whose exercise price is at or above the fair market value of the stock
as determined in the discretion of the Board’s Compensation Committee (taking
into account, as appropriate, the proceeds that would be received in connection
with the event covered by Section 4999) (“Underwater Options”), (ii) the
payments due under Section 7(a) above, (iii) nonacceleration of any stock
options other than Underwater Options, and (iv) any vesting or distribution of
restricted stock or restricted stock units.  Within each category
described in clauses (i), (iii), and (iv), reductions or eliminations shall be
made in reverse order beginning with vesting or distributions that are to be
paid the farthest in time from the date of event covered by Section
4999.”
  
 6.
                    Section
      22 is added to read as follows:
  “Tax
Considerations.  Any payments due under this Agreement shall be
reduced by any amounts that the Company is required to withhold under applicable
law.  The Executive acknowledges that this Agreement is intended to
comply, to the extent applicable, with the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) and shall, to the
extent practicable, be construed in accordance with such
section.  Terms defined in this Agreement have the meanings given such
terms under Section 409A if and to the extent required to comply with Section
409A.  If and to the extent any portion of any payment, compensation
or other benefit provided to the Executive in connection with the Executive’s
separation from service (as defined in Section 409A) is determined to
constitute “nonqualified deferred compensation” within the meaning of Section
409A and the Executive is a “specified employee” as defined in Section
409A(a)(2)(B)(i), as determined by the Company in accordance with its procedures
and Treasury Regulation 1.409A-1(i)(6)(i), by which determination the Executive
hereby agrees to be bound, such portion of the payment, compensation or other
benefit shall not be paid before the earlier of (i) the day that is six months
plus one day after the date of separation from service or (ii) ten (10) days
after the Executive’s date of death (either, the “New Payment
Date”).  The aggregate of any payments that would otherwise have been
paid to the Executive during the period between the date of separation from
service and the New Payment Date shall be paid to the Executive in a lump sum on
such New Payment Date, and any remaining payments will be paid on their original
schedule.  For purposes of this Agreement, each amount to be paid or
benefit to be provided will be construed as a separate identified payment for
purposes of Section 409A, and any payments that are due within the “short term
deferral period” as defined in Section 409A will not be treated as deferred
compensation unless applicable law requires otherwise.  Neither the
Company nor the Executive has the right to accelerate or defer the delivery of
any such payments or benefits except to the extent Section 409A specifically
permits or requires such acceleration or deferral.  Notwithstanding
the foregoing, to the extent that this Agreement or any payment or benefit
hereunder is determined not to comply with Section 409A, then neither the
Company, its Board, nor any of its designees, agents, or employees will be
liable to the Executive or any other person for any actions, decisions, or
determinations made under the Agreement or for any resulting adverse tax
consequences.”
  Except as
modified by this letter or by other intervening amendments, all other terms and
conditions of the Agreement shall remain in full force and
effect.  This letter may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute one and the
same document.
  SKILLSOFT PUBLIC LIMITED
      COMPANYBy:
                    /s/ Charles
      E. MoranCharles
      E. MoranPresident
      and Chief Executive Officer and Director(Principal
      Executive Officer)
 SKILLSOFT CORPORATION (FORMERLY
      SMARTFORCE)By:
                      /s/ Charles
      E. MoranCharles
      E. MoranPresident
      and Chief Executive Officer and Director(Principal
      Executive Officer)
  
 Acknowledged
      and agreed:By:
                      /s/ Colm
      DarcyColm
      DarcyDate
                      December
      23, 2008