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Exhibit 10.1
 SKILLSOFT PUBLIC LIMITED COMPANY
 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.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




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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 Journalor 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 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.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
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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.
 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 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
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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:
 (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
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implemented by the Company in connection with the Plan, or (iv) any combination of the
foregoing methods of payment.8.
    
    Exercise of Option.
 (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 Optionee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
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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.(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.
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(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 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.
   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.
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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
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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