| 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 onthe 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 markettrading 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 Companyor 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 appointedby 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 Sharesbecome 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. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 ofthe foregoing methods of payment. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  8. |   |
|----------|--------|

|   | (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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (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 twelve (12) months following the date of such termination, and only to the extentthat 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 Optioneewas 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 dateof 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 herAttorney. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 expirationof 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 ofany 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 proposeddate 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 Parentor 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 voluntaryresignation 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 ofconsideration, 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 Corporationor 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 desirableto 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 Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, therules 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. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----