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                                                                     EXHIBIT 4.1

                        SMARTFORCE 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 SmartForce 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 last market trading day
                     prior to the time 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 last market trading day prior to the time of
                     determination, as reported in The Wall Street Journal or
                     such other source as the Board deems reliable; or

                            (iii) In the absence of an established market for
                     the Shares, the Fair Market Value thereof shall be
                     determined in good faith by the Board.


              (j)    "Incapacity" means in relation to an Optionee who has a
                     Disability, the inability to exercise an Option due to a
                     medically determinable physical or mental impairment that
                     has been proven to the satisfaction of the Board.

              (k)    "Inside Director" means a Director who is an Employee.

              (l)    "Option" means a share option granted pursuant to the Plan.

              (m)    "Optioned Shares" means Shares subject to an Option.

              (n)    "Optionee" means a Director who holds an Option.

              (o)    "Outside Director" means a Director who is not an Employee.

              (p)    "Parent" means a "parent corporation," whether now or
                     hereafter existing, as defined in Section 424(e) of the
                     Code.

              (q)    "Plan" means this 2001 Outside Director Option Plan.

              (r)    "Share" means an ordinary share of EURO0.11 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 350,000 Shares (the "Pool"). The Shares may be
       authorized, but unissued, or (subject to compliance with the Companies
       Acts, 1963 to 1999 of Ireland) reacquired.

       If an Option expires or becomes unexercisable without having been
       exercised in full, the unpurchased Shares which were subject thereto
       shall become available for future grant or sale under the Plan (unless
       the Plan has terminated). Shares that have actually been issued under the
       Plan shall not be returned to the Plan and shall not become available for
       future distribution under the Plan.


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4.     Administration and Grants of Options under the Plan.

              (a)    Procedure for Grants. All grants of Options to Outside
                     Directors under this Plan shall be automatic and
                     nondiscretionary and shall be made strictly in accordance
                     with the following provisions:

                            (i) No person shall have any discretion to select
                     which Outside Directors shall be granted Options or to
                     determine the number of Shares to be covered by Options.

                            (ii) Each Outside Director shall be automatically
                     granted an Option to purchase 25,000 Shares (the "First
                     Option") on the date on which the later of the following
                     events occurs: (A) the effective date of this Plan, as
                     determined in accordance with Section 6 hereof, or (B) the
                     date on which such person first becomes an Outside
                     Director, whether through election by the shareholders of
                     the Company or appointment by the Board to fill a vacancy;
                     provided, however, that an Inside Director who ceases to be
                     an Inside Director but who remains a Director shall not
                     receive a First Option.

                            (iii) Each Outside Director shall be automatically
                     granted an Option to purchase 10,000 Shares (a "Subsequent
                     Option") on January 1 of each year provided he or she is
                     then an Outside Director and if as of such date, he or she
                     shall have served on the Board for at least the preceding
                     six (6) months.


                            (iv) The terms of a First Option granted hereunder
                     shall be as follows:

                                   (A) the term of the First Option shall be ten
                            (10) years.

                                   (B) the First Option shall be exercisable
                            only while the Outside Director remains a Director
                            of the Company, except as set forth in Sections 8
                            and 10 hereof.

                                   (C) the exercise price per Share shall be one
                            hundred percent (100%) of the Fair Market Value per
                            Share on the date of grant of the First Option.

                                   (D) subject to Section 10 hereof, the First
                            Option shall become exercisable as to twenty five
                            percent (25%) 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:

                                   (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 as to
                            twenty five percent (25%) of the Shares subject to
                            the Subsequent Option on each anniversary of its
                            date of grant, provided that the Optionee continues
                            to serve as a Director on all such relevant dates.

                            (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


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                     shareholders to increase the number of Shares which may be
                     issued under the Plan or through cancellation or expiration
                     of Options previously granted hereunder.

5.     Eligibility. Options may be granted only to Outside Directors. All
       Options shall be granted automatically in accordance with the terms set
       forth in Section 4 hereof.

              The Plan shall not confer upon any Optionee any right with respect
       to continuation of service as a Director or nomination to serve as a
       Director, nor shall it interfere in any way with any rights which the
       Director or the Company may have to terminate the Director's relationship
       with the Company at any time.

6.     Term of Plan. The Plan shall become effective upon the earlier to occur
       of its adoption by the Board or its approval by the shareholders of the
       Company as described in Section 16 of the Plan. It shall continue in
       effect for a term of ten (10) years unless sooner terminated under
       Section 11 of the Plan.

7.     Form of Consideration. The consideration to be paid for the Shares to be
       issued upon exercise of an Option, including the method of payment, shall
       consist of (i) cash, (ii) check, (iii) consideration received by the
       Company under a cashless exercise program implemented by the Company in
       connection with the Plan, or (iv) any combination of the foregoing
       methods of payment.

8.     Exercise of Option.

                     (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


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                         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 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-Transferability 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.


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10.    Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
       Sale.

                     (a) Changes in Capitalization. Subject to any required
                     action by the shareholders of the Company, the number of
                     Shares covered by each outstanding Option, the number of
                     Shares which have been authorized for issuance under the
                     Plan but as to which no Options have yet been granted or
                     which have been returned to the Plan upon cancellation or
                     expiration of an Option, as well as the price per Share
                     covered by each such outstanding Option, and the number of
                     Shares issuable pursuant to the automatic grant provisions
                     of Section 4 hereof shall be proportionately adjusted for
                     any increase or decrease in the number of issued Shares
                     resulting from a reorganization, bonus issue,
                     reclassification or the like, or any other increase or
                     decrease in the number of issued Shares effected without
                     receipt of consideration by the Company; provided, however,
                     that conversion of any convertible securities of the
                     Company shall not be deemed to have been "effected without
                     receipt of consideration." Except as expressly provided
                     herein, no issuance by the Company of shares of any class,
                     or securities convertible into shares of any class, shall
                     affect, and no adjustment by reason thereof shall be made
                     with respect to, the number or price of Shares subject to
                     an Option.

                     (b) Dissolution or Liquidation. In the event of the
                     proposed dissolution or liquidation of the Company, the
                     Board shall notify each Optionee as soon as practicable
                     prior to the effective date of such proposed transaction.
                     Each Optionee shall have the right to exercise his or her
                     Option within fifteen (15) days prior to the proposed date
                     of such transaction as to all of the Optioned Shares
                     covered thereby. To the extent it has not been previously
                     exercised, an Option will terminate immediately prior to
                     the consummation of such proposed action.

                     (c) Merger or Asset Sale. In the event of a merger of the
                     Company with or into another corporation or the sale of
                     substantially all of the assets of the Company, outstanding
                     Options may be assumed or equivalent options may be
                     substituted by the successor corporation or a Parent or
                     Subsidiary thereof (the "Successor Corporation"). If an
                     Option is assumed or substituted for, the Option or
                     equivalent option shall continue to be exercisable as
                     provided in Section 4 hereof for so long as the Optionee
                     serves as a Director or a director of the Successor
                     Corporation. If, at any time following such assumption or
                     substitution, the Optionee's status as a Director or
                     director of the Successor Corporation, as applicable, is
                     terminated other than upon a voluntary resignation by the
                     Optionee, the Option or substituted option shall become
                     fully exercisable. Following such termination, the Option
                     or substituted option shall remain exercisable in
                     accordance with Sections 8(b) through (d) above.

       If the Successor Corporation does not assume an outstanding Option or
substitute for it an equivalent option, the Option shall become fully vested and
exercisable. In such event the Board shall notify the Optionee that the Option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and upon the expiration of such period the Option shall terminate.

       For the purposes of this Section 10(c), an Option shall be considered
assumed if, following the merger or sale of assets, the Option confers the right
to purchase or receive, for each Optioned Share subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
shares, cash, or other securities or property) received in the merger or sale of
assets by holders of Shares for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares). If
such consideration received in the merger or sale of assets is not solely
ordinary shares (or their equivalent) of the Successor Corporation or its
Parent, the Board may, with the consent of the Successor Corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Optioned Share, to be solely ordinary shares (or their equivalent) of the
Successor Corporation or its Parent equal in fair market value to the per share
consideration received by holders of ordinary shares in the merger or sale of
assets.


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11.    Amendment and Termination of the Plan.

              (a) Amendment and Termination. The Board may at any time amend,
       alter, suspend, or discontinue the Plan, but no amendment, alteration,
       suspension, or discontinuation shall be made which would impair the
       rights of any Optionee under any grant theretofore made, without his or
       her consent. In addition, to the extent necessary and desirable to comply
       with any applicable law, regulation or stock exchange rule, the Company
       shall obtain shareholder approval of any Plan amendment in such a manner
       and to such a degree as required.

              (b) Effect of Amendment or Termination. Any such amendment or
       termination of the Plan shall not affect Options already granted and such
       Options shall remain in full force and effect as if this Plan had not
       been amended or terminated.

12.    Time of Granting Options. The date of grant of an Option shall, for all
       purposes, be the date determined in accordance with Section 4 hereof.

13.    Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
       to the exercise of an Option unless the exercise of such Option and the
       issuance and delivery of such 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.