Document:

Prepared by R.R. Donnelley Financial -- SmartForce 2002 Share Option Plan

 EXHIBIT 10.34 
  
 SMARTFORCE PLC 
  
 2002 SHARE OPTION PLAN 
  
 1.     Purposes of the Plan.    The purposes of this 2002 Share Option Plan are:

  

	 	•
	 
	to attract and retain the best available personnel for positions of substantial responsibility, 
 

  

	 	•
	 
	to provide additional incentive to Employees, Inside Directors and Consultants, and 
 

  

	 	•
	 
	to promote the success of the Company’s business. 
 

  
 Options granted under the Plan may be Incentive Share Options or Nonstatutory Share Options, as determined by the Administrator at the time of grant. 

 
 2.    Definitions.    As used herein, the following definitions shall apply:

  
 (a)  “Administrator” means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b)  “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Ordinary Shares are listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan and the laws of Ireland. 
  
 (c)  “Board ” means the Board of Directors of the Company. 
  
 (d)  “Change in Control” means the occurrence of any of the following events: 

 
 (i)  Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; or 
  
 (ii)  The consummation of the sale or disposition by
the Company of all or substantially all of the Company’s assets; 
  
 (iii)  A change
in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective
date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election
or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or 
  
 (iv)  The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  
 (e)  “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (f)  “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 
 

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 (g)  “Company” means SmartForce Public
Limited Company, a public limited company organized under the laws of Ireland. 
  
 (h)  “Consultant” means any natural person, including an advisor, engaged by the company or a Parent or Subsidiary to render services to such entity. 
  

(i)  “Director” means a member of the Board. 
  
 (j)  “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 (k)  “Employee” means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Share Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave any Incentive Share Option held by the Optionee shall cease to be treated as an Incentive Share Option and shall be treated for tax
purposes as a Nonstatutory Share Option. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  

(l)  “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (m)  “Fair Market Value” means, as of any date, the value of Ordinary Shares determined as
follows: 
  
 (i)  If the Ordinary 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 Ordinary Shares (or the closing bid, if no
sales were reported) as quoted on such exchange or system on the day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii)  If the Ordinary 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 Ordinary Shares on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable; or 
  
 (iii)  In the absence of an established market for Ordinary Shares, the
Fair Market Value shall be determined in good faith by the Administrator. 
  
 (n)  “Incentive Share Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

 
 (o)  “Inside Director” means a Director who is an Employee. 
  
 (p)  “Nonstatutory Share Option” means an Option not intended to qualify as an Incentive Share
Option. 
  
 (q)  “Notice of Grant” means a written or electronic notice
evidencing certain terms and conditions of an individual Option. The Notice of Grant is part of the Option Agreement. 
  
 (r)  “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (s)  “Option” means an option for Ordinary Shares granted pursuant to the Plan. 

 
 (t)  “Option Agreement” means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 
 

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 (u)  “Option Exchange
Program” means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price. 
  
 (v)  “Optioned Share” means one of the Ordinary Shares subject to an Option. 
  
 (w)  “Optionee” means the holder of an outstanding Option granted under the Plan. 
  
 (x)  “Ordinary Shares” means the Ordinary Shares and/or related American Depository
Shares of the Company. 
  
 (y)  “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (z)  “Plan” means this 2002 Share Option Plan. 
  
 (aa)  “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
  
 (bb)  “Section 16(b)” means Section 16(b) of the Exchange Act. 
  
 (cc)  “Service Provider” means an Employee, Inside Director or Consultant. 

 
 (dd)  “Share” means a share of the Ordinary Shares, as adjusted in accordance with
Section 13 of the Plan. 
  
 (ee)  “Subsidiary” means a “subsidiary
corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 3.    Ordinary Shares Subject to the Plan.    Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Ordinary Shares that may be optioned and sold under the
Plan is 2,350,000 Ordinary Shares. The Ordinary Shares shall be authorized, but unissued Ordinary Shares. 
  
 If an
Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Ordinary Shares which were subject thereto shall become available for future grant or sale under
the Plan (unless the Plan has terminated); provided, however, that Ordinary Shares that have actually been issued under the Plan, upon exercise of an Option, shall not be returned to the Plan and shall not become available for future
distribution under the Plan. 
  
 4.    Administration of the Plan. 

 
 (a)  Procedure. 
  
 (i)  Multiple Administrative Bodies.    Different Committees with respect to different groups of Service Providers may
administer the Plan. 
  
 (ii)  Section 162(m).    To the extent
that the Administrator determines it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code. 
  
 (iii)  Rule 16b-3.    To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements
for exemption under Rule 16b-3. 
  
 (iv)  Other
Administration.    Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws. 
 

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 (b)  Powers of the
Administrator.    Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

  
 (i)  to determine the Fair Market Value; 
  
 (ii)  to select the Service Providers to whom Options may be granted hereunder; 
  
 (iii)  to determine the number of Ordinary Shares to be covered by each Option granted hereunder; 

 
 (iv)  to approve forms of agreement for use under the Plan; 
  
 (v)  to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option granted
hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or the Ordinary Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  

(vi)  to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Ordinary Shares
covered by such Option shall have declined since the date the Option was granted; 
  
 (vii)  to institute an Option Exchange Program; 
  
 (viii)  to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan; 
  
 (ix)  to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws; 

 
 (x)  to modify or amend each Option (subject to Section 14(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan; 
  
 (xi)  to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option previously granted by the Administrator; 
  
 (xii)  to make all other determinations deemed necessary or advisable for administering the Plan. 

 
 (c)  Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees and any other holders of Options. 
  
 5.    Eligibility.    Nonstatutory Share Options may be granted to Service Providers. Incentive Share Options may be granted only to Employees. 
  
 6.    Limitations. 
  
 (a)  Each Option shall be designated in the Option Agreement as either an Incentive Share Option or a Nonstatutory Share Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Ordinary Shares with respect to which Incentive Share Options are exercisable for the first time by the Optionee during any calendar year (under all plans of
the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Share Options. For purposes of this Section 6(a), Incentive Share Options shall be taken into account in the order in which they were granted.
The Fair Market Value of the Ordinary Shares shall be determined as of the time the Option with respect to such Ordinary Shares is granted. 
  
 (b)  Neither the Plan nor any Option shall confer upon an Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee’s right or the Company’s right to terminate such relationship at any time, with or without cause. 
 

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 (c)  The following limitations shall apply to grants of
Options: 
  
 (i)  No Service Provider shall be granted, in any fiscal year of the Company,
Options to purchase more than 1,500,000 Ordinary Shares. 
  
 (ii)  In connection with his
or her initial service, a Service Provider may be granted Options to purchase up to an additional 500,000 Ordinary Shares, which shall not count against the limit set forth in subsection (i) above. 
  
 (iii)  The foregoing limitations shall be adjusted proportionately in connection with any change in the
Company’s capitalization as described in Section 12. 
  
 (iv)  If an Option is
cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 12), the cancelled Option will be counted against the limits set forth in subsections (i) and (ii) above. For
this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 
  
 7.    Term of Plan.    Subject to Section 18 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 14 of the Plan. 
  
 8.    Term of Option.    The term of each Option shall be stated in the Option Agreement. In the case of an Incentive Share Option, the term shall be up to ten (10) years from the date
of grant or such shorter term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Share Option granted to an Optionee who, at the time the Incentive Share Option is granted, owns Ordinary Shares representing more than
ten percent (10%) of the total combined voting power of all classes of Ordinary Shares of the Company or any Parent or Subsidiary, the term of the Incentive Share Option shall be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement. 
  
 9.  Option Exercise Price and Consideration. 

 
 (a)  Exercise Price.    The per share exercise price for the Ordinary
Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following: 
  
 (i)  In the case of an Incentive Share Option 
  
 (A)  granted to an Employee who, at the time the Incentive Share Option is granted, owns Ordinary Shares representing more than ten percent (10%) of the voting power of all classes of Ordinary Shares of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 
  
 (B)  granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant. 
  
 (ii)  In the case of a Nonstatutory Share Option, the per Share
exercise price shall be determined by the Administrator, subject to compliance with Applicable Laws. In the case of a Nonstatutory Share Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of
the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (iii)  Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate
transaction, subject to compliance with Applicable Laws. 
  
 (b)  Waiting Period and
Exercise Dates.    At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be
exercised. 
 

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 (c)  Form of
Consideration.    The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment, subject to compliance with Applicable Laws. In the case of an Incentive Share
Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: 
  
 (i)  cash; 
  
 (ii)  check;

  
 (iii)  promissory note; 
  
 (iv)  consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

  
 (v)  a reduction in the amount of any Company liability to the Optionee, including any
liability attributable to the Optionee’s participation in any Company-sponsored deferred compensation program or arrangement; 
  
 (vi)  any combination of the foregoing methods of payment; or 
  
 (vii)  such other consideration and method of payment for the issuance of Ordinary Shares to the extent permitted by Applicable Laws. 
  
 10.    Exercise of Option. 
  
 (a)  Procedure for Exercise; Rights as a Shareholder.    Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and
under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence. An Option may
not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Ordinary Shares with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of (i) the Optionee, or if requested by the Optionee,
in the name of the Optionee and his or her spouse, or in the name of a third party as the Optionee’s nominee to hold the shares issued on exercise on Optionee’s behalf and subject to the Optionee’s directions. Until the Ordinary
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a Shareholder shall exist with respect to the
Optioned Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Ordinary Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan. 
  
 Exercising an
Option in any manner shall decrease the number of Ordinary Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Ordinary Shares as to which the Option is exercised. 
  
 (b)  Termination of Relationship as a Service Provider.    If an Optionee ceases to
be a Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following
the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the
 
 

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Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the
Ordinary Shares covered by such Option shall revert to the Plan. 
  
 (c)  Disability of
Optionee.    If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Ordinary Shares covered by the unvested portion of the Option shall revert
to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Ordinary Shares covered by such Option shall revert to the Plan. 
  
 (d)  Death of Optionee.    If an Optionee dies while a Service Provider, the Option
may be exercised following the Optionee’s death within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the
expiration of the term of such Option as set forth in the Option Agreement), by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to the Optionee’s death in a form acceptable to the Administrator.
If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or
in accordance with the laws of descent and distribution. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s death. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Ordinary Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall
terminate, and the Ordinary Shares covered by such Option shall revert to the Plan. 
  
 11.    Transferability of Options.    Unless determined otherwise by the Administrator, an 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. If the Administrator makes an Option transferable, such Option shall contain such additional terms
and conditions as the Administrator deems appropriate. 
  
 12.    Adjustments Upon Changes in
Capitalization, Merger or Change in Control. 
  
 (a)  Changes in
Capitalization.    Subject to any required action by the shareholders of the Company, the number of Ordinary Shares that 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 and the number of Ordinary Shares as well as the price per Ordinary Shares covered by each such outstanding Option shall be proportionately adjusted for any increase
or decrease in the number of issued Ordinary Shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the Ordinary Shares, or any other increase or decrease in the number of issued Ordinary 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.” Such adjustment shall
be made by the Board, whose determination in that respect shall be final, binding and conclusive. 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 Ordinary Shares subject to an Option. 
  
 (b)  Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the
Optioned Shares
 
 

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covered thereby, including Ordinary Shares as to which the Option would not otherwise be exercisable. 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 Change in
Control.    In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option shall be assumed or an equivalent option or right substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation. 
  
 In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Shares, including Ordinary Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully vested and exercisable for
a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. 
  
 For the purposes of this subsection (c), the Option shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option
immediately prior to the merger or Change in Control, the consideration (whether Ordinary Shares, cash, or other securities or property) received in the merger or Change in Control by holders of Ordinary 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 Ordinary Shares); provided, however, that if such consideration received in the merger
or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each
Share subject to the Option, to be solely common stock 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 Change in Control. 

 
 13.    Date of Grant.    The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting such Option, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after
the date of such grant. 
  
 14.    Amendment and Termination of the Plan. 

 
 (a)  Amendment and Termination.    The Board may at any time amend, alter,
suspend or terminate the Plan. 
  
 (b)  Shareholder
Approval.    The Company shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c)  Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan shall
impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 
  
 15.    Conditions Upon Issuance of Shares. 
  
 (a)  Legal Compliance.    Ordinary 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 Ordinary
Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 (b)  Investment Representations.    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
 
 

 8 

 
Ordinary Shares are being purchased only for investment and without any present intention to sell or distribute such Ordinary Shares if, in the opinion of counsel for the Company, such a
representation is required. 
  
 16.    Inability to Obtain
Authority.    The 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
Ordinary Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Ordinary Shares as to which such requisite authority shall not have been obtained. 
  
 17.    Reservation of Shares.    The Company, during the term of this Plan, will at all
times reserve and keep available such number of Ordinary Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 18.    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. Such shareholder
approval shall be obtained in the manner and to the degree required under Applicable Laws. 
 

 9Prepared by R.R. Donnelley Financial -- Form of Amended and Restated SmartForce Option Agmt.

  
 Exhibit 10.35 
  
 AMENDMENT AND RESTATED 
 SMARTFORCE OPTION AGREEMENT 
  
 THIS AMENDED AND RESTATED SMARTFORCE OPTION AGREEMENT (this “Agreement”) is made and entered into as of July
    , 2002 among SkillSoft Corporation, a Delaware corporation (“SkillSoft”), and SmartForce Public Limited Company, a public limited company organized under the laws of the Republic of Ireland (“SmartForce”).
Capitalized terms used but not otherwise defined herein will have the meanings ascribed to them in the Merger Agreement (as defined below). 
  
 RECITALS 
  
 A.    SmartForce, the Transitory Subsidiary, as
defined below, and SkillSoft have entered into an Agreement and Plan of Merger dated June 10, 2002 (the “Merger Agreement”) which provides for the merger (the “Merger”) of a wholly-owned subsidiary of SmartForce (“Transitory
Subsidiary”) with and into SkillSoft. Pursuant to the Merger, all outstanding capital stock of SkillSoft will be converted into the right to receive American Depository Shares of SmartForce (“SmartForce ADSs”) evidenced by American
Depository Receipts of SmartForce (“SmartForce ADRs”). 
  
 B.    As a condition to
SmartForce’s willingness to enter into the Merger Agreement, SmartForce requested that SkillSoft agree, and SkillSoft agreed, to grant to SmartForce an option to acquire shares of SkillSoft common stock, par value $0.001 per share (the
“SkillSoft Common Stock”) upon the terms and subject to the conditions set forth in the SmartForce Option Agreement dated June 10, 2002 (the “Option Agreement”). 
  
 C.    SmartForce and SkillSoft each agree that it is in their mutual best interest to amend and restate the Option Agreement. 
  
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein and in the Merger
Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1.    Grant of Option.    Subject to the terms and conditions of this Agreement, SkillSoft hereby grants to SmartForce an irrevocable option (the
“Option”) to purchase up to either (i) 3,473,930 shares of SkillSoft Common Stock (as adjusted as set forth herein) or (ii) if such number is greater than 19.9% of the shares of SkillSoft Common Stock outstanding on the date of the
Exercise Notice (as defined below), then such number of shares of SkillSoft Common Stock as would equal 19.9% of the outstanding shares of SkillSoft Common Stock on the date of the Exercise Notice (the “Option Shares”), in the manner set
forth below by paying cash at a price of $14.93 per share (the “Exercise Price”). 
  
 2.    Exercise of Option. 
  
 (a)  Subject to
the terms and conditions of this Agreement, the Option may be exercised by SmartForce, in whole or in part, at any time or from time to time (i) after the termination of the Merger Agreement under the conditions described in clauses (ii) or (iii) of
Section 8.3(c) of the Merger Agreement or (ii) immediately prior to the occurrence of any event causing the termination fee to become payable pursuant to clause (i) of Section 8.3(c) of the Merger Agreement (any of the conditions described
in this sentence being referred to herein as an “Exercise Event”). In the event SmartForce wishes to exercise the Option, SmartForce will deliver to SkillSoft a written notice (each an “Exercise Notice”) specifying the total
number of Option Shares it wishes to purchase. Each closing of a purchase of Option Shares (a ”Closing”) will occur on a date and at a time prior to the termination of the Option designated by SmartForce in an Exercise Notice delivered at
least two business days prior to the date of such Closing, which Closing will be held at the principal offices of SkillSoft. 
 

 1 

  
 (b)  The Option will terminate upon the earliest of (i)
the Effective Time, (ii) twelve months following the date on which the Merger Agreement is terminated pursuant to Section 8.1(d) thereof under the circumstances under which the termination fee may become payable under clause (i) of Section 8.3(c),
if no event causing such termination fee to become payable pursuant to clause (i) of Section 8.3(c) of the Merger Agreement occurs during such twelve-month period, (iii) twelve months following the date on which the termination fee is paid pursuant
to Section 8.3(c) of the Merger Agreement and (iv) the date on which the Merger Agreement is otherwise terminated; provided, however, that if the Option cannot be exercised by reason of any applicable government order or because the
waiting period related to the issuance of the Option Shares under the HSR Act or the Irish Mergers Act will not have expired or been terminated, then the Option will not terminate until the tenth business day after such impediment to exercise has
been removed or has become final and not subject to appeal. 
  
 3.    Conditions to
Closing.    The obligation of SkillSoft to issue Option Shares to SmartForce hereunder is subject to the conditions that (A) any waiting period under the HSR Act or the Irish Mergers Act applicable to the issuance of the
Option Shares hereunder will have expired or been terminated; (B) all material consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Federal, state, local or foreign administrative agency or commission
or other Federal, state, local or foreign governmental authority or instrumentality, if any, required in connection with the issuance of the Option Shares hereunder will have been obtained or made, as the case may be; and (C) no preliminary or
permanent injunction or other order by any court of competent jurisdiction prohibiting or otherwise restraining such issuance will be in effect. It is understood and agreed that at any time during which the Option is exercisable, the parties will
each use commercially reasonable efforts, to satisfy all conditions to Closing, so that a Closing may take place as promptly as practicable. 
  
 4.    Closing.    At any Closing, SkillSoft will deliver to SmartForce a certificate representing the number of shares of SkillSoft Common Stock
designated by SmartForce in its Exercise Notice, such certificate to be registered in the name of SmartForce and to bear the legend set forth in Section 10 hereof, against delivery of payment by SmartForce to SkillSoft of the Exercise Price for
shares of SkillSoft Common Stock so designated and being purchased by delivery of immediately available funds. 
  
 5.    Representations and Warranties of SkillSoft.    SmartForce represents and warrants to SmartForce that (A) SkillSoft is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware and has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (B) the execution and delivery of this Agreement by SkillSoft and consummation
by SkillSoft of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of SkillSoft and no other corporate proceedings on the part of SkillSoft are necessary to authorize this Agreement or any of
the transactions contemplated hereby; (C) this Agreement has been duly executed and delivered by SkillSoft and constitutes a legal, valid and binding obligation of SkillSoft and, assuming this Agreement constitutes a legal, valid and binding
obligation of SmartForce, is enforceable against SkillSoft in accordance with its terms subject to the Bankruptcy and Equity Exception; (D) except for any filings required under the HSR Act or the Irish Mergers Act, SkillSoft has taken all
necessary corporate and other action to authorize and reserve for issuance and to permit it to issue upon exercise of the Option, and at all times from the date hereof until the termination of the Option will have reserved for issuance, a sufficient
number of unissued shares of SkillSoft Common Stock for SmartForce to exercise the Option in full and will take all necessary corporate or other action to authorize and reserve for issuance all additional shares of SkillSoft Common Stock or other
securities which may be issuable pursuant to Section 9 upon exercise of the Option, all of which, upon their issuance and delivery in accordance with the terms of this Agreement, will be validly issued and fully paid; (E) upon delivery of
certificates representing SkillSoft Common Stock and any other securities to SmartForce upon exercise of the Option, SmartForce will acquire such shares of SkillSoft Common Stock or other securities free and clear of all material claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever, excluding those imposed by SmartForce and by applicable securities laws; (F) the execution and delivery of this Agreement by SkillSoft does not, and the performance of
this Agreement by SkillSoft will not, (i) conflict with or violate SkillSoft Charter Documents or equivalent organizational documents of any of
 
 

 2 

 
SkillSoft’s Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to SkillSoft or any of its Subsidiaries or by which its or any of
their respective properties is bound or affected or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or impair SkillSoft’s or any of its
Subsidiaries’ rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the
properties or assets of SkillSoft or any of its Subsidiaries pursuant to any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which SkillSoft or any of its
Subsidiaries is a party or by which SkillSoft or any of its Subsidiaries or any of their respective properties are bound or affected; and (G) the execution and delivery of this Agreement by SkillSoft does not, and the performance of this Agreement
by SkillSoft will not, require any consent, approval, authorization or permit of, or filing with, or notification to, any Governmental Entity except pursuant to the HSR Act or the Irish Mergers Act. 
  
 6.    Representations and Warranties of SkillSoft.    SmartForce represents and warrants to
SkillSoft that (A) SmartForce is a public limited company duly organized, validly existing and in good standing under the Republic of Ireland and has the corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder; (B) the execution and delivery of this Agreement by SmartForce and consummation by SmartForce of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of SmartForce and no
other corporate proceedings on the part of SmartForce are necessary to authorize this Agreement or any of the transactions contemplated hereby; (C) this Agreement has been duly executed and delivered by SmartForce and constitutes a legal, valid and
binding obligation of SmartForce and, assuming this Agreement constitutes a legal, valid and binding obligation of SkillSoft, is enforceable against SmartForce in accordance with its terms subject to the Bankruptcy and Equity Exception; (D) except
for any filings required under the HSR Act or the Irish Mergers Act, SmartForce has taken all necessary corporate and other action to permit it to exercise the Option; (E) the execution and delivery of this Agreement by SmartForce does not, and the
performance of this Agreement by SmartForce will not, (i) conflict with or violate the organizational documents of SmartForce or any of its Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable
to SmartForce or any of its Subsidiaries or by which its or any of their respective properties is bound or affected or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a
default) under, or impair SmartForce’s or any of its Subsidiaries’ rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of SmartForce or any of its Subsidiaries pursuant to any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which SmartForce or any of its Subsidiaries is a party or by which SmartForce or any of its Subsidiaries or its or any of their respective properties are bound or affected; (F) the execution and delivery of this Agreement by SmartForce
does not, and the performance of this Agreement by SmartForce will not, require any consent, approval, authorization or permit of, or filing with, or notification to, any Governmental Entity except pursuant to the HSR Act or the Irish Mergers
Act; and (G) SmartForce is an “accredited investor” within the meaning of Rule 501 under the Securities Act and the Option and any Option Shares that SmartForce may hereafter purchase are being purchased by SmartForce for its own
account, for investment and not with a view to the distribution or resale thereof, except in compliance with the Securities Act and applicable state securities and blue sky laws. SmartForce has sufficient knowledge and experience in investing in
securities similar to the Option and to the Option Shares so as to be able to evaluate the risks and merits of any investment in the Option and in the Option Shares and is able financially to bear the risks thereof, including a complete loss of its
investment. 
  
 7.    Certain Rights. 
  
 (a)  SmartForce Put.    At the request of and upon notice by SmartForce (the
“Put Notice”), at any time during the period during which the Option is exercisable pursuant to Section 2 (the “Purchase Period”), SkillSoft (or any successor entity thereof) will purchase from SmartForce all or any portion of
the Option, to the extent not previously exercised, at the price which equals the difference between the Market/Tender Offer Price (as defined below) for SkillSoft Common Stock as of the date SmartForce gives notice of its
 
 

 3 

 
intent to exercise its rights under this Section 7(a) and the Exercise Price, multiplied by the number of shares of SkillSoft Common Stock purchasable pursuant to the Option. The
“Market/Tender Offer Price” shall mean the higher of (A) the highest price per share of SkillSoft Common Stock offered to be paid by any person pursuant to any Acquisition Proposal with respect to SkillSoft which was made after the date of
this Agreement and on or prior to the delivery of the Put Notice and not terminated or withdrawn as of the date of delivery of the Put Notice and (B) the average closing sale price of the SkillSoft Common Stock on the Nasdaq National Market
during the 20 trading days ending on and including the trading day immediately preceding such date. For purposes of determining the highest price offered pursuant to any Acquisition Proposal which involves consideration other than cash, the
value of such consideration will be equal to the higher of (x) if securities of the same class of the proponent as such consideration are traded on any national securities exchange or by any registered securities association, a value based on the
closing sale price or asked price for such securities on their principal trading market on such date and (y) the value ascribed to such consideration by the proponent of such Acquisition Proposal, or if no such value is ascribed, a value determined
in good faith by the Board of Directors of SkillSoft. 
  
 (b)  Payment and Redelivery of
Option.    In the event SmartForce exercises its rights under Section 7(a) by delivery of a Put Notice, SkillSoft will, within five business days after SmartForce delivers such Put Notice, pay the required amount to
SmartForce in immediately available funds and SmartForce will surrender to SkillSoft all or such portion of the Option with respect to which the Put Notice relates and SkillSoft shall, upon receipt of the Option or any portion of the Option,
immediately terminate such Option or portion of such Option so surrendered. 
  
 8.    Registration Rights. 
  
 (a)  During the
period beginning on the date of the termination of the Merger Agreement in accordance with its terms and until such date as of which all Option Shares issued to SmartForce may be sold pursuant to Rule 144(k) of the Securities Act (the
“Registration Period”), SmartForce (sometimes referred to herein as the “Holder”) may by written notice (a “Registration Notice”) to SkillSoft (the “Registrant”) request the Registrant to register under the
Securities Act all or any part of the shares acquired by the Holder pursuant to this Agreement (such shares requested to be registered, the “Registrable Securities”) in order to permit the sale or other disposition of any or all of the
Registrable Securities that have been acquired by or are issuable to Holder upon exercise of the Option in accordance with the intended method of sale or other disposition stated by Holder, including a “shelf” registration statement under
Rule 415 under the Securities Act or any successor provision. 
  
 (b)  The Registrant will
use commercially reasonable efforts to effect, as promptly as practicable, the registration under the Securities Act of the Registrable Securities requested to be registered in the Registration Notice (a “Demand Registration Statement”)
and to keep such registration statement effective for a period up to 180 calendar days from the day such registration statement first becomes effective to permit the Holder to effect such sale or other disposition; provided, however, that the
Holder will not be entitled to more than an aggregate of four effective Demand Registration Statements hereunder. The obligations of the Registrant hereunder to file a Demand Registration Statement and to maintain its effectiveness may be suspended
for up to 90 calendar days in the aggregate if the Board of Directors of the Registrant shall have determined, in its good faith judgment, that the filing of such Demand Registration Statement or the maintenance of its effectiveness would require
premature disclosure of material nonpublic information that would materially and adversely affect the Registrant or otherwise materially interfere with or adversely affect any pending or proposed offering of securities of the Registrant or any other
material transaction involving the Registrant. The Registrant will use commercially reasonable efforts to cause any Registrable Securities registered pursuant to this Section 8 to be qualified for sale under the securities or blue sky laws of such
jurisdictions as the Holder may reasonably request and will continue such registration or qualification in effect in such jurisdictions; provided, however, that the Registrant will not be required to qualify to do business in, or consent to
general service of process in, any jurisdiction by reason of this provision. If, during the Registration Period, the Registrant shall propose to register under the Securities Act the offering, sale and delivery of shares of SkillSoft Common Stock
for cash pursuant to a firm commitment
 
 

 4 

 
underwriting, it shall, in addition to the Registrants other obligations under this Section 8, allow the Holder the right to participate in such registration for its Registrable Securities (a
“Piggy-back Registration”) provided that the Holder participates in the underwriting, and such participation will not affect the obligation of the Registrant to effect Demand Registration Statements for the Holder under this Section 8;
provided that, if the managing underwriters of such offering advise the Registrant in writing that in their opinion the number of shares of SkillSoft Common Stock requested to be included in such registration exceeds the number which can be
sold in such offering, the Registrant may reduce or eliminate the shares requested to be included therein by the Holder pro rata based on the number of shares intended to be included therein by other stockholders of the Registrant. The Registrant
shall not be required to effect more than two Piggy-back Registrations at the request of the Holder pursuant to this Section 8. In connection with any offering, sale and delivery of shares of SkillSoft Common Stock pursuant to a registration
statement effected pursuant to this Section 8, the Registrant and the Holder shall provide each other and each underwriter of the offering with customary representations, warranties and covenants, including covenants of indemnification and
contribution, and opinions of counsel. The registration rights under this Section 8 shall not apply to any shares acquired upon exercise of the Option to the extent such shares may be sold pursuant to Rule 144(k) under the Securities Act.

  
 (c)  The registration rights set forth in this Section 8 are subject to the condition
that the Holder will provide the Registrant with such information with respect to the Holder’s Registrable Securities, the plan for distribution thereof and such other information with respect to the Holder as, in the reasonable judgment of
counsel for the Registrant, is necessary to enable the Registrant to include in a registration statement all material facts required to be disclosed with respect to a registration thereunder. 
  

(d)  A registration effected under this Section 8 will be effected at the Registrant’s expense, except for underwriting discounts and
commissions and expenses of the Holder’s counsel, and the Registrant will provide to the underwriters such documentation (including certificates, opinions of counsel and “comfort” letters from auditors) as are customary in connection
with underwritten public offerings and as such underwriters may reasonably require. In connection with any registration, the Holder and the Registrant agree to enter into an underwriting agreement reasonably acceptable to each such party, in form
and substance customary for transactions of this type with the underwriters participating in such offering. 
  
 (e)  The Registrant will indemnify the Holder, each of its directors and officers and each person who controls the Holder within the meaning of Section 15 of the Securities Act, with respect to any registration,
qualification or compliance which has been effected pursuant to this Agreement, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus or offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by the Registrant of any rule or regulation promulgated under the Securities Act applicable to the Registrant in connection with any such registration, qualification or
compliance, and the Registrant will reimburse the Holder and, each of its directors and officers and each person who controls the Holder within the meaning of Section 15 of the Securities Act, for any legal and any other expenses reasonably incurred
in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided, that the Registrant will not be liable in any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made (i) in reliance upon and in conformity with written information furnished to the Registrant by the Holder or director or officer or
controlling person of the Holder or (ii) in a preliminary prospectus (or in a prospectus that was subsequently amended or supplemented) if a copy of the final prospectus (or amendment or supplement) filed with the Securities and Exchange Commission
(“SEC”) was not furnished to the person asserting the claim, loss, damage, liability or expense at or prior to the time such action is required by the Securities Act, and if such
 
 

 5 

 
final prospectus (or amendment or supplement) cured the untrue statement, alleged untrue statement, omission or alleged omission giving rise to the claim, loss, damage, liability or expense.

  
 (i)  The Holder will indemnify the Registrant, each of its directors and officers, each
person who controls the Registrant within the meaning of Section 15 of the Securities Act, and each other seller of securities covered by such registration statement against all claims, expenses, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration
statement, prospectus or offering circular or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, or any violation by the Holder of any rule or regulation promulgated under the Securities Act applicable to the Holder in connection with any such registration, qualification or compliance, and the Holder will reimburse the
Registrant, such directors, officers or control persons or such other selling stockholders for any legal or any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus or offering circular or any amendment or
supplement thereto in reliance upon and in conformity with written information furnished to the Registrant by the Holder or any director, officer or control person of the Holder for use therein; provided, that in no event will any indemnity
under this Section 8(e) exceed the gross proceeds of the offering received by the Holder. 
  
 (ii)  Each party entitled to indemnification under this Section 8(e) (the ”Indemnified Party”) will give notice to the party required to provide indemnification (the ”Indemnifying Party”) promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and will permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided, that counsel for the
Indemnifying Party, who will conduct the defense of such claim or litigation, will be approved by the Indemnified Party (whose approval will not unreasonably be withheld), and the Indemnified Party may participate in such defense at such
party’s expense; provided, however, that the Indemnifying Party will pay such expense if representation of the Indemnified Party by counsel retained by the Indemnifying Party would be inappropriate due to actual or potential materially
differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding, and provided further, however, that the failure of any Indemnified Party to give notice as provided herein will not relieve
the Indemnifying Party of its obligations under this Section 8(e) except to the extent that the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action. Unless the Indemnified Party
consents in writing (which consent shall not be unreasonably withheld), no Indemnifying Party, in the defense of any such claim or litigation, will consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. No Indemnifying Party will be required to indemnify any Indemnified Party with
respect to any settlement entered into without such Indemnifying Party’s prior consent (which will not be unreasonably withheld). 
  
 9.    Adjustment Upon Changes in Capitalization.    In the event of any change in SkillSoft Common Stock by reason of stock dividends, stock splits, reverse stock splits,
mergers (other than the Merger), recapitalizations, combinations, exchanges of shares and the like, the type and number of shares or securities subject to the Option and the Exercise Price will be adjusted appropriately, and proper provision will be
made in the agreements governing such transaction so that SkillSoft will receive, upon exercise of the Option, the number and class of shares or other securities or property that SkillSoft would have received in respect of SkillSoft Common Stock if
the Option had been exercised immediately prior to such event or the record date therefor, as applicable. 
 

 6 

  
 10.    Restrictive
Legends.    Each certificate representing Option Shares issued to SmartForce hereunder will include a legend in substantially the following form: 
  
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR
IF, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SMARTFORCE OPTION AGREEMENT DATED AS OF JUNE 10,
2002, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER. 
  
 It is understood and agreed that the reference to
restrictions arising under the Securities Act in the above legend will be removed by delivery of substitute certificate(s) without such reference if such Option Shares have been sold pursuant to a registration statement under the Securities Act,
such Option Shares have been sold in reliance on and in accordance with Rule 144 under the Securities Act or Holder has delivered to Registrant a copy of a letter from the staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Registrant and its counsel, to the effect that such legend is not required for purposes of the Securities Act. 
  
 11.    Listing and HSR or Irish Mergers Act Filing.    SkillSoft, upon the request of SmartForce, will promptly file an application or notice to list the shares of SkillSoft Common Stock
to be acquired upon exercise of the Option for quotation on the Nasdaq National Market and will use commercially reasonable efforts to obtain approval or effectiveness of such listing as soon as practicable. Promptly after the date hereof, each of
the parties hereto will promptly file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice and any applicable Irish governmental authority all required premerger notification and report forms and
other documents and exhibits required to be filed under the HSR Act or the Irish Mergers Act to permit the acquisition of the shares of SkillSoft Common Stock subject to the Option at the earliest possible date. 
  
 12.    Binding Effect.    This Agreement will be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective successors and permitted
assigns any rights or remedies of any nature whatsoever by reason of this Agreement. Certificates representing shares sold in a registered public offering pursuant to Section 8 will not be required to bear the legend set forth in Section 10.

  
 13.    Specific Performance.    The parties hereto recognize and
agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party hereto agrees that in addition to other remedies the other party hereto will be entitled to an injunction restraining any violation or threatened violation of the provisions of this Agreement or the right
to enforce any of the covenants or agreements set forth herein by specific performance. In the event that any action will be brought in equity to enforce the provisions of this Agreement, neither party hereto will allege, and each party hereto
hereby waives the defense, that there is an adequate remedy at law. 
  
 14.    Entire
Agreement.    This Agreement, the Merger Agreement and any other agreements referred to in the Merger Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof. 
  
 15.    Further Assurances.    Each party hereto will execute and deliver all such further documents and instruments and take all such further action as
the other party may reasonably deem necessary in order to consummate the transactions contemplated hereby. 
 

 7 

  
 16.    Validity.    The invalidity
or unenforceability of any provision of this Agreement will not affect the validity or enforceability of the other provisions of this Agreement, which will remain in full force and effect. In the event any Governmental Entity of competent
jurisdiction holds any provision of this Agreement to be null, void or unenforceable, the parties hereto will negotiate in good faith and will execute and deliver an amendment to this Agreement in order, as nearly as possible, to effectuate, to the
extent permitted by law, the intent of the parties hereto with respect to such provision. 
  
 17.    Notices.    All notices and other communications hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally or (b) on the date of
confirmation of receipt of transmission by telecopy or telefacsimile or by commercial delivery service, to the parties in the manner set forth in the Merger Agreement. 
  
 18.    Governing Law.    This Agreement will be governed by and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within such State, without regard to any conflict of law rules. 
  
 19.    Expenses.    Except as otherwise expressly provided herein or in the Merger Agreement, all costs and expenses incurred in connection with the transactions contemplated by
this Agreement, including taxes and duties arising from the actions taken pursuant to this Agreement, will be paid by the party incurring such expenses. 
  
 20.    Amendments; Waiver.    This Agreement may be amended by the parties hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance. 
  
 21.    Assignment.    Neither of the parties hereto may sell, transfer, assign or otherwise dispose of any of its rights or obligations under this
Agreement or the Option created hereunder to any other person, without the express written consent of the other party, except that the rights and obligations hereunder will inure to the benefit of and be binding upon any successor of a party hereto.

  
 22.    Counterparts.    This Agreement may be executed in
counterparts, each of which will be deemed to be an original, but both of which, taken together, will constitute one and the same instrument. 
  
 23.     Profit Limitation. 
  
 (a)  Notwithstanding any other provision in this Agreement, in no event shall SmartForce’s Total Profit (as defined below) exceed the amount of the fee set forth in Section 8.3(c) of the Merger Agreement (the
“Maximum Profit”) and, if SmartForce’s Total Profit otherwise would exceed the Maximum Profit, SmartForce, at its sole discretion shall either (i) reduce the number of Option Shares subject to the Option, (ii) pay cash to SkillSoft,
or (iii) any combination of the foregoing, so that SmartForce’s actually realized Total Profit shall not exceed the Maximum Profit after taking into account the foregoing action. 
  
 (b)  For purposes of this Agreement, “Total Profit” shall mean: (i) the aggregate amount (before taxes) of (A) any excess of (x) the net
cash amounts or fair market value of any property received by SmartForce pursuant to a sale of Option Shares (or securities into which such shares are converted or exchanged) as determined in good faith by the Board of Directors of SkillSoft on the
date of the receipt of such property by SmartForce over (y) SmartForce’s aggregate purchase price for such Option Shares (or other securities), plus (B) any amounts received by SmartForce on the repurchase of the Option by SkillSoft
pursuant to Section 7, plus (C) any termination fee paid by SkillSoft and received by SmartForce pursuant to the Merger Agreement, minus (ii) the amounts of any cash previously paid by SmartForce to SkillSoft pursuant to this Section
23. 
  
 (c)  The provisions of this Section 23 shall survive any termination or
cancellation of the Option under the terms of this Agreement or otherwise. 
  
 [Remainder of Page Intentionally Left Blank.]

 

 8 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly
authorized officers as of the date first above written. 
  
 
	 SKILLSOFT CORPORATION
 
	 
	 By:
 	 	  
	  	 	 
Name:
 Title:
 

 
  
 
	 SMARTFORCE PUBLIC LIMITED COMPANY
 
	 
	 By:
 	 	  
	  	 	 
Name:
 Title:
 

 
 

 9

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