Document:

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                                                                  Exhibit 10.4

                              SKILLSOFT CORPORATION

                            2001 STOCK INCENTIVE PLAN

1.       Purpose

         The purpose of this 2001 Stock Incentive Plan (the "Plan") of SkillSoft
Corporation, a Delaware corporation (the "Company"), is to advance the interests
of the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except where
the context otherwise requires, the term "Company" shall include any of the
Company's present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code") and any other business venture
(including, without limitation, joint venture or limited liability company) in
which the Company has a significant interest, as determined by the Board of
Directors of the Company (the "Board").

2.       Eligibility

         All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options or restricted stock awards (each, an "Award")
under the Plan. Each person who has been granted an Award under the Plan shall
be deemed a "Participant".

3.       Administration and Delegation

         (a) Administration by Board of Directors. The Plan will be administered
by the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect, and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.

         (b) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). The Board shall
appoint one such Committee of not less than two members, each member of which
shall be an "outside director" within the meaning of Section 162(m) of the Code
("Section 162(m)") and a "non-employee director" as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All references in the Plan to the "Board" shall mean the Board or a

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Committee of the Board to the extent that the Board's powers or authority under
the Plan have been delegated to such Committee.

4.       Stock Available for Awards

         (a) Number of Shares. Subject to adjustment under Section 7, Awards may
be made under the Plan for up to the number of shares of common stock, $.001 par
value per share, of the Company (the "Common Stock") that is equal to the sum
of:

         (1)      1,450,000 shares of Common Stock; plus

         (2)      an annual increase to be effected on the first day of each of
                  the Company's fiscal years beginning on February 1, 2002
                  through and including February 1, 2005 equal to the lesser of
                  (i) 500,000 shares of Common Stock, (ii) 2% of the outstanding
                  shares on such date or (iii) an amount determined by the
                  Board.

         If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Common Stock subject to such Award being repurchased by
the Company at the original issuance price pursuant to a contractual repurchase
right) or results in any Common Stock not being issued, the unused Common Stock
covered by such Award shall again be available for the grant of Awards under the
Plan, subject, however, in the case of Incentive Stock Options (as hereinafter
defined), to any limitations under the Code. Shares issued under the Plan may
consist in whole or in part of authorized but unissued shares or treasury
shares.

         (b) Per-Participant Limit. Subject to adjustment under Section 7, the
maximum number of shares of Common Stock with respect to which Awards may be
granted to any Participant under the Plan shall be 500,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m).

5.       Stock Options

         (a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".

         (b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of SkillSoft Corporation and
its present and future corporate subsidiaries and shall be subject to and shall
be construed consistently with the requirements of Section 422 of the Code. The
Company shall have no liability to a Participant, or any other party, if an
Option (or any part thereof) which is intended to be an Incentive Stock Option
is not an Incentive Stock Option.

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         (c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement.

         (d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

         (e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

         (f) Payment Upon Exercise. Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

                  (1) in cash or by check, payable to the order of the Company;

                  (2) except as the Board may, in its sole discretion, otherwise
provide in an option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax
withholding or (ii) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price and
any required tax withholding;

                  (3) when the Common Stock is registered under the Exchange
Act, by delivery of shares of Common Stock owned by the Participant valued at
their fair market value as determined by (or in a manner approved by) the Board
in good faith ("Fair Market Value"), provided (i) such method of payment is then
permitted under applicable law and (ii) such Common Stock, if acquired directly
from the Company was owned by the Participant at least six months prior to such
delivery;

                  (4) to the extent permitted by the Board, in its sole
discretion by (i) delivery of a promissory note of the Participant to the
Company on terms determined by the Board, or (ii) payment of such other lawful
consideration as the Board may determine; or

                  (5) by any combination of the above permitted forms of
payment.

         (g) Substitute Options. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.

6.       Restricted Stock.

         (a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at

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their issue price or other stated or formula price (or to require forfeiture of
such shares if issued at no cost) from the recipient in the event that
conditions specified by the Board in the applicable Award are not satisfied
prior to the end of the applicable restriction period or periods established by
the Board for such Award (each, a "Restricted Stock Award").

         (b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.

         (c) Stock Certificates. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's estate.

7.       Adjustments for Changes in Common Stock and Certain Other Events

         (a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in Section 4(b), (iii) the number and
class of securities and exercise price per share subject to each outstanding
Option, and (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award shall be appropriately adjusted by the Company (or
substituted Awards may be made, if applicable) to the extent the Board shall
determine, in good faith, that such an adjustment (or substitution) is necessary
and appropriate. If this Section 7(a) applies and Section 7(c) also applies to
any event, Section 7(c) shall be applicable to such event, and this Section 7(a)
shall not be applicable.

         (b) Liquidation or Dissolution. In the event of a proposed liquidation
or dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least ten business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date. The Board may specify the effect of a liquidation or
dissolution on any Restricted Stock Award at the time of the grant.

         (c) Reorganization Events

                  (1) Definition. A "Reorganization Event" shall mean: (a) any
merger or consolidation of the Company with or into another entity as a result
of which all of the Common Stock of the Company is converted into or exchanged
for the right to receive cash, securities or

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other property or (b) any exchange of all of the Common Stock of the Company for
cash, securities or other property pursuant to a share exchange transaction.

                  (2) Consequences of a Reorganization Event on Options. Upon
the occurrence of a Reorganization Event, or the execution by the Company of any
agreement with respect to a Reorganization Event, the Board shall provide that
all outstanding Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof). For purposes hereof, an Option shall be considered to be assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation, provide for the consideration to be
received upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in fair
market value to the per share consideration received by holders of outstanding
shares of Common Stock as a result of the Reorganization Event.

         Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or substitute
for, such Options, then the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time prior to the Reorganization Event and will
terminate immediately prior to the consummation of such Reorganization Event,
except to the extent exercised by the Participants before the consummation of
such Reorganization Event; provided, however, that in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Reorganization Event (the "Acquisition Price"),
then the Board may instead provide that all outstanding Options shall terminate
upon consummation of such Reorganization Event and that each Participant shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such Options. To the extent all or
any portion of an Option becomes exercisable solely as a result of the first
sentence of this paragraph, upon exercise of such Option the Participant shall
receive shares subject to a right of repurchase by the Company or its successor
at the Option exercise price. Such repurchase right (1) shall lapse at the same
rate as the Option would have become exercisable under its terms and (2) shall
not apply to any shares subject to the Option that were exercisable under its
terms without regard to the first sentence of this paragraph.

                  (3) Consequences of a Reorganization Event on Restricted Stock
Awards. Upon the occurrence of a Reorganization Event, the repurchase and other
rights of the Company under each outstanding Restricted Stock Award shall inure
to the benefit of the Company's successor and shall apply to the cash,
securities or other property which the Common Stock was

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converted into or exchanged for pursuant to such Reorganization Event in the
same manner and to the same extent as they applied to the Common Stock subject
to such Restricted Stock Award.

8.       General Provisions Applicable to Awards

         (a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.

         (b) Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.

         (c) Board Discretion. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.

         (d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

         (e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value; provided, however, that the
total tax withholding where stock is being used to satisfy such tax obligations
cannot exceed the Company's minimum statutory withholding obligations (based on
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income). The Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a Participant.

         (f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

         (g) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares

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previously delivered under the Plan until (i) all conditions of the Award have
been met or removed to the satisfaction of the Company, (ii) in the opinion of
the Company's counsel, all other legal matters in connection with the issuance
and delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules and
regulations, and (iii) the Participant has executed and delivered to the Company
such representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or regulations.

         (h) Acceleration. The Board may at any time provide that any Award
shall become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

9.       Miscellaneous

         (a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

         (b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

         (c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant that is intended to comply with Section 162(m) shall become
exercisable, vested or realizable, as applicable to such Award, unless and until
the Plan has been approved by the Company's stockholders to the extent
stockholder approval is required by Section 162(m) in the manner required under
Section 162(m) (including the vote required under Section 162(m)). No Awards
shall be granted under the Plan after the completion of ten years from the
earlier of (i) the date on which the Plan was adopted by the Board or (ii) the
date the Plan was approved by the Company's stockholders, but Awards previously
granted may extend beyond that date.

         (d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award,

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unless and until such amendment shall have been approved by the Company's
stockholders as required by Section 162(m) (including the vote required under
Section 162(m)).

         (e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, without regard to any applicable conflicts of law.

                         Adopted by the Board of Directors on April 30, 2001

                         Approved by the Company's stockholders on [_____], 2001

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                                                                    EXHIBIT 10.5

                              AGREEMENT AND RELEASE

      This Agreement and Release ("Agreement") is made by and between SmartForce
PLC (the "Company"), and Jeff Newton ("Employee"). The parties desire to enter
into this Agreement for the purpose of reaching an amicable termination of their
employment relationship and to promote harmonious relations in the future.

      WHEREAS, Employee was employed by the Company;

      WHEREAS, the Company and Employee have entered into an Employment,
Confidential Information and Invention Assignment Agreement (the
"Confidentiality Agreement");

      WHEREAS, the Company has entered into an Agreement and Plan of Merger with
Slate Acquisition Corp. and SkillSoft Corporation dated June 10, 2002 (the
"Merger Agreement");

      AND WHEREAS, this Agreement is conditioned upon the Closing (as defined in
the Merger Agreement) of the Merger (as defined in the Merger Agreement) and
shall be null and void ab initio should the Merger not close or be completed for
any reason.

      NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee (collectively referred to as "the Parties") hereby agree as
follows:

      1. Termination. Employee hereby resigns his position as Executive Vice
President, Complex Solutions with SmartForce effective immediately upon the
Closing of the Merger, and further agrees to the termination of his employment
on September 30, 2002 (the "Termination Date").

      2. Consideration. As consideration for the general release contained
herein, the Company agrees to:

      (a)   Continue to pay the Employee his base salary, less applicable
            withholding, through the Termination Date;

      (b)   On the next regularly scheduled payroll following the Effective Date
            of the Supplemental Agreement and Release attached hereto as Exhibit
            B (the "Release Effective Date"), pay the Employee a lump sum of (i)
            $400,000, less applicable withholding, which the parties agree is
            equal to two (2) years' salary, less (ii) any salary paid in the
            ordinary course between the Closing of the Merger and the
            Termination Date;

      (c)   On the next regularly scheduled payroll following the Release
            Effective Date, pay the Employee a lump sum of (i) $134,400, less
            applicable withholding, which the parties agree is equal to two (2)
            years' housing and car allowance, less (ii) any amounts paid for
            such allowances in the ordinary course between the Closing of the
            Merger and the Termination Date;

      (d)   On the next regularly scheduled payroll following the Release
            Effective Date, pay the Employee a lump sum of (i) $380,000, less
            applicable withholding, which the parties agree is equal to two (2)
            years' maximum targeted performance bonus, less (ii) any bonus
            amounts paid in the ordinary course between the Closing of the
            Merger and the Termination Date; and

      (e)   Continue to provide for the vesting of Employee's stock options (a
            summary of which is attached hereto as Exhibit A) for three (3)
            years after the Closing of the Merger.

      Items (b) through (e) above are referred to herein as the "Release
      Proceeds."

      On the Termination Date, Employee agrees to execute the Supplemental
      Agreement and Release, attached hereto as Exhibit B. Employee acknowledges
      and agrees that the Release Proceeds are intended to be deemed as
      consideration for both this Agreement and the Supplemental Agreement and
      Release to be executed on the Termination Date.
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      3. Covenant Not to Solicit. In exchange for $100,000 of the Release
Proceeds, until the date that is three (3) years after the Closing of the Merger
(the "NON-COMPETE PERIOD"), the Employee agrees that he will not:

      (a)   solicit, encourage, or take any other action which is intended to
            induce any other employee of the Company to terminate his employment
            with the Company, or

      (b)   interfere in any manner with the contractual or employment
            relationship between the Company and any such employee of the
            Company.

      The foregoing shall not prohibit the Employee or any entity with which the
Employee may be affiliated from hiring a former employee of the Company,
provided that such hiring results from such employee's affirmative response to a
general recruitment effort carried out through a public solicitation or a
general solicitation.

      4. Covenant Not to Compete. During the Non-Compete Period, in exchange for
the $100,000 of the Release Proceeds set forth in Section 3 above, the Employee
agrees that he will not, directly or indirectly, own, manage, operate, join,
control, advise or participate in, as a shareholder (other than as a shareholder
with less than one percent (1%) of the outstanding stock of a company), officer,
manager, executive, partner, consultant or technical or business advisor (or any
foreign equivalents of the foregoing) any company that derives more than ten
percent (10%) of its revenues from a Restricted Business, or any company or
entity controlling, controlled by or under common control with any company that
derives more than ten percent (10%) of its revenues from a Restricted Business
(any such company, a "RESTRICTED COMPANY"). For the purposes of this Agreement,
the term "RESTRICTED BUSINESS" shall mean the business of developing or selling
computer-based training for information technology professionals, on-line
business degrees, or any other interactive education business in which the
Company is then involved. Notwithstanding the foregoing, Restricted Business
shall not include (i) the professional services entity, if any, that is created
in connection with the possible sale of the Company's professional services
organization to the existing management team, provided, however, that such
entity is not in the business of developing or selling computer-based training
for information technology professionals, on-line business degrees, or any other
interactive education business in which the Company is then involved, and (ii)
with respect to the entity that would succeed the Prokoda business unit if such
business unit is sold by the Company, a role within the professional services
business unit of Prokoda and not a role related to the definition of Restricted
Business above.

      The foregoing will not in any way affect the Employee's right to take any
of the foregoing positions if he is involved only in parts of a company that do
not derive any revenues from the Restricted Business.

      (a)   In the event that the Employee intends to associate with any
            Restricted Company during the Non-Compete Period, the Employee must
            provide information in writing to the CEO of the Company relating to
            the business engaged in or proposed to be engaged in by such
            Restricted Company. All such current associations of the Employee
            are set out in Exhibit C hereto. In the event that the CEO
            authorizes the Employee to engage in such activity in writing, any
            activity by the Employee described in the written information
            furnished to the CEO and so authorized shall be conclusively deemed
            not to be a violation of this Section 4.

      (b)   The Employee acknowledges that, pursuant to an Amended and Restated
            Share Purchase Agreement between the Company, Knowledge Well Limited
            and Knowledge Well Group Limited (collectively "KNOWLEDGE WELL") and
            the shareholders of Knowledge Well, he has transferred to the
            Company all Ordinary and Preferred Shares of Knowledge Well owned by
            him and that the Company will be irreparably injured if the
            provisions of Sections 3 or 4 are not specifically enforced. If the
            Employee commits or, in the reasonable belief of the Company,
            threatens to commit a breach of any of the provisions of Sections 3
            or 4, the Company and each of its subsidiaries and affiliates shall
            have the right and remedy, in addition to any other remedy that may
            be available at law or in equity, to have the provisions of Sections
            3 and 4 specifically enforced by any court having equity
            jurisdiction together with
<PAGE>
            an accounting for any benefit or gain by the Employee in connection
            with any such breach, it being acknowledged and agreed that any such
            breach or threatened breach will cause irreparable injury to the
            Company and its subsidiaries and that money damages will not provide
            an adequate remedy therefor. Such injunction shall be available
            without the posting of any bond or other security, and the Employee
            hereby consents to the issuance of such injunction.

      5. Benefits. On the Termination Date, the Company will pay the Employee
all accrued and unused vacation time. No further vacation accrual will occur.
Employee shall continue to be eligible to receive healthcare benefits through
the Termination Date as an Employee of the Company. Employee shall have the
right thereafter to convert his health insurance benefits to individual coverage
pursuant to COBRA. The payments and benefits described in this paragraph are
separate and distinct from the Release Proceeds and are not part of the
consideration provided to the Employee for the Employee's release and other
duties and obligations under this Agreement.

      6. Confidential Information. Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all the Company property and confidential and proprietary information in
his possession to the Company within five business days from the Termination
Date.

      7. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its officers, managers, supervisors, agents and employees.
Employee, on his own behalf, and on behalf of his respective heirs, family
members, executors, agents, and assigns, hereby fully and forever releases the
Company and its officers, directors, employees, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, from, and agree not to sue concerning, any claim,
duty, obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee may possess
arising from any omissions, acts or facts that have occurred up until and
including the Effective Date of this Agreement including, without limitation:

      (a)   any and all claims relating to or arising from Employee's employment
            relationship with the Company and the termination of that
            relationship;

      (b)   any and all claims relating to, or arising from, Employee's right to
            purchase, or actual purchase of shares of stock of the Company,
            including, without limitation, any claims for fraud,
            misrepresentation, breach of fiduciary duty, breach of duty under
            applicable state corporate law, and securities fraud under any state
            or federal law;

      (c)   any and all claims under the law of any jurisdiction including, but
            not limited to, wrongful discharge of employment; constructive
            discharge from employment; termination in violation of public
            policy; discrimination; breach of contract, both express and
            implied; breach of a covenant of good faith and fair dealing, both
            express and implied; promissory estoppel; negligent or intentional
            infliction of emotional distress; negligent or intentional
            misrepresentation; negligent or intentional interference with
            contract or prospective economic advantage; unfair business
            practices; defamation; libel; slander; negligence; personal injury;
            assault; battery; invasion of privacy; false imprisonment; and
            conversion;

      (d)   any and all claims for violation of any federal, state or municipal
            statute, including, but not limited to, Title VII of the Civil
            Rights Act of 1964, the Civil Rights Act of 1991, the Age
            Discrimination in Employment Act of 1967, the Americans with
            Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
            Retirement Income Security Act of 1974, The Worker
<PAGE>
            Adjustment and Retraining Notification Act, Older Workers Benefit
            Protection Act; the California Fair Employment and Housing Act, and
            the California Labor Code.;

      (e)   any and all claims for violation of the federal, or any state,
            constitution;

      (f)   any and all claims arising out of any other laws and regulations
            relating to employment or employment discrimination;

      (g)   any claim for any loss, cost, damage, or expense arising out of any
            dispute over the non-withholding or other tax treatment of any of
            the proceeds received by Employee as a result of this Agreement; and

      (h)   any and all claims for attorneys' fees and costs.

      The Company and Employee agree that the release set forth in this section
shall be and remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any obligations
incurred under this Agreement. Additionally, until the Termination Date, the
Company shall continue to be bound by the Indemnification Agreement between the
Company and Employee.

      Employee acknowledges and agrees that any breach of any provision of this
Agreement shall constitute a material breach of this Agreement and shall entitle
the Company immediately to recover and cease the Release Proceeds provided to
Employee under this Agreement.

      8. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21)
days within which to consider this Agreement; (c) he has seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; (d) this Agreement shall not be effective until the revocation period
has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of
this waiver under the ADEA, nor does it impose any condition precedent,
penalties or costs for doing so, unless specifically authorized by federal law.

      9. Civil Code Section 1542. The Parties represent that they are not aware
of any claim by either of them other than the claims that are released by this
Agreement. Employee and the Company acknowledge that they have been advised by
legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

            A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
            NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
            THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
            SETTLEMENT WITH THE DEBTOR.

Employee and the Company, being aware of said code section, agree to expressly
waive any rights they may have thereunder, as well as under any other statute or
common law principles of similar effect.

      10. Application for Employment. Employee understands and agrees that, as a
condition of this Agreement, he shall not be entitled to any employment with the
Company, its subsidiaries, or any successor, except as provided in this
Agreement, and he hereby waives any right, or alleged right, of employment or
re-employment with the Company. Employee further agrees that he will not apply
for employment with the Company, its subsidiaries or related companies, or any
successor.
<PAGE>
      11. No Cooperation. Employee agrees he will not act in any manner that
might damage the business of the Company. Employee agrees that he will not
counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against the Company and/or any officer, director,
employee, agent, representative, shareholder or attorney of the Company, unless
under a subpoena or other court order to do so. Employee agrees both to
immediately notify the Company upon receipt of any such subpoena or court order,
and to furnish, within three (3) business days of its receipt, a copy of such
subpoena or court order to the Company. If approached by anyone for counsel or
assistance in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints against the Company and/or any
officer, director, employee, agent, representative, shareholder or attorney of
the Company, Employee shall state no more than that he cannot provide counsel or
assistance.

      12. Non-Disparagement. Each party agrees to refrain from any defamation,
libel or slander of the other, or tortious interference with the contracts and
relationships of the other. All inquiries by potential future employers of
Employee will be directed to the Company's Human Resources Department. Upon
inquiry, the Company shall only state the following: Employee's last position
and dates of employment.

      13. Confidentiality. Except as otherwise required by law, (i) the Parties
hereto each agree to use their best efforts to maintain in confidence the
existence of this Agreement, the contents and terms of this Agreement, and the
consideration for this Agreement (hereinafter collectively referred to as
"Severance Information"), (ii) each Party hereto agrees to take every reasonable
precaution to prevent disclosure of any Severance Information to third parties,
and each agrees that there will be no publicity, directly or indirectly,
concerning any Severance Information, and (iii) the Parties hereto agree to take
every precaution to disclose Severance Information only to those employees,
officers, directors, attorneys, accountants, governmental entities, and family
members who have a reasonable need to know of such Severance Information.

      14. No Admission of Liability. The Parties understand and acknowledge that
this Agreement constitutes a compromise and settlement of disputed claims. No
action taken by the Parties hereto, or either of them, either previously or in
connection with this Agreement shall be deemed or construed to be (a) an
admission of the truth or falsity of any claims heretofore made or (b) an
acknowledgment or admission by either party of any fault or liability whatsoever
to the other party or to any third party. The Employee may seek a waiver of this
provision at any time.

      15. Arbitration. The Parties agree that any and all disputes arising out
of the terms of this Agreement, their interpretation, and any of the matters
herein released, shall be subject to binding arbitration in Santa Clara County
before the American Arbitration Association under its Employment Dispute
Resolution Rules. The Parties agree that the prevailing party in any arbitration
shall be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. The Parties agree that the prevailing party in
any arbitration shall be awarded its reasonable attorney's fees and costs. THE
PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM
RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. This section will not prevent
either party from seeking injunctive relief (or any other provisional remedy)
from any court having jurisdiction over the Parties and the subject matter of
their dispute relating to Employee's obligations under this Agreement and the
agreements incorporated herein by reference.

      16. Authority. The Company represents and warrants that the undersigned
has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he has the capacity to act on his own
behalf and on behalf of all who might claim through him to bind them to the
terms and conditions of this Agreement. Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

      17. No Representations. Neither party has relied upon any representations
or statements made by the other party hereto which are not specifically set
forth in this Agreement.
<PAGE>
      18. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.

      19. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning Employee's separation
from the Company, and supersedes and replaces any and all prior agreements and
understandings concerning Employee's relationship with the Company and his
compensation by the Company, with the exception of the Confidentiality Agreement
and the stock option agreements, but including the Amended and Restated
Employment Agreement dated June 10, 2002.

      20. No Oral Modification. This Agreement may only be amended in writing
signed by Employee and the President of the Company.

      21. Governing Law. This Agreement shall be governed by the laws of the
State of California, without regard to choice of law principles

      22. Effective Date. This Agreement will become effective after it has been
signed by both Parties and after seven (7) days have passed since Employee
signed the Agreement (the "Effective Date"). Each party has seven days after
Employee signs the Agreement to revoke it.

      23. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

      24. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

      (a)   They have read this Agreement;

      (b)   They have been represented in the preparation, negotiation, and
            execution of this Agreement by legal counsel of their own choice or
            that they have voluntarily declined to seek such counsel;

      (c)   They understand the terms and consequences of this Agreement and of
            the releases it contains;

      (d)   They are fully aware of the legal and binding effect of this
            Agreement.
<PAGE>
      IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

                               SMARTFORCE PLC

Dated:  9/13/02                By     /s/ Greg Priest
        -------                   ------------------------------------------
                                         Greg Priest, Chairman & CEO

                               Jeffrey N. Newton, an individual

Dated:  9/6/02                       /s/ Jeffrey N. Newton
        ------                 ---------------------------------------------
<PAGE>
Exhibit A - Option Summary

Unvested Options Schedule at September 6, 2002.

<TABLE>
<CAPTION>
  Option Date    Shares Unvested(1)
  -----------    ------------------
<S>              <C>
    12-9-98             3,354
    12-9-98            21,646
     7-2-99            33,334
     4-5-01           120,000
     5-8-02           300,000
    7-12-02           104,613
    7-12-02           343,334
    7-12-02           262,053
</TABLE>

(1)   Only those shares that vest by their terms prior to September 6, 2005 will
      be exercisable.
<PAGE>
Exhibit B - Supplemental Release

                                    EXHIBIT B

                  SUPPLEMENTAL SEPARATION AGREEMENT AND RELEASE

      This Supplemental Severance Agreement and Release ("Supplemental
Agreement") is made by and between Jeff Newton ("Employee") and SmartForce
PLC("Company") (collectively referred to as the "Parties"):

      1. Separation Agreement. Company and Employee agree that the terms of the
Separation Agreement and Release dated September __, 2002 (the "Agreement")
shall remain in full force and effect and is fully incorporated herein except to
the extent it is inconsistent with this Supplemental Agreement.

      2. Consideration. As set forth in Section 2 of the Agreement.

      3. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its officers, managers, supervisors, agents and employees.
Employee, on his own behalf, and on behalf of his respective heirs, family
members, executors, agents, and assigns, hereby fully and forever releases the
Company and its officers, directors, employees, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns, from, and agree not to sue concerning, any claim,
duty, obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee may possess
arising from any omissions, acts or facts that have occurred up until and
including the Effective Date of this Agreement including, without limitation:

         (a) any and all claims relating to or arising from Employee's
         employment relationship with the Company and the termination of that
         relationship;

         (b) any and all claims relating to, or arising from, Employee's right
         to purchase, or actual purchase of shares of stock of the Company,
         including, without limitation, any claims for fraud,
         misrepresentation, breach of fiduciary duty, breach of duty under
         applicable state corporate law, and securities fraud under any state
         or federal law;

         (c) any and all claims under the law of any jurisdiction including,
         but not limited to, wrongful discharge of employment; constructive
         discharge from employment; termination in violation of public policy;
         discrimination; breach of contract, both express and implied; breach
         of a covenant of good faith and fair dealing, both express and
         implied; promissory estoppel; negligent or intentional infliction of
         emotional distress; negligent or intentional misrepresentation;
         negligent or intentional interference with contract or prospective
         economic advantage; unfair business practices; defamation; libel;
         slander; negligence; personal injury; assault; battery; invasion of
         privacy; false imprisonment; and conversion;

         (d) any and all claims for violation of any federal, state or
         municipal statute, including, but not limited to, Title VII of the
         Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
         Discrimination in Employment Act of 1967, the Americans with
         Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
         Retirement Income Security Act of 1974, The Worker Adjustment and
         Retraining Notification Act, Older Workers Benefit Protection Act; the
         California Fair Employment and Housing Act, and the California Labor
         Code;
<PAGE>
      (e)any and all claims for violation of the federal, or any state,
      constitution;

      (f) any and all claims arising out of any other laws and regulations
      relating to employment or employment discrimination;

      (g) any claim for any loss, cost, damage, or expense arising out of any
      dispute over the non-withholding or other tax treatment of any of the
      proceeds received by Employee as a result of this Agreement; and

      (h) any and all claims for attorneys' fees and costs.

      The Company and Employee agree that the release set forth in this section
shall be and remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any obligations
incurred under this Agreement.

      Employee acknowledges and agrees that any breach of any provision of this
Agreement shall constitute a material breach of this Agreement and shall entitle
the Company immediately to recover and cease the severance benefits provided to
Employee under this Agreement.

      4. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Employee and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Employee acknowledges that the
consideration given for this waiver and release agreement is in addition to
anything of value to which Employee was already entitled. Employee further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has twenty-one (21)
days within which to consider this Agreement; (c) he has seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; (d) this Agreement shall not be effective until the revocation period
has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of
this waiver under the ADEA, nor does it impose any condition precedent,
penalties or costs for doing so, unless specifically authorized by federal law.

      5. Civil Code Section 1542. The Parties represent that they are not aware
of any claim by either of them other than the claims that are released by this
Agreement. Employee acknowledges that he/she has been advised by legal counsel
and is familiar with the provisions of California Civil Code Section 1542, which
provides as follows:

      A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
      KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
      RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
      SETTLEMENT WITH THE DEBTOR.

Employee, being aware of said code section, agrees to expressly waive any rights
he/she may have thereunder, as well as under any other statute or common law
principles of similar effect.

      6. Arbitration. The Parties agree that any and all disputes arising out
of, or relating to, the terms of this Agreement, their interpretation, and any
of the matters herein released, shall be subject to binding arbitration in Santa
Clara County before the American Arbitration Association under its National
Rules for the Resolution of Employment Disputes. The Parties agree that the
prevailing party in any arbitration shall be entitled to injunctive relief in
any court of competent jurisdiction to enforce the arbitration award. The
Parties agree that the prevailing party in any arbitration shall be awarded its
reasonable attorneys' fees and costs. THE PARTIES HEREBY AGREE TO WAIVE THEIR
RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR
JURY. This section will not prevent either party from seeking injunctive relief
(or any other
<PAGE>
provisional remedy) from any court having jurisdiction over the Parties and the
subject matter of their dispute relating to Employee's obligations under this
Agreement and the agreements incorporated herein by reference.

      7. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee's relationship with the Company, and supersedes and
replaces any and all prior agreements and understandings between the Parties
concerning the subject matter of this Agreement and Employee's relationship with
the Company, with the exception of the Confidentiality Agreement and the Stock
Agreements.

      8. Governing Law. This Agreement shall be deemed to have been executed and
delivered within the State of California, and it shall be construed,
interpreted, governed, and enforced in accordance with the laws of the State of
California, without regard to conflict of law principles. To the extent that
either party seeks injunctive relief in any court having jurisdiction for any
claim relating to the alleged misuse or misappropriation of trade secrets or
confidential or proprietary information, each party hereby consents to personal
and exclusive jurisdiction and venue in the state and federal courts of the
State of California.

      9. Effective Date. This Agreement will become effective after it has been
signed by both Parties and after seven (7) days have passed since Employee
signed the Agreement (the "Effective Date"). Each party has seven days after
Employee signs the Agreement to revoke it.

      10. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

      (a) They have read this Agreement;

      (b) They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;

      (c) They understand the terms and consequences of this Agreement and of
the releases it contains; and

      (d) They are fully aware of the legal and binding effect of this
Agreement.
<PAGE>
      IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.

                                    SMARTFORCE PLC

Dated:  _______________             By
                                       _________________________________________
                                       Greg Porto
                                       Vice President, Administration

                                    Jeff Newton, an individual

Dated:  ________________            ____________________________________________
<PAGE>
Exhibit C

None.

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