Press Releases & Coverage

SkillSoft Accelerates Vesting of Unvested Stock Options, Excluding Those Held by Executive Officers and Directors

NASHUA, N.H., Jan. 20 /PRNewswire-FirstCall/ -- SkillSoft PLC (Nasdaq: SKIL), a leading provider of content resources and complementary technologies for integrated enterprise learning, today announced that its Board of Directors has approved the accelerated vesting of all currently outstanding unvested stock options previously awarded to employees effective January 13, 2006. This vesting acceleration initiative does not extend to any options held by executive officers and directors.

The purpose of the accelerated vesting of unvested stock options is to enable the Company to eliminate compensation expense which would be associated with these options from future periods subsequent to the Company's adoption of FASB Statement No. 123(R) ("Share-Based Payment") on February 1, 2006. SkillSoft's Board of Directors took the action based on the belief that it is in the best interests of the Company's shareholders to reduce future stock- based compensation expense related to existing stock options.

As a result of the Board's action, previously unvested options to purchase approximately 1.7 million SkillSoft ordinary shares are now immediately exercisable as a result of the accelerated vesting, representing approximately 11% of the Company's total outstanding stock options. These newly-vested stock options consist of both "in-the-money" as well as "out-of-the-money" options. Based upon the closing price of SkillSoft's American Depositary Shares (ADSs) of $5.77 per share on January 13, 2006, approximately 52% of the total accelerated stock options are "in-the-money" with a weighted average exercise price of $3.76 per share.

As a result of the accelerated vesting, SkillSoft expects that it will avoid recognition of approximately $9.1 million of stock-based compensation expense in future periods beginning February 1, 2006, including approximately $4.7 million of stock-based compensation expense in the fiscal year ending January 31, 2007. Of these anticipated savings, approximately $6.7 million (including approximately $3.0 million in the fiscal year ending January 31, 2007) is attributable to options with an exercise price above $5.77 per share (the closing price of the Company's ADSs on January 13, 2006) and approximately $2.4 million (including approximately $1.7 million in the fiscal year ending January 31, 2007) is attributable to "in-the-money" options.

Based on the closing price of SkillSoft's ADSs on January 13, 2006, its historical employee turnover rates and its estimate of future employee separation, the Company estimates that it will incur a GAAP, non-cash stock- based compensation charge of between $90,000 to $175,000 as a result of the accelerated vesting in the fourth quarter of the fiscal year ending January 31, 2006.

In addition to the financial considerations described above, the Board also considered whether accelerating share options, particularly "in-the- money" options, would have an adverse impact on employee retention. The Board determined that the retentive value of underwater options (i.e., options with an exercise price greater than $5.77 per share on January 13, 2006) is minimal. In addition, the Board does not believe that significant retentive value will be lost as a result of the acceleration of "in-the-money" share options held by employees due to the fact that 86% of these options were scheduled to vest, according to their terms, absent the acceleration, within 18 months from January 13, 2006. The Board therefore believes the advantages to shareholders, in the form of reduced operating expenses, outweigh the potential disadvantages of accelerating share options, including "in-the- money" options.

About SkillSoft

SkillSoft is a leading provider of comprehensive e-learning content and technology products for business and IT professionals within global enterprises. SkillSoft's multi-modal learning solutions support and enhance the speed and effectiveness of both formal and informal learning processes and integrate SkillSoft's in-depth content resources, learning management system, virtual classroom technology and support services.

Content offerings include SkillSoft's business, IT, desktop and compliance courseware collections and BusinessPro(TM), ITPro(TM), OfficeEssentials(TM), FinancePro(TM), EngineeringPro(TM), GovEssentials(TM), ExecSummaries(TM) and ExecBlueprints(TM) collections from Books24x7(R). SkillSoft's complementary technologies include SkillPort(R), the company's learning management system with its powerful Search-and-Learn(TM) technology and premium add-on modules, and SkillSoft(R) Dialogue(TM) virtual classroom, a tool that allows customers to create and deliver effective blended learning programs using custom content and off-the-shelf learning resources. For more information, visit http://www.skillsoft.com.

SkillSoft, the SkillSoft logo, Ahead of the Learning Curve, SkillPort, Search-and-Learn, SkillChoice, Books24x7, Referenceware, ITPro, BusinessPro, OfficeEssentials, GovEssentials, EngineeringPro, FinancePro, ExecSummaries, ExecBlueprints, Express Guide and Dialogue are trademarks or registered trademarks of SkillSoft PLC in the United States and certain other countries. All other trademarks are the property of their respective owners.

SkillSoft courseware content described herein is for information purposes only and is subject to change without notice. SkillSoft has no obligation or commitment to develop or deliver any future release, upgrade, feature, enhancement or function described in this press release except as specifically set forth in a written agreement.

This release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements. Factors that could cause or contribute to such differences include competitive pressures, changes in customer demands or industry standards, adverse economic conditions, loss of key personnel, litigation and other risk factors disclosed under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Future Operating Results" in SkillSoft's Annual Report on Form 10-K for the fiscal year ended January 31, 2005 and its Form 10-Q for the quarterly period ended October 31, 2005, as filed with the Securities and Exchange Commission. The forward-looking statements provided by the Company in this press release represent the Company's views as of January 20, 2006. The Company anticipates that subsequent events and developments may cause the Company's views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this release.

SOURCE  SkillSoft PLC
    -0-                             01/20/2006
    /CONTACT:  Tom McDonald, Chief Financial Officer of SkillSoft PLC,
+1-603-324-3000, x4232; Investor: Michael Polyviou or Peter Schmidt, both of
Financial Dynamics, +1-212-850-5600 /
    /Web site:  http://www.skillsoft.com /