Table of Contents

---

---

---

---

---

---

---

---

---

---

---

(1)

Each ordinary share issued will have attached thereto one subscription right.

(2)

Based upon the estimated maximum number of ordinary shares, par value €0.11 per share, represented by the American Depositary Shares, or ADSs, of the Registrant that may be issued to stockholders of SkillSoft Corporation pursuant to the merger described herein based on the number of shares of SkillSoft Corporation common stock outstanding on the date hereof and giving effect to the exercise of all options to purchase SkillSoft Corporation’s common stock and rights to purchase SkillSoft Corporation’s common stock under its employee stock purchase plans. Each ADS represents one ordinary share.

(3)

Estimated solely for purposes of calculating the registration fee required by the Securities Act of 1933, as amended, and computed pursuant to Rules 457(f) and (c) under the Securities Act based on (i) $9.575, the average of the high and low per share prices of common stock, par value $0.001 per share, of SkillSoft Corporation as reported on the Nasdaq National Market on June 18, 2002 and (ii) the maximum number of shares of SkillSoft Corporation common stock expected to be received by the Registrant or cancelled pursuant to the merger described herein.

(4)

Pursuant to Rule 457(p) under the Securities Act, the Registrant intends to offset a portion of the currently due filing fee with the filing fee of $11,953.64 previously paid to the Commission by the Registrant in connection with a different Registration Statement on Form S-4 (file number 333-84768) filed by the Registrant on March 22, 2002 and subsequently withdrawn on April 8, 2002.

---

---

Table of Contents

---

Table of Contents

---

---

(i)

the Agreement and Plan of Merger dated June 10, 2002 made by and among SmartForce, Slate Acquisition Corp. and SkillSoft Corporation (“SkillSoft”), in the form produced to the meeting and initialed by the Chairman for the purposes of identification (a copy of which was included in the joint proxy statement/prospectus circulated to all of the members of SmartForce on [________], 2002) relating to the merger (the “Merger”) of Slate Acquisition Corp. (a wholly owned subsidiary of SmartForce) with and into SkillSoft and the automatic conversion of each share of common stock of SkillSoft outstanding immediately prior to the consummation of the Merger into a right to receive 2.3674 ordinary shares of €0.11 each in the capital of SmartForce (or American Depositary Shares (“ADSs”) representing such ordinary shares) and the assumption by SmartForce of all outstanding options to purchase shares of SkillSoft common stock, such Merger and the issuance of ordinary shares of €0.11 each in the capital of SmartForce (or ADSs representing such ordinary shares) pursuant to the Merger be, and they each hereby are, approved;

(ii)

the authorized share capital of SmartForce be and it hereby is increased from €13,200,000 to €27,500,000 by the creation of an additional 130,000,000 ordinary shares of €0.11 each ranking pari passu in all respects with the existing ordinary shares of €0.11 each in the capital of SmartForce;

(iii)

the first sentence of paragraph 5 of SmartForce’s Memorandum of Association be deleted and the following be substituted therefor:

(iv)

Article 2 of SmartForce’s Articles of Association be deleted in its entirety and the following be substituted therefor:

(v)

Article 64 of SmartForce’s Articles of Association be deleted in its entirety and the following be substituted therefor:

---

Table of Contents

(vi)

with the consent of the Registrar of Companies, the name of SmartForce be and it hereby is changed to:

(vii)

clause 1 of SmartForce’s Memorandum of Association be amended to read as follows:

(viii)

the Directors of SmartForce be and they hereby are generally and unconditionally authorized to exercise all of the powers of SmartForce to allot relevant securities of SmartForce (within the meaning of Section 20 of the Companies (Amendment) Act, 1983) up to an amount equal to but not exceeding the authorized but unissued share capital of SmartForce as at the date of passing of this resolution provided that this authority shall expire at the close of business on June     , 2007 unless previously renewed, varied or revoked by SmartForce in general meeting, except that SmartForce may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities pursuant to any such offer or agreement as if the authority conferred hereby had not expired; and

(ix)

the Directors of SmartForce pursuant to Section 24 of the Companies (Amendment) Act, 1983 be and they hereby are empowered to allot equity securities (within the meaning of Section 23 of the said Act) for cash pursuant to the authority to allot relevant securities conferred on the Directors by paragraph (viii) above as if subsection (1) of the said Section 23 did not apply to any such allotment, provided that this power shall expire at close of business on June    , 2007 unless such power shall be renewed in accordance with and subject to the provisions of the said Section 24, except that SmartForce may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to any such offer or agreement as if the power hereby conferred had not expired.

---

Table of Contents

---

Table of Contents

---

---

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

Q:

What is the proposed merger? (see page 45)

A:

In the proposed merger, SmartForce and SkillSoft will merge in a stock-for-stock transaction. The transaction is structured as a merger of SkillSoft with a newly formed subsidiary of SmartForce, with SkillSoft surviving as a wholly-owned subsidiary of SmartForce. In exchange for their shares in SkillSoft, the SkillSoft stockholders will receive ordinary shares of SmartForce, represented by American Depositary Shares, or ADSs. The merger agreement is attached to this joint proxy statement/prospectus as Annex A. You are encouraged to read it carefully.

Q:

Am I being asked to vote on anything else? (see page 127)

A:

Yes.

•

If you are a SkillSoft common stockholder, the SkillSoft board of directors is asking you to authorize SkillSoft to adjourn or postpone the SkillSoft special meeting if the number of shares of SkillSoft common stock present or represented and voting in favor of the merger is insufficient to adopt the merger agreement under Delaware law. Adjourning the special meeting to a later date will give SkillSoft additional time to solicit proxies to vote in favor of the merger.

•

If you are a SmartForce shareholder, the SmartForce board of directors is asking you to do the following:

—

Approve the merger agreement, the merger and the issuance of American Depositary Shares, or ADSs, and the ordinary shares underlying such ADSs pursuant to the merger;

—

Approve the increase in the authorized share capital of SmartForce to €27,500,000 divided into 250,000,000 ordinary shares of € 0.11 per share;

—

Approve the amendment of SmartForce’s memorandum of association and articles of association to reflect the increase in the authorized share capital of SmartForce;

—

Approve the amendment to Article 64 of the articles of association of SmartForce to read as follows:

—

Approve the change in the name of SmartForce to [                    ] (subject to the consent of the Registrar of Companies) and the amendment of clause 1 of the memorandum of association of SmartForce to reflect the new name;

—

Authorize the directors to allot relevant securities up to an amount equal to but not exceeding the authorized but unissued shares in the capital of SmartForce immediately following the passing of the resolution; and

—

Authorize the directors to allot equity securities pursuant to the authority conferred on the directors to allot relevant securities as if Section 23(1) of the Companies (Amendment) Act, 1983 (Ireland) did not apply to any such allotment.

Q:

What will I receive in the merger? (see page 45)

A:

Following the merger:

•

SkillSoft common stockholders will receive, in exchange for each of their SkillSoft shares, 2.3674 ordinary shares represented by ADSs of SmartForce. Each ADS represents one ordinary share of SmartForce.

---

Table of Contents

•

Each option to purchase SkillSoft common stock outstanding immediately before the completion of the merger will automatically become an option to purchase SmartForce ADSs (representing SmartForce ordinary shares). The number of SmartForce ADSs (representing SmartForce ordinary shares) which may be purchased under each assumed option will be equal to the product of the number of SkillSoft shares that were purchasable upon exercise of the option before the merger multiplied by 2.3674 and rounded down to the nearest whole ADS. The exercise price per share will be the pre-merger exercise price divided by 2.3674 and rounded up to the nearest whole cent.

•

Instead of fractional shares in the merger, SkillSoft stockholders will receive cash in an amount equal to the fraction multiplied by the average of the last reported sales prices of SmartForce ADSs on the Nasdaq National Market for the ten (10) trading days immediately preceding the last full trading day prior to the effective date of the merger.

Q:

What percentage of the combined company will the SmartForce shareholders and the SkillSoft stockholders own following the merger? (see page 70)

A:

After the merger, based on shares outstanding as of the date of this joint proxy statement/prospectus, the current SmartForce shareholders would own approximately 58% of the outstanding shares of SmartForce and the former SkillSoft stockholders would own approximately 42% of the outstanding shares of SmartForce.

Q:

When do you expect the merger to be completed?

A:

SmartForce and SkillSoft are working toward completing the merger as quickly as possible. We hope to complete the merger during the third calendar quarter of 2002 promptly following the approval of the merger by the SmartForce shareholders and SkillSoft stockholders. However, the merger is subject to several conditions that could affect the timing of its completion.

Q:

Are there risks involved in undertaking the merger? (see pages 11-28)

A:

Yes. In evaluating the merger, you should carefully consider the factors discussed in the section of the joint proxy statement/prospectus entitled “Risk Factors” beginning on page 11.

Q:

What are the conditions to completion of the merger? (see page 76)

A:

SmartForce’s and SkillSoft’s respective obligations to complete the merger are subject to the satisfaction or waiver of specified closing conditions. If either SmartForce or SkillSoft waives any of these conditions, each company will consider the facts and circumstances at that time and make a determination whether a resolicitation of proxies from its respective shareholders or stockholders is appropriate.

Q:

Is the merger subject to governmental approvals? (see pages 68-69)

A:

Yes. This merger is subject to review by the U.S. Department of Justice and the U.S. Federal Trade Commission to determine whether it is in compliance with applicable antitrust laws. Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the merger may not be consummated until the specified waiting period requirements of that Act have been satisfied. In addition, any time before or after the merger, and notwithstanding that the waiting period has terminated or that the merger may have been consummated, the U.S. Federal Trade Commission, the U.S. Department of Justice or any state could take any action under the applicable antitrust or competition laws as it deems necessary or desirable. This action could include seeking to enjoin the completion of the merger. Private parties may also institute legal actions under the antitrust laws under some circumstances.

---

Table of Contents

Q:

What shareholder approvals are required for approval of the merger and the related proposals? (see pages 40 and 42)

A:

The holders of three-fourths of the ordinary shares of SmartForce cast in person or by proxy on the proposal must approve the merger proposal which includes the approval of the merger agreement and the approval of the merger, the issuance of the SmartForce ordinary shares, represented by the ADSs, in the merger, the increase in the authorized share capital of SmartForce, the name change and the other related matters contained in the merger proposal.

Q:

Are there any SmartForce shareholders or SkillSoft stockholders already committed to voting in favor of the merger, the share issuance and the other proposals described in this joint proxy statement/prospectus? (see pages 40 and 43)

A:

Yes.

•

SmartForce officers, directors and shareholders who collectively hold approximately 1.0% of the voting power of the SmartForce ordinary shares outstanding as of June 10, 2002 entered into a voting agreement with SkillSoft requiring them to vote all of their shares in favor of the merger proposal.

•

SkillSoft officers, directors and stockholders who collectively hold approximately 39.6% of the voting power of the SkillSoft common stock outstanding as of June 10, 2002 entered into voting agreements with SmartForce requiring them to vote all of their shares in favor of adoption of the merger agreement.

Q:

Who will be the directors of the combined company following the merger?

A:

Following the merger, the board of directors of SmartForce is expected to consist of seven members of which three members will be from SmartForce’s board, three members will be from SkillSoft’s board and one new member will be initially designated by SkillSoft. The board members will be Gregory M. Priest, James S. Krzywicki, Ferdinand von Prondzynski, Charles E. Moran, Stewart K.P. Gross, William T. Coleman III and P. Howard Edelstein.

Q:

Who will be the executive officers of the combined company following the merger?

A:

Following the merger, the executive management team of the combined company is expected to include:

•

Gregory M. Priest, as Chairman of the Board of Directors and Chief Strategy Officer;

•

Charles E. Moran, as President and Chief Executive Officer;

•

Thomas J. McDonald, as Executive Vice President and Chief Financial Officer;

•

Jeffrey N. Newton, as Executive Vice President, Complex Solutions;

•

Jerald A. Nine, Jr., as Executive Vice President, Content Solutions and General Manager, Books Division;

•

Paul Henry, as Executive Vice President of Corporate Marketing and Customer Service;

•

Colm Darcy, as Executive Vice President of Content Development; and

•

Mark A. Townsend, as Executive Vice President of Software Development.

Q:

Why are SmartForce and SkillSoft proposing the merger? (see pages 48-52)

A:

SmartForce and SkillSoft are proposing the merger to create an e-Learning company capable of becoming the world’s leading provider of e-Learning solutions. By bringing together SmartForce’s leading portfolio of IT, enterprise applications and sales and CRM e-Learning solutions with SkillSoft’s comprehensive suite of business and professional e-Learning solutions, SmartForce and SkillSoft believe that the merger supports both companies’ overall strategy to deliver the

---

Table of Contents

most comprehensive and highest-quality e-Learning solutions and positions the combined company to best serve the demands of this growing market.

Q:

Does the board of directors of SmartForce recommend voting in favor of the merger proposal? (see page 41)

A:

Yes. After careful consideration, SmartForce’s board of directors unanimously recommends that its shareholders vote in favor of the merger proposal including the adoption of the merger agreement, the merger, the issuance of the SmartForce ordinary shares, represented by the ADSs, in the merger, the increase in the authorized share capital of SmartForce, the name change and the other matters contained in the merger proposal.

Q:

Does the board of directors of SkillSoft recommend voting in favor of the merger agreement and the merger? (see page 43)

A:

Yes. After careful consideration, SkillSoft’s board of directors unanimously recommends that its stockholders vote in favor of adoption of the merger agreement.

Q:

Do persons involved in the merger have interests which may conflict with mine? (see page 66)

A:

Yes. When considering the recommendations of SmartForce’s and SkillSoft’s respective boards of directors, you should be aware that certain SmartForce and SkillSoft directors and officers have interests in the merger that are different from, or are in addition to, yours. These interests include:

•

the employment of Gregory M. Priest as Chairman and Chief Strategy Officer and Charles E. Moran as President and CEO of the combined company;

•

the appointment of certain other SkillSoft and SmartForce executive officers and directors to executive officer and director positions in the combined company;

•

stock options held by SkillSoft executive officers and directors, which will be assumed by SmartForce upon completion of the merger;

•

the amendment of certain share options held by certain retiring SmartForce and SkillSoft directors to extend the exercise period of such options;

•

a registration rights agreement entered into by SmartForce with SkillSoft’s principal stockholder, Warburg Pincus Ventures, L.P. intended substantially to replicate the rights which Warburg has under an existing registration rights agreement between Warburg and SkillSoft; and

•

indemnification provided to the present and former executives and directors of SkillSoft and SmartForce.

Q:

Did SmartForce’s and SkillSoft’s financial advisors render fairness opinions in connection with the merger? (see pages 52-66)

A:

Yes.

•

SmartForce’s board of directors considered the opinion, dated as of June 10, 2002, of its financial advisor, Credit Suisse First Boston, to the effect that, as of such date, and based upon and subject to various considerations set forth in the opinion, the exchange ratio was fair, from a financial point of view, to SmartForce.

•

SkillSoft’s board of directors considered the opinion, dated as of June 10, 2002, of its financial advisor, Banc of America Securities, to the effect that, as of such date, the exchange ratio of 2.3674 SmartForce ADSs, each of which represents and is exchangeable for one ordinary share of SmartForce, to be received for each share of SkillSoft common stock pursuant to the merger agreement was fair from a financial point of view to the holders of shares of SkillSoft common stock.

•

The full text of the written opinions of the financial advisors are attached to the back of this document as Annex B and Annex C, and should be read carefully in their entirety to understand the assumptions made, matters considered and limitations on the review undertaken in providing the opinions.

•

The opinion of Credit Suisse First Boston is addressed to the SmartForce board and the opinion of Banc of America Securities is addressed to the SkillSoft board and are provided to the respective addressees for their information and assistance in connection with their consideration of the transactions contemplated by the merger agreement. These opinions do not address the prices at which SmartForce’s ADSs will trade at any time and do not constitute a recommendation to any shareholder as to how to vote with respect to any matter relating to the proposed merger.

---

Table of Contents

Q:

What do I need to do now?

A:

After carefully reading and considering the information contained in this joint proxy statement/prospectus, please complete, date, sign and mail your proxy card in the enclosed return envelope as soon as possible so that your shares will be represented at your respective shareholder meeting.

Q:

When and where will the vote take place? (see pages 36 and 42)

A.

Extraordinary General Meeting of SmartForce Shareholders.    The SmartForce extraordinary general meeting will be held at [                ] on [        ], 2002, starting at [                ] local time.

Q:

Should I send in my SkillSoft stock certificates now? (see page 67)

A:

No. After the merger is completed, SmartForce will send you written instructions for exchanging your SkillSoft stock certificates for American Depositary Receipts, or ADRs, representing SmartForce ADSs.

Q:

If my shares are held in street name by my broker, will my broker vote my shares for me? (see pages 38 and 43)

A:

Your broker will vote your shares only if you provide your broker with instructions on how to vote your shares by following the information provided to you by your broker.

Q:

What do I do if I want to change my vote? (see pages 38 and 43)

A:

You can change your vote at any time before your proxy is voted at your meeting. There are four ways for you to do this:

1.

Send written notice to the secretary of SmartForce or SkillSoft (as appropriate) that you wish to revoke your proxy,

2.

In the case of SkillSoft stockholders, send written notice to the secretary of SkillSoft that you wish to change your proxy,

3.

Send a completed proxy to SmartForce’s Registrars, The Bank of New York or SkillSoft, as applicable, bearing a date later than your original proxy prior to the vote at your meeting, or

4.

Attend the SmartForce shareholder or SkillSoft stockholder meeting and vote in person.

Q:

What happens if a SkillSoft stockholder does not vote? (see page 43)

A:

If you are a SkillSoft stockholder and you fail to submit a proxy or vote at the special meeting, your shares will not be counted as present for purposes of determining the presence or absence of a quorum and will have the same effect as a vote AGAINST adoption of the merger agreement but will have no effect on the adjournment proposal.

---

Table of Contents

•

If you sign and return your proxy and do not indicate how you want to vote, your proxy will be counted as present for purposes of determining the presence of a quorum and will be voted FOR adoption of the merger agreement and FOR approval of the adjournment proposal.

•

If you submit a proxy and affirmatively elect to ABSTAIN from voting, your proxy will be counted as present for the purpose of determining the presence of a quorum for the special meeting but will not be voted at the special meeting. Consequently, your abstention will have the same effect as a vote AGAINST adoption of the merger agreement but will have no effect on the adjournment proposal.

Q:

What happens if a SmartForce shareholder does not vote? (see page 38)

A:

If you are a SmartForce shareholder and do not submit a proxy or vote at the extraordinary general meeting, your shares will not be counted as present for purposes of determining the presence or absence of a quorum and will have no effect on the outcome of the merger proposal.

•

If you submit a proxy with respect to your SmartForce ADSs and do not indicate how you want to vote, your proxy will be counted as present for the purpose of determining the presence of a quorum but will not be voted at all at the extraordinary general meeting. Consequently, your failure to indicate how you want to vote with respect to the merger proposal will have no effect on the outcome of the merger proposal. For a description of the matters for which The Bank of New York is not entitled to a discretionary proxy to vote SmartForce ADSs, please see “Description of American Depositary Shares—Voting Rights” beginning on page 99.

•

If you submit a proxy with respect to your SmartForce ordinary shares and do not indicate how you want to vote, your proxy will be counted both as present for the purpose of determining the presence of a quorum and will be voted FOR the merger proposal.

•

If you submit a proxy and affirmatively elect to ABSTAIN from voting, your proxy will be counted as present for the purpose of determining the presence of a quorum but will not be voted on the merger proposal at the extraordinary general meeting. Consequently, your abstention will not have an effect on the vote for the merger proposal to be voted upon at the meeting.

Q:

Am I entitled to dissenters’ or appraisal rights in connection with the merger? (see page 69)

A:

No. Under the Irish Companies Acts and Delaware law, neither shareholders of SmartForce nor stockholders of SkillSoft, respectively, are entitled to dissenters’ or appraisal rights in connection with the merger.

Q:

How do the market prices of SmartForce ADSs and SkillSoft common stock compare? (see page 35)

A:

SmartForce ADSs and shares of SkillSoft common stock are listed on the Nasdaq National Market. SmartForce’s trading symbol is “SMTF,” and SkillSoft’s trading symbol is “SKIL.” On June 10, 2002, the last full trading day prior to the public announcement of the proposed merger, the last reported sale prices were:

•

$5.32 per SmartForce ADS, and

•

$14.93 per share of SkillSoft common stock.

•

$4.27 per SmartForce ADS, and

•

$9.95 per share of SkillSoft common stock.

---

Table of Contents

Q:

What are the United States federal income tax consequences of the merger? (see pages 89-93)

A:

We expect that, in general, SmartForce, SmartForce’s shareholders, SkillSoft and SkillSoft’s stockholders will not recognize a gain or loss for United States federal income tax purposes as a result of the merger, except for a gain or loss attributable to cash received by SkillSoft stockholders instead of fractional shares.

Q:

How will the merger be accounted for? (see page 68)

A:

The merger will be accounted for as a purchase business combination for financial accounting purposes in accordance with accounting principles generally accepted in the United States. Although SmartForce will be acquiring SkillSoft as a legal matter, SkillSoft will be considered the acquirer for accounting purposes. As a result, the cost to the combined company of the acquisition will be allocated to SmartForce’s tangible and identifiable intangible assets deemed to be acquired by the combined company and liabilities deemed to be assumed by the combined company based on their fair value with the remaining excess reflected as goodwill. The results of operations and cash flows of SmartForce will be included in the combined company’s financial statements prospectively as of the consummation of the merger.

Q:

Does the merger agreement permit termination of the merger (see page 77)

A:

Yes. The merger agreement may be terminated prior to the effectiveness of the merger under some circumstances.

Q:

Could payment of a termination fee be required in connection with the merger? (see pages 78-79)

A:

Yes. If the merger agreement is terminated upon some specified occurrences, either SmartForce or SkillSoft may be required to pay a termination fee of up to $8,800,000.

Q:

May SmartForce or SkillSoft solicit acquisition proposals from other parties? (see pages 73-75)

A:

No. Both parties have agreed, subject to limited exceptions for responses to unsolicited bona fide offers, not to initiate or engage in discussions with other parties concerning a business combination with another party while the merger is pending.

Q:

Are there restrictions on the ability to sell SmartForce ADSs received as a result of the merger? (see page 69)

A:

All SmartForce ADSs received by SkillSoft stockholders in connection with the merger will be freely transferable unless the holder is considered an affiliate of either SkillSoft or SmartForce under the Securities Act of 1933, as amended. SmartForce ADSs issued in the merger and held by affiliates may only be sold pursuant to a registration statement or an exemption from the registration requirements of the Securities Act.

---

Table of Contents

•

combining and successfully integrating the businesses of SmartForce and SkillSoft may cost more or be more difficult than we expect;

•

the completion of the proposed merger could be materially delayed or prohibited;

•

general economic conditions or conditions in securities markets may be less favorable than we currently anticipate, which may result in, among other things, lower than expected revenues or results of operations for the combined company;

•

cost savings and revenue enhancements that we expect from the merger may not be fully realized or realized within the expected time frame;

•

retaining key personnel may be more difficult than we expect;

•

contingencies may arise of which we were not aware or of which we underestimated the significance;

•

our revenues after the merger may be lower than we expect;

•

we may lose more business or customers after the merger than we expect or our operating costs may be higher than we expect;

---

Table of Contents

•

the amount (both in absolute dollars and as a percentage of net sales) of SmartForce and SkillSoft expenditures for research and development, selling, general and administrative and capital acquisitions and improvements may be materially greater or less than those expected;

•

development costs, anticipated completion, introduction and projected revenues from SmartForce’s and SkillSoft’s new and developing products and technologies may be materially different than anticipated;

•

changes in technology may increase the number of competitors SmartForce or SkillSoft faces or require significant capital expenditures to provide competitive products and services;

•

the effects of vigorous competition in the markets in which SmartForce and SkillSoft operate may be materially different from that anticipated;

•

adverse changes may occur in the securities markets; or

•

the risks described under “Risk Factors” beginning on page 11 or other risks may occur.

---

Table of Contents

•

integration of the two companies’ products and services, sales and marketing, information and software systems and other operations;

•

retention and integration of management and other key employees;

•

coordination of ongoing and future research and development efforts and marketing activities;

•

retention of existing customers of both companies and attraction of additional customers;

•

retention of strategic partners of each company and attraction of new strategic partners;

•

developing and maintaining uniform standards, controls, procedures and policies;

•

identifying and eliminating redundant and underperforming operations and assets;

•

effectively leveraging SmartForce’s indirect sales presence;

•

capitalizing on cross-selling opportunities;

•

minimization of disruption of each company’s ongoing business and distraction of its management; and

•

limiting expenses related to integration.

---

Table of Contents

---

Table of Contents

•

the integration of SmartForce and SkillSoft is unsuccessful or not completed in a timely and efficient manner;

•

the combined company does not achieve the expected benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts;

•

the effect of the merger on the combined company’s financial results is not consistent with the expectations of financial or industry analysts; and

•

significant shareholders of SmartForce following the merger decide to dispose of their shares because the results of the merger are not consistent with their expectations.

•

under the circumstances described in the merger agreement, SkillSoft could be required to pay SmartForce, or SmartForce could be required to pay SkillSoft, a termination fee in the amount of up to $8.8 million;

•

the market price of SmartForce’s ADSs and SkillSoft’s common stock may decline to the extent that the current market price of such shares reflects a market assumption that the merger will be completed;

•

each company’s costs related to the merger, such as legal and accounting fees and a portion of the investment banking fees, must be paid even if the merger is not completed;

•

benefits that each company expects to realize from the merger would not be realized; and

•

the diversion of management attention from the day-to-day businesses of SmartForce and SkillSoft, the scaling back of marketing and capital spending and the unavoidable disruption to their employees and their relationships with customers and suppliers during the period before consummation of the merger may make it difficult for SmartForce and SkillSoft to regain their financial and market positions if the merger does not occur.

---

Table of Contents

---

Table of Contents

•

Messrs. Gregory M. Priest, Jeffrey N. Newton, Paul Henry and Colm M. Darcy of SmartForce and Messrs. Charles E. Moran, Thomas J. McDonald, Jerald A. Nine and Mark A. Townsend of SkillSoft will become executive officers of the combined company following the merger. In addition, Messrs. Priest, Moran, James S. Krzywicki, Ferdinand von Prondzynski, Stewart K.P. Gross and William T. Coleman will become directors of the combined company. Certain of these officers and directors hold shares of SmartForce and/or SkillSoft stock, or options to purchase such shares.

•

In connection with the merger, Messrs. Priest, Moran, Newton and Nine have entered into employment agreements, conditioned and effective upon the completion of the merger, whereby each has been provided with certain incentives to remain employed by the combined company following the merger.

•

In connection with the merger, SmartForce has agreed to amend certain of the outstanding option agreements of its current directors who will not be directors of the combined company, including Messrs. Ronald C. Conway, John M. Grillos and Patrick J. McDonagh, so that each option held by them which is existing and vested on the closing date of the merger will remain exercisable following the termination of the relevant optionee’s service as a director on the SmartForce board of directors for a period equal to the remaining unexpired portion of the option’s ten-year term. This action will not give any SmartForce director any rights to purchase shares with respect to any options unvested at the time of the merger or that he would not otherwise have the right to purchase at the time of the merger.

•

In connection with the merger, SkillSoft has agreed to amend the outstanding option agreement of Mr. John J. Neuhauser, a current SkillSoft director who will not be a director of the combined company, so that the option to the extent existing and vested will remain exercisable following the termination of Mr. Neuhauser’s service as a director on the SkillSoft board of directors for a period of four years from the grant date of the option. Pursuant to the terms of the SkillSoft 1999 Non-Employee Director Stock Option Plan, Mr. Neuhauser’s option will automatically vest and become immediately exercisable in full upon the completion of the merger.

•

SmartForce has agreed to cause its wholly owned subsidiary, SmartForce (USA), to indemnify each present and former SkillSoft officer and director against liabilities arising out of such person’s services as an officer or director. SmartForce will also cause SmartForce (USA) to maintain officers’ and directors liability insurance to cover any such liabilities for a period of six years from the effective time of the merger.

---

Table of Contents

•

various aspects of the design and functionality of its education and training software and products;

•

customer lists and information;

•

relationships with service providers; and

•

NETg’s soft skills product line business plan.

---

Table of Contents

•

injunctive relief against SkillSoft, the combined company and our officers and employees, which could significantly restrict the combined company’s ability to conduct its business;

•

an adverse judgment against the combined company for monetary damages;

•

a settlement on unfavorable terms to the combined company;

•

obligations on the part of the combined company to indemnify its employees and directors for liabilities and expenses they incur in connection with the lawsuits;

•

obligations to customers for breach of warranties of noninfringement; or

•

a requirement to reengineer the combined company’s products to avoid patent infringement, which would likely result in additional expense and delay.

---

Table of Contents

•

the size and timing of new and renewal agreements;

•

the number and size of outsourcing agreements or other agreements providing for professional services or the resale of instructor-led training;

•

the mix of revenue between access to hosted content or platform services, up-front software licenses, software rental, professional services, maintenance and resale of third parties products and services;

•

royalty rates;

•

the announcement, introduction and acceptance of new products, product enhancements and technologies by the combined company and its competitors;

•

the mix of sales between the combined company’s field sales force, its other direct sales channels and its telesales channels;

•

the impact of any unanticipated decline in net revenues in any particular quarter as compared to the relatively fixed nature of the combined company’s expense levels in the short term;

•

general conditions in the U.S. or the international economy;

•

general conditions in the combined company’s market or the markets served by its customers;

•

the loss of significant customers;

•

delays in availability of existing or new products;

•

product or service quality problems;

•

the spending patterns of the combined company’s customers;

•

litigation costs and expenses;

•

non-recurring charges related to acquisitions;

•

currency fluctuations; and

•

the length of the combined company’s sales cycles.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

difficulties or delays in developing and supporting non-English language versions of the combined company’s products and services;

•

political and economic conditions in various jurisdictions;

•

difficulties in staffing and managing foreign subsidiary operations;

•

longer sales and account receivable payment cycles;

•

multiple, conflicting and changing governmental laws and regulations;

•

foreign currency exchange rate fluctuations;

•

protectionist laws and business practices that may favor local competitors;

•

difficulties in finding and managing local resellers;

•

potential adverse tax consequences; and

•

the absence or significant lack of legal protection for intellectual property rights.

---

Table of Contents

•

announcements of developments related to the combined company’s or its competitors’ business;

•

announcements of new products or enhancements by the combined company or its competitors;

•

the combined company’s success and timing in developing and introducing new products and enhancements to existing products;

•

changes in pricing policies by the combined company or its competitors;

•

the length of the combined company’s sales cycle;

•

cancellations of, or failure to renew, contracts by existing customers;

•

changes in customer buying patterns;

•

market entry by new competitors;

•

sales of SmartForce’s ADSs into the public market;

•

developments in the combined company’s relationships with its customers, partners and distributors;

•

shortfalls or changes in revenues, gross margins, earnings or losses or other financial results which differ from public market expectations;

•

changes in the public market expectation of the combined company’s performance or industry performance;

•

changes in market valuations of competitors;

•

regulatory developments;

•

additions or departures of key personnel;

•

fluctuations in results of operations; and

•

general conditions in the combined company’s markets or the markets served by the combined company’s customers or in the U.S. and/or the international economy.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

(1)

Computed by dividing total shareholders’ equity by the number of shares of capital stock outstanding at the end of the period on a historical and pro forma combined basis, as applicable.

(2)

Basic pro forma loss per share is calculated based on the exchange of 14,921,000 and 17,367,000 shares of SkillSoft common stock outstanding on a weighted average basis during the twelve-month period ended January 31, 2002 and during the three month period ended April 30, 2002, respectively, for SmartForce ordinary shares at the merger exchange ratio of 2.3674 SmartForce ordinary shares per share of SkillSoft common stock. Diluted pro forma loss per share was the same as basic pro forma loss per share due to anti-dilutive impact of common stock equivalents.

(3)

Computed by multiplying pro forma combined information by the inverse of the exchange ratio of 2.3674, or 0.422, as SkillSoft is deemed to be the acquirer in the merger for accounting purposes.

---

Table of Contents

---

Table of Contents

(i)

approve the Agreement and Plan of Merger dated June 10, 2002 made by and among SmartForce, Slate Acquisition Corp. and SkillSoft Corporation, in the form produced to the meeting and initialed by the Chairman for the purposes of identification (a copy of which was included in the joint proxy statement/prospectus circulated to all of the members of SmartForce on [                ], 2002) relating to the merger of Slate Acquisition Corp. (a wholly owned subsidiary of SmartForce) with and into SkillSoft and the automatic conversion of each share of common stock of SkillSoft outstanding immediately prior to the consummation of the merger into a right to receive 2.3674 ordinary shares of €0.11 each in the capital of SmartForce (or American Depositary Shares, or ADSs, representing such ordinary shares) and the assumption by SmartForce of all outstanding options to purchase shares of SkillSoft common stock, such merger and the issuance of ordinary shares of €0.11 each in the capital of SmartForce (or ADSs representing such ordinary shares) pursuant to the merger;

(ii)

approve the increase in the authorized share capital of SmartForce from €13,200,000 to €27,500,000 by the creation of an additional 130,000,000 ordinary shares of €0.11 each ranking pari passu in all respects with the existing ordinary shares of €0.11 each in the capital of SmartForce;

(iii)

delete the first sentence of paragraph 5 of SmartForce’s memorandum of association and substitute the following therefor:

(iv)

delete Article 2 of SmartForce’s articles of association in its entirety and substitute the following therefor:

“2.

Share Capital

(v)

delete Article 64 of SmartForce’s articles of association in its entirety and substitute the following therefor:

“64.

Number of Directors

(vi)

with the consent of the Registrar of Companies, change the name of SmartForce to:

---

Table of Contents

(vii)

amend clause 1 of SmartForce’s memorandum of association to read as follows:

“1.

The name of the Company is [                            ].”

(viii)

generally and unconditionally authorize the directors of SmartForce to exercise all of the powers of SmartForce to allot relevant securities of SmartForce (within the meaning of Section 20 of the Companies (Amendment) Act, 1983) up to an amount equal to but not exceeding the authorized but unissued share capital of SmartForce as at the date of passing of this resolution provided that such authority shall expire at the close of business on June [    ], 2007 unless previously renewed, varied or revoked by SmartForce in general meeting, except that SmartForce may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities pursuant to any such offer or agreement as if the authority conferred hereby had not expired; and

(ix)

empower the directors of SmartForce pursuant to Section 24 of the Companies (Amendment) Act, 1983 to allot equity securities (within the meaning of Section 23 of the said Act) for cash pursuant to the authority to allot relevant securities conferred on the directors by paragraph (viii) above as if subsection (1) of the said Section 23 did not apply to any such allotment, provided that such power shall expire at close of business on June [    ], 2007, unless such power shall be renewed in accordance with and subject to the provisions of the said Section 24, except that SmartForce may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities pursuant to any such offer or agreement as if the power thereby conferred had not expired.

---

Table of Contents

•

the information contained in the notice of meeting received by The Bank of New York from SmartForce;

•

a statement that the owners of ADSs at the close of business on a specified record date are entitled, subject to any applicable provisions of Irish law and of SmartForce’s articles of association, to instruct

---

Table of Contents

•

a statement that owners of ADSs who instruct The Bank of New York as to the exercise of their voting rights will be deemed to have instructed The Bank of New York or its authorized representative to call for a poll with respect to each matter for which instructions are given, subject to any applicable provisions of Irish law and of SmartForce’s articles of association; and

•

a statement as to the manner in which the instructions may be given, including an express indication that instructions may be given or deemed to be given in accordance with the next paragraph, if no instruction is received, to The Bank of New York to give a discretionary proxy to a person designated by SmartForce.

---

Table of Contents

•

providing written notice before the meeting that you have revoked your proxy by mail or facsimile to:

•

submitting a new signed proxy with a later date; or

•

attending the meeting.

---

Table of Contents

---

Table of Contents

1.

To adopt the merger agreement.

2.

To grant SkillSoft management the discretionary authority to adjourn or postpone the special meeting in order to enable the SkillSoft board of directors to solicit additional proxies if there are not sufficient votes at the originally scheduled time of the special meeting to adopt the merger agreement.

3.

To consider and vote upon any other matters that may properly come before the special meeting or any adjournment or postponement of the special meeting. SkillSoft is not currently aware of any other matter that will come before the special meeting.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

The potential strategic benefits of the merger, including without limitation, the ability to expand and enhance SmartForce’s comprehensive e-Learning solutions;

•

Historical information concerning SmartForce’s and SkillSoft’s respective businesses, financial performance and condition, operations, technology and management, including public reports concerning results of operations during recent fiscal periods for each company filed with the SEC;

•

SmartForce management’s view of the financial condition, results of operations and businesses of SmartForce and SkillSoft before and after giving effect to the merger and the merger’s effect on shareholder value;

•

Current financial market conditions and historical market prices, volatility and trading information with respect to SmartForce’s ADSs and SkillSoft’s common stock;

•

The consideration to be received by SkillSoft’s stockholders in the merger and the relationship between the current and historical market values of SmartForce’s ADSs and SkillSoft’s common stock and a comparison of comparable merger transactions;

•

The composition of the board and the executive management team following the merger;

•

The belief that the terms of the merger agreement, including the parties’ respective representations, warranties and covenants, and the conditions to their respective obligations, are reasonable;

•

The potential for other parties to enter into strategic relationships with or to acquire SmartForce or SkillSoft;

•

Detailed financial analysis and pro forma and other information with respect to the companies presented to the SmartForce board, including the opinion of Credit Suisse First Boston, dated as of June 10, 2002, to the effect that as of such date, and based upon and subject to various considerations set forth in the opinion, the exchange ratio was fair, from a financial point of view, to SmartForce. This opinion is subject to assumptions and limitations noted in the opinion and described under “—Opinion of SmartForce’s Financial Advisor,” and you should carefully read both that section and the opinion that is attached to this document as Annex B;

•

The impact of the merger on SmartForce’s customers and employees; and

•

Reports from management, legal, financial and accounting advisors as to the results of the due diligence investigation of SkillSoft.

---

Table of Contents

•

SmartForce management’s belief that the merger would enhance the opportunity for the potential realization of SmartForce’s strategic objective to become the world’s leading provider of e-Learning solutions;

•

The belief that the combination of SmartForce’s IT, sales and CRM content library with SkillSoft’s interpersonal and business skills library would solidify the combined company’s position as the leader in e-Learning content with over 3,000 courses and simulations and over 2,000 Referenceware products;

•

The potential impact on SmartForce’s financial condition, results of operations and businesses including additional benefits from incremental bookings;

•

The benefits derived from the combination of members of two respected management teams with complementary strengths;

•

The synergies and cost saving opportunities that could potentially be realized by leveraging the strengths of both organizations while eliminating redundancies and underperforming operations and assets;

•

The potential revenue synergies due to cross selling opportunities and utilization of SmartForce’s and SkillSoft’s complementary sales and distribution approaches;

•

The increased customer base of the combined company, including SmartForce’s more than 2,500 corporate customers, and SkillSoft’s 500 corporate customers, only approximately 200 of whom are SmartForce customers;

•

The benefits of becoming a larger organization with almost 1800 employees, which would provide access to greater financial, development, distribution channel and other resources;

•

The opportunity to leverage the significant research and development capabilities of the two companies, which include a combined 2001 research and development investment of over $69 million, allowing duplicate resources to be re-deployed to facilitate faster introduction and additional feature developments of the products of the combined company;

•

More substantial resources and a larger capital base to enable faster growth and expansion in the rapidly-evolving e-Learning market;

•

The belief that the combined company could further pursue opportunities relating to business processes within the enterprise involving the transfer of knowledge not formally part of the training function such as managing contact centers, launching products and getting sales hires up to quota productivity; and

•

The opportunity for SmartForce’s shareholders to participate in the potential growth of the combined company after the merger.

•

The risk that the potential benefits and costs synergies of the merger may not be realized;

•

The challenges of integrating the businesses of the combined company and management and employee disruption associated with the merger, including the risk that despite the efforts of the combined company, key personnel might not remain employed by the combined company;

•

The risk that the combined company’s financial results will not meet expectations given the current e-Learning market environment and the combined company’s customer base;

•

The risk of disruption of sales momentum as a result of uncertainties created by the announcement of the merger;

---

Table of Contents

•

The adverse accounting consequences caused by the structuring of the transaction such as the loss of a significant amount of SmartForce’s balance sheet deferred revenue to goodwill and the creation of intangible assets requiring a non-cash quarterly amortization expense;

•

The negative impact on projected revenue of the combined company resulting from the planned changes to the contracting practices and attendant changes to revenue recognition of the two companies;

•

Commercial overlap of customers that is expected to initially result in a reduction in revenue for the combined company;

•

The risk that the merger might not be consummated on a timely basis, if at all, despite the parties’ efforts, and even if approved by each company’s shareholders;

•

The substantial charges to be incurred in connection with the merger, including costs of integrating the businesses and transaction expenses arising from the merger;

•

The negative impact on projected revenues that could be caused by changes in business strategy such as de-emphasizing custom service revenue activities to focus on higher margin segments of the business;

•

The effect of public announcement of the merger and the possibility that the merger might not be consummated on (a) SmartForce’s sales and operating results, (b) SmartForce’s ability to attract and retain key management, marketing and technical personnel and (c) the progress of certain development projects; and

•

Other applicable risks described in the section of this joint proxy statement/prospectus entitled “Risk Factors” on page 11.

•

the fact that the combination of the product lines, sales channels and financial resources of SmartForce and SkillSoft should result in a combined company that is a leader in the e-Learning market, with the

---

Table of Contents

•

the complementary nature of the product lines of SmartForce and SkillSoft, with SmartForce’s focus on information technology and SkillSoft’s focus on business skills training;

•

the strong customer base of each company, which should provide opportunities for each company to introduce its product line into the customer base of the other company;

•

the fact that the merger would combine two experienced and respected management teams, resulting in a combined management team that is stronger than the management teams of each of the individual companies;

•

the opportunity for SkillSoft’s current management and directors to participate in the management and oversight of SmartForce following the merger through the appointment of Chuck Moran as Chief Executive Officer and Tom McDonald as Chief Financial Officer of SmartForce and the election of three current SkillSoft directors and a fourth person designated by SkillSoft to the seven-member SmartForce board of directors;

•

the synergies and cost-saving opportunities that should result from the combination of the two organizations, as redundant operations are eliminated or streamlined;

•

the fact that the Irish tax resident status of certain SmartForce entities offers SkillSoft the possibility of securing a lower corporate tax rate on earnings than that currently applicable following the implementation of appropriate planning strategies.

•

the larger public float of SmartForce and the corresponding likelihood of increased trading liquidity for SkillSoft stockholders as a result of the merger; and

•

the fact that the merger will be tax-free to SkillSoft’s U.S. stockholders who receive SmartForce ADSs in exchange for their SkillSoft common stock in the merger (except to the extent they received cash for any fractional shares).

•

SkillSoft management’s view of the business and prospects of SkillSoft and SmartForce as stand-alone companies and as a combined company;

•

historical information concerning SkillSoft’s and SmartForce’s respective businesses and financial performance;

•

historical stock market prices, volatility and trading information with respect to SkillSoft common stock and SmartForce ADSs;

•

the number of SmartForce ADSs to be exchanged in the merger for each share of SkillSoft common stock;

•

the financial analyses and presentation of Banc of America Securities delivered to the SkillSoft board of directors on June 10, 2002, as well as the opinion of Banc of America Securities dated June 10, 2002 that, as of such date, the exchange ratio of 2.3674 SmartForce ordinary shares represented by ADSs for each share of SkillSoft common stock in the merger agreement was fair from a financial point of view to the holders of SkillSoft common stock (a copy of Banc of America Securities’ written opinion is attached as Annex C to this joint proxy statement/prospectus);

•

the results of the due diligence investigation of SmartForce conducted by SkillSoft’s management, financial advisor, accountants and legal counsel;

•

the accounting treatment of the merger;

---

Table of Contents

•

the contractual terms of the merger agreement and related transaction documents; and

•

the interest that certain SkillSoft officers and directors may have in the merger, in addition to their interest as SkillSoft stockholders (see “Interests of Certain Persons in the Merger” on page 66).

•

the historical volatility and recent trends of the market price of SmartForce ADSs;

•

the negative impact on the projected revenue of the combined companies resulting from the reconciliation of the accounting practices of the two companies and areas of business overlap;

•

the risks that the integration of the businesses, products and personnel of the two companies will not be successfully implemented and may require a significant amount of management time and resources;

•

the fact that the restructuring announced by SmartForce in April 2002 may present additional challenges for the combined management of SmartForce following the merger;

•

the risk that the potential synergies and cost-saving opportunities identified by SmartForce and SkillSoft will not be fully realized;

•

the risk that the merger may not be well received by customers, business partners and employees of the two companies;

•

the significant cost that will be incurred in seeking to consummate the merger;

•

the risk that the merger may not be completed; and

•

the other risks described in this joint proxy statement/prospectus under the heading “Risk Factors” on page 11.

---

Table of Contents

•

reviewed the merger agreement and certain related documents;

•

reviewed certain publicly available business and financial information relating to SmartForce and SkillSoft;

•

reviewed certain other information relating to SmartForce and SkillSoft, including publicly available financial forecasts (as adjusted by the managements of SmartForce and SkillSoft), provided to or discussed with Credit Suisse First Boston by SmartForce and SkillSoft, and met with the managements of SmartForce and SkillSoft to discuss the businesses and prospects of SmartForce and SkillSoft, respectively;

•

considered certain financial and stock market data of SmartForce and SkillSoft and compared that data with similar data for other publicly held companies in businesses which Credit Suisse First Boston deemed similar to those of SmartForce and SkillSoft;

•

considered, to the extent publicly available, the financial terms of certain other business combinations and other transactions which have recently been effected or announced; and

•

considered such other information, financial studies, analyses and investigations and financial, economic and market criteria which Credit Suisse First Boston deemed relevant.

•

the existing and future technology and products of SmartForce and SkillSoft and the risks associated with such technology and products;

•

the potential cost savings and other synergies (including the amount, timing and achievability of such cost savings and other synergies) and strategic benefits anticipated by the managements of SmartForce and SkillSoft to result from the merger;

•

their ability to integrate the businesses of SmartForce and SkillSoft; and

•

their ability to retain key employees of SmartForce and SkillSoft.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

reviewed certain publicly available financial statements and other business and financial information of SmartForce and SkillSoft, respectively;

•

reviewed certain internal financial statements and other financial and operating data concerning SmartForce and SkillSoft, respectively;

•

analyzed financial forecasts, reports and other information regarding SkillSoft and SmartForce published by certain research analysts from selected investment banking firms (collectively, the “Research Analyst Reports”) and certain additional information prepared by the management of SkillSoft and SmartForce and discussed such information with representatives of SkillSoft’s and SmartForce’s management;

•

reviewed and discussed with representatives of the management of SkillSoft and SmartForce pro-forma adjustments, provided by SkillSoft, required to be made to the financial forecasts derived from the combination of the SmartForce and SkillSoft financial forecasts contained in the Research Analyst Reports;

•

participated in meetings and discussions with representatives of the management of SkillSoft and SmartForce to discuss the business, operations, historical financial data and certain other financial and operating data of the respective companies;

•

reviewed and discussed with representatives of the management of SkillSoft and SmartForce information, prepared by the management of SkillSoft and SmartForce, respectively, relating to certain strategic, financial and operational benefits anticipated from the merger;

•

considered the possible accretion and dilution effects of the merger on the forward cash earnings per share of SkillSoft and SmartForce based on projections contained in the Research Analyst Reports and the pro-forma adjustments provided by SkillSoft, as noted above;

•

reviewed and considered in the analysis the relative contributions of SmartForce and SkillSoft to the combined company;

•

reviewed the reported prices and trading activity for SmartForce ADSs and SkillSoft common stock;

•

compared the financial performance of SmartForce and SkillSoft and the prices and trading activity of SmartForce ADSs and SkillSoft common stock with that of SkillSoft and SmartForce, respectively, and certain other publicly traded companies deemed relevant;

•

compared certain financial terms of the merger to financial terms, to the extent publicly available, of certain other business combination transactions deemed relevant;

•

participated in discussions and negotiations among representatives of SmartForce and SkillSoft and their financial and legal advisors;

•

reviewed the June 7, 2002 draft of the merger agreement and certain related documents; and

•

performed such other analyses and considered such other factors as it deemed appropriate.

•

in connection with rendering its opinion, Banc of America Securities, reviewed and relied upon the Research Analyst Reports in lieu of any internal financial forecasts prepared by SkillSoft or SmartForce;

---

Table of Contents

•

with respect to such financial and other information, including the Research Analyst Reports, the pro-forma adjustments, and information related to certain strategic, financial and operation benefits anticipated from the merger, Banc of America Securities has assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the future financial performance of SkillSoft and SmartForce, and assumed at SkillSoft’s direction that such strategic, financial and operational benefit anticipated from the merger will be realized in all material respects;

•

assumed that in connection with the receipt of all necessary regulatory approvals for the proposed merger, no restrictions will be imposed that would have a material adverse effect on SmartForce, SkillSoft, the combined company or the contemplated benefits expected to be derived in the proposed merger;

•

that the final executed merger agreement will be identical in all material respects to the June 7, 2002 draft merger agreement, and that the merger will be consummated as provided in such draft merger agreement, with full satisfaction of all covenants and conditions and without any waivers thereof; and

•

relied upon, without independent verification, the assessment by the management of SkillSoft and SmartForce of their respective technology, products and services, and the integration of SmartForce’s technology, products and services with SkillSoft’s technology, products and services and the timing of the introduction of future products incorporating such technology, products and services and SkillSoft’s and SmartForce’s ability to retain key managers.

•

relied on advice of counsel and independent accountants to SkillSoft as to all legal and financial reporting matters with respect to SkillSoft, the merger and the June 7, 2002 draft merger agreement; and

•

did not make an independent evaluation or appraisal of any of the assets or liabilities of SkillSoft or SmartForce, nor did Banc of America Securities receive any such appraisals.

---

Table of Contents

•

equity value, defined as the product of the number of shares of common stock outstanding for a company multiplied by its stock price; plus

•

outstanding debt; less

•

cash and cash equivalents.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

Executive Officers and Directors.    The following current officers of SkillSoft or SmartForce will be appointed as executive officers of the combined company following the effectiveness of the merger:

—

Gregory M. Priest, Chairman and Chief Strategy Officer;

—

Charles E. Moran, President and Chief Executive Officer;

—

Thomas J. McDonald, Executive Vice President and Chief Financial Officer;

—

Jeffrey N. Newton, Executive Vice President of Complex Solutions;

—

Jerald A. Nine Jr., Executive Vice President, Content Solutions and General Manager, Books Division;

—

Paul Henry, Executive Vice President of Corporate Marketing and Customer Services;

—

Colm Darcy, Executive Vice President of Content Development; and

—

Mark A. Townsend, Executive Vice President of Software Development.

•

Employment.    In connection with the merger, Gregory M. Priest, Charles E. Moran, Jeffrey N. Newton and Jerald A. Nine have entered into employment agreements with SmartForce, whereby each has been provided with certain incentives to remain employed by the combined company following the effectiveness of the merger. See “Agreements Related to the Merger—Employment Agreements” beginning on page 86 for a description of these agreements.

•

Stock Options.    As of May 31, 2002, executive officers and directors of SkillSoft owned options to purchase a total of 690,000 shares of SkillSoft common stock (equivalent to 1,633,506 SmartForce ordinary shares represented by ADSs), at exercise prices ranging from $15.05 to $30.25 per SkillSoft share (equivalent to a range of $6.36 to $12.78 per SmartForce ADS), of which 571,670 (equivalent to 1,353,372 SmartForce ordinary shares represented by ADSs) are unvested. SkillSoft options will be assumed by SmartForce in the merger.

•

Non-Employee Directors.    Mr. John J. Neuhauser, who currently serves on the board of directors of SkillSoft but will not serve as a member of the board of directors of SmartForce after the closing of the merger, holds an option to purchase 40,000 shares of SkillSoft common stock at an exercise price of $30.25 per share. Mr. Neuhauser’s option will automatically vest and become immediately exercisable in full upon the completion of the merger. In contemplation of the merger, the board of directors of SkillSoft extended the term of the option to the extent it is existing and vested at the closing date of the merger so it expires on May 18, 2005. In connection with the merger, SmartForce has agreed to amend certain option agreements previously entered into with its non-employee directors Messrs. Conway, McDonagh and Grillos such that any options to purchase SmartForce ADSs held by them which are

---

Table of Contents

existing and vested by the closing date of the merger will remain exercisable for the remainder of the relevant ten-year option term following a termination of each such non-employee director’s service to SmartForce. This action will not give any of these former directors any rights to purchase shares with respect to any options unvested at the time of the merger or that they would not otherwise have the right to purchase at the time of the merger.

•

Registration Rights.    Warburg, Pincus Ventures, L.P., which is a principal stockholder of SkillSoft, will be an “affiliate” of SmartForce following the merger. It will be restricted from selling the SmartForce ADSs it receives in the merger in the manner described in the section entitled “Certain Securities Laws Considerations” beginning on page 69. Accordingly, Warburg has entered into a registration rights agreement with SmartForce. Under the terms of this agreement, Warburg may, on one occasion, require SmartForce to register for resale under the Securities Act the SmartForce ADSs it receives in the merger. This agreement is intended substantially to replicate the rights which Warburg has under an existing registration rights agreement between Warburg and SkillSoft. See “Agreements Related to the Merger—Registration Rights Agreement” beginning on page 86 for a description of this Agreement.

•

Indemnification.    SmartForce and SkillSoft directors and executive officers have customary rights to indemnification against losses incurred as a result of actions or omissions occurring prior to the effective time of the merger. The merger agreement provides that, for a period of six years after the completion of the merger, SmartForce shall cause the combined company to indemnify each present and former SkillSoft officer and director against liabilities arising out of such person’s service as an officer or director. In addition, for a period of six years after the completion of the merger, the combined company shall maintain officers’ and directors’ liability insurance to cover any such liabilities.

---

Table of Contents

---

Table of Contents

•

an effective registration statement under the Securities Act covering the resale of those shares;

•

an exemption under paragraph (d) of Rule 145 under the Securities Act; or

•

any other applicable exemption under the Securities Act.

---

Table of Contents

---

Table of Contents

•

corporate organization, standing and power;

•

capitalization;

•

subsidiaries;

•

authorization to enter into the merger agreement;

•

the effect of the merger on obligations of the respective companies under their respective charters, applicable laws and third party obligations;

•

regulatory approvals required to complete the merger;

•

required stockholder approval;

•

filings and reports with the Securities and Exchange Commission;

---

Table of Contents

•

financial statements;

•

liabilities;

•

material changes in the respective companies’ business since March 31, 2002 for SmartForce, and April 30, 2002 for SkillSoft;

•

taxes;

•

properties owned and leased;

•

intellectual property;

•

material agreements, contracts and commitments;

•

restrictions on the conduct of business;

•

litigation;

•

environmental matters;

•

employees;

•

employee benefit plans;

•

permits required to conduct business and compliance with those permits;

•

insurance;

•

the fairness opinion received by each company from its financial advisor; and

•

payments, if any, required to be made to brokers and agents on account of the merger.

•

the inapplicability of state takeover statutes to the merger.

•

subscription rights; and

•

the operations of Slate Acquisition Corp.

•

act and carry on business in the usual, regular and ordinary course in substantially the same manner as previously conducted, pay their debts and taxes and perform obligations when due;

•

comply in all material respects with applicable laws, rules and regulations;

•

use commercially reasonable efforts to preserve intact their respective business organizations, assets and properties;

---

Table of Contents

•

use commercially reasonable efforts to keep available the services of their present officers and key employees; and

•

use commercially reasonable efforts to preserve their relationships with customers, strategic partners, suppliers, distributors and others with which they have business dealings.

•

the declaration, setting aside or payment of dividends or other distributions;

•

stock splits, combinations or reclassifications of capital stock or issuances or authorization of any other securities;

•

purchase, redemption or other acquisition of their respective shares or securities;

•

the issuance, delivery, granting, pledge, disposition or encumbrance of their respective capital stock or securities (other than the issuing of shares subject to the exercise of options or the grant of a certain amount of options);

•

amendment to their respective charter documents;

•

the acquisition by merger, consolidation or purchase of assets or stock of other entities;

•

the sale, lease, license, pledge or other disposition of assets;

•

adoption of a rights plan;

•

merger, consolidation, liquidation or business combination;

•

the incurrence of indebtedness, issuance of debt securities or provision of loans, advances, investments or capital contributions;

•

capital expenditures;

•

changes to accounting policies and procedures;

•

modification, amendment or termination of material contracts;

•

entry into any material contract or licensing any material intellectual property to or from any third party;

•

employees and employee benefits, including compensation, severance and termination payments;

•

tax elections, settlement or compromise of tax liability or amendment to tax returns;

•

payment or settlement of claims, liabilities or obligations; and

•

insurance.

•

any inquiry, proposal or offer for a merger, consolidation, dissolution, sale of substantial assets, tender offer, recapitalization, share exchange or other business combination involving SmartForce or SkillSoft or their subsidiaries;

---

Table of Contents

•

any proposal for the issuance of over 10% of the equity securities of either party or its subsidiaries; or

•

any other proposal or offer to acquire in any manner, directly or indirectly, over 10% of the equity securities or consolidated total assets of either party;

•

solicit, initiate, encourage or take any other action to facilitate any inquiries or the making of any proposal or offer that constitutes or could reasonably be expected to lead to an Acquisition Proposal;

•

participate in any discussions or negotiations with a third party regarding, or furnish to any person any information with respect to, or otherwise cooperate in any way with, any Acquisition Proposal;

•

except as described below relating to a Superior Proposal, withdraw or modify or publicly propose to withdraw or modify the approval or recommendation of the board with respect to the merger;

•

enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or similar agreement constituting or relating to any Acquisition Proposal; and

•

adopt, approve, or recommend, or propose to adopt, approve or recommend, any Acquisition Proposal.

•

the board of directors determines in good faith, after consultation with its outside legal counsel, that its fiduciary obligations require it to do so, and the Superior Proposal does not result from a breach by SmartForce or SkillSoft of their nonsolicitation obligations under the merger agreement; and

•

an executed confidentiality agreement containing customary limitations on the use and disclosure of all non-public information (which limitations must be no less restrictive to the third party than the corresponding restrictions contained in the confidentiality agreement entered into between SmartForce and SkillSoft in connection with the merger) is obtained from the party making the Superior Proposal.

•

the board of directors determines in good faith, after consultation with its outside legal counsel, that its fiduciary obligations require it to do so; and

•

such withdrawal or modification of its recommendation can be made only at such time that is prior to the applicable shareholders meeting and after the fifth business day following receipt by the other party of written notice advising it that the board intends to do so and specifying the material terms of the Superior Proposal and the party making such Superior Proposal.

---

Table of Contents

---

Table of Contents

•

the merger agreement must be adopted by the requisite vote of holders of SkillSoft stock;

•

the merger agreement must be adopted and the issuance of SmartForce’s ordinary shares (represented by ADSs) to SkillSoft’s stockholders, the increase in the authorized share capital of SmartForce, the name change and other related matters must be approved by the requisite vote of SmartForce shareholders;

•

all applicable waiting periods under applicable antitrust laws must have expired or been terminated and all antitrust approvals required to be obtained shall have been obtained;

•

all required governmental approvals (other than the filing of the certificate of merger in Delaware) shall have been filed and obtained;

•

SmartForce’s registration statement on Form S-4 to register the ordinary shares to be issued in the merger and a related registration statement to register the corresponding ADSs must be effective, and no stop order suspending the effectiveness of the Registration Statement or the ADS Registration Statement shall be in effect and no proceedings for that purpose and no similar proceeding with respect to the Joint Proxy Statement/Prospectus shall have been initiated or threatened in writing by the SEC or its staff;

•

no law, regulation or order shall have been enacted or issued which has the effect of making the merger illegal or otherwise prohibiting completion of the merger; and

•

the SmartForce’s ADSs to be issued in the merger shall have been authorized for listing on the Nasdaq National Market.

•

SmartForce and Slate Acquisition Corp’s representations and warranties must be true and correct immediately prior to the completion of the merger, except for (i) representations and warranties that refer to a specific date, which must have been true and correct in all material respects as of that date, (ii) changes contemplated by the merger agreement and (iii) where the failure of such representations and warranties to be true and correct, taken together, have not had and are not reasonably likely to have a Material Adverse Effect (as described below) on SmartForce;

•

SmartForce and Slate Acquisition Corp. must in all material respects perform all of the obligations required to be performed by them by the merger agreement;

•

SkillSoft must receive from its tax counsel an opinion to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and

•

SmartForce shall have entered into a Registration Rights Agreement with Warburg, Pincus Ventures, L.P., a SkillSoft stockholder.

•

SkillSoft’s representations and warranties must be true and correct immediately prior to the completion of the merger, except for (i) representations and warranties that refer to a specific date, which must

---

Table of Contents

have been true and correct in all material respects as of that date, (ii) changes contemplated by the merger agreement and (iii) where the failure of such representations and warranties to be true and correct, taken together, have not had and are not reasonably likely to have a Material Adverse Effect on SkillSoft;

•

SkillSoft must in all material respects perform all of the obligations required to be performed by it under the merger agreement;

•

SmartForce must receive from its tax counsel an opinion to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and

•

Each affiliate of SkillSoft shall have signed an affiliate agreement.

•

any decrease in such party’s stock price in and of itself;

•

any material adverse effect resulting solely or primarily from factors affecting the United States (and in the case of SmartForce, Irish) economy or corporate training software market in general.

•

by mutual written consent of the boards of directors of SmartForce and SkillSoft;

•

by SmartForce or SkillSoft, if the merger is not completed before November 30, 2002, except that the right to terminate the merger agreement is not available to any party whose action or failure to act, in breach of the merger agreement, has been a principal cause of or resulted in the failure of the merger to occur on or before November 30, 2002;

•

by SmartForce or SkillSoft, if a court or governmental authority having jurisdiction over either SmartForce or SkillSoft shall have issued a nonappealable final order, decree or ruling permanently restraining, enjoining or prohibiting the completion of the merger;

•

by SmartForce or SkillSoft, if the stockholders of SkillSoft fail to adopt the merger agreement at the SkillSoft stockholders meeting, or if the shareholders of SmartForce fail to approve the merger agreement and approve the share issuance, the increase in share capital, the name change and other related matters contained in the merger proposal at the SmartForce shareholders meeting, except that the right to terminate the merger agreement is not available to any party whose failure to act has been a principal cause of or resulted in the failure to obtain the stockholder or shareholder approval or the failure to obtain the requisite vote has been caused by a breach of the SkillSoft or SmartForce voting agreement;

•

by SmartForce if any of the following shall have occurred:

—

SkillSoft’s board of directors fails to give its recommendation to adopt the merger agreement or withdraws or modifies its recommendation of the merger agreement or the merger in a manner adverse to SmartForce;

—

SkillSoft’s board of directors approves or recommends any Acquisition Proposal;

---

Table of Contents

—

A tender offer or exchange offer for outstanding shares of SkillSoft common stock is commenced (other than by SmartForce or its affiliates) and the SkillSoft board of directors either (i) recommends that the SkillSoft stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SmartForce to do so; or

—

SkillSoft materially breaches its obligations relating to the non-solicitation or stockholder meeting and proxy solicitation sections of the merger agreement.

•

by SkillSoft if any of the following shall have occurred:

—

SmartForce’s board of directors fails to give its recommendation to approve the merger agreement or withdraws or modifies its recommendation of the merger agreement or the merger in a manner adverse to SkillSoft;

—

SmartForce’s board of directors approves or recommends any Acquisition Proposal;

—

A tender offer or exchange offer for SmartForce ordinary shares or ADSs is commenced (other than by SkillSoft or its affiliates) and the SmartForce board of directors either (i) recommends that the SmartForce stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SkillSoft to do so; or

—

SmartForce materially breaches its obligations relating to the non-solicitation or stockholder meeting and proxy solicitation sections of the merger agreement.

•

by SmartForce, if SkillSoft has breached or failed to perform any representation, warranty, covenant or agreement, in any case such that the corresponding condition to completion of the merger would not be met, and the breach or failure to perform is not cured within 15 days after receipt of notice of such breach or failure (unless the terminating party is also in material breach of the merger agreement); or

•

by SkillSoft, if SmartForce has breached or failed to perform any representation, warranty, covenant or agreement, in any case such that the corresponding condition to completion of the merger would not be met, and the breach or failure to perform is not cured within 15 days after receipt of notice of such breach or failure (unless the terminating party is also in material breach of the merger agreement).

•

by SmartForce or SkillSoft if the merger is not approved by SkillSoft stockholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SkillSoft has become publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction (as described below) with a party other than SmartForce is consummated by SkillSoft or SkillSoft enters

---

Table of Contents

into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated);

•

by SmartForce if SkillSoft’s board of directors fails to give its recommendation to approve the merger agreement or the merger or withdraws or modifies its recommendation of the merger agreement or the merger in a manner adverse to SmartForce;

•

by SmartForce if SkillSoft’s board of directors approves or recommends any Acquisition Proposal;

•

by SmartForce if a tender offer or exchange offer for outstanding shares of SkillSoft common stock is commenced (other than by SmartForce or its affiliates) and the SkillSoft board of directors either (i) recommends that the SkillSoft stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SmartForce to do so;

•

by SmartForce if SkillSoft materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation; or

•

by SmartForce if SkillSoft intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SkillSoft in the merger agreement such that the corresponding condition to completion of the merger would not be met, and SkillSoft fails to cure such breach within 15 days following receipt of written notice regarding such breach.

•

by SmartForce or SkillSoft if the merger is not approved by the SmartForce shareholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SmartForce has become publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction with a party other than SkillSoft is consummated by SmartForce or SmartForce enters into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated);

•

by SkillSoft if SmartForce’s board of directors fails to give its recommendation to approve the merger agreement or the merger or withdraws or modifies its recommendation of the merger agreement or the merger in a manner adverse to SkillSoft;

•

by SkillSoft if SmartForce’s board of directors approves or recommends any Acquisition Proposal;

•

by SkillSoft if a tender offer or exchange offer for SmartForce ordinary shares or ADSs is commenced (other than by SkillSoft or its affiliates) and the SmartForce board of directors either (i) recommends that the SmartForce shareholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SkillSoft to do so;

•

by SkillSoft if SmartForce materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation; or

•

by SkillSoft if SmartForce intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SmartForce in the merger agreement such that the corresponding condition to completion of the merger would not be met and, SmartForce fails to cure such breach within 15 days following receipt of written notice regarding such breach.

---

Table of Contents

•

a sale or other disposition by SmartForce or SkillSoft of its business or assets representing 40% or more of its net revenues, net income or assets of the company immediately prior to the sale;

•

the acquisition by any person or group (including by way of tender offer or an exchange offer or issuance by SmartForce or SkillSoft), directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of 40% or more of the then outstanding voting power or equity interest of SmartForce or SkillSoft; or

•

a merger, consolidation, business combination, or similar transaction involving SmartForce or SkillSoft in which the stockholders of SmartForce or SkillSoft, as the case may be, own less than 50% of the voting power or equity interest in the surviving or acquiring entity in the transaction.

---

Table of Contents

---

Table of Contents

•

After termination of the merger agreement as described below:

—

by SmartForce if SkillSoft’s board of directors (a) fails to recommend to SkillSoft’s stockholders that they approve the merger agreement or the merger, (b) withdraws its recommendation or (c) modifies its recommendation of the merger agreement or the merger in a manner adverse to SmartForce;

—

by SmartForce if SkillSoft’s board of directors approves or recommends any Acquisition Proposal;

---

Table of Contents

—

by SmartForce if a tender offer or exchange offer for outstanding shares of SkillSoft common stock is commenced (other than by SmartForce or its affiliates) and the SkillSoft board of directors either (i) recommends that the SkillSoft stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SmartForce to do so;

—

by SmartForce if SkillSoft materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation;

—

by SmartForce if SkillSoft intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SkillSoft in the merger agreement such that the corresponding condition to completion of the merger would not be met, and SkillSoft fails to cure such breach within 15 days following receipt of written notice regarding such breach; or

—

by SmartForce or SkillSoft if the merger agreement is not adopted by SkillSoft stockholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SkillSoft becomes publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction with a party other than SmartForce is consummated by SkillSoft or SkillSoft enters into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated).

•

the completion of the merger;

•

twelve months after termination of the merger agreement based on a failure to obtain the required approval of SkillSoft stockholders if no event causing the termination fee to become payable has occurred;

•

twelve months after payment of the termination fee in connection with SmartForce’s termination of the merger agreement because of any of the following:

—

SkillSoft’s board of directors (a) fails to recommend to SkillSoft’s stockholders that they approve the merger agreement or the merger, (b) withdraws its recommendation or (c) modifies its recommendation of the merger agreement or the merger in a manner adverse to SmartForce;

—

SkillSoft’s board of directors approves or recommends any Acquisition Proposal;

—

A tender offer or exchange offer for outstanding shares of SkillSoft common stock is commenced (other than by SmartForce or its affiliates) and the SkillSoft board of directors either (i) recommends that the SkillSoft stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SmartForce to do so;

—

SkillSoft materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation;

—

SkillSoft intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SkillSoft in the merger agreement such that the corresponding condition to completion of the merger would not be met, and SkillSoft fails to cure such breach within 15 days following receipt of written notice regarding such breach; or

---

Table of Contents

—

if SmartForce or SkillSoft terminates the merger agreement because the merger agreement is not adopted by SkillSoft stockholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SkillSoft becomes publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction with a party other than SmartForce is consummated by SkillSoft or SkillSoft enters into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated); and

•

the date on which the merger agreement is otherwise terminated.

•

After termination of the merger agreement as described below:

—

by SkillSoft if SmartForce’s board of directors (a) fails to recommend to SmartForce’s shareholders that they approve the merger agreement or the merger, (b) withdraws its recommendation or (c) modifies its recommendation of the merger agreement or the merger in a manner adverse to SkillSoft;

—

by SkillSoft if SmartForce’s board of directors approves or recommends any Acquisition Proposal;

---

Table of Contents

—

by SkillSoft if a tender offer or exchange offer for SmartForce ordinary shares or ADSs is commenced (other than by SkillSoft or its affiliates) and the SmartForce board of directors either (i) recommends that the SmartForce stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SkillSoft to do so; or

—

by SkillSoft if SmartForce materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation;

—

by SkillSoft if SmartForce intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SmartForce in the merger agreement such that the corresponding condition to completion of the merger would not be met, and SmartForce fails to cure such breach within 15 days following receipt of written notice regarding such breach; or

—

by SmartForce or SkillSoft if the merger is not approved by SmartForce stockholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SmartForce becomes publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction with a party other than SkillSoft is consummated by SmartForce or SmartForce enters into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated).

•

the completion of the merger;

•

twelve months after termination of the merger agreement based on a failure to obtain the required approval of SmartForce shareholders if no event causing the termination fee to become payable has occurred;

•

twelve months after payment of the termination fee in connection with SkillSoft’s termination of the merger agreement because of any of the following:

—

SmartForce’s board of directors (a) fails to recommend to SmartForce’s shareholders that they approve the merger agreement or the merger, (b) withdraws its recommendations or (c) modifies its recommendation of the merger agreement or the merger in a manner adverse to SkillSoft;

—

SmartForce’s board of directors approves or recommends any Acquisition Proposal;

—

A tender offer or exchange offer for SmartForce ordinary shares or ADSs is commenced (other than by SkillSoft or its affiliates) and the SmartForce board of directors either (i) recommends that the SmartForce stockholders tender their shares in such tender or exchange offer, (ii) within 10 business days after the commencement of such tender or exchange offer, fails to recommend rejection of such offer or (iii) fails to reconfirm its recommendation of the merger agreement or the merger within 10 business days after receipt of a request by SkillSoft to do so;

—

SmartForce materially breaches its obligations under the sections of the merger agreement relating to non-solicitation or the holding of a stockholder meeting and proxy solicitation;

—

SmartForce intentionally breaches or fails to perform any representation, warranty, covenant or agreement of SmartForce in the merger agreement such that the corresponding condition to completion of the merger would not be met, and SmartForce fails to cure such breach within 15 days following receipt of written notice regarding such breach; or

---

Table of Contents

—

if SmartForce or SkillSoft terminates the merger agreement because the merger is not approved by SmartForce stockholders and if, following the date of the merger agreement and prior to the termination of the merger agreement, an Acquisition Proposal with respect to SmartForce becomes publicly announced or publicly known and, within 12 months following the termination of the merger agreement, either an Acquisition Transaction with a party other than SkillSoft is consummated by SmartForce or SmartForce enters into an agreement with respect to an Acquisition Transaction (and that Acquisition Transaction is later consummated); or

•

the date on which the merger agreement is otherwise terminated.

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

a dealer in securities or currencies;

•

a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;

•

a bank or other financial institution;

•

an insurance company;

•

a tax-exempt organization;

•

a person that holds shares of SkillSoft common stock or will hold SmartForce ADSs as part of a straddle or a hedging, integrated, constructive sale or conversion transaction for tax purposes;

•

a person whose functional currency for tax purposes is not the United States dollar;

•

a person liable for U.S. alternative minimum tax;

•

a person that owns, or is treated as owning, 10% or more of any class of SmartForce ADSs;

•

a person who acquired shares of SkillSoft common stock or SmartForce ADSs through stock option or stock purchase programs or in other compensatory transactions; or

•

a person who is not a U.S. holder.

---

Table of Contents

•

no gain or loss will be recognized by SmartForce, SkillSoft or Slate Acquisition Corp. solely as a result of the merger;

---

Table of Contents

•

no gain or loss will be recognized by the U.S. holders of SkillSoft common stock upon the receipt of SmartForce ADSs solely in exchange for SkillSoft common stock in the merger, except to the extent of cash received in lieu of fractional shares;

•

cash payments received by U.S. holders of SkillSoft common stock in lieu of a fractional share will result in capital gain (or loss) measured by the difference between the cash payment received and the portion of the tax basis in the shares of SkillSoft common stock surrendered that is allocable to such fractional share. Such gain (or loss) will be long-term capital gain (or loss) if the shares of SkillSoft common stock allocable to such fractional share have been held for more than one year at the effective time of the merger;

•

the aggregate tax basis of the SmartForce ADSs received by SkillSoft stockholders in the merger will be the same as the aggregate tax basis of the SkillSoft common stock surrendered in exchange therefor reduced by any tax basis allocable to a fractional share for which cash is received; and

•

the holding period with respect to SmartForce ADSs received by each SkillSoft stockholder in the merger will include the holding period for the SkillSoft common stock surrendered in exchange therefor.

•

gain or loss will be recognized by the seller in an amount equal to the difference (if any) between the amount realized on such sale or other taxable disposition and the seller’s adjusted tax basis in the SmartForce ADSs;

---

Table of Contents

•

gain or loss recognized on the sale or other taxable disposition will be capital gain or loss and will be long-term capital gain or loss if the holding period for SmartForce ADSs is more than one year at the time of the sale or other disposition;

•

any gain or loss recognized on the sale or other taxable disposition will be treated as having a U.S. source for U.S. foreign tax credit purposes; and

•

the ability to deduct capital losses is subject to limitations.

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

the ADR register maintained by the depositary shows the U.S. Holder as having a U.S. address on the register; or

•

where there is an intermediary between the depositary and the beneficial owner of ADSs, the depositary receives confirmation from the intermediary that the beneficial owner’s address in the intermediary’s records is in the U.S.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

is a matter not submitted to shareholders by means of a proxy statement comparable to that specified in the United States proxy rules;

•

is the subject of a counter-solicitation, or is part of a proposal made by a shareholder which is being opposed by SmartForce’s management;

•

is related to a merger or consolidation, except in limited circumstances involving a merger between SmartForce and a wholly-owned subsidiary;

•

authorizes mortgaging of property;

•

authorizes or creates indebtedness or increases the authorized amount of indebtedness;

•

authorizes or creates preference shares or increases the authorized amount of existing preference shares;

•

alters the terms or conditions of any shares then outstanding or existing indebtedness;

•

involves the waiver or modification of preemptive rights, except when SmartForce’s proposal is to waive these rights for ordinary shares being offered under share option or purchase plans involving the additional issuance of not more than 5% of SmartForce’s outstanding ordinary shares;

•

alters voting provisions or the proportionate voting power of a class of shares, or the number of its votes per share, except where cumulative voting provisions govern the number of votes per share for election of directors and SmartForce’s proposal involves a change in the number of its directors by not more than 10% or not more than one;

•

changes existing quorum requirements for shareholder meetings;

•

authorizes issuance of ordinary shares, or options to purchase ordinary shares, to SmartForce’s directors, officers, or employees in an amount which exceeds 5% of the total amount of the class outstanding. However, when no plan is amended to extend its duration, SmartForce shall factor into the calculation the number of ordinary shares that remain available for issuance, the number of ordinary shares subject to outstanding options and any ordinary shares being added. Should there be more than one plan being considered at the same meeting, all ordinary shares will be aggregated;

•

authorizes (a) a new profit-sharing or special remuneration plan, or a new retirement plan, the annual cost of which will amount to more than 10% of SmartForce’s average annual income before taxes for the preceding five years, or (b) the amendment of an existing plan which would bring the annual costs above 10% of SmartForce’s five-year average annual income before taxes. Should there be more than one plan being considered at the same meeting, all costs are aggregated; exceptions may be made in cases of: (a) retirement plans based on agreement or negotiations with labor unions or which have been or are to be approved by labor unions, and (b) any related retirement plan for benefit of non-union employees having terms substantially equivalent to the terms of a union-negotiated plan, which is submitted for action of shareholders concurrently with a union-negotiated plan;

•

changes SmartForce’s purposes or powers to an extent which would permit SmartForce to change to a materially different line of business and it is SmartForce’s stated intention to make such a change;

•

authorizes the acquisition of property, assets, or a company, where the consideration to be given has a fair value of 20% or more of the market value of SmartForce’s previously outstanding ADSs and ordinary shares;

•

authorizes the sale or other disposition of 20% or more of SmartForce’s assets or earning power as measured prior to the closing of the transaction;

---

Table of Contents

•

authorizes a transaction which is not in the ordinary course of business in which an officer, director or substantial security holder of SmartForce has a direct or indirect interest; or

•

reduces SmartForce’s earned surplus by 51% or more, or reduces earned surplus to an amount less than the aggregate of the three previous years’ ordinary share dividends computed at the current dividend rate.

---

Table of Contents

•

advise you that the deposit agreements are terminated;

•

collect distributions on the deposited securities; and

•

deliver ordinary shares and other deposited securities upon cancellation of ADRs.

•

are only obligated to take the actions specifically described in the deposit agreements without engaging in negligence or bad faith;

•

are not liable if either party is prevented or delayed by law or circumstances beyond its control from performing their obligations under the deposit agreements;

•

are not liable if either party exercises discretion permitted under the deposit agreements;

---

Table of Contents

•

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreements on your behalf or on behalf of any other party; and

•

may rely upon any documents they believe in good faith to be genuine and to have been signed or presented by the proper party.

•

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;

•

production of satisfactory proof of the identity and genuineness of any signature or other information it considers necessary; and

•

compliance with regulations it may establish, from time to time, consistent with the deposit agreements, including presentation of transfer documents.

•

When temporary delays arise because:

—

the transfer books are closed by SmartForce or the depositary;

—

the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting; or

—

SmartForce is paying a dividend on the ordinary shares;

•

When you or other ADS holders seeking to withdraw ordinary shares owe money to pay fees, taxes and similar charges; or

•

When it is necessary to prohibit withdrawals to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities.

---

Table of Contents

•

before or at the time of the pre-release, the person to whom the pre-release is being made must represent to the depositary in writing that it or its customer owns the ordinary shares or ADSs to be deposited;

•

the pre-release must be fully collateralized with cash or other collateral that the depositary considers appropriate; and

•

the depositary must be able to close out the pre-release on not more than five business days’ notice.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

•

the chairman of the meeting;

•

at least three shareholders present, in person or by proxy, entitled to vote at the meeting;

•

any shareholder or shareholders present, in person or by proxy, representing not less than one-tenth of the total voting rights of all the shareholders entitled to vote at the meeting; or

•

any shareholder or shareholders present, in person or by proxy, holding shares conferring the right to vote at the meeting being shares on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

---

Table of Contents

•

to approve any amendment to a company’s memorandum or articles of association;

•

to change a company’s name;

•

to alter a company’s capital structure in certain respects;

•

to change or amend the rights of shareholders; and

•

to permit a company to issue new shares for cash without applying shareholders’ preemptive rights.

---

Table of Contents

•

any person, or any persons acting in concert, acquire control of a relevant company; or

•

any person, or any persons acting in concert, who control a relevant company but do not hold securities conferring in the aggregate more than 50% of the voting rights in that company acquire in any 12 month period additional securities conferring in the aggregate more than 1% of the voting rights in that company.

---

Table of Contents

•

his or her spouse, or minor child is interested;

•

a corporate body is interested and either:

—

that corporate body is or its directors are accustomed to act in accordance with that person’s directions or instructions; or

—

that person exercises or controls the exercise of one-third or more of the voting power of that corporate body; or

•

another party is interested and the person and that other party are parties to an agreement which provides for the acquisition by one or more of the parties of interests in shares of the company, which imposes obligations or restrictions on any one or more of the parties with respect to the use, retention or disposal of such interests acquired pursuant to such agreement and pursuant to which any interest in the company’s shares is in fact acquired by any of the parties.

---

Table of Contents

•

shares of stock of the surviving corporation;

•

shares of stock of another corporation which shares of stock are either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 shareholders;

•

cash in lieu of fractional shares of the stock described in the first two points above; or

•

some combination of the above.

---

Table of Contents

---

Table of Contents

•

breaches of the director’s duty of loyalty to the corporation or its stockholders;

•

acts or omissions not in good faith or involving intentional misconduct or knowing violations of law;

•

the payment of unlawful dividends or unlawful stock repurchases or redemptions; or

•

transactions in which the director received an improper personal benefit.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

(a)

The issuance of approximately 57.0 million SmartForce ordinary shares, represented by ADSs, and options for the issued and outstanding common stock and outstanding options of SkillSoft, at a total value of $315.4 million. The ordinary shares of SmartForce, represented by ADSs, will increase by approximately $9.7 million and additional paid in capital will increase by approximately $305.7 million.

---

Table of Contents

(b)

Elimination of SmartForce’s pre-acquisition shareholders’ equity, as follows:

(c)

Elimination of SmartForces’s pre-acquisition goodwill.

(d)

Excess of the fair value of purchase consideration over the fair value of the net tangible assets and identifiable intangible assets acquired. This excess has been recorded in the pro forma statements as an increase in the carrying value of the acquired intangible assets of SmartForce. The final figure for intangibles and/or goodwill will be increased by any reduction in net assets at the date of closure of the acquisition and by the reorganization costs which will be incurred as a result of the transaction.

(e)

Elimination of $16.0 million of deferred revenue of SmartForce as required by EITF 01-3 “Accounting in a Purchase Business Combination for Deferred Revenue of an Acquiree.” The adjustment of deferred revenue is based on management’s estimate at this time.

(f)

Estimated transaction costs of $13.6 million consisting primarily of Irish capital duty cost, and financial advisor, legal and other professional fees.

(g)

Elimination of the amortization of SmartForce goodwill during the year ended December 31, 2001.

(h)

No pro forma adjustment for the provision of income taxes is required as the provision represents tax liabilities due to certain taxing jurisdictions where income is generated.

---

Table of Contents

(i)

approve and adopt the merger agreement and approve the merger and the issuance of the SmartForce ordinary shares, represented by SmartForce ADSs, in the merger;

(ii)

approve the increase in authorized share capital of SmartForce;

(iii)

approve and adopt the amendment to SmartForce’s memorandum of association;

(iv)

approve and adopt the amendment to SmartForce’s articles of association;

(v)

approve the reduction in the maximum number of directors that may be appointed to the SmartForce board;

(vi)

approve the name change and adopt the consequent amendment to SmartForce’s memorandum of association;

(vii)

approve and adopt the amendment to SmartForce’s memorandum of association to reflect its new name;

(viii)

approve the grant of authority to the directors to allot shares; and

(ix)

disapply statutory pre-emption provisions.

---

Table of Contents

---

Table of Contents

---

---

---

Table of Contents

---

Table of Contents

•

SmartForce’s annual report on Form 10-K, as amended, for the fiscal year ended December 31, 2001;

•

SmartForce’s quarterly report on Form 10-Q for the quarter ended March 31, 2002;

•

SmartForce’s current report on Form 8-K dated April 6, 2002;

•

SmartForce’s current report on Form 8-K dated June 14, 2002;

•

SmartForce’s definitive proxy statement on Schedule 14A filed on June 17, 2002;

•

the description of SmartForce’s ordinary shares contained in SmartForce’s registration statement on Form 8-A filed on March 9, 1995 and amended on April 10, 1995; and

•

SmartForce’s registration statement on Form 8-A filed on October 5, 1998.

•

SkillSoft’s annual report on Form 10-K for the fiscal year ended January 31, 2002;

•

SkillSoft’s quarterly report on Form 10-Q for the quarter ended April 30, 2002;

•

SkillSoft’s current report on Form 8-K dated June 13, 2002; and

•

SkillSoft’s definitive proxy statement on Schedule 14A filed on May 13, 2002.

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

Technology Group

CREDIT SUISSE FIRST BOSTON CORPORATION

650 California Street                    Telephone:    415 249 8866 San Francisco, CA 94108

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

(a)

Exhibits

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

Table of Contents

---

(1)

Filed as an annex to the joint proxy statement/prospectus constituting a part of this registration statement and incorporated by reference herein.

(b)

Financial statement schedules

(c)

Reports, opinions or appraisals

---

Table of Contents

---

Table of Contents