Registration No. 33-97522C
As filed with the Securities and Exchange Commission
on September 26, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
CATALYST INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 39-1415889
(State of Incorporation) (I.R.S. Employer Identification No.)
8989 North Deerwood Drive, Milwaukee, WI 53223
(Address of Principal Executive Office) (Zip Code)
-------------------------------
1997 DIRECTOR STOCK OPTION PLAN
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Sean P. McGowan, President
Catalyst International, Inc.
8989 North Deerwood Drive
Milwaukee, WI 53223
(Name and address of agent for service)
(414) 362-6800
(Telephone Number, including area code, of agent for service)
with a copy to
Mark T. Ehrmann
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, WI 53202
(414) 273-3500
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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<C> <C> <C> <C> <C>
Proposed Proposed
Title of Securities Amount to be Maximum Offering Maximum Aggregate Amount of
to be registered registered price per share offering price registration fee
- ----------------------------------------------------------------------------------------
Common Stock, 250,000
$0.10 par value shares $6.06 (1) $1,515,625 $522.62 (1)
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<FN>
<FN1>
(1) Registration fee calculated pursuant to Rule 457(h)(1) under the
Securities Act of 1933, as amended. The registration fee is based on
the average of the high and low price of a share of Catalyst
International, Inc. common stock on September 25, 1997 as reported by
The Nasdaq Stock Market, Inc. on its website on September 25, 1997.
</FN>
</TABLE>
<PAGE>
PAGE 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in
this Registration Statement:
(a) The Registrant's latest Annual Report on Form
10-KSB filed March 26, 1997 pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) The Registrant's Form 8-K filed January 3,
1997 pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act.
(c) The Registrant's Amendment 2 to Form SR for
the period ended February 15, 1997 filed February 25, 1997
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act.
(d) The Registrant's Form 10-QSB for the period
ended March 31, 1997 filed May 15, 1997 pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act.
(e) The Registrant's Form 10-QSB for the period
ended June 30, 1997 filed August 15, 1997 pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act.
<PAGE>
Page 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the General Corporation Law of
Delaware (the "DGCL"), the Registrant is in certain circumstances
permitted, and in other circumstances may be required, to
indemnify its directors, officers, employees and agents against
certain expenses (including attorneys' fees) and other amounts
paid in connection with certain threatened, pending or completed
civil, criminal, administrative or investigative actions, suits
or proceedings in which such persons were or are parties, or are
threatened to be made parties, by reason of the fact that such
persons were or are directors, officers, employees or agents of
the Registrant. Such section also permits the Registrant to
purchase and maintain insurance on behalf of its directors,
officers, employees or agents against liability which may be
asserted against, or incurred by, such persons in their
capacities as directors, officers, employees or agents of the
Registrant, or which may arise out of their status as directors,
officers, employees or agents of the Registrant whether or not
the Registrant would have the power to indemnify such persons
against such liability under the provisions of the DGCL.
Under Article VIII of the Registrant's Amended and
Restated Bylaws, the Registrant is required to indemnify and
reimburse the expenses of all directors, officers, employees or
agents to the maximum extent permitted by Section 145 of the DGCL
or any successor provision thereto.
The Registrant's Amended and Restated Certificate of
Incorporation limits the personal liability of directors to the
fullest extent permitted by the DGCL.
The Registrant's officers and directors currently are
covered by insurance protecting them from claims brought against
them for acts or omissions related to the conduct of their
duties, including, in certain circumstances, claims brought under
the Securities Act.
<PAGE>
Page 4
ITEM 8. EXHIBITS
4.1 Articles IV and V of the Amended and Restated
Certificate of Incorporation.*
4.2 1997 Director Stock Option Plan of Catalyst
International, Inc.
4.3 Form of Stock Option Agreement between the
Registrant and the holders of option under the
Registrant's 1997 Director Stock Option Plan.
23.1 Consent of Ernst & Young LLP.
___________________
* Incorporated by reference to the Registration Statement on
Form SB-2 (No. 33-97522C).
ITEM 9. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement to include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933 (the "Securities
Act"), each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove the registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining any
liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PAGE>
Page 5
(5) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the provisions described in Item 6 of this Registration Statement
or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person or the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel that matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
<PAGE>
PAGE 6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1933, as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Milwaukee, State of
Wisconsin, on September 26, 1997.
Catalyst International, Inc.
By: /s/ Sean P. McGowan
Sean P. McGowan, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
/s/ Douglas B. Coder Chairman of the Board, 9/26/97
Douglas B. Coder a Director
/s/ Sean P. McGowan President, Chief Executive 9/26/97
Sean P. McGowan Officer and a Director
(Principal Executive Officer)
/s/ Thomas G. Hickinbotham Vice President of Finance 9/26/97
Thomas G. Hickinbotham & Administration; Chief
Financial Officer (Principal
Accounting Officer
/s/ Roy J. Carver Director 9/26/97
Roy J. Carver
/s/ Douglas B. Coder Director 9/26/97
Douglas B. Coder
/s/ James F. Goughenour Director 9/26/97
James F. Goughenour
/s/ Terrence L. Mealy Director 9/26/97
Terrence L. Mealy
/s/ Sean P. McGowan Director 9/26/97
Sean P. McGowan
<PAGE>
EXHIBIT 4.2
CATALYST INTERNATIONAL, INC.
1997 DIRECTOR STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of the 1997 Director Stock Option Plan (the
"Plan") is to enable Catalyst International, Inc. (the "Company")
to attract and retain outside directors and to strengthen the
mutuality of interests between such directors and the Company's
stockholders.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms shall have the
following meanings:
2.1 "Board" shall mean the Board of Directors of the
Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as
amended, and rules and regulations under the Internal Revenue
Code of 1986, as amended.
2.3 "Common Stock" shall mean the Common Stock, par value
$0.10 per share of the Company.
2.4 "Effective Date" shall mean the date on which the Plan
is approved by the affirmative vote of the holders of a majority
of the outstanding shares of Common Stock present, or
represented, and entitled to vote at a duly held meeting of the
stockholders of the Company.
2.5 "Eligible Director" shall mean any member of the Board
who, on the date on which Options are to be granted, is not an
officer or employee of the Company or any of the Company's
subsidiaries, but shall exclude any such member of the Board who
advises the Company in writing of his or her desire not to
participate in the Plan.
<PAGE>
2.6 "Fair Market Value" for purposes of the Plan, unless
otherwise required by the Code, shall mean, of any date, the
closing price of a share of Common Stock as reported on the
principal national securities exchange on which the Common Stock
is listed or admitted to trading, or, if not listed or traded on
any such exchange, on the Nasdaq Stock Market, or, if not so
listed or traded, the fair market value as determined by the
Board, which determination shall be conclusive.
2.7 "Optionee" shall mean an individual to whom a Stock
Option has been granted under the Plan.
2.8 "Stock Option" or "Option" shall mean any option to
purchase shares of Common Stock granted pursuant to Article VI.
ARTICLE III
ADMINISTRATION
3.1 Administration. The Plan shall be administered and
interpreted by the Board.
3.2 Guidelines. Subject to Article VII, the Board shall
have the authority to adopt, alter and repeal administrative
rules, guidelines and practices governing the Plan as it, from
time to time, deems advisable; to interpret the terms and
provisions of the Plan and any Option granted under the Plan (and
any related agreements); to make discretionary grants under the
Plan; to accelerate vesting or exercise of an option; to
determine the terms, conditions and restrictions of an option; to
grant waivers of Plan terms; and to otherwise supervise the
administration of the Plan. The Board may correct any defect,
supply any omission, conform the Plan to any change in law or
regulation, or reconcile any inconsistency or ambiguity in the
Plan or in any Option in the manner and to the extent it shall
deem necessary to carry the Plan into effect. Notwithstanding
the foregoing, no action of the Board under this Section 3.2
shall impair the rights of any Option without such person's
consent, unless otherwise required by law.
3.3 Decisions Final. Any decision, interpretation or other
action made or taken in good faith by the Board in accordance
with the Plan shall be final, binding and conclusive on the
Company, all members of the Board and their respective heirs,
executors, administrators, successors and assigns.
<PAGE>
3.4 Delegation. The Board may delegate any or all of its
administrative responsibilities under the Plan to officers or
employees of the Company.
ARTICLE IV
SHARE LIMITATION
4.1 Shares. The maximum aggregate number of shares of
Common Stock that may be issued under the Plan shall be 250,000
shares of Common Stock, subject to any increase or decrease
pursuant to Section 4.2. If any Option granted under the Plan
shall terminate or be canceled for any reason without having
been exercised in full, the number of unpurchased shares shall
again be available for the purpose of the Plan.
4.2 Changes. In the event of any merger, reorganization,
consolidation, recapitalization, dividend (other than a regular
cash dividend), stock split, or other change in the capital
structure of the Company affecting the Common Stock, such
substitution or adjustment shall be made in the maximum aggregate
number of shares that may be issued under the Plan, in the number
of shares for which Stock Options are to be granted to Eligible
Directors pursuant to Section 6.2 and in the number of shares
subject to, and the option price of, outstanding Options as may
be determined to be appropriate by the Board, in its sole
discretion, provided that the number of shares subject to any
Option shall always be a whole number. In the event of a change
in the capital structure of the Company, merger, consolidation,
combination or exchange of shares or the like, as a result of
which Common Stock is changed into another class, or securities
of another person, cash or other property, the consideration to
be received upon exercise shall be adjusted as deemed equitable
by the Board in its sole discretion.
ARTICLE V
ELIGIBILITY
5.1 Eligible Directors. Only Eligible Directors shall be
granted Options under the Plan.
<PAGE>
ARTICLE VI
STOCK OPTIONS
6.1 Options. All Stock Options granted under the Plan
shall be non-qualified stock options (i.e., options that do not
qualify as incentive stock options under Section 422 of the
Code).
6.2 Grants. Pursuant to the terms of the Plan contained
herein, each Eligible Director shall be granted Stock Options on
an ongoing basis in exchange for their agreement to serve on the
Board and shall also be eligible to receive Stock Options in lieu
of cash compensation for their fees for meetings of the Board,
any committees thereof, for any other services performed by such
Eligible Director on behalf of the Company or for any other such
reason as determined by the Board from time to time, in its sole
discretion.
(a) Initial Stock Option Grant; Anniversary Stock Option
Grants. On the Effective Date, each Eligible Director shall
automatically be granted Stock Options to purchase 10,000 shares
of Common Stock, and each Eligible Director who first becomes a
member of the Board after the Effective Date shall automatically
be granted Stock Options to purchase 10,000 shares of Common
Stock on the date of his or her selection or election to the
Board. For as long as the Plan remains in effect, each Eligible
Director shall also automatically be granted Stock Options to
purchase 5,000 shares of Common Stock on each anniversary of the
date of such initial grant (beginning on the second such
anniversary), provided such person is an Eligible Director on
such date.
(b) Additional Stock Option Grants. Each Eligible Director
shall also be entitled to receive options as the Board may
determine in its sole discretion from time to time.
(c) Execution of Nonqualified Stock Option Agreements. The
Company shall effect the granting of Stock Options under the Plan
by execution of Nonqualified Stock Option Agreements which shall
contain, among other things, such representations, warranties and
other terms and conditions as shall be necessary in the opinion
of counsel of the Company to comply with all applicable Federal
and state securities laws.
6.3 Terms of Options. Options granted under the Plan shall
be subject to the following terms and conditions and shall
<PAGE>
contain such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Board shall, in its
discretion, determine:
(a) Option Price. The option price per share of Common
Stock purchasable upon exercise of a Stock Option shall be equal
to the Fair Market Value of a share of Common Stock on the date
the Stock Option is granted.
(b) Method of Exercise. Stock Options may be exercised in
whole or in part at any time during the option term by giving
written notice of exercise to the Secretary or Assistant
Secretary of the Company, specifying the number of shares of
Common Stock to be purchased. Such notice shall be accompanied
by payment in full of the option price and, if requested, by the
representation described in Section 9.2. The option price may be
paid in cash or by check payable to the Company or in such other
form as the Board deems acceptable. The Company shall have the
right to delay the issuance or delivery of any shares of Common
Stock under this Plan until (a) the completion of such
registration or qualification of such shares under any applicable
federal or state law, ruling or regulation as the Company shall
determine to be necessary or advisable and (b) receipt from the
Participant of such documents and information as the Board may
deem necessary or appropriate in connection with such
registration or qualification.
(c) Non-transferability of Option. Unless otherwise
determined by the Board, no Stock Option shall be transferable by
an Optionee otherwise than by will or by the laws of descent and
distribution, to the extent consistent with the terms of the Plan
and the Option, and all Stock Options shall be exercisable,
during an Optionee's lifetime, only by the Optionee.
ARTICLE VII
TERMINATION OR AMENDMENT
7.1 Termination or Amendment of the Plan. The Board may at
any time amend, discontinue or terminate the Plan in whole or in
part (including any amendment deemed necessary to ensure that the
Company may comply with any regulatory requirement referred to in
Article IX); provided, however, that, unless otherwise required
by law, the rights of an Optionee with respect to Options granted
prior to such amendment, discontinuance or termination, may not
be impaired without the consent of such Optionee.
<PAGE>
7.2 Amendment of Options. The Board may amend the terms of
the Stock Options, prospectively or retroactively, but, subject
to Article IV, no such amendment or other action by the Board
shall impair the rights of any Optionee without the Optionee's
consent.
ARTICLE VIII
UNFUNDED PLAN
8.1 Unfunded Status of Plan. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With
respect to any payment not yet made to an Optionee by the
Company, nothing contained herein shall give any such individual
any rights that are greater than those of a general creditor of
the Company.
ARTICLE IX
GENERAL PROVISIONS
9.1 Nonassignment. Except as otherwise provided in the
plan or as otherwise determined by the Board, Options granted
hereunder and the rights and privileges conferred thereby shall
not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be
subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of such Option, right or privilege contrary to the
provisions hereof, or upon the levy of any attachment or similar
process thereon, such Option and the rights and privileges
conferred thereby shall immediately terminate and the Option
shall immediately be forfeited to the Company.
9.2 Legend. The Board may require each person purchasing
shares upon exercise of an Option to represent to the Company in
writing that the Optionee is acquiring the shares for investment
only and not for release or with a view to distribution and to
make such other representations as the Board may require. The
stock certificates representing such shares may include any
legend which the Board deems appropriate to reflect any
restrictions on transfer.
<PAGE>
All certificates representing shares of Common Stock
delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Board may deem advisable
under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which
the Common Stock is then listed or traded or the Nasdaq Stock
Market, any applicable Federal or state securities law, and any
applicable corporate law, and the Board may cause a legend or
legends to be put on any such certificates to make appropriate
reference to such restrictions.
9.3 Other Plans. Nothing contained in the Plan shall
prevent the Board from adopting other or additional compensation
arrangements and such arrangements may be either generally
applicable or applicable only in specific cases.
9.4 No Right to Continue Relationship. Neither the Plan
nor the grant of any Option under the Plan shall confer upon any
person any right to continue as a director of the company or
obligate the Company to nominate any director for reelection by
the company's stockholders.
9.5 Listing and Other Conditions.
(a) The issuance of any shares of Common Stock upon
exercise of an Option shall be conditioned upon such shares being
listed on a national securities exchange or on the Nasdaq Stock
Market. The Company shall have no obligation to issue such
shares unless and until such shares are so listed, and the right
to exercise any Option shall be suspended until such listing has
been effected.
(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock upon
exercise of an Option is or may in the circumstances be unlawful
or result in the imposition of a material amount of excise taxes
under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities
Act of 1933, as amended, or otherwise with respect to shares of
Common Stock, and the right to exercise any Option shall be
suspended until, in the opinion of such counsel, such sale or
delivery shall be lawful or shall not result in the imposition of
a material amount of excise taxes.
<PAGE>
9.6 Governing Law. The Plan and actions taken in
connection herewith shall be governed and construed in accordance
with the laws of the State of Wisconsin.
9.7 Construction. Wherever any words are used in the Plan
in the masculine gender they shall be construed as though they
were also used in the feminine gender in all cases where they
would so apply, and wherever any words are used herein the
singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.
9.8 Liability of the Board. No member of the Board nor any
employee of the Company or any of it subsidiaries shall be liable
for any act or action hereunder, whether of omission or
commission, by any other member of the Board or employee or by
any agent to whom duties in connection with the administration of
the Plan have been delegated or, except in circumstances
involving bad faith, gross negligence or fraud, for anything done
or omitted to be cone by himself.
9.9 Costs. The Company shall bear all expenses incurred
in administering the Plan, including expenses of issuing Common
Stock upon the exercise of Options.
9.10 Fractional Shares. No fractional shares of stock
shall be issued upon the exercise of any option and the Company
shall not be under any obligation to compensate any Optionee in
any way for any such fractional share.
9.11 Severability. If any part of the Plan shall be
determined to be invalid or void in any respect, such
determination shall not affect, impair, invalidate or nullify the
remaining provisions of the Plan which shall continue in full
force and effect.
9.12 Successors. The Plan shall be binding upon and inure
to the benefit of any successor or successors of the Company.
9.13 Headings. Article and section headings contained in
the Plan are included for convenience only and are not to be used
in construing or interpreting the Plan.
<PAGE>
ARTICLE X
TERM OF PLAN
10.1 Effective Date. The Plan shall be effective as of the
Effective Date.
10.2 Termination. The Plan shall continue until terminated
by the Board. Termination of the Plan shall not affect Options
granted before such date, which shall continue to be exercisable,
in accordance with the terms of the Plan, after the Plan
terminates.
<PAGE>
EXHIBIT 4.3
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into as of the ____ day of
_________ 199__, by and between ______________________
("Optionee") and Catalyst International, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Company has established the 1997 Director
Stock Option Plan (the "Plan") and, unless otherwise defined
herein, all capitalized terms used in this Agreement shall have
the meaning set forth in the Plan; and
WHEREAS, Optionee, as an Eligible Director under the
Plan, has been granted a nonqualified stock option by the Board
of Directors of the Optionee Company (the "Board") to purchase
shares of the Company's $0.10 par value common stock (the "Common
Stock") pursuant to the Plan; and
WHEREAS, Optionee and the Company wish to enter into
this Agreement setting forth the terms and conditions of
Optionee's option.
NOW, THEREFORE, in consideration of the mutual promises
set forth below, Optionee and the Company agree as follows:
1. OPTION. Pursuant to the Plan, Optionee is hereby
granted the option to purchase _________ shares of the Common
Stock on the terms and conditions set forth in this Agreement
(the "Option"). It is intended that the Option shall constitute
a nonqualified stock option which is not subject to the
provisions of Section 422 of the Internal Revenue Code of 1986,
as amended, and any successor thereto (the "Code").
2. EXERCISE PRICE. The per share purchase price under
the Option shall be _________________ Dollars ($.), which is the
Fair Market Value of the shares subject to the Option.
3. EXERCISE PERIOD. Subject to the provisions of
Paragraphs 4 and 6, below, the Option, or any portion thereof,
may be exercised by Optionee (i) only while Optionee is an
Eligible Director or for three (3) months thereafter, (ii) only
if such exercise will not violate any federal or state securities
laws and (iii) no later than ten (10) years from the date of the
grant. Unless the Board establishes otherwise, or except as
otherwise provided herein, the Option may be exercised as
<PAGE>
follows: all or any portion of the shares covered hereby may be
purchased at any time commencing on the date on which the Option
has been granted (the "Grant Date"). Notwithstanding any other
provisions hereof, the Option shall lapse and cannot be exercised
as to any shares after ten (10) years from the Grant Date.
4. TERMINATION OF DIRECTORSHIP WHILE OPTIONS EXERCISABLE
4.1 TERMINATION. Unless otherwise determined by the
Board, if, during the period Optionee has a present right to
exercise the Option, Optionee's status as an Eligible Director is
terminated, Optionee shall have three (3) months from the date of
such termination to exercise the Option as to all or any part of
the shares subject to the Option, subject to the condition that
the Option shall not be exercisable if it would result in a
violation of federal or state securities laws or subsequent to
ten (10) years after the date of grant. However, if such
termination is due to the death of Optionee, the personal
representative, administrator, or other representative of
Optionee's estate, or the person or persons to whom the Option
shall pass by will or under the laws of descent and distribution,
shall have the right, for a period of three (3) months after the
date of the Optionee's death, to exercise the Option, subject to
the condition that the Option shall not be exercisable if it
would result in a violation of federal or state securities laws
or subsequent to ten (10) years after the date of grant. To the
extent the Option is not exercised within the three (3) month
period following termination of Optionee's status as an Eligible
Director, it shall lapse.
4.2 EXTENSION OF EXERCISE PERIOD. Paragraph 4.1
notwithstanding, the Board may, in its sole discretion, extend
the period permitted for exercise of the Option if allowable
under applicable law.
5. TRANSFERABILITY OF OPTION. The Option shall be
nontransferable and shall, except as provided in Paragraph 4.1,
above, be exercisable only by Optionee during the lifetime of
Optionee. Optionee shall have the right to transfer the Option
upon Optionee's death, either by the terms of Optionee's will or
under the laws of descent and distribution, subsequent to the
limitations set forth in Paragraph 4.1, above, and all such
transferees shall be subject to the same terms and conditions of
the Plan and the Option as would Optionee.
<PAGE>
6. EXERCISE OF OPTION. Subject to the limitations
stated elsewhere in this Agreement or in the Plan, the Option
will be exercisable as provided in Paragraph 3, above. In no
event will the Option be exercisable if it would result in a
violation of federal or state securities laws or later than ten
(10) years from the date of grant, unless otherwise extended.
The Option shall be exercisable by delivering to the Secretary or
Assistant Secretary of the Company at its principal business
office a written notice designating the number of shares for
which it is being exercised. Payment in full for the number of
shares for which the Option has been exercised must accompany
said written notice. No person shall acquire any rights or
privileges of a shareholder of the Company with respect to any
shares issued pursuant to the exercise of the Option until such
shares have been duly issued. The Company shall have the right
to delay the issue or delivery of any shares of Common Stock to
be delivered or issued hereunder until (a) the completion of such
registration or qualification of such shares under federal or
state law, ruling or regulation as the Company shall deem
necessary or advisable, and (b) receipt from Optionee of such
documents and information as the Company may deem necessary or
appropriate in connection with such registration or qualification
or the issuance of such shares of Common Stock hereunder.
7. SECURITIES LAW REPRESENTATION. Optionee hereby
represents and warrants with respect to the shares of Common
Stock which may be acquired upon exercise of the Option that
Optionee is acquiring such shares for Optionee's own account for
investment and not with a view to, or for sale in connection
with, the resale or distribution of any such shares. Optionee
understands that by "investment" it is meant that Optionee is
acquiring such shares because of Optionee's desire to acquire a
proprietary interest in the Company and because of prospects of
future long-term appreciation in the value of such shares.
Optionee understands that such shares may not be registered under
the Securities Act of 1933, as amended (the "Securities Act"), on
the ground that the issuance of shares pursuant to the exercise
of the Option is exempt under the Securities Act as not involving
any public offering and that the Company's reliance on such
exemption is in part based on the representation contained in
this Paragraph 7; and that the statutory basis for such exemption
would not be present if, notwithstanding such representation, the
Optionee has in mind acquiring such shares for resale on the
occurrence or nonoccurrence of some predetermined event.
<PAGE>
8. ADJUSTMENTS. In the event there is any increase or
decrease in the number of issued and outstanding shares of any
class of Common Stock of the Company, or in the number of issued
and outstanding shares of any class of Common Stock of the
Company convertible into shares of any class of Common Stock of
the Company, by reason of a stock dividend, stock split, reverse
stock split, or similar adjustment or in the event of any change
in the Company or in the issued and outstanding shares of the
Common Stock of the Company by reason of a recapitalization,
merger, consolidation, acquisition of stock or property,
reorganization, liquidation, initial public offering, or other
significant event affecting the Company or the issued and
outstanding shares of its Common Stock, the number and kind of
shares subject to the Option, the exercise price applicable to
the Option, and/or the consideration to be received upon the
exercise of the Option shall be adjusted as deemed equitable by
the Board. In addition, the Option may be converted, at the sole
discretion of the Board, into a new option to purchase such
number or kind of shares of stock or other securities with
appropriate adjustment of the purchase price per share as the
Board deems appropriate to reflect such change; and the Board
shall, in its sole discretion, have authority to provide, in
appropriate cases for (i) waiver in whole or in part of any
remaining restrictions or vesting requirements in connection with
the Option and/or (ii) the conversion of the Option into cash or
other property to be received in certain of the transactions
specified above. Any adjustment, waiver, conversion or the like
carried out by the Board under this Paragraph shall be conclusive
and binding for all purposes.
9. NO UNLAWFUL ISSUE OF SHARES. If, in the opinion of
the Company's counsel, the issue or sale of any shares of its
stock hereunder pursuant to the Option shall not be lawful for
any reason, including the inability of the Company to obtain,
from any regulatory body having jurisdiction, authority deemed by
such counsel to be necessary to such issuance or sale, the
Company shall not be obligated to issue or sell any such shares
pursuant to the exercise of the Option.
10. NO RIGHT TO CONTINUE RELATIONSHIP. Neither the
Plan nor the grant of any Option under the Plan shall confer upon
any person any right to continue as a director of the Company or
obligate the Company to nominate any director for re-election by
the Company's stockholders.
<PAGE>
11. PROVISIONS OF THE PLAN CONTROL. The Option is
qualified in its entirety by reference to the provisions of the
Plan under which it is granted, a copy of which may be examined
by Optionee at the chief executive offices of the Company. The
Plan empowers the Board to make interpretations, rules and
regulations thereunder, and in general provides that the
determinations of the Board with respect to the Plan shall be
binding upon Optionee. The Plan is hereby incorporated herein by
reference.
12. AUTHORITY OF BOARD. As a condition of the
granting of the Option, Optionee agrees, for himself, for the
personal representative, administrator or other representative of
Optionee's estate, and for the person or persons to whom the
Option shall pass by will or by the laws of descent and
distribution, that any dispute or disagreement which may arise
under this Agreement shall be resolved by the Board in its sole
discretion and that any interpretation by the Board of the terms
of this Agreement and the Plan shall be final, binding and
conclusive.
13. USE OF WORDS. The use of words of the masculine
gender in this Agreement is intended, wherever appropriate, the
feminine or neuter gender and vice versa.
14. SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of any successor or successors of the
Company.
15. TAXES. The Company may require payment of or
withhold any tax which it believes is required as a payment of
the grant or exercise of the Option, and the Company may defer
making delivery with respect to shares issuable hereunder until
arrangements satisfactory to the Company have been made with
respect to such withholding obligations.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day, month and year first written above.
Catalyst International, Inc.
By: /s/ Douglas B. Coder
Douglas B. Coder, Chairman
_________________________________
__________________, Optionee
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8) pertaining to 1997 Directors
Stock Option Plan of our report dated January 27, 1997 with
respect to the financial statements of Catalyst International,
Inc. included in its Annual Report (Form 10-KSB) for the year
ended December 31, 1996,filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Milwaukee, Wisconsin
September 26, 1997
