Document:

Exhibit 10.7

 

AMENDMENT TO STOCK RESTRICTION 

AND REPURCHASE AGREEMENT 

AND STOCK PURCHASE AGREEMENT

 

This Amendment
(the “Amendment”) is entered into as of the       day
of May, 2003, by and between PERRY JUDD’S HOLDINGS, INC., a Delaware
corporation (the “Corporation”), and Verne F. Schmidt (“Executive”), and
constitutes an amendment to (i) that certain Stock Restriction and
Repurchase Agreement made as of February 3, 2000, by and between the
Corporation and Executive, as amended on March 27, 2001 and September 20,
2001 (the “Stock Restriction and Repurchase Agreement”), and (ii) that certain
Stock Purchase Agreement, dated as of June 1, 2000, by and between the
Corporation and Executive, as amended on March 27, 2001 (the “Stock
Purchase Agreement”).  Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to them in the Stock Restrictive and Repurchase Agreement.

 

WHEREAS, Executive
owns 5,718 shares of common stock of the Corporation (the “Purchased Shares”),
of which 2,218 shares are subject to the Stock Restriction and Repurchase
Agreement, and 3,500 shares are subject to the Stock Purchase Agreement;

 

WHEREAS, upon a
Mandatory Redemption Event, including retirement from the Corporation after
attaining the age of 62, the Corporation is obligated to purchase, and the
Executive is obligated to sell, the Purchased Shares for Fair Market Value (the
“Mandatory Repurchase”);

 

WHEREAS, as an
inducement to Executive to forego retirement from the Corporation until at
least December 31, 2005, the Corporation has agreed to enter into this
Amendment of the Stock Restriction and Repurchase Agreement and the Stock
Purchase Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties, covenants
and agreements in this Amendment, the parties hereto, intending to be legally
bound, agree as follows:

 

1.             Amendment to Mandatory Repurchase Process. 
Section C.2 of the Stock Restriction and Repurchase Agreement and
Section E.2 of the Stock Purchase Agreement are each hereby amended and
restated in their entirety as follows:

 

“Mandatory
Repurchase Process.  Not
later than sixty (60) days after the occurrence of a Mandatory Redemption
Event, the Corporation shall deliver a written notice to each Owner of the
Purchased Shares.  The notice shall
indicate the Mandatory Repurchase Price to be paid for the Purchased Shares and
the date on which the repurchase is to be effected, such date to be not more
than thirty (30) days after the date of such notice.  The certificates representing the Purchased Shares shall be
delivered to the Corporation on the closing date specified for the
repurchase.  Concurrently with the
receipt of such stock certificates, the Corporation shall pay to the Owner(s)
an amount equal to the Mandatory Repurchase Price pursuant to either of the
following alternative methods of payment determined in the sole discretion of
the Corporation:  (a) in cash or

 

 

cash equivalents (including the cancellation of any purchase-money
indebtedness) or (b) by a Promissory Note; provided that, if the Mandatory
Repurchase Price is $25 per share or greater, at least $25 of the total
Mandatory Repurchase Price per share shall be paid for in cash or cash
equivalents.

 

The
Mandatory Repurchase Price payable by the Corporation with respect to the
Purchased Shares which are to be repurchased from each Owner on a Mandatory
Repurchase shall be the greater of (i) $146.68 per share, adjusted after
the date hereof for any stock splits or reverse stock splits, or (ii) the
Fair Market Value of the Purchased Shares.

 

Notwithstanding the foregoing, in the event that a Subsequent Value
Event is consummated within six (6) months after the date of a Mandatory
Redemption Event and such Subsequent Value Event evidences a Subsequent Value
in excess of the Mandatory Repurchase Price (on a per share basis) determined
pursuant to the preceding paragraph, then the Mandatory Repurchase Price shall
be adjusted as follows: the Mandatory Repurchase Price to be paid per share in
connection with the Mandatory Redemption Event shall be directly increased by
the excess of the Subsequent Value per share over the Mandatory Purchase Price
previously paid per share.

 

The increase to the Mandatory Repurchase Price per share which results
from such adjustment shall be hereinafter designated as the Excess Value per
share and shall be payable as follows: (x) if the Corporation elected to
pay the original Mandatory Repurchase Price in cash or cash equivalents, then
such Excess Value shall be payable in cash or cash equivalents within ninety
(90) days after the Subsequent Value Event, or (y) if the Corporation elected
to pay such Mandatory Repurchase price partly in cash or cash equivalents and
the balance by Promissory Note, then the principal amount of the Promissory
Note shall be increased in an amount equal to such Excess Value, as the date of
issuance of such Promissory Note, and the installment amounts shall be
reamortized for such increased principal amount.  In the latter event, the Corporation shall deliver to each owner,
in exchange for such Owner’s original Promissory Note, a new Promissory Note
with such revised terms.”

 

2.             Change of Control Transaction. 
The Stock Restriction and Repurchase Agreement and the Stock Purchase
Agreement are each hereby amended by adding the following as Section C.5
and E.5, respectively:

 

“5.           Change of Control
Transaction.  Within sixty (60) days
after a Change of Control Transaction (as defined herein) in which an Owner
receives consideration for all or a portion of the Purchased Shares, the
Corporation shall pay to such Owner in cash the difference between the value
per share received, or to be received, for the Purchased Shares by such Owner
in the Change of Control Transaction, and the Mandatory Repurchase Price.  “Change of Control Transaction” shall mean
(i) a merger or consolidation in which the Corporation is not the
surviving entity, (ii) a sale, transfer or other disposition of all or
substantially all of the Corporation’s assets, or (iii) a reverse merger in
which the Corporation is the surviving entity but in which the Corporation’s
outstanding voting securities are transferred in whole or in part to a person

 

2

 

or persons different from the persons holding those securities
immediately prior to the merger.”

 

3.             Amendment to Mandatory Redemption Event. 
Section H.17 of the Stock Restriction and Repurchase Agreement and
Section L.18 of the Stock Purchase Agreement are each hereby amended and
restated in their entirety as follows:

 

“Mandatory
Redemption Event” shall mean (A) the Stockholder’s death, (B) the
Stockholder’s Permanent Disability, (C) the Stockholder’s resignation or
retirement from the Corporation on or after December 31, 2005, or (D) the
termination of the Stockholder’s services upon a Change of Control
Transaction.”

 

4.             Entire Amendment.  This
Amendment constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supercedes any and all prior or contemporaneous
amendments relating to the subject matter hereof.  Except as expressly amended hereby, the Stock Restriction and
Repurchase Agreement and the Stock Purchase Agreement shall remain unchanged
and in full force and effect.  This
Amendment shall be deemed part of and is hereby incorporated into the Stock
Restriction and Repurchase Agreement and the Stock Purchase Agreement.  To the extent that any terms or conditions
of the Stock Restriction and Repurchase Agreement and the Stock Purchase
Agreement shall contradict or be in conflict with any terms or conditions of
this Amendment, the terms and conditions of this Amendment shall control.

 

5.             Counterparts.  This
Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Amendment by signing any such counterpart.

 

6.             Amendments.  This
Amendment cannot be altered, amended, changed or modified in any respect or
particular except by an instrument in writing signed by both the Corporation
and Executive.

 

 

[Signature page follows.]

 

3

 

IN WITNESS
WHEREOF, the undersigned have caused this Amendment to the Stock Purchase
Agreement to be executed and delivered as of the date first written above.

 

	
   

  	
  PERRY JUDD’S HOLDINGS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  575 West Madison Street

  
	
   

  	
   

  	
  Waterloo, Wisconsin 53594

  
	
   

  	
   

  	
  Attention: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: Verne F. Schmidt

  
	
   

  	
   

  
	
   

  	
  Address:Exhibit 10.8

 

SUPPLEMENTAL AGREEMENT

 

THIS SUPPLEMENTAL AGREEMENT
(“Agreement”) is entered into as of the      day of August,
2003, by and among PERRY JUDD’S INCORPORATED, a Delaware corporation (the
“Corporation”), PERRY JUDD’S HOLDINGS, INC., a Delaware Corporation
(“Holdings”), and Craig A. Hutchison, an individual (“Executive”).  Terms used but not defined herein shall have
the meanings ascribed thereto in the Amended and Restated Stock Restriction and
Repurchase Agreement, made as of June 15, 2000, by and between Holdings
and Executive, as amended on March 28, 2001 and September 13, 2001
(the “Stock Restriction and Repurchase Agreement”).

 

WHEREAS, Executive
is the President and Chief Executive Officer of the Corporation (the “Executive
Position”);

 

WHEREAS, the
Corporation desires to provide Executive with certain benefits in the event of
a Change of Control Event (as defined below);

 

WHEREAS, the Stock Restriction and Repurchase
Agreement governs the rights and privileges of Holdings and Executive with
respect to 18,443 shares of common stock of Holdings owned by Executive (the
“Purchased Shares”);

 

WHEREAS, Holdings has been granted, as set forth in
Article D of the Stock Restriction and Repurchase Agreement, the Call
Right, exercisable at any time during the 90-day period following the
occurrence of a Termination of Service with respect to Executive, to repurchase
at the Call Price all or any portion of the Purchased Shares;

 

WHEREAS, Executive Purchased 8,750 shares of common
stock of Holdings (the “Option Shares,” and together with the Purchased Shares,
the “Shares”) pursuant to that certain Perry Judd’s Holdings, Inc. Stock
Purchase Agreement (the “Holdings Stock Purchase Agreement”), dated
June 15, 2000, by and between Holdings and Executive, as amended on
March 28, 2001, upon exercise of stock options granted to Executive under
the Perry-Judd’s Incorporated Amended and Restated 1995 Stock Option Plan;

 

WHEREAS, Holdings has been granted, as set forth in
Article F of the Holdings Stock Purchase Agreement, a call right (the
“Second Call Right”), exercisable at any time during the 90-day period
following Executive’s termination of service (the “90-day Period”) (as defined
in the Holdings Stock Purchase Agreement), to repurchase at the call price set
forth in the Holdings Stock Purchase Agreement all or any portion of the shares
purchased under the Holdings Stock Purchase Agreement (the Second Call Right
together with the Call Right, the “Call Rights”);

 

WHEREAS, the Executive and the Corporation are parties
to the Restated and Amended Employment Agreement dated as of April 28,
2003 (the “Employment Agreement”); and

 

WHEREAS, Holdings desires to waive its right to
exercise the Call Rights for the period set forth herein.

 

 

NOW, THEREFORE, in
consideration of the foregoing recitals and mutual agreements and covenants
contained herein, the parties agree as follows:

 

A.            CHANGE OF
CONTROL

 

1.             Change of Control Event. 
“Change of Control Event” means (a)
a merger or consolidation in which the Corporation or Holdings is not the
surviving entity, other than any transaction effected primarily to change the
state in which the Corporation or Holdings is incorporated; (b) a sale,
transfer or other disposition of all or substantially all of the Corporation’s
or Holdings’ assets; (c) a reverse merger in which the Corporation or Holdings
is the surviving entity but in which fifty percent (50%) or more of the
Corporation’s or Holdings’ outstanding voting securities are transferred to, or
held by, a person or persons different from the persons holding those
securities immediately prior to the merger; or (d) a sale, transfer or other
disposition of capital stock of Holdings after which fifty percent (50%) or
more of Holdings’ outstanding voting securities are held by a person or persons
different from the persons holding those securities immediately prior to such
sale, transfer or other disposition.

 

2.             Minimum Value of
Shares.  In the event of a Change of Control Event in
which the Shares do not have an aggregate value (the “Share Value”), either
actual or implied based on the fair market value of the consideration received
by the Executive, Holdings or the Corporation (collectively, the “Sellers”), as
the case may be, of at least $1,000,000, Holdings shall pay to the Executive
the difference between $1,000,000 and the Share Value.  Such payment shall be made in cash within
thirty (30) days after the Sellers have received all of the consideration to
which they are entitled pursuant to the Change of Control Event.

 

3.             Special Severance
Benefit.  In the event of a Change of Control Event in
which the Share Value is less than $2,000,000, and as a result of such Change
of Control Event or within six (6) months thereafter (i) the Executive’s
Service is terminated by the Corporation for any reason other than “cause” (as
defined in the Employment Agreement), (ii) the Executive voluntarily
terminates his Service after being required to accept a position with
materially less responsibility than the Executive Position, or (iii) the
Executive voluntarily terminates his Service after he is required to relocate
his principal place of business to a location that is more than sixty (60)
miles from his residence as set forth on the signature page hereof, Executive
shall be entitled to salary continuation in the aggregate amount of the lesser
of (A) the difference between $2,000,000 and the Share Value (the “Special
Severance Amount”) or (B) $999,000.

 

The Special Severance
Amount shall be payable by the Corporation in equal installments over three (3)
years from the date of Termination of Service in accordance with the policies
governing the payment of salary applicable to the Executive at the date of
Termination of Service; provided, however, that the Executive shall not be
entitled to any further payments of the Special Severance Amount upon the
commencement of new employment by the Executive.  The Special Severance Amount shall be in addition to any
severance benefit that the Executive shall be entitled to receive under the
Employment Agreement.

 

2

 

B.            WAIVER OF CALL
RIGHTS.

 

Holdings hereby
irrevocably and unconditionally agrees to waive its right to exercise the Call
Rights during the two (2)-year period commencing on August 3, 2004 and
ending on August 8, 2006 (the “Waiver Period”); provided, however, that if
any portion of the 90-day Period occurs during the Waiver Period, Holdings
shall have the right to exercise the Call Rights on or before the later of
(i) the 90th day following Executive’s termination of service and
(ii) September 7, 2006. 
Except as expressly set forth in the preceding sentence, the Call Rights
shall remain in full force and effect as provided in the Stock Restriction and
Repurchase Agreement and the Holdings Stock Purchase Agreement.

 

C.            MISCELLANEOUS
PROVISIONS

 

1.             Executive’s
Undertaking.  Executive hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation
and/or Holdings may deem necessary or advisable in order to carry out or effect
one or more of the obligations or restrictions imposed on Executive, Holdings
or the Corporation pursuant to the provisions of this Agreement.

 

2.             Agreement
is Entire Contract.  This
Agreement, along with the Stock Restriction and Repurchase Agreement, the
Holdings Stock Purchase Agreement and the Employment Agreement, constitute the
entire contract between the parties hereto with regard to the subject matter
hereof and supersedes any prior contracts, agreements or understanding between
the parties with respect to such subject matter.

 

3.             Governing
Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without resort
to that State’s conflict-of-laws rules.

 

4.             Successors and
Assigns.  This Agreement shall be binding on and
insure to the benefit of the parties hereto and their respective successors,
assigns, heirs and legal representatives. 
Notwithstanding the foregoing, neither party shall assign this Agreement
without the prior written consent of the other parties.

 

5.             Counterparts. 
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and
the same instrument.

 

3

 

IN WITNESS WHEREOF,
the parties have executed this Agreement on the date first indicated above.

 

 

	
   

  	
  PERRY JUDD’S INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  575 West Madison Street

  
	
   

  	
   

  	
  Waterloo,
  Wisconsin  53594

  
	
   

  	
   

  	
  Attention:  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PERRY JUDD’S HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  575 West Madison Street

  
	
   

  	
   

  	
  Waterloo,
  Wisconsin  53594

  
	
   

  	
   

  	
  Attention:  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CRAIG A. HUTCHISON

  
	
   

  	
  Address:

  	
  18 Chautauqua Trail

  
	
   

  	
   

  	
  Madison, Wisconsin
  53719

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