U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 1997
/_/ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
_______________ to _________________
Commission file number: 0-18815
OUTLOOK GROUP CORP.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1278569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1180 American Drive, Neenah, Wisconsin 54956
(Address of principal executive offices)
Issuer's telephone number: (920) 722-2333
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class: on which registered:
None N/A
Securities registered pursuant to Section 12(g) of the Act:
$.01 Par Value Common Stock
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /x/
As of August 22, 1997, 4,655,382 shares of Common Stock
were outstanding, and the aggregate market value of the Common
Stock (based upon the $4.75 last sale price on that date on the
NASDAQ Stock Market) held by non-affiliates (excludes a total of
533,283 shares reported as beneficially owned by directors and
executive officers -- does not constitute an admission as to
affiliate status) was approximately $19.5 million.
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Outlook Group Corp. (the "Company") hereby amends its annual
report on Form 10-K for the year ended May 31, 1997 (the "1997
10-K") by adding thereto Items 10 through 13 as set forth below.
Although it was originally anticipated that such information
would be incorporated by reference from the Proxy Statement for
the Company's 1997 Annual Meeting of Shareholders, the 1997 Proxy
Statement will not be filed within 120 days of the Company's
fiscal 1997 year end.
In addition, new Exhibits 10.13(c) and 10.15 to the 1997
10-K are filed herewith; see Exhibit Index immediately
following the signature page hereto.
ITEM 10.-DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's Articles of Incorporation and Bylaws provide
for a Board of between seven and eleven directors, and for
classification of the Board of Directors into three separate
classes. The number of directors is currently eight. At each
annual meeting of shareholders, a number of directors equal to
the number constituting the class whose term expires at such
meeting is elected to hold office until the third succeeding
annual meeting and until their successors have been elected. The
terms of the directors are included in the following table in
addition to certain information as to each of the directors of
the Company.
Principal Occupation and Director
Name and Age Business Experience Since
Terms expire in 1999
Harold J. Bergman, President and Chief Executive 1994
62 Officer of Riverside Paper
Corporation (specialty paper
manufacturer and converter)
Richard C. Fischer, Investment banker with the 1995
58 firm Fischer & Associates,
LLC since 1995; previously,
an investment banker with
Robert W. Baird & Co.
Incorporated
James L. Dillon, 53 Accountant practicing with 1978
the firm Dillon, Endries,
Otto & Calmes LLC since 1995;
previously with the firm
DiRenzo, Simonis & Miller,
Certified Public Accountants
Terms expire in 1998
David L. Erdmann, 54 Chairman of the Board and 1977
(1) Chief Executive Officer
of the Company
Charles E. Thompson, Film Distributor and 1977
53` Consultant with PKG
Partners, LLC since 1996;
previously, President of
Outlook Packaging, Inc.
from 1994 to 1996, Special
Projects Coordinator of the
Company from 1993 to 1994
and Executive Vice President
of the Company from 1990 to
1993
Terms expire in 1997
Jeffry H. Collier, Jeffry H. Collier, Manager of 1993
44 the Graphics Division of the
Company since 1996 and Executive
Vice President of the Company
since 1994; previously, Vice
President
Pat Richter, 55 (2) Director of Athletics, 1995
University of Wisconsin
Madison
A. John Wiley, Jr., President of Elipticon Wood 1978
55 Products Inc. (manufacturer)
since 1995; previously,
salesperson for, and officer
of, the Company
____________________
(1) Mr. Erdmann is also a director of FCB Financial Corp., a
publicly held savings bank holding company.
(2) Mr. Richter is also a director of Anchor BanCorp Wisconsin
Inc., a publicly held savings bank holding company.
Certain information as to each of the executive officers of
the Company was included in Part I of the 1997 10-K.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than 10% of the Company's Common Stock, to file reports
of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater
than 10% shareholders (collectively, "insiders") are required by
SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
All publicly held companies are required to disclose the
names of persons who fail to make any such filing on a timely
basis and the number of delinquent filings and transactions,
based solely on a review of the copies of the Section 16(a) forms
furnished to the Company, or written representations that no such
forms were required. On that basis, the Company believes that
during fiscal 1997 the Company's insiders have complied with all
Section 16(a) filing requirements applicable to them.
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ITEM 11. - EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, with respect to the years
ended May 31, 1997, 1996 and 1995, compensation awarded to,
earned by or paid to (i) the Company's Chief Executive Officer
and (ii) the other executive officers who were serving as
executive officers at May 31, 1997 and whose total salary and
bonus exceeded $100,000 in 1997 for services in an all capacities
to the Company and its subsidiaries.
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<TABLE>
<CAPTION>
Long Term
Annual Compensation (1) Compensation
Awards
Name and Fiscal Options/SARs All Other
Principal Position year Salary ($) Bonus ($)(2) #(3) Compensation ($)(4)
<S> <C> <C> <C> <C> <C>
David L. Erdmann, 1997 $200,670 -0- -0- $3,500
Chairman and CEO 1996 244,875 -0- 10,000 4,050
(5) 1995 247,121 -0- -0- 3,600
Joseph J. Baksha, 1997 $162,787 $48,831 30,000 -0-
President and COO
(5)(6)
Jeffry H. Collier, 1997 $111,165 -0- -0- $2,860
Vice President and 1996 115,938 -0- 6,000 2,970
General Manager 1995 113,201 -0- -0- 2,695
</TABLE>
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_______________________
(1) While the named individuals received perquisites or other
personal benefits in the years shown, in accordance with SEC
regulations, the value of these benefits are not shown since
they did not exceed, in the aggregate, the lesser of $50,000
or 10% of the individual's salary and bonus in any year.
(2) Annual bonus amounts, if any, are earned and accrued during
the fiscal years indicated but paid in the following fiscal
year.
(3) Represents number of shares for which options were granted
under the Company's 1990 Stock Option Plan (the "Option
Plan"). The options granted in fiscal 1994 were replaced as
part of the fiscal 1996 grants. See "Option/SAR Grants in
Last Fiscal Year" below. No SARs have been granted.
(4) Reflects the Company's contributions to the executive
officer's account in the Company's Employee Savings Plan
(the "Savings Plan") .
(5) See "Employment Contracts, Termination of Employment, and
Change-In-Control Arrangements" for a description of Mr.
Erdmann's and Mr. Baksha's employment agreements.
(6) Mr. Baksha became a Company employee and an executive
officer effective June 1, 1996.
<PAGE>
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
The following table sets forth information about stock
option grants during the last fiscal year to the executive
officers named in the Summary Compensation Table receiving grants
during such period. Messrs. Erdmann and Collier did not receive
option grants.
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<TABLE>
<CAPTION>
Individual Grants
Number of % of Total Potential Realizable Value
Securities Options/SARs at Assumed Annual Rates
Underlying Granted to Exercise or of Stock Price Appreciation
Options/SARs Employees in Base Price Expiration for Option Term (2)
Name Granted (#) Fiscal Year ($/sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Joseph J. Baksha 30,000 39% $5.50 6/3/01 $26,008 $54,615
</TABLE>
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(1) Consists entirely of stock options and does not include
SARs.
(2) Amounts represent hypothetical gains that could be achieved
for the respective options if exercised at the end of the
option term. These gains are based on assumed rates of
stock appreciation of 5% or 10% compounded annually from the
date the respective options were granted to their expiration
date and are not presented to forecast possible future
appreciation, if any, in the price of the Company's Common
Stock (the "Common Stock"). The potential realizable value
of the foregoing options is calculated by assuming that the
market price of the underlying security appreciates at the
indicated rate for the entire term of the option and that
the option is exercised at the exercise price and sold on
the last day of its term at the appreciated price.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE TABLE (1)
The following table sets forth information with respect to
the executive officers named in the Summary Compensation Table
concerning option exercises during the last fiscal year and the
number and value of options outstanding at May 31, 1997.
<PAGE>
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<TABLE>
<CAPTION>
Number of Securities Value of Unexercosed
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)(2)
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exerciseable Unexercisable Exerciseable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
David L. Erdmann 0 0 10,000 0 $630 0
Joseph J. Baksha 0 0 20,000 10,000 0 0
Jeffry H. Collier 0 0 6,000 0 $378 0
</TABLE>
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___________________
(1) No SARs are outstanding.
(2) Based upon the $4.50 closing price of the Common Stock on
May 30, 1997.
<PAGE>
Compensation of Directors
Directors who are not employees of the Company receive a fee
of $3,600 per year, $300 for each meeting of the Board of
Directors attended and $100 ($150 in the case of the committee
chairman) for each Board committee meeting attended. (Messrs.
Collier and Erdmann are currently employees of the Company.)
On December 18, 1996, the Company granted each non-employee
director of the Company a non-qualified stock option to purchase
3,000 shares of Common Stock at an exercise price of $4.675 per
share. The options became exercisable on June 18, 1997 and
expire December 18, 2001.
Mr. Fischer has been engaged to provide continuing
assistance to the Company in reviewing strategic options. For
these services, the Company has paid Mr. Fischer a retainer of
$10,000. Mr. Fischer provides services against the retainer at
the rate of $200 per hour.
Employment Contracts, Termination of Employment, and
Change-in-Control Arrangements
Beginning in fiscal 1995, the Compensation Committee of the
Board of Directors (the "Compensation Committee") determined it
would be in the Company's best interest to employ David L.
Erdmann, Chief Executive Officer of the Company, pursuant to an
employment agreement. The agreement was for a term of three
years. Under the agreement, Mr. Erdmann received a base salary
in fiscal 1995 of $250,000. The employment agreement provided
for annual review by the Compensation Committee of both salary
and incentive provisions. Because of the slow growth in sales,
and reduced level of earnings, in fiscal 1995, originally no
changes in the Chief Executive Officer's salary or incentive
provisions were made for fiscal 1996. In February 1996, in view
of the Company's losses to date during fiscal 1996, Mr. Erdmann
and the Compensation Committee mutually agreed upon a reduction
of Mr. Erdmann's base salary to an annual rate of $200,000,
effective immediately. Mr. Erdmann was also entitled to receive
an annual incentive payment provided the Company's results of
operations showed a profit before taxes of at least 5% of the
Company's net sales. Since the Company did not achieve the
required profit level, Mr. Erdmann was not paid a bonus for
fiscal 1996. The employment agreement also imposed certain
non-competition and confidentiality obligations on Mr. Erdmann.
In the event the employment agreement was terminated by the
Company other than for cause (as defined in the agreement), Mr.
Erdmann would have been entitled to receive his salary for the
40-week period following the termination date.
Mr. Erdmann entered into a new employment agreement for a
term of three years with the Company on June 1, 1997 which
terminated and replaced his previous employment agreement. Under
his new agreement, Mr. Erdmann earns a salary of $250,000 per
year, which shall be reviewed annually by the Compensation
Committee. Mr. Erdmann will also be paid an incentive payment
immediately following audit of the Company's 1998 fiscal year
annual financial and accounting reports provided the results show
at least a 5% profit before taxes. The amount, if any, of the
incentive payment would be discretionary and determined by the
Compensation Committee. The amount, if any, shall be guided by
accomplishment of the goals and objectives determined by Mr.
Erdmann and the Company together with acknowledgment of the
difficulty of attainment of those goals and the conditions under
which the Company operated during the fiscal year.
Prior to a change in control, Mr. Erdmann's employment
agreement may be terminated by either party, at any time, with or
without cause or reason, upon 30 days written notice. The
employment agreement also imposes certain non-competition and
confidentiality obligations on Mr. Erdmann. In the event the
employment agreement is terminated by the Company other than for
cause (as defined in the agreement), Mr. Erdmann would be
entitled to receive his annual salary for the year following his
termination plus any bonus earned through the last day of active
employment. If there is a change of control of the Company and
Mr. Erdmann is terminated without cause (as defined in the
agreement), Mr. Erdmann shall be entitled to receive his annual
salary for the two years following his termination plus any bonus
earned through the last day of active employment. Mr. Erdmann is
subject to a covenant not to compete and confidentiality
provisions for the duration of this employment and for one year
following termination of his employment with the Company.
On June 1, 1997, the Company entered into an employment
agreement with Joseph J. Baksha, President and Chief Operating
Officer of the Company, for a term of two years, renewable June
1, 1999. Under the terms of the employment agreement, Mr. Baksha
earns an annual salary of $175,000 and an incentive equal to a
percentage of operating income capped at 100% of Mr. Baksha'a
annual salary.
Prior to a change in control, Mr. Baksha's employment
agreement may be terminated by either party, at any time, with or
without cause or reason, upon 30 days written notice. The
employment agreement also imposes certain non-competition and
confidentiality obligations on Mr. Baksha. In the event the
employment agreement is terminated by the Company other than for
cause (as defined in the agreement), Mr. Baksha would be entitled
to receive his annual salary for the year following his
termination plus any bonus earned through the last day of active
employment. If there is a change of control of the Company and
Mr. Baksha is terminated without cause (as defined in the
agreement), Mr. Baksha's employment status changes (as specified
in the agreement) or Mr. Baksha's employment agreement is not
renewed (as specified in the agreement), Mr. Baksha shall be
entitled to receive his annual salary for the two years following
the happening of an event as set forth above plus any bonus
earned through the last day of active employment. Mr. Baksha is
subject to a covenant not to compete and confidentiality
provisions for the duration of this employment and for six months
following termination of his employment with the Company.
The Company has committed to grant Mr. Baksha an option to
purchase an additional 10,000 shares of Common Stock under the
provisions of the Corporate 1990 Stock Option Plan. The price of
the option will be determined in the future by the Compensation
Committee. In the event of a change in control of the Company so
that the stock option cannot be granted, Mr. Baksha will receive
the value of the stock option based on a price of $5.00 per share
and the price received by the Company's shareholders in the
change of control.
The Company has agreed to make a loan available to Mr.
Baksha up to $100,000 to purchase Common Stock at the time Mr.
Baksha, as an officer of the Company, would be able to purchase
Common Stock on the NASDAQ Stock Market. The term of the loan
would be five years at the same rate of interest charged the
Company on a line-of-credit at the time of such loan.
Compensation Committee Interlocks and Insider Participation
The members of the Company's Compensation Committee are
Harold J. Bergman, James L. Dillon and Pat Richter (chair). None
of Messrs. Bergman, Dillon and Richter are or have ever been
employees of the Company or any of its subsidiaries, or have any
relationship with the Company requiring disclosure as certain
relationships or related transactions under this caption.
<PAGE>
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information regarding the
beneficial ownership of Common Stock at August 1, 1997 with
respect to (i) each person who beneficially owns more than 5% of
the Company's outstanding Common Stock including such persons'
address, (ii) each director of the Company, (iii) each of the
executive officers listed in the Summary Compensation Table above
and (iv) all directors and executive officers of the Company as a
group.
Name and Nature of Number of Percent
Beneficial Ownership(1) Shares of Class
Joseph J. Baksha . . . . . . 36,000 *
Harold J. Bergman. . . . . . 4,000 *
Jeffry H. Collier(2) . . . . 26,527 *
James L. Dillon. . . . . . . 62,499 1.3%
David L. Erdmann(2)(3) . . . 326,049 7.0%
Richard C. Fischer . . . . . 5,000 *
Pat Richter. . . . . . . . . 3,150 *
Charles E. Thompson. . . . . 44,668 *
A. John Wiley, Jr.(2). . . . 83,118 1.8%
All directors and executive
officers as a group
(12 persons)(2)(4)(5). . . 623,283 13.2%
Dimensional Fund Advisors,
Inc.(6) . . . . . . . . . 236,700 5.1%
Heartland Advisors, Inc.(7). 430,000 9.2%
The TCW Group, Inc. and
Robert Day(8) . . . . . . 303,900 6.5%
___________________
*Less than 1%.
(1) Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment
power with respect to securities. In accordance with SEC
rules, shares which may be acquired upon conversion or
exercise of stock options, warrants or convertible
securities which are currently exercisable or which become
exercisable within 60 days are deemed beneficially owned by
the optionee. Except as indicated by footnote, and subject
to community property laws where applicable, the persons or
entities named in the table above have sole voting and
investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(2) The following persons share voting and/or dispositive power
with respect to the indicated number of shares: Mr.
Collier--3,720; Mr. Erdmann--25,977; Mr. Wiley--1,165; all
directors and executive officers as a group--30,862. See
also footnote (4).
(3) The business address of Mr. Erdmann is in care of the
Company, 1180 American Drive, Neenah, Wisconsin 54956.
(4) As of June 30, 1997 (the last available report date), 72,315
shares of Common Stock were held in the Savings Plan.
Employees have the right to designate the vote of shares of
Common Stock allocated to their accounts. Jeffry H.
Collier, James W. Buhl and one other Company employee are
trustees of the Savings Plan and share voting power as to
the shares not voted by participants or not allocated to
participants' accounts. Savings Plan shares are not
included in the table, except those allocated to named
participants' accounts as of June 30, 1997 (the date of the
last allocation); on that date, there were no shares which
were not allocated to participants' accounts.
(5) Includes the following shares issuable under currently
exercisable stock options: all directors and executive
officers as a group--70,000. Other outstanding stock
options are not exercisable within 60 days of August 1,
1997.
(6) According to a report on Form 13F as of June 30, 1996,
Dimensional Fund Advisors ("Dimensional") held sole voting
and dispositive power as to 161,800 shares of Common Stock,
and sole dispositive power as to 74,900 shares of Common
Stock at June 30, 1996. Dimensional is an investment
adviser under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"). The business address of
Dimensional is 1299 Ocean Avenue, Santa Monica, California
90401.
(7) According to a report on Schedule 13G dated February 9, 1996
and a report on Form 13F as of June 30, 1996, Heartland
Advisors, Inc. ("Heartland") had sole voting and dispositive
power as to 430,000 shares of Common Stock as of June 30,
1996. Heartland is an investment adviser registered under
the Advisers Act. The business address of Heartland is 790
North Milwaukee Street, Milwaukee, Wisconsin 53202.
(8) According to a report on Schedule 13G dated February 12,
1996 and a report on Form 13F as of June 30, 1996, The TCW
Group, Inc. ("TCW"), a holding company, and Robert Day, an
individual who may be deemed to control TCW, had sole voting
and dispositive power as to 303,900 shares of Common Stock
as of June 30, 1996. The business address of TCW is 865
South Figuroa Street, Los Angeles, California 90017; the
business address of Mr. Day is 200 Park Avenue, Suite 2200,
New York, New York 10166.
The above beneficial ownership information is based on
information furnished by the specified persons and is determined
in accordance with Rule 13d-3, as required for purposes of this
Proxy Statement. It is not necessarily to be construed as an
admission of beneficial ownership for other purposes.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
It is the policy of the Company that all material
transactions between the Company, its officers, directors or
principal shareholders, or affiliates of any of them, shall be on
terms no less favorable to the Company than those which could
have been obtained if the transaction had been with unaffiliated
third parties on an arms-length basis, and such transactions will
be approved by a majority of the members of the Audit Committee
of the Board of Directors, or a majority of the directors who are
independent and not financially interested in the transaction.
Effective July 14, 1995, the Company sold certain assets of
its Outlook Publishing division to Willow Creek Press, LLC
("Willow Creek"), of which Charles E. Thompson is a 50% owner.
The assets, which were related to businesses purchased in 1994 by
the Company for an aggregate of $313,000, and which had a book
value of $765,000 at the time of sale, were sold for an aggregate
price of $1.1 million, payable $100,000 at closing and $1.0
million in periodic payments, with interest at 1/2% over the
prime rate, from October 1, 1996 through July 1, 1999. On
May 31, 1996, to facilitate Willow Creek obtaining a new third
party line of credit, the $1.0 million payment obligation was
replaced by a new promissory note, also in the principal amount
of $1.0 million, which provides for interest at 1% over the prime
rate, with quarterly payments (in varying amounts stated in the
note) due from February 28, 1997 through May 31, 2000; interest
on outstanding principal amounts is due monthly. On November 1,
1996, the existing promissory note was amended so that the
interest rate on the promissory note was changed to 1% over the
prime rate at M&I Bank Fox Valley on the outstanding balance of
principal and interest during the period from May 30, 1996, until
October 31, 1996, and interest of 1.5% over such prime rate on
the outstanding balance of principal and interest during the
period beginning November 1, 1996, until May 30, 2000. Interest
payments continue to be due monthly. The amortization schedule
for repayment of principal has been amended to provide for
payment of $50,000 in fiscal 1997, $145,000 in fiscal 1998,
$195,000 in fiscal 1999, $250,000 in fiscal 2000, and $360,000 in
fiscal 2001. Willow Creek also assumed certain specific
liabilities of the Company. In addition, the Company agreed to
provide Willow Creek a revolving line of credit of up to
$750,000, or a formula amount depending upon Willow Creek
inventory, accounts receivable and loss, whichever is greater,
until July 14, 1996. The line of credit bore interest at 1%
above prime. (The revolving line of credit has been paid in full
and terminated; on June 3, 1996, the balance was $656,633.) The
borrowings were secured by Willow Creek inventory and accounts
receivable. Willow Creek also entered into a service agreement
with the Company whereby the Company would provide printing,
mailing and other services for four years, with a gross value of
not less than $500,000, on specific terms to be negotiated by the
parties; in June 1996, the Company agreed to terminate the
service agreement without further obligation.
The Outlook Publishing transaction resulted from the
Company's determination that publishing did not fit within its
long term strategy. The arrangements were negotiated between
Willow Creek and the Company, with Mr. Thompson not actively
participating on behalf of either party. The transaction was
unanimously approved by the Company's Board of Directors, with
Mr. Thompson abstaining.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated the 26th day of September, 1997.
OUTLOOK GROUP CORP.
By/s/ David L. Erdmann__________
David L. Erdmann
Chief Executive Officer
<PAGE>
<PAGE>
EXHIBIT INDEX
OUTLOOK GROUP CORP.
AMENDMENT NO. 1
1997 10-K
Additional Exhibits
Exhibit Number Description
10.13(c) Amendment to Promissory Note of Willcree
dated as of November 1, 1996
10.15 Form of the Company's Non-Qualified Stock
Option Agreement, for non-employee directors
AMENDMENT
(to Promissory Note)
THIS AMENDMENT to Promissory Note ("Amendment") effective as of November
1, 1996 is made by Willow Creek Press, LLC ("Maker") and acknowledged and
agreed to by Outlook Group Corp. ("Holder").
Maker issued a promissory note on May 31, 1996 pursuant to which Maker
promised to pay Holder the principal sum of one million and no/100 dollars
($1,000,000.00) plus interest of 1% over the prime rate on the outstanding
balance of principal and interest ("Note"); and
Maker, for other good and valuable consideration, is willing to pay Holder
a higher interest rate on the outstanding balance effective as of the date
of this Amendment.
NOW THEREFORE, for value received by Maker:
1. Paragraph a. of the Note is deleted and replaced by the following:
"a. Interest of 1.0% over the prime rate at M&I Bank Fox Valley on
the outstanding balance of principal and interest during the period
from May 30, 1996 until October 31, 1996 and interest of 1.5% over
the prime rate at M&I Bank Fox Valley on the outstanding balance of
principal and interest during the period beginning November 1, 1996
until May 31, 2000, to be paid by the fifteenth (15th) day of each
month for the prior month with the first payment due July 15, 1996."
2. Other than the changes to the Note specified in this Amendment all of
the terms set forth in the Note shall remain in full force and
effect.
Signed and delivered as of the date written above.
WILLOW CREEK PRESS, LLC
by: /s/ Thomas C. Petrie
Thomas C. Petrie
Member and President
Acknowledged and agreed:
OUTLOOK GROUP CORP.
by: /s/ Larry E. Driscoll
Larry E. Driscoll
Vice President of Finance/CFO
<PAGE>
<PAGE>
EXHIBIT A
Original Promissory Note Revised Promissory Note
02/28/97 $ 50,000 04/30/97 $ 50,000
05/31/97 $ 125,000 06/30/97 $ 20,000
08/31/97 $ 50,000 08/31/97 $ 25,000
11/30/97 $ 50,000 10/31/97 $ 25,000
12/31/97 $ 25,000
02/28/98 $ 50,000 02/28/98 $ 25,000
05/31/98 $ 125,000 04/30/98 $ 25,000
08/31/98 $ 50,000 06/30/98 $ 20,000
11/30/98 $ 50,000 08/31/98 $ 25,000
10/31/98 $ 25,000
12/31/98 $ 25,000
02/28/99 $ 50,000 02/28/99 $ 50,000
05/31/99 $ 125,000 04/30/99 $ 50,000
08/31/99 $ 50,000 06/30/99 $ 25,000
11/30/99 $ 50,000 08/31/99 $ 25,000
10/31/99 $ 50,000
12/31/99 $ 50,000
02/29/00 $ 125,000 02/29/00 $ 50,000
05/31/00 $ 50,000 04/30/00 $ 50,000
06/30/00 $ 25,000
08/31/00 $ 25,000
10/31/00 $ 50,000
12/31/00 $ 50,000
02/28/01 $ 125,000
05/31/01 $ 85,000
TOTAL $ 1,000,000 TOTAL $ 1,000,000
[Form of Agreement]
OUTLOOK GROUP CORP.
NONQUALIFIED STOCK OPTION
AGREEMENT
Option granted the 18th day of December, 1996, by OUTLOOK GROUP
CORP., a Wisconsin corporation (hereinafter called "Company"), to
___________________, non-employed Board of Director member of
Outlook Group Corp. (hereinafter called "Optionee") pursuant to
the grant of the Board.
1. Number of Shares Optioned; Exercise Price. The Company
grants to Optionee the right and option to purchase, from
time to time, on the terms and conditions hereof, all or any
part of an aggregate of 3,000 shares of the Company's Common
Stock, $.01 par value, at the exercise price of $4.675 (four
and 67.5/100 Dollars) per share, subject to adjustment under
paragraph 16 hereof.
2. Nonqualified Stock Option. This Option is intended to be a
nonqualified stock option. It is not intended to be an
"incentive stock option" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the
"Code").
3. Vesting. Except as provided in paragraph 13, this Option
may not be exercised until June 18, 1997, six months from
the date of grant; and then this Option may be exercised, in
whole or in part, only in accordance with the terms of this
Agreement.
4. Term of Option. If this Option is not earlier exercised or
terminated, all rights to exercise this Option shall expire
on December 18, 2001, five years from the date this Option
was granted or the end of the optionee's term on the Board,
whichever occurs first.
5. Method of Exercising Option. This Option shall be exercised
by delivering to the Company, at the office of its
Secretary, a written notice of the number of shares with
respect to which the Option is at the time being exercised
and by paying the Company in full the exercise price of the
shares being acquired at the time.
6. Manner of Payment. The exercise price for shares purchased
pursuant to this Option shall be paid in full at the time of
exercise and no shares shall be issued until full payment
therefore is made. Such payment may be made either (i) in
cash or (ii) at the discretion of the Compensation Committee
(the "Committee") of the Board of Directors of the Company,
by delivering shares of the Company's Common Stock which
have been beneficially owned by Optionee, Optionee's spouse,
or both of them for a period of at least one year prior to
the time of exercise ("Delivered Stock") or a combination of
cash and Delivered Stock. Delivered Stock shall be valued
at its Fair Market Value determined as of the date of
exercise.
7. Method of Valuation. For all purposes of this Agreement,
the term "Fair Market Value" on any date shall be the
average of the highest and lowest sale prices of the shares
on such date (or, if such date is not a trading date, on the
next preceding trading date) as reported by NASDAQ (the
National Association of Securities Dealers, Inc. Automated
Quotation System). However, if at any time the Common Stock
of the Company is listed on any other exchange, the "Fair
Market Value" shall be the average of the reported highest
and lowest prices at which shares are sold on such exchange
on such date (or, if such date is not a trading date, on the
next preceding trading date). In the absence of reported
sales on NASDAQ or on such exchange on any trading date, the
"Fair Market Value" shall be the average of the reported
closing bid and asked price for the shares on NASDAQ or such
exchange on such date.
8. Deferral of Exercise. Although the Company intends to exert
its best efforts sot that the shares purchasable upon the
exercise of this Option, when it first becomes exercisable,
will be registered under, or exempt from the registration
requirements of, the Securities act of 1933, as amended (the
"Securities Act"), and any applicable state securities law,
if the exercise of this Option would otherwise result in the
violation by the Company of any provision of the Securities
Act or of any state securities law, the Company may require
that such exercise be deferred until the Company has taken
appropriate action to avoid any such violation.
9. Rights of Shareholder. Optionee shall not be deemed the
holder of any shares subject to this Option until the shares
covered by this Option are fully paid and issued to optionee
upon exercise of this Option.
10. Transferability of Options. This Option may not be
transferred except by will or the laws of descent and
distribution, and may be exercised during the lifetime of
Optionee only by him or by his guardian or legal
representative. This Option and any rights and privileges
pertaining hereto shall not be transferred, assigned,
pledged or hypothecated by Optionee in any way, whether by
operation of law or otherwise, and shall not be subject to
execution, attachment or similar process.
11. Death of Optionee. If the Optionee dies while serving on
the Board, the personal representative of Optionee's estate
or the person or persons to whom this Option is transferred
by will or the laws of descent and distribution may, at any
time within one year after the date of death, but not later
than the date of expiration of this Option, exercise this
Option to the extent Optionee was entitled to do so on the
date of death. This Option or any portion of this Option
not so exercised shall terminate.
12. Changes in Common Stock. In the event of a reorganization,
recapitalization, stock split, stock dividend, merger,
consolidation, combination or exchange of shares, rights
offering or any other change affecting the Common Stock of
the Company, the Committee shall make, subject to approval
of the Board of Directors, such adjustments, if any, as it
deems to be equitable in the number, exercise price and kind
of shares covered by this Option.
13. Dissolution or Merger. Anything contained herein to the
contrary notwithstanding, upon the dissolution or
liquidation of the Company, or upon any merger in which the
Company is not the surviving corporation, at any time prior
to the expiration date of this Option, Optionee shall have
the right within sixty (60) days prior to the effective date
of such dissolution, liquidation or merger, to surrender
this Option, whether or not vested, to the Company for cash,
subject to the discretion of the Committee as to the exact
timing of said surrender, but such right of surrender shall
apply only if, and to the extent that, the Optionee could
not realize the value of this Option by exercising it
(because this Option was not then presently exercisable, or
because the exercise of this Option would result in a
forfeiture under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or the like). The
amount of cash to be paid to the Optionee, subject to any
applicable withholding taxes, for any portion of this Option
surrendered hereunder shall be the amount by which the Fair
Market Value of the shares covered by the surrendered
portion of this Option, determined at the time of surrender,
exceeds the exercise price thereof.
14. Withholding Taxes.
(a) The Company may require, as a condition to the exercise
of this Option, that Optionee concurrently pay to the
Company (either in cash or, at the request of Optionee
but in the discretion of the Committee and subject to
such rules and regulations as the Committee may adopt
from time to time, in share of Delivered Stock) the
entire amount or a portion of any taxes which the
Company is required to withhold by reason of such
exercise, in such amount as the Committee or the
Company in its discretion may determine.
(b) In lieu of part or all of any such payment, Optionee
may elect, subject to such rules and regulations as the
Committee may adopt from time to time, or the Company
may require, that the Company withhold from the shares
to be issued upon exercise of this Option that number
of shares having a Fair Market Value equal to the
amount which the Company is required to withhold.
(c) Any such request or election (to satisfy withholding
obligations using shares) by an Optionee who is an
officer or director of the Company who is subject to
the provisions of Section 16 of the Exchange Act shall
be made in accordance with the rules and regulations of
the Securities and Exchange Commission promulgated
thereunder.
15. Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company,
in care of its Secretary. Any notice to be given to
Optionee may be addressed to Optionee at his address as it
appears on the Company's records, or at such other address
as the Optionee may hereafter designate in writing to the
Company. Any such notice shall be deemed to have been duly
given if and when personally delivered or enclosed in a
properly sealed envelope addressed as aforesaid, and
deposited, postage prepaid, in the United States mails.
16. Successors. This Agreement shall be binding upon and inure
to the benefit of any successor or successors of the
Company.
17. Wisconsin Contract. This Option has been granted in
Wisconsin and shall be construed under the laws of that
state.
IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its behalf by its President or Executive Vice
President, and the Optionee has hereunto set his hand and seal,
all of the day and year first above written, which is the date of
the granting of the Option evidenced hereby.
OUTLOOK GROUP CORP.
By:___________________________
Title: Chairman and President
______________________________
Optionee
