http://www.canidae.com/blog/2010/06/what-causes-cherry-eye-in-dogs-and-how-to-correct-it.htmlMight help - there are many other websites about this condition. If surgery can be avoided, do because sometimes the eye can become dry afterwards, causing problems of it's own. It is possible to massage the bulge back in again - again there is information about how to do this online.
He can be shown (I'd have to ask whether this condition has to be reported for permission beforehand - certain corrective surgery requires this) but should NOT be bred from as there is an hereditary aspect to this. And if I were you, I'd not repeat this combination either.