<PAGE>   1
                                                                  EXHIBIT 10.15

                         LONG TERM INCENTIVE PLAN (LTIP)

Objective:        To motivate and reward over a multi-year period key executives
                  who have responsibility for influencing the growth and
                  profitability of the Company and its business units.

Participants:     As selected and approved by the President/Chief Executive
                  Officer and Board of Directors: Patrick W. Cavanagh, Douglas
                  Brander and Bernard J. Smith.

Performance Measures:   Measured annually at the end of each year. SSPI includes
                        the DAI division. Ruf includes automotive, infra-red,
                        hearing aid and components businesses. Corporate results
                        represents the audited consolidated and combined results
                        of all Knowles Companies.

                        Performance measures for all three participants will be
                        revenue, operating income and the percentage
                        relationship of operating income to net assets. The
                        three performance measures will be given equal
                        weightings for each participant. However, different
                        weightings will be assigned to each participant based on
                        overall performance of SSPI/RUF and Corporate results.

                        Each measure will have a Target (Plan at 100%) against
                        which performance will be evaluated.

Period Covered:   January 1, 1997 through December 31, 1999.

Payment Dates:    Three potential payouts - based on the audits of the 12 month
                  periods ended December 31, 1997, 1998 and 1999.

Payment Structure and Administration:

1.    Payout is based on achievement of results compared to Target goals.
      Achievement of all Target goals (at 100%) as to each participant will
      result in incentive payments of $60,000 after the close of December 31,
      1997, $60,000 after CY 1998 and $80,000 after CY 1999.

2.    The threshold level of a Performance Measure must be achieved before any
      payout is made to the participant with respect to that Performance
      Measure. Threshold is 90% of Target for Revenue, 80% of Target for
      Operating Income and 80% of Target for Operating Income to Net Assets.
<PAGE>   2

3.    Performance between Threshold and Target will be pro-rated for payout
      purposes. Performance above Target will be pro-rated up to a Maximum of
      120%. Performance for each payout period will be calculated by multiplying
      the performance percentage of each Measure times that portion of the total
      incentive payment allocated to the Performance Measure for the payout
      period and adding the three results for a total payout. By way of example,
      a 120% revenue performance, a 100% operating income performance and a 79%
      operating RONA performance applied to a $60,000 annual incentive payment
      would result in a payment of $44,000 to the participant - I.,e., (120% x
      $20,000) + (100% x $20,000) + (0% x $20,000).

4.    Each individual is also a participant in the Management Incentive Plan
      (MIP). For the bonus entitlement under MIP during the contract period, the
      calculations will be made using the same criteria as the 100% performance
      measures under this special agreement, but at their respective tiers. The
      related bonus entitlement will be included with any incentive amount
      earned under this agreement and paid out for the appropriate payout
      period.

5.    Any substantial change in organization, business structure, strategy or
      other matters affecting Ruf, SSPI or the Company overall will result in an
      appropriate adjustment of the Plan (including Performance Measures) as
      determined in the sole discretion of the Company's President and CEO.

6.    A participant whose employment with the Company or its subsidiaries
      terminates for any reason other than workforce reduction, disability or
      death prior to the end of a payout period will not be eligible for any
      incentive payment for that or any subsequent year under this Plan. In the
      event of employment termination due to workforce reduction, disability or
      death, any incentive payment will be pro-rated only for the year in which
      the termination occurs.

7.    Appropriate adjustments will be made as soon as practical to the operating
      RONA percentages displayed on pages 2 and 3 of Attachment 1 to reflect the
      Company's S election and the finalization of the Ruf/Ruwido balance
      sheets.

8.    The Company's books and records of account shall govern all financial
      determinations to be made under the Plan. The Targets, related gradation
      scales and tables in Attachment 1 have been determined on the basis of
      converting the projected financial results of the Ruf and Ruwido
      operations from Deutschemarks to Dollars at the exchange rate of 1.5DM to
      $1.00. In determining and applying the Targets, related gradation scales
      and tables at any time and from time to time in accordance with the
      provisions of the Plan, such Targets, gradation scales and/or tables shall
      be adjusted to reflect, in lieu of the 1.5DM to $1.00 exchange rate,
<PAGE>   3

      the Deutschemark to Dollar exchange rate published in the Wall Street
      Journal for the business day immediately preceding the date as of which
      the adjustment is being made.

5.    This Plan is subject to termination as of the end of any year at the
      discretion of the Company.
<PAGE>   4

Attachment 1

Page 1 - Weightings for each participant
Page 2 - Consolidated Targets and Gradation Scales
Page 3 - SSPI/RUF Targets and Gradation Scales

                                                                         3/13/97
<PAGE>   5

                                                                    Attachment 1
                                                                     Page 1 of 3

                         LONG TERM INCENTIVE PLAN (LTIP)

<TABLE>
<CAPTION>
                                                   WEIGHTING
                                                   ---------
PARTICIPANT                               SSPI/RUF         CORPORATE
-----------                               --------         ---------

<S>                                             <C>             <C>
Brander & Smith                                 0               100%

Cavanagh                                       80%               20%
</TABLE>

      Brander and Smith will be entitled to a bonus under the Long-Term
Incentive Plan based only on Consolidated results which will include the
performance of SSPI/Ruf. (Attachment 1, page 2)

      Cavanagh's bonus will be determined separately based on the achievements
of SSPI/Ruf targets (80%) as identified on page 3 of Attachment 1; the balance
(20%) will be determined based on overall Consolidated results (page 2).
<PAGE>   6
                                                                    ATTACHMENT 1
($ EXPRESSED IN '000s)                                               PAGE 2 OF 3


              LONG TERM INCENTIVE PLAN (LTIP) - OTHER PARTICIPANTS
                       CONSOLIDATED - INCLUDING RUF/SSPI



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE A - NET SALES
 SALES AS A %       ------------------------------------------------              BONUS
  OF TARGET         12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 90.00%             $204,314            $233,490            $270,716             90.00%
 95.00%              215,664             246,461             285,756             95.00%
100.00%              277,015             259,433             300,796            100.00%
105.00%              238,366             272,405             315,836            105.00%
110.00%              249,717             285,376             330,876            110.00%
115.00%              261,067             298,348             345,915            115.00%
120.00%              272,418             311,320             360,955            120.00%
--------------------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE B - OPERATING INCOME
 OP. INC. AS A %   ------------------------------------------------               BONUS
    OF TARGET      12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 80.00%             $46,508             $56,205             $66,981              80.00%
 90.00%              52,322              63,230              75,353              90.00%
 95.00%              55,228              66,743              79,540              95.00%
100.00%              58,135              70,256              83,726             100.00%
105.00%              61,042              73,769              87,912             105.00%
110.00%              63,949              77,282              92,099             110.00%
115.00%              68,855              80,794              96,285             115.00%
120.00%              69,762              84,307             100,471             120.00%
--------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE C - AVG. OPERATING RONA
 OP. RONA AS A      ------------------------------------------------              BONUS
 % OF TARGET        12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 80.00%              21.40%              24.31%              27.32%              80.00%
 90.00%              24.08%              27.35%              30.74%              90.00%
 95.00%              25.41%              28.87%              32.44%              95.00%
100.00%              26.75%              30.39%              34.15%             100.00%
105.00%              28.09%              31.91%              35.86%             105.00%
110.00%              29.43%              33.43%              37.57%             110.00%
115.00%              30.76%              34.95%              39.27%             115.00%
120.00%              32.10%              36.47%              40.98%             120.00%
--------------------------------------------------------------------------------------------
</TABLE>


Note:  "S" Corp. effect on financial statements not yet known; it was originally
       estimated that the asset base would increase by $4.1 million, and the
       RONA targets have been adjusted to reflect this adjustment. The actual
       impact on the asset base from the "S" Corp. conversion will not be known
       until completion of the 1997 audit.


<PAGE>   7
                                                                    ATTACHMENT 1
($ EXPRESSED IN '000s)                                               PAGE 3 OF 3



                                    RUF/SSPI

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE A - NET SALES
 SALES AS A %       ------------------------------------------------              BONUS
  OF TARGET         12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 90.00%              $85,964             $79,635             $95,186             90.00%
 95.00%              $90,739             $84,059            $100,474             95.00%
100.00%              $95,515             $88,483            $105,762            100.00%
105.00%             $100,291             $92,907            $111,050            105.00%
110.00%             $105,067             $97,331            $116,338            110.00%
115.00%             $109,842            $101,755            $121,626            115.00%
120.00%             $114,618            $106,180            $126,914            120.00%
--------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE B - OPERATING INCOME
 OP. INC. AS A %   ------------------------------------------------               BONUS
    OF TARGET      12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 80.00%              $6,738              $8,432             $12,047              80.00%
 90.00%              $7,580              $9,486             $13,553              90.00%
 95.00%              $8,001             $10,013             $14,306              95.00%
100.00%              $8,422             $10,540             $15,059             100.00%
105.00%              $8,843             $11,067             $15,812             105.00%
110.00%              $9,264             $11,594             $16,585             110.00%
115.00%              $9,685             $12,121             $17,318             115.00%
120.00%             $10,106             $12,648             $18,071             120.00%
--------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                   TABLE C - AVG. OPERATING RONA
 OP. RONA AS A      ------------------------------------------------              BONUS
 % OF TARGET        12/31/97            12/31/98            12/31/99            PERCENTAGE
--------------------------------------------------------------------------------------------

<S>                 <C>                 <C>                 <C>                 <C>
 80.00%              22.54%              26.43%              31.78%              80.00%
 90.00%              25.35%              29.74%              35.76%              90.00%
 95.00%              26.76%              31.39%              37.74%              95.00%
100.00%              28.17%              33.04%              39.73%             100.00%
105.00%              29.58%              34.69%              41.72%             105.00%
110.00%              30.99%              36.34%              43.70%             110.00%
115.00%              32.40%              38.00%              45.69%             115.00%
120.00%              33.80%              39.65%              47.68%             120.00%
--------------------------------------------------------------------------------------------
</TABLE>


NOTE:  Targets have been adjusted to reflect the business transfer of Deltek to
       KE and Infrared to Emkay. The asset base has not been adjusted to exclude
       any property, plant and equipment which may also be utilized by Emkay.