**Exhibit10.31**

**EMPLOYMENT AND NON-COMPETITIONAGREEMENT**

**(JoanB. Davidson)**

This**EMPLOYMENT AND NON-COMPETITION AGREEMENT**(this “Agreement”), dated as of March 29, 2007, is between The SheridanGroup, Inc., a Maryland corporation (the “Employer”), and Joan B.Davidson (the “Employee”).

**WHEREAS**, the Employer wishes toemploy the Employee as an executive officer of the Employer, and the Employeewishes to work as an executive officer of the Employer, on the terms set forthbelow.

**NOW, THEREFORE**,it is hereby agreed as follows:

§1.    **EMPLOYMENT**.  The Employer hereby employs the Employee, andthe Employee hereby accepts employment, upon the terms and subject to theconditions hereinafter set forth.

§2.    **DUTIES**.  The Employee shall be employed as the GroupPresident, Sheridan Publication Services of The Sheridan Group, Inc., aMaryland corporation.  In such capacity,the Employee shall have the executive responsibilities and duties assigned bythe Employer’s Board of Directors (the “Board”) and shall reportdirectly to the President of the Employer. The Employee agrees to devote her full time and best efforts to theperformance of her duties to the Employer. Nothing contained herein shall be construed as prohibiting the Employeefrom serving as a director of any entity that is not in the DesignatedIndustry, as defined in §8, so long as such activity does not involve asubstantial time commitment and otherwise does not interfere with theperformance of her duties under this Agreement.

§3.    **TERM**.  The term of employment of the Employeehereunder shall commence on April 1, 2007 (the “CommencementDate”)and shall continue until March 31, 2008 (the “InitialTerm”),unless earlier terminated pursuant to §6, and shall be renewed automaticallyfor additional one (1) year terms thereafter unless terminated by either partyby written notice to the other party given at least  ninety (90) days prior to the expiration ofthe then current term.

§4.    **COMPENSATIONANDBENEFITS**.  Duringthe term of the Employee’s employment hereunder, in consideration for theservices of the Employee hereunder, the Employer shall compensate the Employeeas follows:

(a)     **BaseSalary**.  The Employer shallpay the Employee, in accordance with the Employer’s current payroll practices,a base salary (the “BaseSalary”).  The Base Salary will be paid at an annualrate of $290,000.  The Base Salary may beincreased from time to time at the discretion of the Board and is in additionto the other benefits set forth herein.

(b)    **ManagementIncentiveBonus**.  TheEmployee shall be eligible to receive from the Employer, for each of the fiscalyears of the Employer ended after the date hereof, a management incentive bonus(the “IncentiveBonus”) in an amount up to fifty percent (50%) ofthe Base Salary for such fiscal year, in accordance with an incentive bonusplan to be adopted by the Board prior to the end of the first fiscal quarterfor each such fiscal year.  In accordancewith applicable Federal law, the Incentive Bonus, if any, will be paid by theMarch 15 following the fiscal year during which the Employee becomes vested inher Incentive Bonus.

(c)     **Insurance;OtherBenefits**. Accident, disability, and health insurance for the Employee shall beprovided by the Employer under group accident, disability, and health insuranceplans maintained by the Employer for, and on the terms and conditions generallyapplicable to, its full-time, salaried employees as such employmentbenefits may be modified from time to time by the Employer for all full-time,salaried employees.  The amount andextent of such coverage shall be subject to the discretion of the Board.  The Employee shall also be eligible toparticipate in any deferred compensation or retirement plans maintained by theEmployer, in accordance with the terms of such plans as in effect from time totime.

(d)    **Retention Bonus**.  In addition to the Incentive Bonus, if theEmployee remains employed hereunder on December 31st of any year, the Employee shall be entitled toreceive from the Employer an additional annual bonus for each year (the “RetentionBonus”) in an amount equal to 25% of the Base Salary then in effect.  This Retention Bonus will be paid by February15 of the following year into a deferred compensation account in accordancewith the Employer’s Deferred Compensation Plan (the “Deferred Compensation Plan”).  The Retention Bonus will be administered andsubject to a five (5) year vesting requirement as provided in the DeferredCompensation Plan.

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§5.    **EXPENSES**.  The Employer shall reimburse the Employee forall reasonable expenses of types authorized by the Employer and incurred by theEmployee in the performance of his duties hereunder.  The Employee shall comply with such budgetlimitations and approval and reporting requirements with respect to expenses asthe Employer may establish from time to time.

§6.    **TERMINATION**.  The Employee’s employment hereunder shallcommence on the Commencement Date and continue until the expiration of theInitial Term, and any extension of such term pursuant to §3, except that theemployment of the Employee hereunder shall earlier terminate:

(a)     **DeathorDisability**.  Uponthe death of the Employee during the term of her employment hereunder or, atthe option of the Employer, in the event of the Employee’s physical or mentaldisability, upon thirty (30) days’ written notice from the Employer.  The Employee shall be deemed disabled if anindependent medical doctor (selected by the Employer’s health or disabilityinsurer) certifies that the Employee has for 180 days, consecutive or non-consecutive,in any twelve (12) month period been physically or mentally disabled in amanner which seriously interferes with her ability to perform hisresponsibilities under this Agreement. Any refusal by the Employee to submit to a medical examination for thepurpose of certifying physical or mental disability under this §6(a) shall bedeemed to constitute conclusive evidence of the Employee’s physical or mentaldisability.

(b)    **ForCause**.  For “Cause”immediately upon written notice by the Employer to the Employee.  For purposes of this Agreement, a terminationshall be for Cause if any one or more of the following has occurred:

(i)    the Employee shall have committed an act offraud, embezzlement or misappropriation against the Employer, including, but notlimited to, the offer, payment, solicitation or acceptance of any unlawfulbribe or kickback with respect to the Employer’s business; or

(ii)   the Employee shall have been convicted by acourt of competent jurisdiction of, or pleaded guilty or nolo contendere to,any felony or any crime involving moral turpitude; or

(iii)  the Employee shall have refused, afterexplicit written notice, to obey any lawful resolution of or direction by theBoard which is consistent with her duties hereunder; or

(iv)  the Employee has been chronically absent fromwork (excluding vacations, illnesses or leaves of absence approved by theBoard); or

(v)   the Employee shall have failed to perform theduties incident to her employment with the Employer on a regular basis, andsuch failure shall have continued for a period of twenty (20) days afterwritten notice to the Employee specifying such failure in reasonable detail(other than as a result of the Employee’s Disability); or

(vi)  the Employee shall have engaged in theunlawful use (including being under the influence) or possession of illegaldrugs on the Employer’s premises; or

(vii) the Employee shall have breached any one ormore provisions of the Stock Purchase Agreement, dated as of August 1, 2003,among the Employer and its stockholders as amended and in effect from time totime, and such breach shall have continued for a period of ten (10) days afterwritten notice to the Employee specifying such breach in reasonable detail.

(c)     **ResignationWithoutGoodReason; WithoutCause**.  Upon thirty (30) days’written notice by the Employer to the Employee without Cause or by the Employeeto the Employer without Good Reason (as defined below).

(d)    **ResignationWithGoodReason. **Uponwritten notice by the Employee to the Employer for Good Reason specifying inreasonable detail the basis for such termination, provided, that such noticeshall be given no more than thirty (30) days following the event or conditionwhich gives rise to such termination.  Forpurposes of this Agreement, the term “Good Reason” shall mean the occurrence ofany of the events or conditions described in subparagraphs (i) through (ii)hereof without the Employee’s express written consent which is not correctedwithin twenty (20) days after delivery by the Employee of written notice to theEmployer:

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(i)  a materialreduction in the Employee’s status, position, scope of authority orresponsibilities, the assignment to the Employee of any duties orresponsibilities which are materially inconsistent with such status, position,authority or responsibilities; involuntary relocation of the Employee to anextent requiring an increase in his commute to his normal place of employmentof more than 50 miles; or any removal of the Employee from or failure toreappoint him to any of positions to which the Employee has been appointed bythe Employer, except in connection with the termination of his employment; or

(ii) a materialreduction by the Employer in the Employee’s compensation or benefits, except inconjunction with a general reduction by the Employer in the salaries of it’sexecutive level employees or the  TSGmanagement team.

(e)     **RightsandRemediesUponTermination**.

(i)   If the Employee’s employment hereunder isterminated by the Employer without Cause pursuant to §6(c) or by the Employeewith Good Reason pursuant to §6(d), then the Employee shall be entitled toreceive (A) severance payments, in accordance with the Employer’s payrollpractices in existence on the date of Separation from Service at an annual rateequal to the sum of (1) the Employee’s Base Salary in effect at the time ofsuch termination plus (2) the average of the Incentive Bonuses earned bythe Employee for the two fiscal years immediately preceding the date oftermination, for a period equal to eighteen (18) months (the “Severance Period”),(B) provided that the Employee elects continuation coverage, commonly known asCOBRA coverage, under the health insurance plan maintained by the Employer forits full time salaried employees, the Employer, during the Severance Period,will pay the excess of the required COBRA premium for the Employee (and hisspouse and dependents to the extent covered by the Employer’s health insuranceplan at the time of Executive’s termination of employment) over the premiumpaid by the Employee for such coverage immediately prior to the Employee’stermination of employment, (C) payment of any expense reimbursements under §5hereof for expenses incurred in the performance of his duties prior totermination (which shall be made by the December 31 of the second calendar yearfollowing the year in which the Employee experiences a Separation fromService), and (D) immediate vesting of the Employee’s deferred compensationaccount in accordance with the Deferred Compensation Plan. No payment will bemade under this Section 6(e) unless the Employee experiences a Separation fromService (as defined in subsection (iv) below). Once payments commence under §6(e)(i)(A), there shall be no changes madeto the payment schedule.

(ii)  Notwithstandingthe provisions of §6(e)(i), in the event the Employee accepts other employmentduring the Severance Period, the Employer shall be entitled to reduce theamount payable under §6(e)(i) by an amount equal to the income received by theEmployee pursuant to such new employment during the Severance Period.

(iii)   Exceptas otherwise set forth in this §6(e), the Employee shall not be entitled to anyseverance or other compensation after termination.

(iv)  Anemployee experiences a “Separation from Service” if the employee dies, retires,or otherwise has a termination of employment with the Employer, within themeaning of Internal Revenue Code section 409A. A “Separation from Service” shall occur if the Employee ceases toperform significant services for the Employer (for example, if the annual levelof services and remuneration are reduced to less than twenty percent (20%) [orless than fifty percent (50%), if the Employee becomes an independentcontractor] of average prior levels,  basedon the last three full calendar years of employment (or the actual employmentperiod, if shorter) .

(v)   A“Separation from Service” shall not occur if the Employee is on military leave,sick leave, or other bona fide leave of absence, if the period of such leavedoes not exceed six months, or if longer, so long as the Employee’s right toreemployment with the Employer is provided either by statute or by contract. Ifthe period of leave exceeds six months and the Employee’s right to reemploymentis not provided either by statute or by contract, a “Separation from Service”is deemed to occur on the first date immediately following such six-monthperiod.

§7.    **INVENTIONS;ASSIGNMENT**.  All rights todiscoveries, inventions, improvements and innovations (including all data andrecords pertaining thereto) related to the Employer’s business, whether or notpatentable, copyrightable, registrable as a trademark, or reduced to writing,that the Employee may discover, invent or originate during the term of hisemployment hereunder, and for a period of six (6) months thereafter, eitheralone or with others and whether or not during working hours or by the use ofthe facilities of the Employer (“Inventions”), shall be the exclusiveproperty of the Employer.  The Employeeshall promptly disclose all Inventions to the Employer, shall execute at therequest of the Employer any assignments or other documents the Employer maydeem necessary to protect or perfect its rights therein, and shall assist theEmployer, at the

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Employer’sexpense, in obtaining, defending and enforcing the Employer’s rightstherein.  The Employee hereby appointsthe Employer as his attorney-in-fact to execute on his behalf anyassignments or other documents deemed necessary by the Employer to protect orperfect its rights to any Inventions.

§8.    **CONFIDENTIALINFORMATION**.  The Employeerecognizes and acknowledges that certain proprietary and confidentialinformation of the Employer, including without limitation information regardingcustomers, pricing policies, methods of operation, proprietary computerprograms, sales, products, profits, costs, markets, key personnel, formulae,product applications, technical processes, and trade secrets (hereinaftercalled “ConfidentialInformation”) are valuable, special, andunique assets of the Employer and its affiliates.  The Employee shall not, during or after herterm of employment, disclose any or any part of the Confidential Information toany person, firm, corporation, association, or any other entity for any reasonor purpose whatsoever, directly or indirectly, except as may be requiredpursuant to his employment hereunder and except as required by law, unless anduntil such Confidential Information becomes publicly available other than as aconsequence of the breach by the Employee of her confidentiality obligationshereunder.  In the event of thetermination of her employment, whether voluntary or involuntary and whether bythe Employer or the Employee, the Employee shall deliver to the Employer alldocuments and data pertaining to the Confidential Information and shall nottake with her any documents or data of any kind or any reproductions (in wholeor in part) or extracts of any items relating to the Confidential Information.

§9. **NON-COMPETITION**.  In consideration of the Employer’sobligations hereunder, during the term of the Employee’s employment hereunderand during the Designated Period (as defined herein), the Employee will not (i)anywhere within North America, engage, directly or indirectly, alone or as ashareholder (other than as a holder of stock of the Employer (or any of itsaffiliates) or as a holder of less than five percent (5%) of the common stockof any publicly traded corporation), partner, officer, director, employee orconsultant of any other business organization that (A) is engaged or becomesengaged in the business of providing publishing and printing services  journals, catalogs, and books or (B) isengaged in any other business activity that the Employer is conducting at thetime of the Employee’s termination or any activity related thereto of which theEmployee had knowledge that the Employer proposes to conduct (the “DesignatedIndustry”), (ii) divert to any competitor of the Employer any customerof the Employer, or (iii) solicit or encourage any officer, employee or consultantof the Employer to leave its employ for employment by or with any competitor ofthe Employer.  The term “DesignatedPeriod” shall mean a period following the termination of the Employee’semployment hereunder equal to the longer of (a) twelve (12) months and (b) theSeverance Period.  If at any time theprovisions of this §9 shall be determined to be invalid or unenforceable, byreason of being vague or unreasonable as to area, duration or scope ofactivity, this §9 shall be considered divisible and shall become and beimmediately amended to only such area, duration and scope of activity as shallbe determined to be reasonable and enforceable by the court or other bodyhaving jurisdiction over the matter; and the Employee agrees that this §9 as soamended shall be valid and binding as though any invalid or unenforceableprovision had not been included herein.

§10.**GENERAL**.

(a)     **Notices**.  All notices and other communicationshereunder shall be in writing or by written telecommunication, and shall bedeemed to have been duly given if delivered personally or if mailed bycertified mail, return receipt requested, postage prepaid or sent by writtentelecommunication or telecopy, to the relevant address set forth below, or tosuch other address as the recipient of such notice or communication shall havespecified to the other party hereto in accordance with this §10(a):

Ifto the Employer, to:

c/o The Sheridan Group, Inc.

11311 McCormickRoad, Ste. 260

Hunt Valley,Maryland 21031-1437

Attention:President

 

Witha copy to:

CarmenRomano

DechertLLP

CiraCentre Building

2929Arch Street

Philadelphia,PA  19104-2808

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Ifto the Employee, to:

JoanB. Davidson

712Weil Mandel Way

HuntValley, Maryland 21030

(b)    **EquitableRemedies**.  Each of the partieshereto acknowledges and agrees that upon any breach by the Employee of herobligations under §§7, 8 and 9 hereof, the Employer will have no adequateremedy at law, and accordingly will be entitled to specific performance andother appropriate injunctive and equitable relief.

(c)     **Severability**.  If any provision of this Agreement is orbecomes invalid, illegal or unenforceable in any respect under any law, thevalidity, legality and enforceability of the remaining provisions hereof shallnot in any way be affected or impaired.

(d)    **Waivers**.  No delay or omission by either party heretoin exercising any right, power or privilege hereunder shall impair such right,power or privilege, nor shall any single or partial exercise of any such right,power or privilege preclude any further exercise thereof or the exercise of anyother right, power or privilege.

(e)     **Counterparts**.  This Agreement may be executed in multiplecounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.

(f)     **Assigns**.  This Agreement shall be binding upon andinure to the benefit of the heirs and successors of each of the parties hereto.

(g)    **Arbitrationof Disputes.**  Anycontroversy or claim arising out of or relating to this Agreement or the breachthereof shall, to the extent permitted by law, be settled by arbitration in anyforum and form agreed upon by the parties, or in the absence of such anagreement, under the auspices of the American Arbitration Association (“AAA”)in Baltimore, Maryland in accordance with the Employment Dispute ResolutionRules of the AAA, including, but not limited to, the rules and proceduresapplicable to the selection of arbitrators. Notwithstanding the foregoing, this §10(g) shall not preclude eitherparty from pursuing a court action for the sole purpose of obtaining atemporary restraining order or a preliminary injunction in circumstances inwhich such relief is appropriate, provided that any other relief shall bepursued through an arbitration proceeding pursuant to this §10(g).  The prevailing party shall be entitled tocollect reasonable fees and expenses incurred by the prevailing party inconnection with such arbitration or litigation from the other party to sucharbitration or litigation.

(h)    **EntireAgreement**.  This Agreementcontains the entire understanding of the parties, supersedes all prioragreements and understandings relating to the subject matter hereof and shallnot be amended except by a written instrument hereafter signed by each of theparties hereto.

(i)      **GoverningLaw**.  This Agreement and theperformance hereof shall be construed and governed in accordance with the lawsof the State of Maryland.

**IN WITNESS WHEREOF**,and intending to be legally bound hereby, the parties hereto have caused thisAgreement to be duly executed as of the date and year first above written
|        | **THE SHERIDAN GROUP, INC**.           |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
| By:    |   /s/  John A. Saxton        |   |
|   | John A. Saxton                         |
|   | President and  Chief Executive Officer |
|   |                                   |
|   |                                   |
|   |   /s/  Joan B. Davidson      |   |
|   | Joan B. Davidson                       |
|        |                                        |  |  |

 

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