Exhibit 10.14


 


	
  

  	
   

  	
  01/27/05

  



 


THE SHERIDAN GROUP, INC.


 


Change-of-Control
Incentive Plan


 


Key Management Employees


 


The Sheridan Group, Inc. (the “Company”) proposes to
adopt this Change-of-Control Incentive Plan (the “Plan”) for its key management
employees, providing for payment of the Severance Benefits described below in
the event of certain terminations of employment following a change of
control.  Any acquiror will be required
to assume the Plan.


 


Severance Benefits:  During the period of eighteen (18) months
following a Change of Control, each Covered Employee will be entitled to
payment by the Successor Employer of Severance Compensation following any
termination of such Covered Employee’s employment as a result of (a) such
Covered Employee’s termination of his or her employment for Good Reason or (b)
the Successor Employer’s termination of such Covered Employee’s employment
without Cause.


 


Defined Terms:


 


“Applicable Period” means
eighteen (18) months.


 


“Board of Directors” means the
Board of Directors of the Company.


 


“Cause” means:


 


(i)            the
Covered Employee shall have committed an act of fraud, embezzlement or
misappropriation against the Successor Employer, including, but not limited to,
the offer, payment, solicitation or acceptance of any unlawful bribe or
kickback with respect to the Successor Employer’s business; or


 


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


 


(iii)          the
Covered Employee shall have refused, after explicit written notice, to obey any
lawful resolution of or direction by the Successor Board which is consistent
with the duties incident to his or her employment; or


 


(iv)          the
Covered Employee shall have been chronically absent from work (excluding
vacations, illnesses or leaves of absence approved by the Successor Board); or


 


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


 





















 


(vi)          the
Covered Employee shall have engaged in the unlawful use (including being under
the influence) or possession of illegal drugs on the Successor Employer’s
premises.


 


“Change of Control” means (i)
the sale or other transfer of all or substantially all of the assets of the
Company or its subsidiaries in a single transaction or series of related
transactions, (ii) the merger or consolidation of the Company with any other
entity, a majority of whose voting securities are owned by any persons or
persons other than the holders of a majority of the currently outstanding
voting securities of the Company, and (iii) the sale or other transfer of a
majority of the outstanding voting securities of the Company in a single
transaction or series of related transactions.


 


“Covered Employees” means those
employees of the Company or any of its subsidiaries, who:


 


(i)            from
time to time have been designated as Covered Employees by the Board of
Directors and with respect to whom that designation has not been revoked (the Board
of Directors shall have the right in its sole discretion to designate Covered
Employees and to revoke that designation); and


 


(ii)           remain employed by the Company,


 


at the time of the
closing of a Change of Control.


 


“Disability” means that an
independent medical doctor (selected by the Successor Employer’s health or
disability insurer) shall have certified that the Covered Employee has for 180
days, consecutive or non-consecutive, in any twelve (12) month period been
physically or mentally disabled in a manner which seriously interferes with his
or her ability to perform the duties incident to his or her employment.  Any refusal by a Covered Employee to submit
to a medical examination for the purpose of certifying Disability shall be
deemed to constitute conclusive evidence of such Covered Employee’s Disability.


 


“First Change of Control” means
the first Change of Control to occur after the date of adoption of the Plan.


 


“Good Reason” means the
occurrence of any of the events or conditions described in subparagraphs (i) -
(iv) of this definition, without the Covered Employee’s express written
consent, which is not corrected within twenty (20) days after delivery by the
Covered Employee of written notice thereof to the Successor Employer:


 


(i)            a
material reduction in the Covered Employee’s status, title, position, scope of
authority or responsibilities, or the assignment to the Covered Employee of any
duties or responsibilities which are materially inconsistent with such status,
title, position, authority or responsibilities;


 


(ii)           involuntary
relocation of the Covered Employee;


 


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(iii)          any
removal of the Covered Employee from or failure to reappoint him or her to any
of his or her positions held on the date of the Change of Control, except in
connection with the termination of his or her employment by the Successor
Employer for Cause or by the Covered Employee other than for Good Reason, or as
a result of the Covered Employee’s death or Disability; or


 


(iv)          a
material reduction by the Successor Employer in the Covered Employee’s
compensation or benefits as in effect on the date of the Change of Control.


 


“Incentive Bonuses” means any
management incentive bonus paid to a Covered Employee, in accordance with an
incentive bonus plan adopted by the Successor Board or maintained by the
Company and its subsidiaries, but excluding any “Retention Bonus” or other
similar amount payable into such Covered Employee’s Deferred Compensation Plan.


 


“Severance Compensation” means:


 


(i)            severance
payments, in accordance with the Successor Employer’s then current payroll
practices, at an annual rate equal to the sum of (1) the Covered Employee’s
base salary in effect on the date of the Change of Control plus (2) the average
of the Incentive Bonuses earned by the Covered Employee for the two fiscal
years immediately preceding the date of his or her termination of employment,
for the Applicable Period;


 


(ii)           continued
coverage during the Applicable Period under the health insurance plan
maintained by the Successor Employer for its full-time, salaried employees;


 


(iii)          payment
of any expense reimbursements for expenses incurred in the performance of the
Covered Employees’ duties prior to termination of his or her employment; and


 


(iv)          immediate
vesting (to the extent not previously vested) of the Covered Employee’s
deferred compensation account in accordance with the Company’s Deferred
Compensation Plan.


 


“Successor Board” means the
Board of Directors of the Successor Employer.


 


“Successor Employer” means the
entity continuing the business of the Company and its subsidiaries, or a part
thereof, and employing the Covered Employee following a Change of Control.


 


Other Terms:


 


At Will Employment:  Each of the Covered Employees is an at-will
employee of the Company or one of its subsidiaries, and his or her employment
may be terminated at any time by such


 


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Covered Employee’s or by his or her employer’s giving
the other party written notice of termination. 
Nothing contained in this Plan is intended to create for any of the
Covered Employees any right to continued employment with the Company, any of
its subsidiaries, or any Successor Employer, or employment in the same position
or on the same terms as those currently in effect.


 


Arbitration of Disputes:  Any controversy or claim between any
Covered Employee and a Successor Employer arising out of or relating to this
Plan or the breach thereof shall, to the extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the Covered Employee and the
Successor Employer, or in the absence of such an agreement, under the auspices
of the American Arbitration Association (“AAA”) in Baltimore, Maryland in
accordance with the Employment Dispute Resolution Rules of the AAA, including,
but not limited to, the rules and procedures applicable to the selection of
arbitrators, except that the Successor Employer shall pay all administrative
fees and arbitrator’s fees and expenses related to such arbitration.  Notwithstanding the foregoing, this provision
shall not preclude any party from pursuing a court action for the sole purpose
of obtaining a temporary restraining order or a preliminary injunction in
circumstances in which such relief is appropriate, provided that any other
relief shall be pursued through an arbitration proceeding as provided herein.


 


Severability:  If any provision of this Plan is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.


 


Waivers:  No delay or omission by any Covered
Employee, by the Company or any of its subsidiaries, or by any Successor
Employer in 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 any other right, power or privilege.


 


Amendment; Termination:  The Successor Board may, by action(s) duly
approved in accordance with the Company’s By-Laws and applicable law, amend or
terminate the Plan at any time (or, in the case of amendments, from time to
time) after the date of completion of the First Change of Control, provided
that no such amendment or termination shall, without the prior written consent
of the Covered Employee(s) so affected, adversely affect any of the rights or
benefits to which any of the Covered Employees is entitled under the Plan
immediately following the completion of the First Change of Control (including
all rights to payments and benefits upon a subsequent termination of the
employment of such Covered Employee(s)).


 


Assignment; Rights of Parties:  The rights and obligations of the Company,
its subsidiaries, each of the Covered Employees and each Successor Employer
shall inure to the benefit of, and shall be binding upon, the successors and
assigns of each of them.


 


GOVERNING LAW.  THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW.


 


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