Document:

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.

 

4Exhibit 10.23

 

CHANGE OF
CONTROL AGREEMENT

 

This Change of Control Agreement (the “Agreement”)
is made and entered into December 8, 2004 by and between DeCrane Aircraft
Holdings, Inc. (the “Company”) and [**Name**]“Executive”) based on the
following facts:

 

A.           Executive is currently employed by the Company in the
capacity as [**Title**] and is a key executive of the Company.

 

B.             The Company desires to define the terms and conditions
of any termination of employment upon a Change of Control (as defined herein)
in the Company.

 

Based on the foregoing facts and
circumstances and for good and valuable consideration, receipt of which is
hereby acknowledged, the Company and Executive agree as follows:

 

1.               Term of Agreement. Except as otherwise provided herein, the term of this Agreement shall
commence effective the date hereof and shall continue for two years (the “Term”).

 

2.
   A.            Compensation Upon Termination Following a Change of
Control. In the event that (i) a
Change of Control shall have occurred during the term of this Agreement and
while Executive is employed by the Company and (ii) the Executive’s employment
shall be involuntarily terminated for any reason on a date which is less than
two years after the date of the Change of Control (whether during or after the
term of this Agreement) other than for Cause, death or disability or Executive
shall terminate his employment for Good Reason, then the Company shall make the
following payments to Executive within 15 days following the date of such
termination of employment (the “Termination Date”). subject in each case
to any applicable payroll or other taxes required to be withheld.

 

(1)          The Company shall pay Executive a lump sum amount in
cash equal to the sum of (a) Executive’s monthly base salary multiplied by a
number equal to 24 minus the number of whole months elapsed from the date of
the Change of Control to the Termination Date (the “Multiplier”) and (b)
Executive’s average annual bonus including in such average any such annual
bonus earned (even though such bonus may be paid in the year following the year
in which earned), (computed over the shorter of (x) the period of Executive’s
employment by the Company or (y) five calendar years each as measured to the
day immediately preceding the Termination Date) divided by 12 and multiplied by
the Multiplier.  In no event, however,
shall the multiplier be less than 12.

 

(2)          The Company shall pay Executive a lump
sum amount in cash equal to accrued but unpaid salary and bonus through the
Termination Date, and unpaid salary with respect to any vacation days accrued
but not taken as of the Termination Date.

 

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B.            Definitions.

 

(1)          As used in this Agreement, “Change of Control” shall
mean an event involving the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
assuming that such Schedule, Regulation and Act applied to the Company,
provided that such a Change of Control shall be deemed to have occurred at such
time as: (i) any “person” (as that term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act) (other than an Excluded Person (as defined below))
becomes, directly or indirectly, the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act) of securities representing 20% or more of the
combined voting power for election of members of the Board of Directors of the
then outstanding voting securities of the Company or any successor of the
Company, excluding any person whose beneficial ownership of securities of the
Company or any successor is obtained in a merger or consolidation not included
in paragraph (iii) below; (ii) during any period of two consecutive years or
less, individuals who at the beginning of such period constituted the Board of
Directors of the Company cease, for any reason, to constitute at least a
majority of the Board, unless the appointment, election or nomination for
election of each new member of the Board (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) was approved by a vote of at least
two-thirds of the members of the Board of Directors then still in office who
were members of the Board at the beginning of the period or whose appointment,
election or nomination was so approved since the beginning of such period;
(iii) there is consummated any merger, consolidation or similar transaction to
which the Company is a party as a result of which the persons who were equity
holders of the Company immediately prior to the effective date of the merger or
consolidation shall have beneficial ownership of less than 50% of the combined
voting power for election of members of the Board of Directors (or equivalent)
of the surviving entity or its parent following the effective date of such
merger or consolidation; (iv) any sale or other disposition (or similar
transaction) (in a single transaction or series of related transactions) of (x)
50% or more of the assets or earnings power of the Company or (y) business
operations which generated a majority of the consolidated revenues (determined
on the basis of the Company’s four most recently completed fiscal quarters for
which reports have been completed) of the Company and its subsidiaries
immediately prior thereto, other than a sale, other disposition, or similar
transaction to an Excluded Person or to an entity of which equityholders of the
Company beneficially own at least 50% of the combined voting power; (v) any
liquidation of the Company. For purposes of this definition of Change of
Control, the term “Excluded Person” shall mean and include (i) any corporation
beneficially owned by shareholders of the Company in substantially the same
proportion as their ownership of shares of the Company and (ii) the Company.

 

(2)   As used in this Agreement, “Good Reason”
shall mean the occurrence, following a Change of Control, of any one of the
following events without Executive’s consent: (i) the Company assigns Executive
to any duties substantially inconsistent with his position, duties,
responsibilities, status or reporting responsibility with the Company
immediately prior to the Change of Control, or assigns Executive to a position
that

 

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does not provide Executive with substantially the same or better
compensation, status, responsibilities and duties as Executive enjoyed
immediately prior to the Change of Control; (ii) the Company reduces the amount
of Executive’s base salary as in effect as of the date of the Change of Control
or as the same may be increased thereafter from time to time, except for
across-the-board salary reductions similarly affecting all senior executives of
the Company; (iii) the Company fails to pay Executive an annual bonus
consistent with past practices and bonuses consistent with past practices are
paid to any other senior executives of the Company; (iv) the Company changes
the location at which Executive is employed by more than 50 miles from the
location at which Executive is employed as of the date of this Agreement; or
(v) the Company breaches this Agreement in any material respect, including
without limitation failing to obtain a succession agreement from any successor
to assume and agree to perform this Agreement.

 

(3)          For Cause. As
used in this Agreement, “Cause” shall mean (i) any material act of dishonesty
constituting a felony (of which Executive is convicted or pleads guilty) which
results or is intended to result directly or indirectly in substantial gain or
personal enrichment to Executive at the expense of the Company, or (ii) after
notice of breach delivered to Executive specifying in reasonable detail and a
reasonable opportunity for Executive to cure the breaches specified in the
notice, the Board, acting by a two thirds vote, after a meeting held for the
purpose of making such determination and after reasonable notice to Executive
and an opportunity for him together with his counsel to be heard before the
Board, determines, in good faith, other than for reasons of physical or mental
illness, Executive willfully and continually fails to substantially perform his
duties pursuant to this Agreement and such failure results in demonstrable
material injury to the Company. The following shall not constitute Cause: (i)
Executive’s bad judgment or negligence, (ii) any act or omission by Executive
without intent of gaining therefrom directly or indirectly a profit to which
Executive was not legally entitled, (iii) any act or, omission by Executive
with respect to which a determination shall have been made that Executive met
the applicable standard of conduct prescribed for indemnification or
reimbursement of payment of expenses under the By-Laws of the Company or the
laws of the State of Delaware as in effect at the time of such act or omission.

 

3.               Mitigation.
Executive is not required to seek other employment or otherwise mitigate the
amount of any payments to be made by the Company pursuant to this Agreement.

 

4.               Assignment.
Neither Company nor Executive shall, have the right to assign its respective
rights pursuant to this Agreement. The Company shall require any proposed
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place, concurrent with the execution of a
definitive agreement with the Company to engage in such transaction.

 

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5.               This Agreement shall be binding on the inure to the
benefit of Executive and his heirs and the Company and any permitted assignee.
The Company shall not engage in any transaction, including a merger or sale of
assets unless, as a condition to such transaction such successor organization
assumes the obligations of the Company pursuant to this Agreement.

 

6.               Notices.

 

	
  If to Company:

  	
  DeCrane Aircraft Holdings, Inc. 

  2361 Rosecrans Avenue, Suite 180 

  El Segundo, CA 90245 

  Attention: Chief Financial Officer 

  Fax: 310-643-0746

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to Executive:

  	
  [**Name**]

  [**Address**] 

  [**Address**] 

  [**Fax**]

  

 

7.               Facsimile Signatures. Execution and Delivery. This Agreement shall be effective upon transmission of
a signed facsimile by one party to the other.

 

8.               Miscellaneous. This Agreement supersedes and makes void any prior agreement between the
parties and sets forth the entire agreement and understanding of the parties
hereto with respect to the matters covered hereby, and may not otherwise be
amended or modified except by written agreement executed by the Company and the
Executive. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.

 

This
Agreement has been executed on the date specified in the first paragraph.

 

	
   

  	
  DeCRANE AIRCRAFT HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [**Name**]

  
					

 

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