Document:

<PAGE>   1
                                                                   EXHIBIT 10.14

                            KNOWLES ELECTRONICS, INC.
                            MANAGEMENT INCENTIVE PLAN
                                FOR CALENDAR 1999

      This document describes the Management Incentive Plan (the "Plan")
designed for key management positions in all business units of Knowles
Electronics, Inc. (the "Company") as it applies for the period from January 1,
1999 through December 31, 1999 ("the Plan Year").

Plan Description

      Corporate and Strategic Business Unit ("SBU") goals have been established
for the Plan Year. Threshold, target and maximum performance levels have also
been determined for Corporate and the Strategic Business Units. Corporate and
SBU performance measures have been weighted to reflect the degree of control by
the participant and the amount of emphasis that the Company places on the two
performance areas for the participant.

      At the end of the Plan Year, actual results will be determined and
incentive awards distributed based upon Corporate and SBU results, compared to
the predetermined goals.

Administration

      Administrative issues having material impact on the Company's operations
or its personnel policies are to be referred to the Compensation Committee of
the Board of Directors for determination. The Board of Directors continues to
have final authority for the Plan's provisions.
<PAGE>   2

Eligibility

      The Plan includes key executives and managers whose positions have a
direct impact on overall operating results. In order to be eligible,
participants must be in positions that are exempt from overtime and have
significant supervisory (managerial) responsibility. In addition, these
positions must create strategic value for the Company.

      Participation for the Plan Year is determined on the basis of documented
participant performance as determined by the Company's Performance Appraisal
System. Current participants are eligible to participate for the Plan Year if
their performance appraisal rating for the twelve-month period ending December
31, 1998 is at or above the "Meets Expectations" level. However, a participant
who fails to achieve a performance appraisal rating of "Exceeds Expectations" or
above for the Plan Year will not be eligible to receive a payout for the Plan
Year.

      An employee who is promoted, assigned, or transferred prior to the
mid-year date of the Plan Year (June 30, 1999) into a position that is eligible
to participate in the Plan will participate in the Plan upon approval by the CEO
and subject to the provisions hereof. Employees holding new positions
established during the course of the Plan Year may become Plan participants in
the same manner. If the initial participation date is on or before June 30,
1999, the incentive award will be prorated based upon the number of full months
the employee is a participant during the Plan Year. If the initial participation
date is after June 30, 1999, the employee will not be eligible to participate.

                                       -2-
<PAGE>   3

      New employees joining the Company during the Plan Year will be considered
for participation by the CEO. Upon the approval by the CEO, the employee will
enter the Plan as of the date determined by the CEO.

Target Incentive Award

      The Plan provides incentive awards that are meaningful and consistent with
competitive award levels and the participant's responsibility level with the
Company. The participants are assigned to responsibility tiers. A targeted
incentive, expressed as a percentage of base salary, is established for each
tier, as shown below.

<TABLE>
<CAPTION>
              Responsibility                  Targeted Incentive As a
                  Tier                        Percent of Base Salary
              --------------                  -----------------------
                  <S>                                  <C>
                  I                                    40%
                  II                                   30%
                  IIA/IIB                              25%
                  III                                  20%
                  IV                                   15%
                  V                                    10%
</TABLE>

      A targeted incentive award is determined by multiplying participant's base
salary by her/his respective targeted incentive percentage. The resulting
targeted incentive award represents the amount that will be generated if the
Company and SBU meet their performance goals.

                                       -3-
<PAGE>   4

Performance Criteria

      Targeted goals have been established for two areas of performance:

                              Corporate Performance

                       Strategic Business Unit Performance

      These two areas of performance will be weighted to reflect degree of
control over and desired emphasis on the performance criteria.

      The Corporate and SBU performance goals are based on Operating Income in
terms of dollars and as a percentage of Sales. The actual incentive award level
is related to actual financial performance results as shown in Exhibit A.

      Each participant's performance is assessed and incentive awards are
distributed consistent with evaluated performance results documented in the
participant's Performance Appraisal. Notwithstanding any other provision hereof,
any participant who fails to achieve the minimum performance appraisal rating as
specified under "Eligibility" above will not be entitled to any incentive award
for the Plan Year. If a participant's performance as of June 30, 1999 is
considered to be sufficiently below expected performance standards as to
indicate serious doubt whether she/he will be entitled to any incentive award
for the Plan Year, such participant will be so advised by written notice prior
to July 31. Upon receipt of such written notice, the participant shall be
entitled, if she/he so requests in writing, to a meeting with the CEO and, at
the participant's option, the Vice President of Human Resources and/or the
participant's supervisor.

      The determination that a participant's performance fails to meet the
performance standards as determined by the Performance Appraisal System shall be
made on or about the end of the Plan

                                      -4-
<PAGE>   5

Year by the CEO, after consultation with, and with the recommendation of, the
participant's supervisor and when requested by the CEO, the cognizant Vice
President. The determination of the CEO shall be final, subject only to the
participant's right upon prompt written notice to the CEO, to have an adverse
determination reconsidered and then confirmed or reversed by the CEO, and in
that connection to have a meeting with the CEO and, at the participant's option,
the Vice President of Human Resources and/or the participant's supervisor.

Form and Timing of Payment

      All earned incentive awards (if any) will be paid out in cash as soon as
practical after the Company's results for the Plan Year have been certified by
the Company's independent public accounting firm.

Participation and Termination

      Participation in the Plan does not give an individual the right to
continued employment with the Company, and participation is limited to those
employees who are employed by the company on December 31, 1999, except as
provided below. In the case of separation, other than as a result of retirement,
death, permanent disability or involuntary termination due to work force
reduction, before the end of the Plan Year, an employee has no right to any
incentive award opportunity for the Plan Year.

      In the case of separation as the result of retirement, death, permanent
disability or involuntary termination due to work force reduction, an amount
equal to the prorata share of the incentive award, if any, which would otherwise
have been paid to the employee if the employee had been employed by the company
at year end, based on the number of full months of actual

                                       -5-
<PAGE>   6

employment during the Plan Year, will be paid to the former employee at the same
time in the following year when payments are made to continuing employees.

Accounting Treatment

      The cost of the Plan is charged to Plan Year earnings and the liability is
accrued monthly and adjusted at year-end based on the actual earned incentive
awards.

Tax Treatment

      The incentive awards are taxed as personal service income to the
participants in the year received. The Company is entitled to a deduction for
the awards as compensation expense.

Other Incentive Arrangements

      During the course of the Plan Year, participation in the Plan by certain
participants may be supplemented, modified or superseded by special incentive
arrangements that are deemed to be more appropriate than the Plan.

Effective Date: January 1, 1999

                                       -6-<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.

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