Exhibit 99.1
Summary of Morone Compensation Terms
Position President, effective on such date during the period from July
1, 2005 through September 1, 2005 as the Executive shall
designate (the "Effective Date"); Dr. Morone will also become
Chief Executive Officer on January 1, 2006.
Term Employment at will. Employment may be terminated by Dr. Morone
or Albany International Corp. ("the Company") at any time.
Salary Initial base salary at the rate of $600,000 per year. Salary
shall be subject to adjustment from time-to-time in the same
manner as for other executive officers. Salaries of executive
officers are customarily adjusted in April of each year.
Bonus Dr. Morone will be eligible for a cash bonus for 2005 under
the Company's existing annual cash bonus program for senior
management. Under this program, Dr. Morone's 2005 target bonus
will be equal to 50% of his actual 2005 base compensation,
pro-rated for the period during 2005 when he is actually
employed. The Compensation Committee of the Company's Board of
Directors has determined that 2005 executive bonuses (to be
determined and paid during early 2006) will be based on
Company performance with respect to operating income, share of
market and management of inventories and accounts receivable.
The Committee retains the right to exercise its discretion,
after the end of 2005, as in prior years, to determine to what
extent the cash bonuses of Dr. Morone and the other executive
officers are earned, and reserves the right to take individual
performance factors into account, and to employ subjective and
objective criteria. Dr. Morone will be eligible thereafter to
participate in any annual executive cash bonus program, as the
same may be amended, modified or terminated by the Company, in
accordance with its terms.
Restricted
Stock Units 30,000 stock units with a grant date of the Effective Date,
granted pursuant to the Company's Restricted Stock Unit Plan.
Pursuant to the Plan, each unit vests (and is immediately paid
in cash) as to 20% of the units awarded on each of the first
five anniversaries of the date of grant, if Dr. Morone remains
employed by the Company. In the event of termination of
employment after age 62 or upon death, disability or
involuntary termination, one-half of all unvested units
automatically vest and are paid. These units will otherwise be
subject to the terms of the Restricted Stock Unit Plan
pursuant to which they are awarded, as well as the terms of
the Company's 2003 Form of Restricted Stock Unit Award, each
of which has been filed with the SEC. Payment upon vesting is
determined by the average closing price of the Company's Class
A Common Stock during a specified period prior to vesting.
Based upon the closing stock price of $31.20 on May 12, the
units would have an aggregate value of $936,000 and an annual
value of $187,200. In the event of any inconsistency between
this Summary and the Plan or Form or Award, the Plan and Form
of Award shall govern. It is anticipated that Incentive
Compensation for 2006 and subsequent periods will be in the
form of such performance-based incentive awards as the
Compensation Committee shall determine.
Initial Payment Dr. Morone will receive an initial, one-time cash payment, on
the Effective Date, in the amount of $425,000, which amount
shall be reduced by any amount paid or payable to Dr. Morone
with respect to the "Deferred Compensation Agreement" between
Dr. Morone and Bentley College.
Benefits Dr. Morone will be entitled to four weeks vacation with pay
per year (two weeks for the remainder of 2005) unless the
Company's vacation policy applicable to executive officers
provides for a greater period. Dr. Morone will otherwise be
eligible to participate in all of the Company's employee
benefit plans, policies and arrangements applicable to other
executive officers generally, including, without limitation,
relocation, 401(k), health-care, vision, life insurance and
disability; in each case, as the same may exist from time to
time.
Perquisites Dr. Morone will be eligible to receive such perquisites as are
from time-to-time made generally available to senior
executives of the Company. Such perquisites currently include
subsidies for country-club membership and financial planning
assistance from AYCO, but do not include Company cars. All
perquisites are taxable.
Severance In the event that Dr. Morone's employment is terminated by the
Company at any time for any reason other than Cause, Dr.
Morone shall be entitled to an amount equal to twice Dr.
Morone's annual base salary at the time of termination. For
this purpose, termination "by the Company" shall not include
termination as the result of death or Disability.
Defined Terms "Cause" shall be deemed to exist if a majority of the
members of the Board determine that Dr. Morone has (i) caused
substantial harm to the Company with intent to do so or as a
result of gross negligence in the performance of his duties;
(ii) not made a good faith effort to carry out his duties;
(iii) wrongfully and substantially enriched himself at the
expense of the Company; or (iv) been convicted of a felony.
"Disability" shall be deemed to exist if (i) by reason of
mental or physical illness Dr. Morone has not performed his or
her duties for a period of six consecutive months; and (ii)
Dr. Morone does not return to the performance of his duties
within thirty days after written notice is given by Company
that Dr. Morone has been determined by the Board of Directors
to be "Disabled" under the Company's long term disability
policy.
2