EXHIBIT 10(m)(v)
OPTION AGREEMENT
AGREEMENT, dated November 5, 1997, by and between ALBANY INTERNATIONAL
CORP., a Delaware corporation ("AI") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ("the Optionee"), an
officer of AI.
WHEREAS, as an incentive to encourage the Optionee to remain in the
employ of AI and its subsidiaries by affording the Optionee a greater
interest in the success of AI and its subsidiaries, AI desires to grant to
the Optionee an option to purchase shares of its Class A Common Stock;
WHEREAS, the Optionee desires to obtain such option on the terms and
conditions provided for herein;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable considerations receipt of which
is hereby acknowledged, AI and the Optionee hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set, AI
hereby grants to the Optionee the right and option ("the Option") to purchase
250,000 treasury shares (subject to adjustments as provided in paragraph 6
hereof) of Class A Common Stock of AI ("the Optioned Shares").
2. PURCHASE PRICE. The purchase price of the Optioned Shares shall be
$25-9/16 per share (subject to adjustment as provided in paragraph 6 hereof).
3. TERM. The term of the Option shall be for a period of twenty years
from the date hereof; provided, however, that the term of the Option may be
terminated at any time by the Committee if the Committee determines that the
Optionee has engaged in a Competing Activity (as hereinafter defined) without
the specific written consent of AI; PROVIDED, FURTHER, THAT THE COMMITTEE MAY
AT ANY TIME ACCELERATE THE EXPIRATION OF THE TERM OF THE OPTION TO A DATE NOT
LESS THAN TEN YEARS FROM THE DATE HEREOF PROVIDED THAT SUCH DATE SHALL NOT BE
EARLIER THAN SIX MONTHS AFTER THE DATE WHEN WRITTEN NOTICE OF SUCH
ACCELERATION SHALL HAVE BEEN RECEIVED BY THE OPTIONEE.
4. EXERCISABILITY. The Option shall become exercisable only if, prior
to the termination of employment of the Optionee by AI and its subsidiaries,
the average per share composite closing price for Class A Common Stock of AI,
as shown by the Wall Street Journal, for any five successive trading days
after the date of this Agreement shall have equaled or exceeded $48 (subject
to adjustment as provided in paragraph 6 hereof). Upon the satisfaction of
this condition ("the Market Condition"), the Option shall become exercisable
as to a number of shares of Class A Common Stock of AI calculated by
multiplying 25,000 times the number of full years that shall have elapsed
from the date of this Agreement to the date when the Market Condition shall
have been satisfied. After the date when the Market Condition is satisfied,
the Option shall become exercisable, on each anniversary date of the date of
this Agreement until, but including the tenth anniversary date, as to an
additional 25,000 shares, but only if, on such anniversary date, the Optionee
continues to be an employee of AI or a subsidiary.
Notwithstanding the foregoing, this Option shall not be exercised or
exercisable at any given time if and to the extent that exercise at such time
would result in compensation to the Optionee that is not deductible by AI as
a result of the provisions of Section 162(m) of the Internal Revenue Code, or
the regulations thereunder, in each case as amended from time to time, or any
comparable tax law provisions hereinafter adopted.
5. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) In the event that, during the term of the Option, the employment of
the Optionee by AI and its subsidiaries shall be terminated by Voluntary
Termination (as hereinafter defined) after the Optionee has attained age 62
or by death, Disability (as hereinafter defined) or Involuntary Termination
(as hereinafter defined),
(i) if the Market Condition shall not have occurred prior to such
termination, the Option shall terminate as to all of the Optioned
Shares at the time of termination; and
(ii) if the Market Condition shall have occurred prior to such
termination,
(A) the Option shall become exercisable, at the time of such
termination, as to 50% of any Optioned Shares as to which the
Option has not yet become exercisable at such time and shall remain
exercisable, as to such 50% and as to all Optioned Shares to which
the Option had become exercisable prior to such termination, until
the earlier of
(I) the expiration of the period of five years following
the date of such termination, and
(II) the expiration of the term of the Option, at which
time the Option shall terminate; and
(B) the Option shall terminate as to 50% of any Optioned
Shares as to which the Option has not yet become exercisable at the
time of such termination.
(b) In the event that, during the term of the Option, the employment of
the Optionee by AI and its subsidiaries shall be terminated by Voluntary
Termination before the Optionee has attained age 62,
(i) if the Market Condition shall not have occurred prior to such
termination, the Option shall terminate as to all of the Optioned
Shares at the time of such termination; and
(ii) if the Market Condition shall have occurred prior to such
termination,
(A) the Option shall remain exercisable as to all Optioned
Shares as to which the Option had become exercisable prior to such
termination, until the earlier of
(I) the expiration of the period of five years following
the date of such termination, and
(II) the expiration of the term of the Option at which
time the Option shall terminate; and
(B) the Option shall terminate as to all Optioned Shares as
to which the Option has not yet become exercisable at the time of
such termination.
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(c) In the event that, during the term of the Option, the employment of
the Optionee by AI and its subsidiaries shall be terminated for Cause (as
hereinafter defined),
(i) if the Market Condition shall not have occurred prior to such
termination, the Option shall terminate as to all of the Optioned
Shares at the time of termination; and
(ii) if the Market Condition shall have occurred prior to such
termination,
(A) the Option shall terminate at the time of such
termination as to all Optioned Shares at the time of such
termination, and
(B) the Option shall remain exercisable as to those of the
Optioned Shares as to which the Option had become exercisable prior
to such termination until the earlier of
(I) the expiration of the period of sixty days following
the date of such termination, and
(II) the expiration of the term of the Option, at which
time the Option shall terminate.
6. RECAPITALIZATION, ETC. Notwithstanding any other provision of this
Agreement, in the event of any change in the outstanding common stock of AI
by reason of a stock dividend, recapitalization, merger, consolidation,
split-up, combination or exchange of shares or the like, the number and class
of shares subject to the Option, the purchase price of the Optioned Shares
and the per share price included in the Market Condition may be appropriately
adjusted by the Committee, whose determination shall be conclusive. No
fractional shares shall be issued hereunder and any fractional shares
resulting from computations pursuant to this paragraph 6 shall be eliminated
from the Option.
7. METHOD OF EXERCISING OPTION. Subject to the terms and conditions
hereof, the Option may be exercised (to the extent then exercisable) by
written notice delivered to AI and signed by the Optionee or other person or
persons entitled to exercise the Option. Such notice shall state the number
of Optioned Shares in respect of which the Option is being exercised and
shall include such written representations as the Committee may from time to
time determine to be desirable in connection with compliance with securities
and other laws and regulations. Such notice shall be accompanied by delivery
of the full purchase price of such Optioned Shares in cash or by check
payable to the order of AI, unless the Committee shall have determined to
accept or withhold, in full or partial payment of such purchase price, shares
of Class A Common Stock of AI.
Such notice shall also be accompanied by payment, in cash or by check
payable to the order of AI, of the minimum amount of any taxes required by
law to be withheld by AI in respect of such exercise, unless the Committee
shall have determined to accept or withhold, in full or partial payment of
such taxes, shares of Class A Common Stock of AI. In the event the Option
shall be exercised by any person or persons other than the Optionee, such
notice shall, in addition, be accompanied by proof satisfactory to AI of the
right of such person or persons to exercise the Option. If and when all of
the foregoing conditions have been fully satisfied, AI shall, as soon as
practicable thereafter (including such time as may be required pursuant to
the last sentence of this paragraph), deliver a stock certificate
representing the Optioned Shares in respect of which the Option is being
exercised (less any shares withheld in payment of the purchase price or
taxes), registered in the name of the person or persons exercising the
Option.
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Such stock certificate may bear any legend which the Committee determines to
be desirable in connection with compliance with securities and other laws and
regulations. Shares acquired upon the exercise of the Option as provided
herein shall be fully paid and non-assessable. Such shares shall be issued
shares of Class A Common Stock reacquired in any manner by AI. AI agrees
that in the event that, at the time of receipt of a notice of exercise
hereunder, it does not have sufficient treasury shares to satisfy the option
exercise, it will, no later than 20 trading days after receipt of such
notice, acquire the required number of treasury shares.
8. NON-TRANSFERABILITY. During the lifetime of the Optionee the
Option shall be exercisable only by the Optionee (or the Optionee's guardian
or legal representative) or by a Permitted Transferee to whom the Option has
been transferred by gift, in which case it shall be exercisable only by such
Permitted Transferee. No option shall be assignable or transferable by the
Optionee, and no other person shall acquire any rights therein other than by
will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended, 26 U.S.C. Section 1 et. seq. (the "Internal Revenue Code") or Title
I of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, except that an option may be transferred by gift to any
Permitted Transferee of such Optionee. The Optionee shall give the Company
prompt written notice of any such transfer and shall provide the Company with
such evidence as the Company may reasonably request to establish that the
transfer is permitted hereunder. "Permitted Transferee" of any Optionee
shall mean any child or grandchild of such Optionee, or any trust for the
benefit of such child or grandchild. Except as specifically permitted above
in this paragraph 8, the Option and this Agreement shall not be pledged,
hypothecated, sold, assigned or otherwise disposed of, encumbered or
transferred, in whole or in part. Any purported pledge, hypothecation, sale,
assignment or other disposition, encumbrance or transfer of the Option or
this Agreement (other than a transfer specifically permitted by this
paragraph 8) and any levy of any execution, attachment or similar process
upon the Option or this Agreement, in whole or in part, shall be null and
void and without effect.
9. NO RIGHTS AS STOCKHOLDER. The Optionee shall not be deemed for any
purpose to be, or have any right as, a stockholder of AI except to the extent
the Optionee shall exercise the Option and a share certificate shall be
issued therefor, and then only from the date such certificate is issued. No
adjustment shall be made for dividends or distributions or other rights the
record date for which is prior to the date on which such share certificate is
issued.
10. DEFINITIONS. As used herein, the following terms shall have the
meanings specified below:
(a) "Cause" shall be deemed to exist if a majority of the members of
the Board of Directors of AI determine that the Optionee has:
(i) caused substantial harm to AI 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 or her duties;
(iii) wrongfully and substantially enriched himself or herself at
the expense of AI; or
(iv) been convicted of a felony.
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(b) "Committee" shall mean the Board of Directors, the Compensation and
Stock Option Committee of the Board of Directors or such other committee of
the Board of Directors as the Board may from time to time designate to
exercise the powers conferred upon "the Committee" by this Agreement.
(c) The Optionee shall be deemed to be engaging in a "Competing
Activity" if he or she is:
(i) a director of a corporation or a member of a partnership, or a
trustee of a business trust, or an officer, employee representative or
agent of, or a consultant to, a corporation, partnership, business
trust or other entity or organization engaged in a Competing Business
(as defined below); or
(ii) a direct or indirect investor in a Competing Business and the
investment (whether made by loan, advance, contribution to capital,
purchase of stock or otherwise) constitutes more than 10% of (A) the
total capital of such business, (B) the equity capital of such business
or (C) the voting power for the election of the Board of Directors or
other governing body of such business.
(d) A business shall be a "Competing Business" at any time if at such
time it is engaging in a business activity which is, at such time, being
conducted by AI, or by a subsidiary of AI, or a company controlled by AI or a
subsidiary or subsidiaries of AI and in or for the conduct of which the
Optionee is or was involved or bore responsibility as an employee of AI or a
subsidiary of AI.
(e) "Disability" shall be deemed to exist if:
(i) by reason of mental or physical illness the Optionee has not
performed his or her duties for a period of six consecutive months; and
(ii) the Optionee does not return to the performance of his or her
duties within thirty days after written notice is given by AI that the
Optionee has been determined by the Committee to be "Disabled" under
the Company's long term disability policy.
(f) "Involuntary Termination" shall mean a termination of the
employment of the Optionee by AI for any reason other than Cause.
(g) "Voluntary Termination" shall mean a termination of the employment
of the Optionee for any reason other than death, Disability, Cause or
Involuntary Termination.
11. NOTICES. Any notice required or permitted under this Agreement
shall be in writing and shall be deemed properly given
(a) in the case of notice to AI, if delivered in person to the
Secretary of AI, or mailed to AI to the attention of the Secretary by
registered mail (return receipt requested) at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other address as AI may from time to time hereafter
designate by written notice to the Optionee; and
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(b) in the case of notice to the Optionee, if delivered to him or her
in person, or mailed to him or her by registered mail (return receipt
requested) at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or at such other address as the Optionee may from time to time hereafter
designate by written notice to AI.
12. AMENDMENT AND WAIVER. Neither this Agreement nor any provision
hereof may be amended, modified, changed, discharged, terminated or waived
orally, by any course of dealing or purported course of dealing or by any
other means except an agreement in writing signed by AI and by the Optionee
(or, following the death of the Optionee, by such person or persons as are
then entitled hereunder to exercise the Option). No such agreement shall
extend to or affect any provision of this Agreement not expressly amended,
modified, changed, discharged, terminated or waived or impair any right
consequent on such a provision. The waiver of or failure to enforce any
breach of this Agreement shall not be deemed to be a waiver of or
acquiescence in any other breach hereof.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, AI and the Optionee have duly executed this
Agreement as of the date hereof.
ALBANY INTERNATIONAL CORP.
By /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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