Exhibit 10(r)
EMPLOYMENT AGREEMENT
This
Agreement is entered into as of May 12, 2005 by and between
Albany
International Corp. (the "Company") and
Joseph G. Morone ("Executive").
1. Duties and Scope of
Employment.
(a) Positions and Duties. Commencing on the Effective Date,
Executive will serve as President of the
Company, reporting to the Company's
Chief Executive Officer. Commencing on
January 1, 2006, Executive will serve as
President and Chief Executive Officer,
reporting to the Company's Board of
Directors (the "Board"). The Effective Date
will be such date during the period
from July 1, 2005 through September 1, 2005
as Executive shall designate by at
least ten days' notice to the Chief
Executive Officer of the Company. The period
during which Executive is employed by the
Company under this Agreement is
referred to herein as the "Employment
Term". During the Employment Term,
Executive will render such business and
professional services in the performance
of his duties, consistent with Executive's
position within the Company, as may
reasonably be assigned to him by the Chief
Executive Officer, prior to January
1, 2006, and by the Board after such
date.
(b)
Obligations. During the Employment Term, Executive will devote
Executive's full business efforts to the
Company and will use good faith efforts
to discharge Executive's obligations under
this Agreement to the best of
Executive's ability. For the duration of
the Employment Term, Executive agrees
not to serve as a director for any
for-profit entity or organization or actively
engage in any employment, occupation, or
consulting activity for any direct or
indirect remuneration without the prior
approval of the Board, in its sole
discretion; provided, however, that
Executive may, without the approval of the
Board, (i) serve in any capacity with any
civic, educational, or charitable
organization, and (ii) continue to serve on
the Board of Directors of Transworld
Entertainment Corporation (and committees
of such Board); in each case, provided
such services do not interfere with
Executive's obligations to the Company.
2.
Term of
Agreement; At-Will Employment. Executive and the Company
agree that Executive's employment with the
Company constitutes "at-will"
employment. Executive and the Company
acknowledge that, subject to the
provisions of Sections 5, 6, 7 and 8 of
this Agreement, Executive's employment
relationship with the Company may be
terminated at any time, upon written notice
to the other party, with or without good
cause, at the option either of the
Company or Executive.
3.
Compensation.
(a) Base Salary. Commencing on the Effective Date, the Company
will
pay Executive an annual salary of $600,000
as compensation for his services
(such annual salary, as is then effective,
to be referred to herein as "Base
Salary"). The Base Salary will be paid
periodically in accordance with the
Company's normal payroll practices and be
subject to standard and customary
withholdings. Executive's salary will be
subject to review by the Compensation
Committee of the Board, or any successor
thereto (the "Committee"), at least
annually, and adjustments will be made in
the discretion of the Committee.
(b) Annual Bonus. Executive will be eligible for a cash bonus
for
2005 under the Company's existing annual
cash bonus program for senior
management, to be determined and paid
during early 2006. Under this program,
Executive's 2005 target bonus will be equal
to 50% of his actual 2005 base
compensation, pro-rated for the portion of
the year during which he is actually
employed. (For example, if the Effective
Date is September 1, 2005, the target
amount would be $100,000 [50% of $600,000 x
4/12] ). The Compensation Committee
of the Company's Board of
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Directors has determined that 2005 senior
management bonuses 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 Executive 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. Executive
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. Target bonuses
in future periods will be at the
discretion of the Compensation
Committee.
(c) Restricted Stock Units. Executive will receive, as of the
Effective Date, a grant of 30,000 stock
units under the Company's Restricted
Stock Unit Plan, pursuant to the form of
Restricted Stock Unit Award attached to
this Agreement as Exhibit A.
(d) Initial Payment. On the Effective Date, Executive will receive
a
one-time cash payment (the "Initial
Payment") in the amount of $425,000 which
amount shall be reduced by any amount paid
or payable to Executive with respect
to the "Deferred Compensation Agreement"
between Executive and Bentley College.
(e) Relocation. Executive will be entitled to benefits provided
pursuant to the Company's Relocation
Policy, a copy of which has been provided
to the Executive.
(f) Perquisites. Executive 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 financial planning
assistance from AYCO and subsidies for
country-club membership, but do not
include Company cars.
4.
Employee
Benefits and Policies. Executive will be entitled to two
weeks of vacation with pay during the
remainder of 2005, and thereafter will be
entitled to four weeks of vacation per
calendar year, unless the Company's
then-current vacation policy applicable to
executive officers provides for a
greater period. In addition, Executive will
be eligible to participate in all of
the Company's employee benefit plans,
policies, and arrangements that are
applicable to other executive officers of
the Company (including, without
limitation, 401(k), health care, vision,
dental, life insurance and disability),
as such plans, policies, and arrangements
may exist from time to time.
5.
Termination of Employment. In the event Executive's employment
with
the Company terminates for any reason,
Executive will be entitled to any (a)
unpaid Base Salary accrued to the effective
date of termination, (b) unpaid but
earned and accrued annual cash bonus for
the portion of the year in which the
termination of employment occurs and for
any completed prior year for which the
annual cash bonus has not been paid, (c)
pay for accrued but unused vacation to
which the Executive is entitled calculated
in accordance with the Company's
vacation policy, (d) benefits or
compensation required to be provided after
termination pursuant to, and in accordance
with the terms of, any employee
benefit plans, policies or arrangements
applicable to Executive, (e)
unreimbursed business expenses incurred
prior to termination and required to be
reimbursed to Executive pursuant to the
Company's policy, and (f) any rights to
indemnification to which Executive may be
entitled under the Company's Articles
of Incorporation, Bylaws, or separate
indemnification agreement, as applicable.
In addition, if the termination is by the
Company without Cause, Executive will
be entitled to the amounts and benefits
specified in Section 6.
6.
Severance.
If Executive's employment is terminated by the Company
without Cause, Executive will receive an
amount equal to twice the Base Salary
of Executive at the time of termination,
payable in 24 equal monthly
installments. Executive's right to receive
payments under this Section is
contingent upon Executive's continuing
compliance with the provisions of
Sections 7 and 8 of this
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Agreement and upon the Executive's having
executed and delivered to the Company
a release of any and all claims relating to
his termination. Executive will not
be required to mitigate the amount of
payments under this Section 6, nor will
any earnings that Executive may receive
from any other source reduce any such
payments. For purposes of this Section,
(a) Termination "by the Company" shall not include termination
as
the result
of death or Disability.
(b) "Cause" shall be deemed to exist if a majority of the members
of
the Board
determine that the Executive 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.
(c) "Disability" shall be deemed to exist if (i) by reason of
mental
or
physical illness the Executive has not performed his or her duties
for
a period
of six consecutive months; and (ii) the Executive does not
return
to the
performance of his duties within thirty days after written
notice
is given
by Company that the Executive has been determined by the Board
of
Directors
to be "Disabled" under the Company's long term disability
policy.
7.
Confidential Information. Executive agrees that all aspects of
the
Company's business, products, prospects,
plans and strategies that have not been
publicly disclosed, including, but not
limited to, the identities, needs and
preferences
