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Stock Options and Incentive Plans | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Stock Options and Incentive Plans | 22. Stock Options and Incentive Plans We recognized no stock option expense during 2019, 2018, or 2017 and there are currently no remaining unvested options for which stock-option compensation costs will be recognized in future periods. There have been no stock options granted since November 2002 and we have no stock option plan under which options may be granted, although options may be granted under the Company’s 2011 incentive plan. Options issued under previous plans and still outstanding were exercisable in five cumulative annual amounts beginning twelve months after date of grant. Option exercise prices were normally equal to and were not permitted to be less than the market value on the date of grant. Unexercised options generally terminate twenty years after the date of grant for all plans, and must be exercised within ten years of retirement. Activity with respect to these plans is as follows:
|  | 2019 |  | 2018 |  | 2017
Shares under option January 1 |  | 18,940 |  | 29,340 |  | 62,390
Options canceled |  | — |  | — |  | 150
Options exercised |  | 6,990 |  | 10,400 |  | 32,900
Shares under option at December 31 |  | 11,950 |  | 18,940 |  | 29,340
Options exercisable at December 31 |  | 11,950 |  | 18,940 |  | 29,340
The weighted average exercise price is as follows:
|  | 2019 |  | 2018 |  | 2017
Shares under option January 1 |  | $17.87 |  | $18.40 |  | $18.28
Options canceled |  | — |  | — |  | 20.63
Options exercised |  | 16.06 |  | 19.38 |  | 18.16
Shares under option December 31 |  | 18.93 |  | 17.87 |  | 18.40
Options exercisable December 31 |  | 18.93 |  | 17.87 |  | 18.40
As of December 31, 2019, the aggregate intrinsic value of vested options was $0.7 million. The aggregate intrinsic value of options exercised was $0.4 million in 2019, $0.5 million in 2018, and $1.1 million in 2017. Executive Management share-based compensation: In 2011, shareholders approved the Albany International 2011 Incentive Plan under which awards were granted through 2017. The multi-year awards granted to date under this Plan provide key members of management with incentive compensation based on achieving certain performance targets over a three year period. Such awards are paid out partly in cash and partly in shares of Class A Common Stock. Participants may elect to receive shares net of applicable income taxes. In March 2019, we issued 25,473 shares and made cash payments totaling $1.0 million. In March 2018, we issued 33,425 shares and made cash payments totaling $1.3 million. In March 2017, we issued 25,899 shares and made cash payments totaling $1.0 million. If a person terminates employment prior to the award becoming fully vested, the person may forfeit all or a portion of the incentive compensation award. The grant date share price is determined when the awards are approved each year and that price is used for measuring the cost for the share-based portion of the award. Expense associated with these awards is recognized over the three year vesting period. In connection with this plan, we recognized an insignificant amount of expense in 2019, $0.8 million in 2018, and $2.6 million in 2017. There are no unvested share-based awards in this Plan that are dependent on performance after 2019. Therefore, we do not expect to record additional compensation expense in future periods. 98 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 22. Stock Options and Incentive Plans — (continued) During 2016 and 2017, the Company had an annual incentive plan for executive management whereby 40 to 50 percent of the earned incentive compensation was payable in the form of shares of Class A Common Stock. Participants could elect to receive shares net of applicable income taxes. In March 2018, the Company issued 10,751 shares and made cash payments totaling $1.4 million as a result of performance in 2017. In March 2017, the Company issued 18,784 shares and made cash payments totaling $1.9 million as a result of performance in 2016. The allocation of the award between cash and shares is determined by an average share price after the year of performance. Expense recorded for this plan was $2.6 million in 2017, and $3.3 million in 2016. In 2017, shareholders approved the Albany International 2017 Incentive Plan. This plan provides key members of management with incentive compensation based on achieving certain performance or service measures. Awards can be paid in cash, shares of Class A Common Stock, Options, or other stock-based or incentive compensation awards pursuant to the Plan. Participants may elect to receive shares net of applicable income taxes. The first awards were granted in 2018, under this plan, with a performance period of one year, with cash payments made in March 2019 totaling $1.5 million as a result of performance in 2018. Awards that were granted in 2018 and 2019, with a performance period of three years, have payments scheduled for March 2021 and 2022. If a participant terminates employment prior to the award becoming fully vested, the person may forfeit all or a portion of the incentive compensation award. The grant date share price is determined when the awards are approved each year and that price is used for measuring the cost for the share-based portion of an award. Expense associated with these awards is recognized over the vesting period of the performance period which is generally one to three years. In connection with the 2017 Incentive Plan, we recognized expense of $4.9 million in 2019 and $3.4 million in 2018. For share-based awards that are dependent on performance after 2019, we expect to record additional compensation expense of approximately $0.4 million in 2020 and $0.2 million in 2021. Shares payable under these plans generally vest immediately prior to payment. As of December 31, 2019, there were 1,115,472 shares of Company stock authorized for the payment of awards under these plans. Information with respect to these plans is presented below:
|  | Number of shares |  | Weighted average grant date value per share |  | Year-end intrinsic value (000's)
Shares potentially payable at January 1, 2017 |  | 189,418 |  | $36.90 |  | $6,989
Forfeitures |  | — |  | — |  |
Payments |  | (75,545) |  | $36.35 |  |
Shares accrued based on 2017 performance |  | 43,532 |  | $48.26 |  |
Shares potentially payable at December 31, 2017 |  | 157,405 |  | $40.30 |  | $6,343
Forfeitures |  | — |  |  |  |
Payments |  | (79,762) |  | $39.90 |  |
Shares accrued based on 2018 performance |  | 34,822 |  | $70.59 |  |
Shares potentially payable at December 31, 2018 |  | 112,465 |  | $49.96 |  | $5,619
Forfeitures |  | — |  | — |  |
Payments |  | (45,689) |  | $36.74 |  |
Shares accrued based on 2019 performance |  | 14,936 |  | $92.12 |  |
Shares potentially payable at December 31, 2019 |  | 81,712 |  | $65.06 |  | $5,316
99 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 22. Stock Options and Incentive Plans — (continued) Other Management share-based compensation: In 2012, the Company adopted a Phantom Stock plan whereby awards under this program vest over a five-year period and are paid annually in cash based on current market prices of the Company’s stock. Under this program, employees may earn more or less than the target award based on the Company’s results in the year of the award. Expense recognized for this plan amounted to $6.3 million in 2019, $4.8 million in 2018, and $4.9 million in 2017. Based on awards outstanding at December 31, 2019, we expect to record approximately $11 million of compensation cost from 2020 to 2023. The weighted average period for recognition of that cost is approximately 2 years. The determination of compensation expense for other management share-based compensation plans is based on the number of outstanding share units, the end-of-period share price, and Company performance. Information with respect to these plans is presented below:
|  | Number of shares |  | Weighted average value per share |  | Cash paid for share based liabilities (000's)
Share units potentially payable at January 1, 2017 |  | 261,145 |  |  |  |
Grants |  | 96,505 |  |  |  |
Changes due to performance |  | (11,891) |  |  |  |
Payments |  | (89,190) |  | $46.64 |  | $4,160
Forfeitures |  | (20,473) |  |  |  |
Share units potentially payable at December 31, 2017 |  | 236,096 |  |  |  |
Grants |  | 65,370 |  |  |  |
Changes due to performance |  | 14,343 |  |  |  |
Payments |  | (75,545) |  | $62.69 |  | $4,736
Forfeitures |  | (12,963) |  |  |  |
Share units potentially payable at December 31, 2018 |  | 227,301 |  |  |  |
Grants |  | 58,878 |  |  |  |
Changes due to performance |  | 21,740 |  |  |  |
Payments |  | (69,912) |  | $70.67 |  | $5,528
Forfeitures |  | (22,935) |  |  |  |
Share units potentially payable at December 31, 2019 |  | 215,072 |  |  |  |
In 2018 and 2019, the Company granted restricted stock units to four executives. The amount of compensation expense is subject to change in the market price of the Company’s stock and was recorded in Selling, general, and administrative expenses. The vesting and payments due under these grants will occur in various periods from 2019 to 2022. Expense recognized for these grants was $1.1 million in 2019 and $0.5 million in 2018. Based on awards outstanding at December 31, 2019, we expect to record approximately $1.5 million of compensation cost from 2020 to 2023. On January 20, 2020, the Board of Directors of the Company appointed A. William Higgins as President and Chief Executive Officer effective January 20, 2020 to succeed Olivier M. Jarrault, who resigned by mutual agreement with the Board on this date. Mr. Jarrault will receive severance payments and accelerated vesting of 50% of his unvested restricted stock units. The Company expects to record a charge of approximately $3.0 million in 2020 related to these termination benefits. 100 Index ALBANY INTERNATIONAL CORP. Notes to Consolidated Financial Statements 22. Stock Options and Incentive Plans — (continued) The Company maintains a voluntary savings plan covering substantially all employees in the United States. The Plan, known as the Prosperity Plus Savings Plan, is a qualified plan under section 401(k) of the U.S. Internal Revenue Code. The Company matches, in the form of cash, between 50 percent and 100 percent of employee contributions up to a defined maximum. The investment of employee contributions to the plan is self-directed. The Company’s cost of the plan amounted to $6.8 million in 2019, $6.3 million in 2018, and $5.9 million in 2017. The Company’s profit-sharing plan covers substantially all employees in the United States. After the close of each year, the Board of Directors determines the amount of the profit-sharing contribution. Company contributions to the plan are in the form of cash. The expense recorded for this plan was $3.7 million in 2019, $3.2 million in 2018, and $2.6 million in 2017.

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