19. Stock Options and Incentive Plans

We recognized no stock option expense during 2014, 2013 or 2012 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. 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:

	2014	2013	2012
Shares under option January 1	228,533	507,313	597,313
Options canceled	-	-	23,300
Options exercised	41,300	278,780	66,700
Shares under option at December 31	187,233	228,533	507,313
Options exercisable at December 31	187,233	228,533	507,313

The weighted average exercise price is as follows:

	2014	2013	2012
Shares under option January 1	$18.94	$19.45	$19.54
Options canceled	-	-	21.23
Options exercised	18.71	19.87	19.65
Shares under option December 31	18.99	18.94	19.45
Options exercisable December 31	18.99	18.94	19.45

As of December 31, 2014, the aggregate intrinsic value of vested options was $3.5 million. The aggregate intrinsic value of options exercised was $0.7 million in 2014, $3.1 million in 2013, and $0.2 million in 2012.

Executive Management share-based compensation:

In 2011, shareholders approved the Albany International 2011 Incentive Plan, replacing the similar 2005 Incentive Plan approved by shareholders in 2005. Awards granted to date under these plans 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 2014 we issued 29,321 shares and made cash payments totaling $1.1 million. In March 2013 we issued 40,255 shares and made cash payments totaling $1.1 million. In March 2012 we issued 6,727 shares and made cash payments totaling $0.2 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 expense of $2.4 million in each of 2014, 2013 and 2012. For share-based awards that are dependent on performance after 2014, we expect to record additional compensation expense of approximately $0.4 million in each of 2015 and 2016.

In 2011, the Board of Directors modified the annual incentive plan for executive management whereby 40 to 50 percent of the earned incentive compensation is payable in the form of shares of Class A Common Stock. Participants may elect to receive shares net of applicable income taxes. In March 2014, the Company issued 15,910 shares and made cash payments totaling $1.4 million as a result of performance in 2013. In March 2013, the Company issued 34,988 shares and made cash payments totaling $2.0 million as a result of performance in 2012. In March 2012, the Company issued 27,768 shares and made cash payments totaling $1.5 million as a result of performance in 2011. 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 $2.7 million in 2014, $2.3 million in 2013, and $3.4 million in 2012.

Shares payable under these plans generally vest immediately prior to payment. As of December 31, 2014, there were 343,183 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, 2012	161,280	$23.74	$3,729
Forfeitures	-	-
Payments	(44,347)	$24.62
Shares accrued based on 2012 performance	112,428	$27.15
Shares potentially payable at December 31, 2012	229,361	$24.13	$5,202
Forfeitures	-	-
Payments	(118,364)	$23.05
Shares accrued based on 2013 performance	74,567	$31.62
Shares potentially payable at December 31, 2013	185,564	$27.51	$6,667
Forfeitures	-	-
Payments	(75,385)	$28.60
Shares accrued based on 2014 performance	75,020	$34.65
Shares potentially payable at December 31, 2014	185,199	$30.69	$5,683

Other Management share-based compensation:

In 2003, the Company adopted a Restricted Stock Program under which certain key employees are awarded restricted stock units. Such units vest over a five-year period and are paid annually in cash based on current market prices of the Company's stock. The amount of compensation expense is subject to changes in the market price of the Company's stock. The amount of compensation cost attributable to such units is recorded in Selling, general and administrative expenses and was $1.4 million in 2014, $2.5 million in 2013, and $1.9 million in 2012. The Company has not awarded new restricted stock units since November 2010. However, awards up to that time will continue to vest until 2015. We expect to record $0.7 million of expense in 2015 related to outstanding restricted stock units.

In 2012, the Company adopted a Phantom Stock Plan that replaces the Restricted Stock Program. Awards under this program also 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 $2.2 million in 2014, $1.5 million in 2013, and $0.5 million in 2012. Based on awards outstanding at December 31, 2014, we expect to record $6.5 million of compensation cost from 2015 to 2018. The weighted average period for recognition of that cost is approximately 2 years.

In 2012, the Company granted restricted stock units to two executives. The amount of compensation expense is subject to changes in the market price of the Company's stock and is recorded in Selling, general, and administrative expenses. These grants will vest in various periods from 2015 to 2017. Expense recognized for these grants was $0.7 million in 2014, $1.0 million in 2013, and $0.4 million in 2012. Based on awards outstanding at December 31, 2014, we expect to record $0.3 million of compensation cost, principally in 2015.

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, 2012	361,419
Grants	220,090
Payments	(196,360)	$21.43	$4,206
Forfeitures	(34,389)
Share units potentially payable at December 31, 2012	350,760
Grants	104,554
Payments	(85,902)	$32.71	$2,810
Forfeitures	(8,223)
Share units potentially payable at December 31, 2013	361,189
Grants	91,631
Changes due to performance	(8,793)
Payments	(86,840)	$35.01	$3,040
Forfeitures	(9,246)
Share units potentially payable at December 31, 2014	347,941

The Company maintains a voluntary savings plan covering substantially all employees in the United States. The Plan, known as the ProsperityPlus Savings Plan, is a qualified plan under section 401(k) of the U.S. Internal Revenue Code. Under the plan, employees may make contributions of 1% to 15% of their wages, subject to contribution limitations specified in the Internal Revenue Code. The Company matches, in the form of cash, between 50% and 100% of each dollar contributed by employees up to a maximum of 5% of pretax income. The investment of employee contributions to the plan is self-directed. The Company's cost of the plan amounted to $4.3 million in 2014, $4.1 million in 2013, and $3.8 million for 2012.

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 $1.5 million in 2014, $1.6 million in 2013, and $1.8 million in 2012.