The Executive is hereby awarded Restricted Stock Units which shall vest based on the financial performance of the Company. The Restricted Stock Units shall vest on , if the average of the Company’s annual return on equity ("ROE") for calendar years through ("Performance Period") is equal to per cent ( %) or more. ROE for each calendar year in the Performance Period shall be calculated by dividing the Company’s net earnings for the calendar year by the average monthly stockholder equity during such year.

"Phantom Share" shall mean a right, pursuant to the Plan, of the Grantee to payment of the Phantom Share Value. Phantom Shares may also be referred to in an Award Agreement or otherwise as Restricted Stock Units.

On the date of the payment of dividends on the Common Stock, a Director’s Phantom Stock Investment Account shall be credited with additional Phantom Stock Units, as follows:

If a Director elects to direct deferred amounts into the Phantom Stock Investment Account, then, on the applicable Compensation Payment Date, the Director’s Phantom Stock Investment Account shall be credited with a number of Phantom Stock Units equal to # the amount deferred into the Phantom Stock Investment Account, divided by # the Market Value on such date, and rounded to the nearest ten-thousandth.

Amount of Retention Incentive. Subject to the provisions of Paragraph 4 below, as soon as practical after the Retention Date Albany shall cause Employee to be paid for any unvested Phantom Performance Stock units that may have been previously awarded to him in accordance with the special vesting provisions of Albany’s 2011 Performance Phantom Stock Plan (the “Plan”). For the avoidance of any doubt, one-half of the unvested Performance Phantom Stock units credited to his Performance Phantom Stock Account shall vest on the Retention Date and the balance shall be forfeited. Payment for the units vesting on the Retention Date (the “Retention Incentive”) shall be calculated and paid according to the terms of the Plan.

Stock Award. An award of shares of Common Stock or phantom share units described in Section 5(b) of the

The Executive is awarded the number of Restricted Stock Units or Cash Settled Restricted Stock Units (applicable for certain non-U.S. Executives only) specified in the Acceptance Certificate.

“Capital Stock” means any and all shares, interests, participations or other equivalents (other than phantom stock), however designated, of capital stock of a corporation and any and all ownership interests in a Person (other than a corporation), including membership interests, units, partnership interests and joint venture interests, as applicable.

In addition to an Eligible Director’s voluntary election provided under [Section V.4(b)], if any, a portion of each Eligible Director’s annual retainer payable to each Director for service on the Board shall be automatically exchanged for Phantom Shares (in the same manner as provided in [Section V.4(b)]). The retainer amount automatically exchanged for Phantom Shares shall be $15,000, unless otherwise determined by the Board from time to time but in all events prior to the first day of the Plan Year for which the annual retainer is awarded.

Crediting of Phantom Investment Experience. From time to time, and in no event less frequently than quarterly, each Account shall be credited or debited (as the case may be) with an amount equal to the net investment gain or loss that such Participant would have realized had the Participant actually invested in each Phantom Fund an amount equal to the portion of the Participant’s Account designated as deemed invested in such Phantom Fund during that calendar quarter (or such other period as the Company may establish).