SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 ( Amendment No. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ X ] Preliminary proxy statement [ ] Confidential, for Use
of the Commission Only
(as permitted by Rule
14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MECHANICAL TECHNOLOGY INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing,
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing Party:
(4) Date filed:
<PAGE>
MECHANICAL TECHNOLOGY INCORPORATED
325 WASHINGTON AVENUE EXTENSION
ALBANY, NEW YORK 12205
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Mechanical Technology Incorporated will
be held at the Desmond Hotel, Northway Exit 4, 660 Albany-Shaker Road,
Albany, New York 12211 (directions enclosed), on March 16, 2000, at 10:00
A.M. local time (refreshments will be served at 9:15 A.M.) for the following
purposes:
1. Election of Directors.
2. Ratification of the appointment of PricewaterhouseCoopers LLP as the
auditors of the Company.
3. Such other business as may properly come before the meeting or any
adjournment thereof.
Shareholders of record at the close of business on January 28, 2000 are
entitled to notice of and to vote at the meeting. The Proxy Statement and
Annual Report of the Company for the fiscal year ended September 30, 1999 are
enclosed.
By Order of the Board of Directors
John Recupero Albany, New York
Secretary February 11, 2000
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO MARK, DATE, SIGN, AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE
<PAGE>
MECHANICAL TECHNOLOGY INCORPORATED
325 WASHINGTON AVENUE EXTENSION
ALBANY, NEW YORK 12205
PROXY STATEMENT
This Proxy Statement, first being mailed to shareholders on approximately
February 11, 2000, is furnished in connection with the solicitation by the
Board of Directors of proxies to be voted at the Annual Meeting of
Shareholders of Mechanical Technology Incorporated to be held on March 16,
2000, and any adjournment thereof, at the Desmond Hotel, Northway Exit 4, 660
Albany-Shaker Road, Albany, New York.
The shares represented by properly completed proxies received prior to the
vote will be voted FOR 1) the election of directors; and 2) ratifying
appointment of auditors, unless specific instructions to the contrary are
given or an abstention from voting is indicated by the shareholder. The proxy
may be revoked any time before it is exercised.
At the close of business on January 28, 2000 the Company had outstanding
11,736,670 shares of Common Stock. Each share of Common Stock entitles the
holder thereof to one vote on the matters to be voted upon by such
shareholders. A majority of the outstanding shares, present in person or by
proxy, will constitute a quorum at the meeting. Abstentions and broker non-
votes are counted for purposes of determining whether a quorum is present but
do not affect the outcome of the election. A plurality vote is required for
the election of Directors. Votes will be tabulated by inspectors of election
appointed in accordance with the applicable provisions of the New York
Business Corporation Law.
ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders, three Directors are to be elected,
each to hold office until the expiration of his or her term and until a
successor shall be elected and shall qualify. The Directors serve staggered
terms.
Dale Church, Edward Dohring and David Eisenhaure are nominated to serve
three-year terms. George McNamee and Dennis O'Connor are in the second year
of three-year terms; Alan Goldberg, Walter Robb and Beno Sternlicht are in
the final year of three-year terms. Management's nominees for Directors,
together with certain information concerning them, are on the following
pages. In the event that any of such nominees shall become unavailable for
any reason, it is intended that proxies will be voted for substitute nominees
designated by management.
Dale Church and Edward Dohring are presently serving as Directors of the
Company.
<PAGE>
CERTAIN INFORMATION REGARDING NOMINEES
Mr. Church, 60, a Director since 1997, has practiced law in private practice,
government, and corporate environments for over 30 years with specialties in
U.S. and international government contracting, developing companies, mergers
and acquisitions, and joint ventures. He is currently the Chief Executive
Officer of Ventures & Solutions LLC, a Trustee of the National Security
Industrial Association and is a director of various private corporations. He
has served as General Counsel to the American Electronics Association. His
previous experience includes working for the U.S. Government's Central
Intelligence Agency and Department of Defense and as corporate counsel to
establish several companies in the Silicon Valley of California.
Mr. Dohring, 66, a Director since 1997, retired December 31, 1998 and had
been Vice President of Silicon Valley Group, Inc. ("SVG") since July 1992 and
President of its SVG Lithography Systems, Inc. ("SVGL") unit since October
1994. From June 1992 to October 1994, he served as President of SVG's Track
Systems Division. He joined SVG from Rochester Instrument Systems, Inc.,
where he served as President from April 1989 to June 1992. He has also held
management positions with General Signal, CVC Products, Bendix, Bell & Howell
and Veeco Instruments. He is a member of the Board of Directors of many
companies including SVGL, Chapman Instruments, Inc., Tropel Corporation and
Tegal Corporation and has served as a director of Semiconductor Equipment &
Materials International (SEMI) and International Disc Equipment Manufacturers
Association (IDEMA). He currently serves on the State University of New York
Maritime College Board of Directors.
Mr. Eisenhaure, 54, has served as President, Chief Executive Officer and
Chairman of the Board of Directors of the SatCon Technology Corporation
("SatCon") since 1985. Prior to founding SatCon, Mr. Eisenhaure was
associated with the Charles Stark Draper Laboratory, Incorporated from 1974
to 1985, and with its predecessor, the Massachusetts Institute of
Technology's Instrumentation Laboratory, from 1967 to 1974. In addition to
his duties at SatCon, Mr. Eisenhaure holds an academic position at the
Massachusetts Institute of Technology ("M.I.T."), serving as a lecturer in
the Department of Mechanical Engineering.
Management recommends that you vote FOR election of the three nominees listed
above as Directors of the Company.
<PAGE>
CERTAIN INFORMATION REGARDING INCUMBENT DIRECTORS
Mr. Goldberg, 54, a Director since 1996, is the President & Co-Chief
Executive Officer and a Director of First Albany Companies, Inc. ("FAC", see
"Securities Ownership of Certain Beneficial Owners" in the section entitled
"Additional Information", below). He is Chairman of the Board of Trustees of
the Albany Institute of History and Art, and a Director of the Center for
Economic Growth and the Albany Symphony Orchestra.
Mr. McNamee, 53, a Director since 1996, Chairman of the Company's Board of
Directors from 1996 through April 1998, and Chief Executive Officer since
April 1998, is the Chairman of the Board and Co-Chief Executive Officer of
FAC (see "Securities Ownership of Certain Beneficial Owners" in the section
entitled "Additional Information", below). Mr. McNamee is a member of the
Board of Directors of MapInfo Corporation and The Meta Group, Inc. and is
Chairman of Plug Power, Inc. He also serves on the Board of Directors of
the New York Stock Exchange, the New York State Science and Technology
Foundation and the New York Conservation Education Fund.
Mr. O'Connor, 60, a Director since 1993, is a registered patent attorney and
has, since April 1984, been the Director of New Products and Technology for
Masco Corporation, Taylor, Michigan, a diversified manufacturer of building
and home improvement, and other specialty products for the home and family.
He is a director of various private corporations. Mr. O'Connor originally
became a Director of the Company when he was selected by Masco Corporation as
its designee on the Company's Board of Directors pursuant to agreements
entered into in connection with the 1992 transaction in which Masco sold
1,730,000 shares of the Company's Common Stock to subsidiaries of the
Lawrence Insurance Group, Inc., a former majority shareholder of the Company.
The Lawrence Insurance Group, Inc. subsidiaries agreed to vote their shares
to elect a designee of Masco to the Company's Board of Directors so long as
Masco remained liable under a guarantee it had executed in connection with
the Company's obligations under a line of credit. This Agreement with Masco
terminated when Mr. Lawrence lost control of his shares in 1996.
Furthermore, the guarantee was released on October 15, 1998 after the Company
replaced its existing line of credit with a line of credit from KeyBank, N.A.
Dr. Robb, 71, a Director since 1997, now a management consultant and
President of Vantage Management, Inc., was until December 31, 1992, General
Electric Company's("GE") Senior Vice President for corporate research and
development. He directed the GE Research and Development Center, one of the
world's largest and most diversified industrial laboratories, and served on
GE's Corporate Executive Council. He serves on the Board of Directors of Plug
Power, Inc., Cree Research and Celgene and a number of privately owned
companies.
Dr. Sternlicht, 71, a Director since 1996, co-founder of the Company, has
been President of Benjosh Management Corporation, a management firm in New
York, New York, since 1976 and has been President of Arben International
since 1994, with offices in Moscow and New York City. He has also served as
Chairman of the Board of Comfortex Corp. since 1994. He previously served as
a Director of the Company from 1961 to 1992. Prior to 1985, he held a number
of positions with the Company. At the time of his departure from the Company
in 1985, he served as Vice Chairman of the Board of Directors and Technical
Director.
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held seven (7) meetings during fiscal 1999. All
Directors attended at least 75% of all meetings of the Board, and of all
Board committees on which they serve, held during fiscal 1999.
The Company's Board of Directors has established Audit and Compensation
Committees. The Audit Committee (consisting of Messrs. O'Connor, Church and
Goldberg) reviews with the independent auditors the plan and results of the
auditing engagement, the auditors' assessment of internal accounting
controls; and recommends the appointment of the public auditors to the Board
of Directors. One Audit Committee meeting was held during fiscal 1999. The
Compensation Committee (consisting of Mr. Goldberg and Dr. Sternlicht)
determines compensation and bonuses for officers and employee Directors. One
Compensation Committee meeting was held during fiscal 1999.
APPROVAL OF AUDITORS
The Board of Directors has recommended that the appointment of
PricewaterhouseCoopers LLP as independent auditors for the year ending
September 30, 2000 be ratified by the stockholders. PricewaterhouseCoopers
LLP (and its predecessor, Coopers & Lybrand, LLP) have been the Company's
auditors since 1978. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting with the opportunity to make a
statement if they desire to do so and to be available to respond to
appropriate questions.
The Board of Directors recommends that shareholders vote FOR the ratification
of the appointment of auditors.
ADDITIONAL INFORMATION
EXECUTIVE COMPENSATION
The following tables set forth information with respect to the compensation
and stock option grants for the fiscal year ended September 30, 1999 (and
during the Company's two prior fiscal years), of each person who served as
Chief Executive Officer during such year, and of all other persons who served
as executive officers of the Company and its subsidiaries during such year
whose total annual compensation exceeded $100,000.
<PAGE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
NAME AND POSITION FISCAL SALARY BONUS SECURITIES ALL
OF PRINCIPAL YEAR UNDER- OTHER
LYING COMP
OPTIONS
(#)
George C. McNamee, 1999 $ - $ - 30,000 $ -
Chief Executive 1998 $ - $ - None $ -
Officer (1)
Martin J. Mastroianni,
President
& COO (2) 1998 $101,168 $50,000 None $170,322
(3),(4)
James Clemens, 1999 $150,000 $18,325 91,875 $ 42,675
President & (6)
CEO, Ling Electronics, 1998 $122,961 $20,340 75,000 $ 4,896
Inc. (3)
1997 $ 57,501 None 45,000 $ 32,123
(3),(5)
Denis P. Chaves, 1999 $160,000 $30,000 97,650 $ 6,523
Vice President (3)
& General Manager 1998 $133,481 $33,500 67,650 $ 5,793
(3)
1997 $120,673 $37,000 37,650 $ 4,233
(3)
Cynthia A. Scheuer, 1999 $103,849 $10,000 37,500 $ 4,235
Vice President & CFO (3)
(1) Mr. McNamee was appointed Chief Executive Officer on April 15, 1998.
(2) Dr. Mastroianni resigned his position as President and Chief Operating
Officer on April 7, 1998.
(3) Represents Company matching contributions of $1.00 for each $1.00
contributed by the named individual to the 401(k) Savings Plan up to a
maximum of 4% of base pay.
(4) Represents payout of vacation pay in lieu of time off and total salary
payments of $150,000 payable monthly at a rate of $10,000 per month for
a period of 15 months pursuant to an agreement dated April 7, 1998.
See "Employment Agreements."
(5) Includes a $30,000 loan by the Company to Mr. Clemens. The loan is
repayable in three equal annual installments of $10,000 plus interest
at the rate of 6.5%. The Company has agreed to pay Mr. Clemens an annual
bonus equal to the principal plus interest due on the promissory note, if
Mr. Clemens continues to be employed by the Company on March 24 of 1998,
1999 and 2000, respectively. The March 24, 1998 installment was bonused
to Mr. Clemens. The Company also agreed to repay the note in full if
Mr. Clemens dies or becomes permanently disabled prior to the due date
of the final payment on the note.
<PAGE>
(6) Includes gain on stock option exercises of $36,675 and Company matching
contributions of $1.00 for each $1.00 contributed to the 401(k) Savings
Plan up to a maximum of 4% of base pay totalling $6,000.
OPTION GRANTS IN FISCAL 1999
Potential
Realizable
Number of Value at
Shares Percentage Assumed Annual
Under- of Total Exercise Rates of Stock
lying Options Price Price Appre-
Options Granted to (per Expiration ciation for
Name Granted Employees share) Date Option Term
5%($) 10%($)
George C. McNamee 15,000(1) 10.52% $12.50 04/01/2009 $117,918 $298,827
James Clemens 22,500(2) 15.78% $ 5.29 12/18/2009 $ 74,854 $189,695
Denis P. Chaves 30,000(3) 21.05% $ 5.29 12/18/2009 $ 99,806 $252,927
Cynthia A. Scheuer 15,000(4) 10.52% $ 5.29 12/18/2009 $49,903 $126,463
__________________________________
1 100% exercisable at grant.
2 25% or 5,625 shares are exercisable each year beginning December 18, 1999.
3 25% or 7,500 shares are exercisable each year beginning December 18, 1999.
4 25% or 3,750 shares are exercisable each year beginning December 18, 1999.
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised In-the-Money Options
on Exer- Realized Options at Fiscal Year at Fiscal Year
cise(#) ($) End (#) End ($)
Exercisable Unexercisable Exercisable Unexercisable
George C.
McNamee 0 0 30,000 0 $ 800,015 0
James
Clemens 5,625 $36,675 13,125 78,750 $ 423,864 $2,529,124
<PAGE>
Denis P.
Chaves 0 0 26,400 71,250 $ 865,619 $2,242,114
Cynthia A.
Scheuer 0 0 5,625 31,875 $ 178,667 $ 990,071
COMPENSATION COMMITTEE REPORT
COMPENSATION POLICIES FOR OFFICERS
The Company's compensation program for executive officers, other than
the Chief Executive Officer, consists of an annual salary and bonus
payments that are designed to reward performance.
For the fiscal year 1999, the Committee used the following criteria in
making compensation decisions for executive officers:
* Company and individual affiliate financial performance.
* Identification and implementation of strategies and programs
that result in increased revenue, decreased cost or improved
share value.
* Implementation of programs to improve working capital
and cash flow, and to focus the Company's product
offerings such that they compliment the Company's
technology resources.
CHIEF EXECUTIVE OFFICER COMPENSATION.
George C. McNamee became Chief Executive Officer of the Company on April
15, 1998. Mr. McNamee receives no salary or bonus from the Company;
however, he does receive stock options as a member of the board of
directors of the Company.
Compensation Committee
Mr. Alan P. Goldberg
Dr. Beno Sternlicht
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee ("Committee") approves all of the policies
under which compensation is paid or awarded to the Company's officers
and employee Directors. The Committee, in fiscal 1999, consisted of
Mr. Goldberg and Dr. Sternlicht.
Mr. Goldberg is Co-Chief Executive Officer of First Albany Companies,
Inc. ("FAC"). (See "Security Ownership of Certain Beneficial Owners" in
the section entitled "Additional Information" and "Certain Relationship
and Related Transactions", below).
<PAGE>
DIRECTORS COMPENSATION Directors who are not salaried officers or employees
receive Director's fees of $750 for each Board meeting attended and all
directors receive annual stock option grants for 10,000 shares.
Directors also are reimbursed for travel expenses incurred in attending
meetings.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. James Clemens,
President of Ling Electronics, Inc. ("Ling"). The agreement provides
for an annual base salary of $115,000, subject to adjustment by the
Compensation Committee. Effective July 1, 1998, Mr. Clemens' salary was
increased to $150,000. In addition, Mr. Clemens is entitled to receive
incentive compensation equal to 3% of annual pre-tax income of Ling up
to $1,000,000, and 2% of annual pre-tax income of Ling in excess of
$1,000,000. Mr. Clemens also received non-qualified stock options for
22,500 shares of the Company's common stock and an advance of $30,000.
The advance must be repaid at the rate of $10,000 per year plus 6.5%
interest. The Company agreed to pay Mr. Clemens an annual bonus
equivalent to the payments due on the advance if Mr. Clemens is still
employed by the Company prior to March 24, 1998, 1999 and 2000,
respectively. If Mr. Clemens dies or is disabled prior to March 24,
2000, the amount then due on the advance will be forgiven. This
agreement expired when Ling was sold to SatCon Technology Corporation on
October 21, 1999.
The Company had an employment agreement with Dr. Mastroianni which
provided that Dr. Mastroianni would receive an annual base salary of
$150,000 and be eligible for incentive compensation and incentive stock
options. The agreement also stated that if Dr. Mastroianni was removed
from the position of President for reasons other than cause during his
first three years of employment, the Company would pay him severance
payments equivalent to a maximum of one year's base salary.
Effective April 7, 1998, Dr. Mastroianni resigned as President and Chief
Operating Officer of the Company. On April 7, 1998, the Company entered
into an agreement with Dr. Mastroianni regarding his employment. The
agreement provided that Dr. Mastroianni receive: a) total salary
payments from the Company of $150,000 payable monthly over 15 months; b)
401(k) matching payments; c) insurance benefits through June 1, 2000;
and d) vesting of 42,000 qualified stock options previously awarded to
Dr. Mastroianni.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At September 30, 1999, First Albany Companies, Inc. ("FAC") owned
approximately 34% of the Company's Common Stock. George McNamee, a
Director and Chief Executive Officer of the Company, is Chairman of the
Board of Directors, Co-Chief Executive Officer and a shareholder of FAC.
Alan Goldberg, a Director of the Company, is a Director, President and
Co-Chief Executive Officer and a shareholder of FAC.
During fiscal 1999, First Albany Corporation, a wholly owned subsidiary
of FAC, was paid $15,000 for financial advisory services provided in
1998 in connection with the sale of the Technology Division. On December
17, 1998, the Industrial Development Agency for the Town of Colonie
issued $6 million in Industrial Development Revenue ("IDR") Bonds on
behalf of the Company to assist in the construction of a new
building for Advanced Products and the Company's corporate headquarters
and renovation of existing buildings leased to Plug Power. The
construction project was completed in 1999. FAC underwrote the sale of
the IDR Bonds. FAC received no fees for underwriting the IDR Bonds but
was reimbursed for its out-of-pocket expenses.
During November 1999, FAC/Equities, a division of First Albany
Corporation, a wholly owned subsidiary of FAC, was paid $352,671 for
financial advisory and investment banking services in connection with
the sale of Ling Electronics, Inc. and Ling Electronics Limited to
SatCon Technology Corporation.
FAC/Equities was a co-manager in the Plug Power, Inc. initial public
offering (IPO). George C. McNamee, the Chairman and Co-Chief Executive
Officer of First Albany Companies, the Chairman and Co-Chief Executive
Officer of First Albany Corporation and the Chief Executive Officer and
a director of Mechanical Technology, is currently the Chairman of the
Board of Directors of Plug Power. In addition, Dr. Walter L. Robb, a
director of Mechanical Technology, is a director of Plug Power and Dr.
Beno Sternlicht, a director of Mechanical Technology, was a director of
Plug Power until just before the Plug Power IPO.
Plug Power has agreed to purchase power conditioners from SatCon
Technology Corporation for its residential fuel cell systems.
Mechanical Technology owns 16% of SatCon's outstanding stock on a fully
diluted basis and has the right to appoint two members to SatCon's board
of directors.
ADDITIONAL INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
First Albany Companies, Inc. ("FAC"), 30 South Pearl street, Albany, New
York, 12207, are beneficial owners of 3,960,811 shares, or 34%, of the
outstanding common stock of the Company. Messrs. McNamee and Goldberg
may be deemed the beneficial owners of at least a portion of the shares
owned by FAC. Messrs. McNamee and Goldberg disclaim such beneficial
ownership.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of shares of the Company's Common Stock by (i) each
Director and nominee for Director of the Company, (ii) each named
executive officer described in the section of this Proxy Statement
captioned "Executive Compensation", and (iii) all present Directors and
Officers of the Company as a group.
Name of Amount and Nature of Percent of
Beneneficial Owner Beneficial Ownership(1) Class
Denis P. Chaves 97,650(2) *
Dale W. Church 120,750(3) 1.04%
James R. Clemens 91,875(4) *
Edward A. Dohring 54,563(5) *
Alan P. Goldberg 4,290,763(6) 36.85%
George C. McNamee 4,469,329(6)(7) 38.39%
E. Dennis O'Connor 106,500(8) *
Dr. Walter L. Robb 56,100(9) *
Cynthia A. Scheuer 37,500(10) *
Dr. Beno Sternlicht 417,082(5)(11) 3.58%
All present Directors and
Officers as a group
(10 persons) 5,781,301 49.65%
*Percentage is less than 1.0% of the outstanding Common Stock.
(1) To the best of the Company's knowledge, based on information reported by
such Directors and Officers or contained in the Company's shareholder records,
except as otherwise indicated, each of the named persons is presumed to have
sole voting and investment power with respect to all shares shown. None of
the Company's present Directors or Officers other than Messrs. Goldberg,
McNamee, Church and Dr. Sternlicht (see "Security Ownership of Certain
Beneficial Owners", above) beneficially own more than 1% of the Company's
outstanding Common Stock; all present Directors and Officers as a group
beneficially own, in the aggregate, approximately 49.62% of the Company's
outstanding Common Stock. The Company effected a 3 for 2 stock split on
April 30, 1999. All shares and option amounts are reflected on a post-split
basis.
(2) Includes options for 30,000 shares granted on December 18, 1998, 30,000
shares granted on June 16, 1998, 37,500 shares granted on August 27, 1997
and 150 shares granted on December 20, 1996.
(3) Includes options for 15,000 shares granted on April 1, 1999, 15,000 shares
granted on August 31, 1998, 15,000 shares granted on April 16, 1997 and
12,750 shares owned by Mr. Church's wife. Mr. Church disclaims beneficial
ownership of such shares.
(4) Includes options for 22,500 shares granted on December 18, 1998, 30,000
shares granted on June 16, 1998, 16,875 shares granted on August 27, 1997
and 22,500 shares granted on March 24, 1997.
<PAGE>
(5) Includes options for 15,000 shares granted on April 1, 1999, 15,000
shares granted on August 31, 1998 and 15,000 shares granted on April 16, 1997.
(6) Includes 3,960,811 shares owned by First Albany Companies Inc.; see
"Security Ownership of Certain Beneficial Owners". However, Messrs. McNamee
and Goldberg disclaim beneficial ownership of such shares.
(7) Includes 19,125 shares owned by Mr. McNamee's wife. Mr. McNamee
disclaims beneficial ownership of such shares.
(8) Includes options for 15,000 shares granted on April 1, 1999 and 15,000
shares granted on August 31, 1998.
(9) Includes options for 15,000 shares granted on April 1, 1999 and 15,000
shares granted on August 31, 1998.
(10) Includes options for 15,000 shares granted on December 18, 1998 and
22,500 shares granted on October 20, 1997.
(11) Includes 6,000 shares held by Dr. Sternlicht's wife as custodian for
their children. Dr. Sternlicht disclaims beneficial ownership of such shares.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to Shareholders accompanies this Proxy
Statement. The Company's Annual Report on Form 10-K for the year
ended September 30, 1999, as filed with the Securities and Exchange
Commission, may be obtained by addressing a written request to the
Investor Relations Department at the Company's corporate headquarters,
325 Washington Avenue Extension, Albany, New York 12205.
PROPOSALS OF SECURITY HOLDERS
Proposals by security holders intended to be presented at the
Company's Annual Meeting of Shareholders to be held in 2001 must be
received by the Company before October 2, 2000 in order to qualify for
inclusion in the Company's Proxy Statement relating to that meeting.
OTHER MATTERS
Management does not know of any matters which will be brought before
the meeting other than those specifically set forth in the notice
thereof. If any other matter properly comes before the meeting,
however, it is intended that the shares represented by proxies will be
voted with respect thereto in accordance with the best judgment of the
persons voting them.
All expenses incurred in connection with this solicitation of proxies
will be borne by the Company.
By Order of the Board of Directors
John Recupero
Secretary
Albany, New York
February 11, 2000
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