FIRST ALBANY COMPANIES INC.
Stock Bonus Plan
Form 11K
For Each of the Three Plan Years Ended
December 31, 1996
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Securities and Exchange Commission
Washington, DC 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
or
[ ] Transition Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
Commission file number 014140
First Albany Companies Inc. Stock Bonus Plan
(Title of Plan)
First Albany Companies Inc.
(Issuer of Securities)
30 South Pearl Street
Albany, New York 12201
(518) 447-8500
(Address of Principal Executive Office)
I.R.S. Employer I.D. No. 22-2655804
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ITEMS
Item 4. Financial Statements and Schedules
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1. Report of Independent Accountants
A. Statements of net assets available for plan benefits
as of December 31, 1996 and 1995
B. Statements of changes in net assets available for plan
benefits for the years ended December 31, 1996, 1995
and 1994
C. Notes to financial statements
D. Schedule of assets held for investment purposes as of December
31, 1996
E. Schedule of reportable transactions for the year ended December
31, 1996
24. Consent of Independent Accountants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
First Albany Companies Inc.
Stock Bonus Plan
DATE: June 26, 1997 BY: /s/ George C. McNamee
-------------------- ---------------------
George C. McNamee
Member of the Administrative
Committee
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THE FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
For the Years Ended December 31, 1996, 1995 and 1994
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TABLE OF CONTENTS
Page
----
REPORT OF INDEPENDENT ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statements of net assets available for plan benefits 2
Statements of changes in net assets available for plan benefits 3
Notes to financial statements 4-6
SUPPLEMENTAL SCHEDULES
Schedule of assets held for investment purposes as of
December 31, 1996 27(a)* 7
Schedule of reportable transactions for the year ended
December 31, 1996 27(d)* 8
* Refers to item number in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for plan year ended December 31, 1996.
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REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Administrative Committee
of First Albany Companies Inc. Stock Bonus Plan
We have audited the accompanying statements of net assets available for plan
benefits of First Albany Companies Inc. Stock Bonus Plan as of December 31, 1996
and 1995, and the related statements of changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1996 and 1995, and the changes in net assets available for
plan benefits for each of the three years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
accompanying table of contents are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Albany, New York
June 20, 1997
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 1996 and 1995
================================================================================
<S> <C> <C>
1996 1995
ASSETS
Investments, at fair value (Note 3) $13,200,874 $10,324,240
Cash and cash equivalents 762,443 446,477
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Net assets available for plan benefits $13,963,317 $10,770,717
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</TABLE>
The accompanying notes are an integral
part of the financial statements.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the years ended December 31, 1996, 1995, and 1994
================================================================================
<S> <C> <C> <C>
For the years ended 1996 1995 1994
Additions to net assets attributed to:
Contributions from:
Employees $ 1,298,852 $ 962,995 $ 716,130
Employer 631,003 470,167 344,353
----------- ----------- -----------
1,929,855 1,433,162 1,060,483
Net appreciation (depreciation) in
the fair value of investments 1,303,060 3,366,599 (160,262)
Dividend/Interest income 249,405 180,581 142,358
----------- ----------- -----------
Total additions 3,482,320 4,980,342 1,042,579
----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to:
Terminated participants 289,720 339,733 204,684
Active participants 84,654 10,315
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Total deductions 289,720 424,387 214,999
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Net increase 3,192,600 4,555,955 827,580
Net assets available for plan benefits:
Beginning of year 10,770,717 6,214,762 5,387,182
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End of year $13,963,317 $10,770,717 $ 6,214,762
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</TABLE>
The accompanying notes are an integral
part of the financial statements.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan
-----------------------
The following description of the First Albany Companies Inc. (the "Company")
Stock Bonus Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
a. General
-------
The Plan is a defined contribution plan covering substantially all
employees of the Company and its subsidiaries. Employees are eligible
to participate upon the first day of the calendar quarter following
completion of at least one thousand hours of service during any
consecutive twelve months of continuous recognized employment as
defined in the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA).
All costs and fees incurred in administering the Plan are borne by the
Company, which is the Plan administrator and custodian.
b. Contributions
-------------
Participants elect to make after-tax contributions to the Plan up
to 8% of their gross pay up to a maximum of $12,000 for 1996. The
Company may, but is not required to, contribute to the Plan an amount
equal to a percentage of each participant's voluntary after-tax
contribution. For 1996, 1995 and 1994, the Company's contribution
percentage was 50%. Annually, the Board of Directors of the Company
may authorize an additional contribution to the Plan. Forfeitures are
maintained within the Plan and used to reduce the Company's matching
contribution.
c. Participants Accounts
---------------------
Each participant account is credited with the participant's and
Company's contributions and allocations of Plan earnings. Allocations
are based on participants account balances, as defined. The benefit to
which the participant is entitled is the benefit that can be provided
from the participant's vested account.
d. Vesting
-------
A participant is 100 percent vested after seven years of credited
service. Participants' contributions and earnings thereon are fully
vested at all times.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
e. Payment of Benefits
-------------------
On termination of service, participants may receive payment, in
cash or shares, of their vested benefits in a lump-sum distribution
equal to the value of their accounts as of the valuation date, as
defined in the Plan.
2. Significant Accounting Policies
-------------------------------
a. Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the accrual
method of accounting.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
c. Investment Valuation and Income Recognition
-------------------------------------------
The Plan's investments are stated at fair value, which is based upon
quoted market prices in the over-the-counter market.
The Plan is limited to investing solely in the common stock of the
Company, except that interim short-term investments may be made pending
purchase of the Company's stock. Purchases and sales of the Company's
stock are conducted by the Company's principal subsidiary, First Albany
Corporation, a registered broker-dealer. Commissions are not charged
on these transactions.
The Plan presents, in the statements of changes in net assets, the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
d. Payments of Benefits
--------------------
Benefits are recorded when paid.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments
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The Plan's investment portfolio consists of the following as of
December 31, 1996 and 1995:
1996 1995
---- ----
At Quoted At Quoted
Cost Fair Value Cost Fair Value
---- ---------- ---- ----------
Common Stock:
First Albany
Companies Inc. $7,204,319 $13,200,874 $5,507,752 $10,324,240
The number of shares of First Albany Companies Inc. common stock as of
December 31, 1996 and 1995 was 1,303,790 and 1,032,424, respectively. The
realized net gain based on average costs was $122,993, $131,269 and $64,092
for the years ended December 31, 1996, 1995 and 1994, respectively. The
unrealized net gain based on average costs was $1,180,067, $3,235,330 and
$(224,354) for the years ended December 31, 1996, 1995 and 1994,
respectively.
The Plan's investment portfolio is subject to daily market price
fluctuations. Since the entire investment portfolio consists of the
Company's common stock, the Plan's portfolio may be exposed to risk in
the event of a decline in the market value of the Company's stock.
5. Forfeitures
-----------
The Company applied forfeitures of $18,431, $11,337 and $13,719 to
reduce its matching contribution to the Plan during 1996, 1995 and 1994,
respectively.
6. Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contribution at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, the account of each participant shall become fully
vested and be distributed.
7. Tax Status
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The Internal Revenue Service has determined and informed the Company by a
letter dated February 26, 1993, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES*
As of December 31, 1996
Description
-----------
Current
Cost Value
---- -------
First Albany Companies Inc.:
Common stock ($0.01 - par value) $7,204,319 $13,200,874
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* The supplemental schedule refers to item number 27(a) in Form 5500
(Annual Return/Report of Employee Benefit Plan).
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS*
For the year ended December 31, 1996
(b) (c) (d) (g) (h) (i)
Current value
of asset on
Description of Purchase Selling Cost of transaction Net gain or
asset price price asset date (loss)
- --------------------------------------------------------------------------------
First Albany $1,856,702 $283,128 $160,135 $3,269,863 $122,993
Companies
(Common Stock)
* The supplemental schedule refers to item number 27(d) in Form 5500
(Annual Return/Report of Employee Benefit Plan).
EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of First Albany Companies Inc. on Form S-8 related to the First Albany Companies
Inc. Stock Bonus Plan (File No. 014140) of our report dated June 20, 1997, on
our audits of the statements of net assets available for plan benefits of First
Albany Companies Stock Bonus Plan as of December 31, 1996 and 1995, and the
statements of changes in net assets available for plan benefits for each of
the three years in the period ended December 31, 1996, which report is
included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Albany, New York
June 25, 1997
