<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6 (e) (2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
FIRST ALBANY COMPANIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
(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:
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<PAGE> 2
First Albany Companies Inc.
April 18, 1997
Dear Shareholder:
The 1997 Annual Meeting of Shareholders of First Albany Companies Inc. will be
held at the offices of the Company at 30 South Pearl Street, Albany, New York on
Thursday, May 15, 1997, at 4:30 P.M.(EDT).
The enclosed material includes the Notice of Annual Meeting and Proxy Statement
which describes the business to be transacted at the meeting. We ask that you
give it your careful attention.
As in the past, we will be reporting on your Company's activities and you will
have an opportunity to ask questions about its operations.
We hope that you are planning to attend the Annual Meeting personally and we
look forward to seeing you. Whether or not you are able to attend in person, it
is important that your shares be represented at the Meeting. Accordingly, the
return of the enclosed Proxy as soon as possible will be appreciated and will
ensure that your shares are represented at the Annual Meeting. Over 93% of the
outstanding shares were represented at last year's Annual Meeting. If you do
attend the Annual Meeting, you may, of course, withdraw your Proxy should you
wish to vote in person.
On behalf of the Board of Directors and management of First Albany Companies
Inc., I would like to thank you for your continued support and confidence.
Sincerely yours,
/s/ George C. McNamee
George C. McNamee
Chairman of the Board
<PAGE> 3
First Albany Companies Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
May 15, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First Albany
Companies Inc. (the "Company") will be held at the offices of the Company, 30
South Pearl Street, Albany, New York, on Thursday, May 15, 1997 at 4:30 P.M.
(EDT) for the following purposes:
1. To elect eight Directors whose term of office will expire in 1998;
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
auditors of the Company for the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof.
Holders of Common Stock of record as of the close of business on April 11, 1997,
are entitled to receive notice of and vote at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting. For that
reason we ask that you promptly sign, date, and mail the enclosed Proxy card in
the return envelope provided. Shareholders who attend the Annual Meeting may
revoke their proxies and vote in person.
By order of the Board of Directors
/s/ Michael R. Lindburg
Michael R. Lindburg
Secretary
Albany, New York
April 18, 1997
2
<PAGE> 4
FIRST ALBANY COMPANIES INC.
30 South Pearl Street
Albany, New York 12207
------------
PROXY STATEMENT
------------
ANNUAL MEETING OF SHAREHOLDERS
-----------------------------------------
May 15, 1997
This Proxy Statement and the accompanying Notice of Annual Meeting and form of
proxy are being furnished to the shareholders of First Albany Companies Inc.
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the 1997 Annual Meeting of Shareholders of
the Company (the "Annual Meeting") to be held at the offices of the Company at
30 South Pearl Street, Albany, New York, on Thursday, May 15, 1997, at 4:30 P.M.
(EDT), and any adjournments thereof. These proxy materials are being mailed on
or about April 18, 1997, to holders of record on April 11, 1997, of the
Company's Common Stock.
A proxy may be revoked by a shareholder prior to its exercise by written notice
to the Secretary of the Company, by submission of another proxy bearing a later
date, or by voting in person at the Annual Meeting. Such notice or later proxy
will not affect a vote on any matter taken prior to the receipt thereof by the
Company. The mere presence at the Annual Meeting of the shareholder appointing
the proxy will not revoke the appointment. If not revoked, the proxy will be
voted at the Annual Meeting in accordance with the instructions indicated on the
proxy by the shareholder, or, if no instructions are indicated, will be voted
FOR the slate of directors described herein; FOR the ratification of the
selection of Coopers & Lybrand L.L.P. as independent auditors of the Company;
and, as to any other matter of business that may properly be brought before the
Annual Meeting, in accordance with the judgment of the person or persons voting
the same.
3
<PAGE> 5
All expenses of the Company in connection with this solicitation will be borne
by the Company. In addition to solicitation by mail, proxies may be solicited by
directors, officers, and other employees of the Company, by telephone,
telegraph, telex, in person, or otherwise, without additional compensation. The
Company will also request brokerage firms, nominees, custodians, and fiduciaries
to forward proxy material to the beneficial owners of shares held of record by
such persons and will reimburse such persons and the Company's transfer agent
for their reasonable out-of-pocket expenses in forwarding such material.
THE COMPANY
The Company, which was incorporated under the laws of the State of New York in
November 1985, is a holding company which, through its principal wholly-owned
subsidiary, First Albany Corporation ("First Albany"), is an investment banking,
securities trading, and brokerage firm serving corporations, governments, and
institutional and individual investors.
VOTING SECURITIES
Holders of record at the close of business on April 11, 1997, of the Company's
Common Stock, par value $.01 per share ("Common Stock"), are entitled to notice
of and to vote at the Annual Meeting and any adjournments thereof. Each
outstanding share of Common Stock entitles the holder thereof to one vote. The
Company's Certificate of Incorporation does not provide for cumulative voting.
On April 11, 1997, 5,171,279 shares of Common Stock were outstanding. The
presence in person or by proxy at the Annual Meeting of the holders of a
majority of such shares shall constitute a quorum.
Assuming the presence of a quorum at the Annual Meeting, (1) the affirmative
vote of a plurality of the votes cast by holders of shares of Common Stock is
required for the election of directors, and (2) the affirmative vote of a
majority of the votes cast by holders of shares of Common Stock present and
entitled to vote is required for the ratification of the selection of Coopers &
Lybrand L.L.P. as independent auditors of the Company.
4
<PAGE> 6
STOCK OWNERSHIP OF PRINCIPAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the beneficial ownership
of Common Stock of the Company as of March 14, 1997, by (i) persons owning more
than 5% of the Common Stock, (ii) each director of the Company and the executive
officers included in the Summary Compensation Table and (iii) all officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned(6)
----------------------------
Name Number Percent
- -----------------------------------------------------------------------------------------
<S> <C> <C>
George C. McNamee(1)(2)(4) 873,037 16.33%
Alan P. Goldberg(2)(4) 689,176 12.92%
Hugh A. Johnson, Jr.(2)(4) 146,153 2.80%
J. Anthony Boeckh 7,751 less than 1%
Walter Fiederowicz(5) 5,381 less than 1%
Daniel V. McNamee III(1) 87,479 1.69%
Charles L. Schwager 11,025 less than 1%
Benaree P. Wiley 992 less than 1%
Edwin T. Brondo 10,201 less than 1%
David J. Cunningham(2) 136,102 2.63%
Michael R. Lindburg(2)(4) 117,280 2.24%
First Albany Employee Stock Bonus Plan(2) 1,377,665 26.64%
All officers and directors of the Company as a group(3)(4) 3,316,778 59.15%
</TABLE>
1 Does not include interest as residual beneficiary under the McNamee Family
Trust, and with respect to Daniel V. McNamee III as trustee under the Trust. Mr.
G. McNamee disclaims beneficial ownership of any such interest.
2 The Board of Directors of the Company serves as the Administrative Committee
of the First Albany Companies Inc. Stock Bonus Plan (the "Stock Bonus Plan").
Daniel V. McNamee III serves as Trustee of the Trust created thereby. Pursuant
to the terms of the Stock Bonus Plan, individual employees are permitted to
direct the vote of shares allocated to their respective accounts. The number of
shares beneficially owned by Messrs. G. McNamee, Goldberg, Johnson, Brondo,
Cunningham, and Lindburg includes the shares allocated to the respective
accounts of such person under the Stock Bonus Plan as of December 31, 1996, all
of which shares are fully vested, except for Mr. Brondo's shares, of which
approximately 1,042 shares are fully vested. Any power of the director to
dispose of such stock is secondary and shares owned by the Stock Bonus Plan are
not aggregated for purposes of the above table with shares held by other
directors for clarity of presentation.
3 Includes all shares beneficially owned by such person, shares owned by the
McNamee Family Trust, and all shares held under the Stock Bonus Plan.
4 Includes 175,668, 162,788, 38,782, and 58,930 options to purchase shares,
granted to Messrs. G. McNamee, Goldberg, Johnson, and Lindburg, respectively,
all of which options are currently exercisable.
5 Includes 2,756 shares owned by Geraldine Fiederowicz, of which Mr. Fiederowicz
disclaims ownership.
6 Except as noted, all shares are held individually or jointly with a spouse and
the named person has or shares the right to vote and to dispose of the shares
indicated.
5
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth certain information regarding compensation paid
during each of the Company's last three fiscal years to each of the Co-Chief
Executive Officers of the Company during fiscal year 1996, and the other
executive officers at the end of fiscal year 1996 constituting the most highly
compensated executive officers of the Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long Term All Other
Annual Compensation Compensa- Compensa-
tion Award tion(2)
- ---------------------------------------------------------------------------------
Year(1) Salary Bonus Shares
Name & Principal Underlying
Position Options
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
George C. McNamee 1996 250,000 320,000 50,000 6,000
Chairman & Co-Chief 1995(3) 62,500 80,000 0 2,250
Executive Officer 1995(4) 200,000 325,000 0 5,969
- ---------------------------------------------------------------------------------
Alan P. Goldberg 1996 250,000 320,000 50,000 6,000
President & Co-Chief 1995(3) 62,500 80,000 0 2,250
Executive Officer 1995(4) 200,000 325,000 0 6,000
- ---------------------------------------------------------------------------------
Hugh A. Johnson, Jr. 1996 200,000 256,000 0 6,000
Senior Vice President 1995(3) 50,000 64,000 0 4,642
1995(4) 189,000 250,000 0 5,981
- ---------------------------------------------------------------------------------
Edwin T. Brondo 1996 175,000 68,000 0 6,000
Vice President 1995(3) 43,750 17,000 0 0
1995(4) 175,000 112,500 0 0
- ---------------------------------------------------------------------------------
David J. Cunningham 1996 150,000 88,000 0 975
Vice President 1995(3) 37,500 22,000 0 462
Chief Financial 1995(4) 135,000 100,000 0 1,225
Officer
- ---------------------------------------------------------------------------------
Michael R. Lindburg 1996 175,000 180,000 0 6,000
Secretary & 1995(3) 43,750 45,000 0 3,469
General Counsel 1995(4) 135,000 120,000 0 5,991
</TABLE>
1 In 1996, the Company changed its fiscal year to the calendar year.
Compensation reflected for fiscal year 1996 covers a twelve-month period;
compensation reflected for the first fiscal year 1995 covers the three-month
period from September 30, 1995 through December 31, 1995; and compensation for
the second fiscal year 1995 covers the period from September 30, 1994 through
September 29, 1995.
2 Represents contributions by the Company to the Employee Stock Bonus Plan, a
tax qualified employee benefit plan in which all employees of the Company are
eligible to participate.
3 Three-month fiscal year from September 30, 1995 through December 31, 1995.
4 Twelve-month fiscal year ending September 29, 1995.
6
<PAGE> 8
Aggregated Stock Option Values
The following table provides information related to the number and value of
unexercised stock options held by the relevant Named Executive Officers as of
March 14, 1997 all of which stock options are currently exercisable.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised Stock In-the-Money Stock
Options at Fiscal Options at
Year-End March 14, 1997
-----------------------------------------------------------------
<S> <C> <C>
George C. McNamee 175,668 999,461
Alan P. Goldberg 162,788 933,821
Hugh A. Johnson, Jr. 38,782 300,173
Michael R. Lindburg 58,930 431,919
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Based on the Company's review of reports filed by directors, executive officers
and 10% shareholders of the Company on Forms 3, 4 and 5 pursuant to Section 16
of the Securities Exchange Act of 1934, all such reports were filed on a timely
basis during fiscal year 1996, except for one Form 3 Initial Statement of
Beneficial Ownership of Securities that was required to be filed by Mr.
Fiederowicz upon his becoming a director of the Company but which was filed 16
days late.
7
<PAGE> 9
EXECUTIVE COMPENSATION COMMITTEE REPORT
Overview
The Executive Compensation Committee establishes the compensation policies
applicable to the executive officers of the Company.
Compensation Policies
Compensation for senior executives of the Company has been strongly influenced
by the principle that the compensation of senior executives should be structured
to directly link the executives' financial reward to Company performance. Thus,
senior executives would both share in the success of the Company as a whole and
be adversely affected by poor Company performances thereby aligning their
interests with the interests of the Company's shareholders.
Salaries of executive officers are intended to be relatively moderate, and are
set at levels which the Executive Compensation Committee believes are generally
competitive with salaries of executives in similar positions at comparable
financial services companies. In addition, substantial emphasis is placed on
incentive compensation directly related to short- and long-term corporate
performance through annual cash bonuses and stock option grants.
As is common in the financial services industry, a significant portion of total
compensation of the Company's executive officers is paid in the form of annual
bonuses. For example, in each of the past three fiscal years, most of the annual
cash compensation of Messrs. G. McNamee and Goldberg, the Company's Co-Chief
Executive Officers (the "Co-CEOs"), was paid as an annual bonus. This is
intended to maximize the portion of an individual's compensation that is subject
to fluctuation each year based upon corporate and individual performance, as
discussed below. The compensation program is structured to recognize each
executive's level of responsibility and to reward exceptional individual and
corporate performance.
Base Salary
A competitive base salary is important in fostering a career orientation among
executives consistent with the long-term nature of the Company's business
objectives. The Executive Compensation Committee determines the salary of each
of the executive officers based on its consideration of each of the Co-CEOs'
recommendations.
Salaries and salary adjustments are based on the responsibilities, performance,
and experience of each executive, regular reviews of competitive positioning
(comparing the Company's salary structure with that of similar companies) and
business performance. While there is no specific weighing of these factors, the
responsibilities, performance and experience of each executive and reviews of
competitive positioning are the most important considerations.
8
<PAGE> 10
The Stock Incentive Plan
In past years, awards under the Stock Incentive Plan have supplemented the
bonuses paid to Named Executive Officers. All of the stock options granted under
the Stock Incentive Plan have been qualified incentive stock options, and the
number of options granted to the executive officers, in general, reflect the
decision of the Executive Compensation Committee to allocate a portion of
compensation in stock options, the value of which is directly linked to the
future financial success of the Company. No awards under the Stock Incentive
Plan were made to the Named Executive Officers for fiscal year 1996, other than
the awards to the Co-CEO's.
Compensation of Co-Chief Executive Officers
The total compensation paid to each of the Company's Co-CEOs for the fiscal year
ended December 31, 1996, was $570,000. For fiscal year 1996, each of the Co-CEOs
received a base salary of $250,000, additional bonus compensation of $320,000,
and stock options for 50,000 shares of Common Stock of the Company.
The specific bonus an executive receives is dependent on his level of
responsibility and individual performance. Levels of responsibility are
evaluated annually by the Executive Compensation Committee without regard to any
specific formula. Assessments of individual performance are also made annually
by the Executive Compensation Committee after receiving the recommendations of
the Co-CEOs. Such assessments are based on a number of subjective factors,
including individual and corporate performance, initiative, business judgment,
and management skills. Messrs. G. McNamee and Goldberg's fiscal year 1996 award
reflects each of their significant personal contributions to the business and
leadership in building the Company's revenues, earnings, and capital position,
and the financial results for fiscal year 1996.
EXECUTIVE COMPENSATION COMMITTEE
J. Anthony Boeckh
Charles L. Schwager
9
<PAGE> 11
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's Common Stock against the
cumulative total return of the S&P Composite 500 Stock Index and the Financial
Services Analytics, Inc. Regional Index ("FSA Regional Index"), an index of
pubicly traded regional brokerage firms for the period from December 31, 1991,
to December 31, 1996. The graph assumes that the value of the investment in the
Company's Common Stock and each index was $100 at December 31, 1991, and that
all dividends, if any, were reinvested.
Comparison of the Company's Common Stock
[LINE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
First Albany 100 138 183 182 294 323
S&P 500 Index 100 108 118 120 165 203
FSA Regional Index 100 111 145 124 183 284
</TABLE>
10
<PAGE> 12
ELECTION OF DIRECTORS
The Board of Directors has nominated and recommends the election of each of the
nominees set forth below under the caption "Directors and Executive Officers of
the Company" as a director of the Company to serve until the next Annual Meeting
of Shareholders or until his/her successor is duly elected and qualified. Each
nominee is currently a director of the Company.
Should any nominee become unable or unwilling to accept nomination or election,
it is intended that the persons named in the enclosed proxy will vote the shares
that they represent for the election of a nominee designated by the Board of
Directors, unless the Board reduces the number of directors. At present, it is
anticipated that all nominees will be candidates.
The affirmative vote of a plurality of the votes cast by holders of shares of
Common Stock is required for the election of directors. Consequently, so long as
a quorum is present, any shares not voted (whether by abstention or broker
non-votes) have no effect on the election of directors. Proxies in the enclosed
form, unless otherwise directed, will be voted for the election as directors of
the eight nominees named below.
Directors and Executive Officers of the Company
The directors nominated for election are as follows:
GEORGE C. McNAMEE, age 50, joined First Albany in 1969. From 1975 until 1989, he
served as President of First Albany. He has served as Chairman of First Albany
since 1984 and Co-Chief Executive Officer since 1993. Mr. McNamee serves on the
Board of Directors of the New York State Science and Technology Foundation, the
Meta Group, Mechanical Technology Incorporated, Internet Shoppping Network and
MapInfo Corporation. He previously served as a member of the Governor's
Commission on State and Local Fiscal Policies and as Chairman of the State Debt
Reform Committee for New York State. He also serves as Chairman of the Committee
on Clearance and Settlement of the Securities Industry Association. Mr. McNamee
has been Chairman and a director of the Company since its incorporation in 1985.
ALAN P. GOLDBERG, age 51, joined First Albany in 1980 and shortly thereafter
became Executive Vice President. Mr. Goldberg became President of First Albany
in 1989 and Co-Chief Executive Officer in 1993. He is a past member of the Board
of Governors of the Boston Stock Exchange and past Chairman of the District
Business Conduct Committee of the National Association of Securities Dealers.
Mr. Goldberg is Chairman of the Board of Trustees of the Albany Institute of
History and Art, is Chair of the Albany-Colonie Chamber of Commerce, Director of
Mechanical Technology Incorporated, and a Director of the Center for Economic
Growth and a member of the Board of Directors of the Albany Symphony Orchestra.
Mr. Goldberg has been a director of the Company since its incorporation in 1985.
11
<PAGE> 13
HUGH A. JOHNSON, JR., age 56, joined First Albany in 1977. He is currently
Senior Vice President and the Chief Investment Officer. He has also been
Chairman of First Albany Asset Management Corporation, a subsidiary of the
Company, since 1991. He has served on the Board of Directors of First Albany
since 1985. Mr. Johnson is a Director of the New York State Business Development
Corporation and serves on other state and community boards. Mr. Johnson has
served as a director of the Company since 1990.
J. ANTHONY BOECKH, Ph.D., age 58, has been Chairman and Chief Executive Officer
of BCA Publications Ltd., Montreal, Canada, and has been Editor-in-Chief of The
Bank Credit Analyst since 1971. Mr. Boeckh is also a principal of Greydanus,
Boeckh and Associates Inc., Montreal, Canada, a fixed income specialty manager.
He also serves on other industry and community boards. Mr. Boeckh has been a
director of the Company since 1986, and serves as a member of the Executive
Compensation Committee.
WALTER M. FIEDEROWICZ, age 50, has been President and Chief Executive Officer of
WorldCorp, Inc. the holding company to World Airways, Inc., an aviation services
subsidiary, since April, 1997. Mr. Fiederowicz served as Chairman of Colonial
Data Technologies Corp. (a telecommunications product and service provider) from
1994 until March 1996, and served on the Board of Directors of such company
since 1985. From January 1991 until July 1994, he held various positions,
including Executive Vice President and Chairman, and served as Director of
Conning Corporation, the parent company of an investment firm. He is also a
director of Photronics, Inc., InteliData Technologies Corporation, and Blau
Marketing Technologies Corp. Mr. Fiederowicz was Chairman of Covenant Mutual
Insurance Company ("Covenant"), from 1989 until March 1993, and was President
and Chief Executive Officer of Covenant from 1989 until December 1992. Covenant
was placed in rehabilitation by the Insurance Commissioner of the State of
Connecticut in 1993 and subsequently liquidated as a result of losses incurred
in connection with insurance claims relating to Hurricane Andrew. Mr.
Fiederowicz has been a director of the Company since 1996.
DANIEL V. McNAMEE III, age 52, has been Chairman of The Publishing and Media
Group, formerly McNamee Consulting Company Inc., a management consulting firm
specializing in the media communications industry since 1981. Mr. McNamee is a
member of the Audit Committee and has been a director of the Company since its
incorporation in 1985.
12
<PAGE> 14
CHARLES L. SCHWAGER, age 53, founded Loanet, Inc. in 1981, a provider of
on-line, real time accounting services to support financial institutions engaged
in the business of borrowing and lending securities. Mr. Schwager served as
President of Loanet, Inc. from 1981 to 1994, when the company was sold. He
continues to be employed by Loanet, Inc. in a consulting capacity. Mr. Schwager
is a member of the Audit and Executive Compensation Committees and has been a
director of the Company since 1995.
BENAREE P. WILEY, age 50, is President and Chief Executive Officer of The
Partnership, a Boston-based organization formed by business and civic leaders to
promote the development of professionals of color through access to corporate,
municipal, and state leaders. Ms. Wiley is a member of the Board of Directors of
The Boston Company, a Trustee of Boston College and serves on the Board of
Directors of the Boston Children's Museum and the United Way of Massachusetts.
From 1989 to 1991, Ms. Wiley served as Director of Graduate Admissions for
Harvard Law School and from 1987 through 1991, she maintained a private
consulting practice. Ms. Wiley serves as Chairperson of the Audit Committee and
has been a director of the Company since 1993.
George C. McNamee and Daniel V. McNamee, III are brothers.
Board and Committee Meetings
The Board of Directors held four meetings during the Company's fiscal year ended
December 31, 1996. Each current Director attended 75% or more of the aggregate
number of meetings of the Board of Directors and each committee to which he/she
was appointed that were held during the period in which he/she was a director.
The Audit Committee, responsible for reviewing the Company's financial
statements, met once during the fiscal year. Among other matters, the Audit
Committee reviews the Company's expenditures, reviews the Company's internal
accounting controls and financial statements, reviews with the Company's
independent auditors the scope of their audit, their report, and their
recommendations, and recommends the selection of the Company's independent
auditors. During fiscal year 1996, the Audit Committee was comprised of Messrs.
Schwager and D. McNamee, and Ms. Wiley.
The Executive Compensation Committee is responsible for reviewing and approving
the compensation of executive officers of the Company, compensation under the
Management Bonus Compensation Plan, and the granting of stock options under the
Stock Incentive Plan and awards under the Company's Restricted Stock Plan.
Following the close of fiscal year 1996, the Executive Compensation Committee
met to review and to approve the compensation of the Named Executive Officers.
The Executive Compensation Committee was comprised of Messrs. Boeckh, and
Schwager.
13
<PAGE> 15
The Board of Directors does not have a nominating committee.
During 1996, the Company paid directors who are not executive officers of the
Company an annual retainer of $6,000 and $2,500 per meeting attended, plus
reimbursement of reasonable expenses. In addition, the Chairman of any committee
and non-employee members of such committees are paid $250 and $200,
respectively, per meeting attended.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of its business, First Albany Corporation extends credit
to employees, including directors and executive officers, under Regulation T,
which regulates credit in cash and margin accounts. Such extensions of credit
are performing and are made on the same terms as for customers.
14
<PAGE> 16
SELECTION OF THE COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has recommended that the accounting firm of Coopers &
Lybrand L.L.P. be selected as the Company's independent auditors for the fiscal
year ending December 31, 1997, subject to shareholder ratification.
Coopers & Lybrand L.L.P. conducted the audit for the fiscal year ended December
31, 1996. Representatives of Coopers & Lybrand L.L.P. are expected to be present
at the Annual Meeting, and will have an opportunity to make a statement and to
respond to appropriate questions.
In the event the shareholders fail to ratify the selection of Coopers & Lybrand
L.L.P., the selection of independent auditors will be submitted to the Board of
Directors for reconsideration and selection. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment of a new
independent accounting firm at any time during the year if the Board of
Directors believes that such a change would be in the best interests of the
Company and its shareholders.
The affirmative vote of a majority of the shares of Common Stock present and
entitled to vote at the Annual Meeting is required to ratify the selection of
Coopers & Lybrand L.L.P. as independent auditors of the Company. For this
purpose, broker non-votes shall be treated as abstentions.
The Board of Directors recommends that shareholders vote FOR the ratification of
the selection of Coopers & Lybrand L.L.P. as independent auditors of the
Company.
15
<PAGE> 17
OTHER MATTERS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should come before the Annual Meeting, it is
intended that the persons named in the enclosed proxy will have discretionary
authority to vote the shares that they represent.
Any shareholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its Annual Meeting
of Shareholders to be held in 1998 must do so no later than December 18, 1997.
You are urged to sign and to return your Proxy promptly in the enclosed return
envelope to make certain your shares will be voted at the Annual Meeting.
By Order of the Board of Directors
/s/ Michael R. Lindburg
Michael R. Lindburg
Secretary
April 18, 1997
16
<PAGE> 18
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
------------------------------------------------------
FIRST ALBANY COMPANIES INC.
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RECORD DATE SHARES:
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Please be sure to sign and date this Proxy. Date
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Stockholder sign here Co-owner sign here
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<TABLE>
<S> <C> <C> <C>
1. The Election of Directors: For All
The Nominees: For Withhold Except
GEORGE C. MCNAMEE HUGH A. JOHNSON, JR. [ ] [ ] [ ]
ALAN P. GOLDBERG DANIEL V. MCNAMEE III
J. ANTHONY BOECKH CHARLES L. SCHWAGER
WALTER M. FIEDEROWICZ BENAREE P. WILEY
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the nominee's name. Your
shares will be voted for the remaining nominee(s).
For Against Abstain
2. The Ratification of the Selection of [ ] [ ] [ ]
Coopers & Lybrand as Certified Public
Accountants to audit the financial
statements of the Company for the fiscal
year ending December 31, 1997.
3. In their discretion, the proxies are [ ] [ ] [ ]
authorized to vote upon any other business
that may properly come before the meeting.
Mark box at right if you plan to attend [ ]
the Annual Meeting.
Mark box at right if an address change or [ ]
comment has been noted on the reverse side
of this card.
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DETACH CARD DETACH CARD
FIRST ALBANY COMPANIES INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, May 15,
1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
First Albany Companies Inc.
<PAGE> 19
FIRST ALBANY COMPANIES INC.
30 SOUTH PEARL STREET
ALBANY, NEW YORK 12207
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
George C. McNamee and Alan P. Goldberg, and each of them, as proxies, with full
power of substitution, are hereby authorized to represent and to vote, as
designated on the reverse side, all Common Stock of First Albany Companies Inc.
held of record by the undersigned on April 11, 1997 at the Annual Meeting of
Stockholders to be held at 4:30 P.M. (EDT) on Thursday, May 15, 1997 at the
offices of the Company at 30 South Pearl Street, Albany, New York, or at any
adjournment thereof. IN THEIR DISCRETION, THE ABOVE-NAMED PROXIES ARE AUTHORIZED
TO VOTE ON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If the shareholder is a corporation, the signature should
be that of an authorized officer who should indicate his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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