<PAGE> 1
Registration No. 333-[___]
As filed with the Securities and Exchange Commission on _______, 1998
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
FIRST ALBANY COMPANIES INC.
(Exact name of issuer as specified in its charter)
New York 22-2655804
(State or Other (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation)
30 South Pearl Street
Albany, New York 12207
(Address of principal executive offices)
FIRST ALBANY COMPANIES INC.
EXECUTIVE OFFICERS DEFERRED COMPENSATION PLAN
AND
FIRST ALBANY COMPANIES INC.
INVESTMENT EXECUTIVES DEFERRED COMPENSATION PLAN
(Full title of Plan)
Stephen P. Wink, Esq.
Secretary and General Counsel
First Albany Companies Inc.
30 South Pearl Street
Albany, New York 12207
(518) 447-8500
(Name, address and telephone number of agent for service)
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Title of Securities to Proposed Maximum Proposed Maximum Amount of
be Registered(1) Amount to Offering Price Per Aggregate Offering Registration Fee
be Registered Share Price(2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deferred Compensation
Obligations........... $700,000.00 100% $700,000.00 $206.50
======================================================================================================
</TABLE>
1. The Deferred Compensation Obligations are unsecured obligations of First
Albany Companies Inc. to pay deferred compensation in the future in
accordance with the terms of the First Albany Companies Inc. Executive
Officers Deferred Compensation Plan and First Albany Companies Inc.
Investment Executives Deferred Compensation Plan.
2. Estimated solely for purposes of determining the registration fee.
<PAGE> 2
PART I
A prospectus setting forth the information required by Part I of Form S-8
will be sent or given to plan participants as specified by Rule 428(b)(1)(i).
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by First Albany
Companies Inc. (the "Company") (File No. 0-14140) with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), are incorporated by reference herein and
shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996; and
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarters ended March 27, 1997, June 27, 1997 and September 26, 1997.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
registration statement and made a part hereof from their respective dates of
filing (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"); provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act in each year during which the
offering made by this registration statement is in effect prior to the filing
with the Commission of the Company's Annual Report on Form 10-K covering such
year shall not be Incorporated Documents or be incorporated by reference in this
registration statement or be a part hereof from and after the filing of such
Annual Report on Form 10-K.
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this registration statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The securities being registered under this registration statement consist
of obligations (the "Obligations") of the Company to pay compensation deferred
by eligible employees under the terms of the First Albany Companies Inc.
Executive Officers Deferred Compensation Plan and the First Albany Companies
Inc. Investment Executives Deferred Compensation Plan
-2-
<PAGE> 3
(collectively, the "Plans"). Although each of the Plans cover a different class
of employees of the Company, the terms of the Plan documents are substantially
similar. Subject to the provisions of the Plans, an eligible employee (a
"Participant") may enter into an agreement with the Company providing for the
deferral of the payment of a specified portion or amount of compensation payable
by the Company to the Participant. A Participant's deferrals are credited to a
record keeping account maintained by the Company in the name of the Participant.
The Company may, at its discretion, credit the account of a Participant with
Company matching contributions in such amounts and at such times as may be
determined by the Company. Each Participant account will be periodically
adjusted to reflect the investment experience of one or more investment
benchmarks designated under the Plans and selected by the Participant. A
Participant will become vested in the amount of any earnings credited to his or
her account, and the amount of any Company matching contributions, in accordance
with the applicable vesting schedule established by the Company for such
purposes. The vested balance credited to a Participant account will be paid upon
the earliest of (i) a pre-retirement distribution date designated by the
Participant in accordance with the applicable Plan, (ii) termination of the
Participant's employment, or (iii) the Participant's retirement, disability or
death. Payment of such vested balance may be made in a lump sum or in up to 180
monthly installments, depending on the applicable terms of the Plan and the
Participant's payment election. The Company reserves the right to accelerate the
payment of any Participant's vested balance in the event of a termination of the
Plan. In addition, the Company may delay the payment of a Participant's vested
amounts under certain circumstances, such as when the Participant has allocated
such amounts to a restricted investment benchmark offered under the Plan or when
the payment of such amounts would exceed certain limitations imposed by tax law.
A Participant's rights to and under the Obligations cannot be assigned,
alienated, sold, garnished, transferred, pledged or encumbered, except by way of
transfer to the employee's beneficiary or estate upon the Participant's death,
pursuant to the terms of the Plan.
The Obligations are unsecured general obligations of the Company which
rank pari passu with other unsecured and unsubordinated indebtedness of the
Company that may be outstanding from time to time. No sinking fund has or will
be established with respect to the Obligations. The Obligations are not subject
to redemption, in whole or in part, prior to the payment dates applicable under
the Plans and the Obligations are not convertible into another security of the
Company. The Company reserves the right to amend or terminate the Plans at any
time, except that no such amendment or termination shall adversely affect the
rights of Participants with respect to amounts deferred prior to such amendment
or termination. In the event a Plan is terminated, the Company may decide, in
its sole discretion, to either pay the Obligations as they come due in
accordance with the Participants' initial elections or accelerate the payment of
the Obligations.
Except as stated above, the Obligations do not enjoy the benefit of any
affirmative or negative pledges or covenants by the Company. The Company may
establish a grantor trust to fund the payment of the Obligations, but the
Company retains discretion to determine whether such a trust will be established
and, if so, the amount and timing of any contributions to the trust. The assets
of the trust will remain subject to the claims of the Company's creditors. The
trustee of the trust will be required to administer the trust in accordance with
its terms, but the trustee's obligations and authority are limited to the
amounts which may be held in the trust from time to time and the trustee may be
subject to the direction of the Company with respect to the payment Obligations.
Accordingly, the trustee of the trust does not have any independent obligation
or
-3-
<PAGE> 4
authority to act on behalf of any Participant or Beneficiary and each
Participant and Beneficiary will be responsible for acting on his or her own
behalf with respect to, among other things, the giving of notices, responding to
requests for consents, waivers or amendments, enforcing covenants and taking
action upon default.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Obligations offered pursuant to this registration
statement has been passed upon for the Company by Stephen P. Wink, Secretary and
General Counsel of the Company, 30 South Pearl Street, Albany, New York 12207.
Mr. Wink is an officer of the Company, is eligible to participate in the Plan
and is a holder of shares (and options to purchase shares) of common stock of
the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6.07 of the Company's By-Laws permits the indemnification of
officers and directors under certain circumstances to the full extent that such
indemnification may be permitted by law.
Such rights of indemnification are in addition to, and not in limitation
of, any rights of indemnification under the Business Corporation Law of the
State of New York (Sections 721 through 727), which provides for indemnification
by a corporation of its officers and directors under circumstances as stated in
the Business Corporation Law and subject to specified limitations set forth in
the Business Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index attached.
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(b) That, for the purpose of determining any liability under the 1933 Act,
each post-effective amendment to this registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
-4-
<PAGE> 5
(d) That, for purposes of determining any liability under the 1933 Act,
each filing of the Company's annual report pursuant to Section 13(a) or Section
15(d) of the 1934 Act that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
-5-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the 1933 Act, the Company certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Albany, and the State of New York, on the 6th day of January, 1998.
FIRST ALBANY COMPANIES INC.
By: /s/ George C. McNamee
-------------------------------
George C. McNamee,
Chairman of the Board
POWER OF ATTORNEY
Know all men by these presents, that each officer or director of
First Albany Companies Inc. whose signature appears below constitutes and
appoints George C. McNamee and Alan P. Goldberg, and each of them singly, his
true and lawful attorney-in-fact and agent, with full and several power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign a registration statement on Form S-8 to be filed pursuant to
the Securities Act of 1933 in connection with the registration of up to
$700,000.00 principle amount of Obligations, and any or all amendments,
including pre- and post-effective amendments and supplements to this
registration statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done. Each of said attorneys-in-fact shall have power to act
hereunder with or without the other.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ George C. McNamee Director, Chairman and January 14, 1997
- ----------------------- Co-Chief Executive Officer
George C. McNamee (Principal Executive Officer)
/s/ Alan P. Goldberg Director, President and January 14, 1997
- ----------------------- Co-Chief Executive Officer
Alan P. Goldberg
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Timothy R. Welles Vice President and Chief January 5, 1998
- ----------------------- Financial Officer (Principal
Timothy R. Welles Financial and Accounting Officer)
Director
- -----------------------
J. Anthony Boeckh
/s/ Walter Fiederowicz Director January 14, 1997
- -----------------------
Walter Fiederowicz
/s/ Hugh A. Johnson Director and Senior Vice January 14, 1997
- ----------------------- President
Hugh A. Johnson
Director
- -----------------------
Daniel V. McNamee, III
/s/ Carles L. Schwager Director January 14, 1997
- -----------------------
Charles L. Schwager
/s/ Benaree P. Wiley Director January 14, 1997
- -----------------------
Benaree P. Wiley
Director
- -----------------------
Peter Barton
</TABLE>
-7-
<PAGE> 8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
EXHIBITS
FILED WITH
REGISTRATION STATEMENT
ON
FORM S-8
UNDER
THE SECURITIES ACT OF 1933
----------------
FIRST ALBANY COMPANIES INC. EXECUTIVE OFFICERS
DEFERRED COMPENSATION PLAN
AND
FIRST ALBANY COMPANIES INC. INVESTMENT EXECUTIVES
DEFERRED COMPENSATION PLAN
(Full title of the plan)
FIRST ALBANY COMPANIES INC.
(Exact name of issuer as specified in its charter)
<PAGE> 9
First Albany Companies Inc.
--------------
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C> <C>
4(a) - First Albany Companies Inc. Executive Officers Deferred
Compensation Plan.
4(b) - First Albany Companies Inc. Investment Executives
Deferred Compensation Plan.
5(a) - Opinion of the Company's General Counsel as to the legality
of securities offered under the Plans.
23(a) - Consent of Coopers & Lybrand L.L.P., independent
accountants.
23(b) - Consent of Counsel (contained in the Opinion of the
Company's General Counsel, Exhibit 5(a) hereto).
24(b) - Power of Attorney (set forth on the signature page
hereof).
</TABLE>
<PAGE> 1
EXHIBIT 4(a)
FIRST ALBANY COMPANIES INC.
EXECUTIVE OFFICERS
DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1998
FIRST ALBANY COMPANIES INC.
EXECUTIVE OFFICERS
DEFERRED COMPENSATION PLAN
Effective January 1, 1998
PURPOSE
The purpose of this Plan is to provide specified benefits to a
select group of management and highly compensated Employees who contribute
materially to the continued growth, development and future business success of
First Albany Companies Inc. and its subsidiaries, if any, that sponsor this
Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I
of ERISA.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the meanings indicated:
1.1 "Aggregate Vested Balance" or "Aggregate Vested Benefit" shall mean, with
respect to the Plan Accounts of any Participant as of a given date, the
sum of the amounts that have become vested under all of the Participant's
Plan Accounts, as adjusted to reflect all applicable Investment
Adjustments and all prior withdrawals and distributions, in accordance
with Article 3 of the Plan and the provisions of the applicable Enrollment
Forms.
1.2 "Amended Election Form" shall mean the Amended Election Form required by
the Committee to be signed and submitted by a Participant to effect a
permitted change in the elections previously made by the Participant under
any Annual Election Form.
1.3 "Annual Deferral Account" shall mean a Participant's Annual Participant
Deferral for a Plan Year, as adjusted to reflect all applicable Investment
Adjustments and all prior distributions and withdrawals.
<PAGE> 2
1.4 "Annual Deferral Agreement" shall mean the Annual Deferral Agreement
required by the Committee to be signed and submitted by a Participant in
connection with the Participant's deferral election with respect to a
given Plan Year.
1.5 "Annual Election Form" shall mean the Annual Election Form required by the
Committee to be signed and submitted by a Participant in connection with
the Participant's deferral election with respect to a given Plan Year.
1.6 "Annual Matching Contribution" shall mean the aggregate amount credited by
the Company to a Participant in respect of a particular Plan Year under
Section 3.2.
1.7 "Annual Matching Contribution Account" shall mean a Participant's Annual
Matching Contributions for a Plan Year, as adjusted to reflect all
applicable Investment Adjustments and all prior distributions and
withdrawals.
1.8 "Annual Participant Deferral" shall mean the aggregate amount deferred by
a Participant in respect of a particular Plan Year under Section 3.1.
1.9 "Base Annual Salary" shall mean the annual base salary payable to a
Participant by an Employer in cash in respect of services rendered during
a Plan Year, including any Elective Deductions, but excluding Bonus
Amounts, Commissions or other additional incentives or awards payable to
the Participant.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 10, that are entitled to
receive a Participant's Aggregate Account Balance under this Plan in the
event of the Participant's death.
1.11 "Board" shall mean the board of directors of the Company.
1.12 "Bonus Amounts" shall mean the amounts payable to a Participant in cash by
an Employer in respect of services rendered during a Plan Year under any
bonus or incentive plan or arrangement of an Employer, including any
Elective Deductions, but excluding Commissions, stock-related awards and
other non-monetary incentives. For the first Plan Year of the Plan, Bonus
Amounts shall include the annual bonus payable to a Participant in respect
of 1996.
1.13 "Change in Control" shall mean the earliest to occur of the following
events:
(a) The consummation of any transaction or series of transactions as a
result of which any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") other than an "Excluded
Person" (as hereinafter defined) has or obtains ownership or
control, directly or indirectly, of fifty percent (50%) or more of
the combined voting power of all securities of the Company or any
successor or surviving corporation of any merger, consolidation or
reorganization involving the Company (the "Voting Securities"). The
term "Excluded Person" means any one or more of the following: (i)
the Company or any majority-owned
-2-
<PAGE> 3
subsidiary of the Company, (ii) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B) any
majority-owned subsidiary of the Company, (iii) any Person who as of
the initial effective date of this Plan owned or controlled,
directly or indirectly, ten percent (10%) or more of the then
outstanding Voting Securities, or any individual, entity or group
that was part of such a Person;
(b) A merger, consolidation or reorganization involving the Company as a
result of which the holders of Voting Securities immediately before
such merger, consolidation or reorganization do not immediately
following such merger, consolidation or reorganization own or
control, directly or indirectly, at least fifty percent (50%) of the
Voting Securities in substantially the same proportion as their
ownership or control of the Voting Securities immediately before
such merger, consolidation or reorganization; or
(c) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
majority-owned subsidiary of the Company).
1.14 "Claimant" shall have the meaning set forth in Section 15.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.
1.16 "Committee" shall mean the committee described in Article 13.
1.17 "Company" shall mean First Albany Companies Inc., a New York corporation,
and any successor to all or substantially all of its assets or business.
1.18 "Disability" shall mean a period of disability during which a Participant
qualifies for total permanent disability benefits under the Participant's
Employer's long-term disability plan, or, if a Participant does not
participate in such a plan, a period of disability during which the
Participant would have qualified for total permanent disability benefits
under such a plan had the Participant been a participant in such a plan,
as determined in the sole discretion of the Committee. If the
Participant's Employer does not sponsor such a plan, or discontinues to
sponsor such a plan, Disability shall be determined by the Committee in
its sole discretion.
1.19 "Covered Termination" shall mean the termination of a Participant's
employment with the Company and all other Employers within two (2) years
following a Change in Control as a result of the Participant's resignation
for good reason or a termination by the Participant's Employer without
cause. For these purposes a Participant's resignation for good reason
shall mean a Participant's resignation following (i) a diminution in the
Participant's status, title, position or responsibilities, or an
assignment to the Participant of duties inconsistent with the
Participant's status, title or position other than for cause or (ii) a
material reduction in the Participant's aggregate annualized compensation
rate solely as a result of a change adopted unilaterally by the Company.
-3-
<PAGE> 4
A Participant's resignation shall not be treated as a resignation for good
reason unless it occurs after one of the foregoing events and the
Participant provides the Employer with written notice of the event within
six (6) months of the occurrence of the event and within seven (7) days
before the effective date of the Participant's resignation and the
Employer shall not have cured such event prior to such resignation. A
termination by the Participant's Employer without cause shall mean an
involuntary termination of the Participant's employment by Participant's
Employer other than by reason of the Participant's (i) willful and
continued failure to perform the duties of his or her position after
receiving notice of such failure and being given reasonable opportunity to
cure such failure; (ii) willful misconduct which is demonstrably and
materially injurious to the Employer; (iii) conviction of a felony; or
(iv) material breach of applicable federal or state securities laws,
regulations or licensing requirements or the applicable rules or
regulations of any self-regulatory body. No act or failure to act on the
part of a Participant shall be considered "willful" unless it is done or
omitted to be done in bad faith or without reasonable belief that the
action or omission was in the best interest of the Employer. No
termination shall be considered a termination for cause unless it is
effected by a written notice to the Participant stating in detail the
grounds constituting cause.
1.20 "Disability Benefit" shall mean the benefit set forth in Article 9.
1.21 "Election Form" shall mean, with respect to any Plan Account, the Annual
Election Form or the Amended Election Form last signed and submitted by
the Participant and accepted by the Committee with respect to that Plan
Account.
1.22 "Elective Deductions" shall mean deductions made from a Participant's Base
Annual Salary, Bonus Amounts and Commissions for amounts voluntarily
deferred or contributed by the Participant pursuant to all qualified and
non-qualified compensation deferral plans, including, without limitation,
amounts not included in the Participant's gross income under Code Sections
125, 402(e)(3) and 402(h), provided, however, that all such amounts would
have been payable in cash to the Employee had there been no such plan.
1.23 "Employee" shall mean a person who is an employee of any Employer.
1.24 "Employer" shall mean the Company and/or any of its subsidiaries (now in
existence or hereafter formed or acquired) that have been selected by the
Board to participate in the Plan and have adopted the Plan as a sponsor.
1.25 "Enrollment Forms" shall mean, for any Plan Year, the Annual Deferral
Agreement, the Annual Election Form and any other forms or documents which
may be required of a Participant by the Committee, in its sole discretion.
1.26 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
-4-
<PAGE> 5
1.27 "Investment Adjustment" shall mean an adjustment made to the balance of
any Plan Account in accordance with Section 3.4 to reflect the performance
of an Investment Benchmark pursuant to which the value of the Plan Account
is measured.
1.28 "Investment Benchmark" shall mean a benchmark made available under the
Plan from time to time by the Committee for purposes of valuing Plan
Accounts.
1.29 "Participant" shall mean any Employee (i) who is selected to participate
in the Plan, (ii) who elects to participate in the Plan, (iii) who signs
the applicable Enrollment Forms and Benefit Election and Beneficiary
Designation Form (and other forms required by the Committee), (iv) whose
signed Enrollment Forms and Benefit Election and Beneficiary Designation
Form (and other required forms) are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose participation has not
terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under the
Plan, even if he or she has an interest in the Participant's benefits
under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.
1.30 "Plan" shall mean the First Albany Companies Inc. Executive Officers
Deferred Compensation Plan, which shall be evidenced by this instrument
and by each Enrollment Form, as they may be amended from time to time.
1.31 "Plan Accounts" shall mean the Annual Deferral Accounts and Annual
Matching Accounts established under the Plan.
1.32 "Plan Year" shall mean the period beginning on January 1 of each year and
ending December 31.
1.33 "Pre-Retirement Distribution Election" shall mean an election made in
accordance with Section 5.1.
1.34 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 8.
1.35 "Restricted Investment Benchmark" means an Investment Benchmark which is
designated as a Restricted Investment Benchmark by the Committee at the
time such Investment Benchmark is initially made available under the Plan.
1.36 "Retirement," "Retires" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, Disability, death or for cause on or after
the earlier of the attainment of age sixty-five (65) with ten (10) Years
of Service.
1.37 "Retirement Benefit" shall mean the benefit set forth in Article 7.
1.38 "Retirement Benefit and Beneficiary Designation Form" shall mean the
Retirement Benefit and Beneficiary Designation Form or Amended Retirement
Benefit and
-5-
<PAGE> 6
Beneficiary Designation Form last signed and submitted by a Participant
and accepted by the Committee.
1.39 "Termination Benefit" shall mean the benefit set forth in Article 6.
1.40 "Termination of Employment" shall mean the severing of employment with all
Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death, an authorized leave of absence or for
cause.
1.41 "Trust" shall mean the trust established in accordance with Article 16.
1.42 "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (i) a sudden and unexpected illness or accident of the Participant or
a dependent of the Participant, (ii) a loss of the Participant's property
due to casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Committee.
1.43 "Vested Account Balance" shall mean, with respect to any Plan Account as
of a given date, the sum of the amounts that have become vested, as
adjusted to reflect all applicable Investment Adjustments and all prior
withdrawals and distributions, in accordance with Article 3 of the Plan
and the provisions of applicable Enrollment Forms.
1.44 "Years of Service" shall mean the total number of full Plan Years during
which a Participant has been continuously employed by one or more
Employers. Any partial Plan Year during which a Participant has been
employed by an Employer shall not be counted.
ARTICLE 2
Eligibility, Selection, Enrollment
2.1 Selection by Committee. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees of the
Employers, as determined by the Committee in its sole discretion. From
that group, the Committee shall select, in its sole discretion, the
Employees who shall be eligible to make an Annual Participant Deferral in
respect of each Plan Year. The Committee's selection of an Employee to
make an Annual Participant Deferral in respect of a particular Plan Year
will not entitle that Employee to make an Annual Participant Deferral for
any subsequent Plan Year, unless the Employee is again selected by the
Committee to make an Annual Participant Deferral for such subsequent Plan
Year.
2.2 Enrollment Requirements. As a condition to being eligible to make an
Annual Participant Deferral for any Plan Year, each selected Employee
shall complete, execute
-6-
<PAGE> 7
and return to the Committee each of the required Enrollment Forms, and
shall have on file with the Committee a completed Retirement Benefit and
Beneficiary Designation Form, all prior to the date specified by the
Committee. In addition, the Committee shall establish from time to time
such other enrollment requirements as it determines necessary, in its sole
discretion.
2.3 Commencement of Participation. Provided an Employee selected to make an
Annual Participant Deferral in respect of a particular Plan Year has met
all enrollment requirements set forth in this Plan and required by the
Committee, including returning all required documents to the Committee
within the specified time period, the Employee's designated deferrals
shall commence as of the date established by the Committee in its sole
discretion. If an Employee fails to meet all such requirements within the
specified time period with respect to any Plan Year, the Employee shall
not be eligible to make any deferrals for that Plan Year.
2.4 Subsequent Elections. The Enrollment Forms submitted by a Participant in
respect of a particular Plan Year will not be effective with respect to
any subsequent Plan Year. If an Employee is selected to participate in the
Plan for a subsequent Plan Year and the required Enrollment Forms are not
timely delivered for the subsequent Plan Year, the Participant shall not
be eligible to make any deferrals with respect to such subsequent Plan
Year.
2.5 Termination of Participation and/or Deferrals. If the Committee determines
in good faith that a Participant no longer qualifies as a member of a
select group of management and highly compensated employees, as membership
in such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
discretion, to (i) terminate any Annual Participant Deferral and Annual
Matching Contribution not yet credited to the Participant's Plan Accounts
and/or (ii) immediately distribute the Participant's then Aggregate Vested
Balance as a Termination Benefit and terminate the Participant's
participation in the Plan. Any Annual Matching Contribution made on behalf
of the Participant that is not vested prior to the date of the Committee's
determination shall be forfeited by the Participant. If the Committee
chooses to terminate the Participant's participation in the Plan, the
Committee may, in its sole discretion, select the Participant to
participate in the Plan at such time in the future as the Participant
again becomes a member of the select group described above. If a
Participant's Employer terminates the Participant's employment for cause
(as described in Section 1.19), then, (i) the Participant's participation
in the Plan shall automatically terminate, (ii) the Committee shall
distribute to the Participant, at the time and in the manner described in
Section 6.2, the remainder of the Participant's Annual Participant
Deferrals that were credited to the Participant's Plan Accounts prior to
the date of termination after adjustment for all prior withdrawals and
distributions and (iii) all other amounts in any of the Participant's Plan
Accounts shall be forfeited by the Participant. Any distribution made
pursuant to this Section 2.5 may be subject to deferred distribution
pursuant to Sections 5.4 and 5.5.
-7-
<PAGE> 8
ARTICLE 3
Participant Deferrals Commitments, Matching Contributions,
Investment Adjustments, Taxes and Vesting
3.1 Participant Deferrals.
(a) Deferral Election. A Participant may make an election to defer the
receipt of amounts payable to the Participant in the form of Base
Annual Salary and Bonus Amounts. The Participant's election shall be
evidenced by an Annual Deferral Agreement and Annual Election Form
completed and submitted to the Committee in accordance with such
procedures and time frames as may be established by the Committee in
its sole discretion. Amounts deferred by a Participant in respect of
a Plan Year shall be referred to collectively as an Annual
Participant Deferral and shall be credited to an Annual Deferral
Account established in the name of the Participant. A separate
Annual Deferral Account shall be established and maintained for each
Annual Participant Deferral. The Committee shall have sole
discretion to determine in respect of each Plan Year: (i) whether a
Participant shall be eligible to make an Annual Participant
Deferral; (ii) the form(s) of compensation which may be the subject
of any Annual Participant Deferral; and (iii) any other terms and
conditions applicable to the Annual Participant Deferral.
(b) Minimum Deferral.
(i) Minimum. For each Plan Year the Committee may permit a
Participant to elect to defer, as his or her Annual
Participant Deferral, one or more of the following forms of
compensation in the following minimum amounts:
<TABLE>
<CAPTION>
Deferral Minimum Amount
-------- --------------
<S> <C>
Base Annual Salary $3,000
Bonus Amounts $3,000
</TABLE>
If an election is made for less than stated minimum amounts,
or if no election is made, the amount deferred shall be zero.
(ii) Short Plan Year. If a Participant first becomes a Participant
after the first day of a Plan Year, the minimum deferral of
each of the Participant's Base Annual Salary and Bonus Amounts
shall be an amount equal to the minimum set forth above,
multiplied by a fraction, the numerator of which is the number
of complete months remaining in the Plan Year and the
denominator of which is 12.
(c) Maximum Deferral. For each Plan Year the Committee may permit a
Participant to elect to defer, as his or her Annual Participant
Deferral, one or
-8-
<PAGE> 9
more of the following forms of compensation payable to the
Participant, but not yet received, during the Plan Year up to the
following maximum percentages:
<TABLE>
<CAPTION>
Deferral Maximum Percentage
-------- ------------------
<S> <C>
Base Annual Salary 50%
Bonus Amounts 100%
</TABLE>
(d) Deferral Designations.
(i) Base Annual Salary. A Participant may designate the amount of
the Annual Participant Deferral to be deducted from his or her
Base Annual Salary as either a percentage of his or her Base
Annual Salary or a fixed dollar amount. Such amount shall be
withheld from each regularly scheduled Base Annual Salary
payment in equal amounts.
(ii) Bonus Amounts. A Participant may designate the amount of the
Annual Participant Deferral to be deducted from his or her
Bonus Amounts as either a percentage or a fixed dollar amount
of specified Bonus Amounts expected by the Participant.
Percentages may be expressed as percentages of Bonus Amounts
in excess of stated thresholds selected by the Participant. If
a Participant designates the Annual Participant Deferral to be
deducted from any Bonus Amount as a fixed dollar amount and
such fixed dollar amount exceeds the Bonus Amount actually
payable to the Participant, the entire amount of such Bonus
Amount shall be withheld.
3.2 Annual Matching Contribution. A Participant may be credited with one or
more matching contributions in respect of any Plan Year, expressed as a
percentage of the amount of Base Annual Salary, Bonus Amounts or any
combination thereof deferred by the Participant pursuant to the
Participant's Annual Participant Deferral for the Plan Year. Such matching
contributions credited to a Participant in respect of a Plan Year shall be
referred to collectively as the Annual Matching Contribution for that Plan
Year and shall be credited to an Annual Matching Contribution Account in
the name of the Participant. A separate Annual Matching Contribution
Account shall be established and maintained for each Annual Matching
Contribution. The Board shall have sole discretion to determine in respect
of each Plan Year and each Participant: (i) whether any Annual Matching
Contribution shall be made; (ii) the Participant(s) who shall be entitled
to such Annual Matching Contribution; (iii) the amount of such Annual
Matching Contribution; (iv) the date(s) on which any portion of such
Annual Matching Contribution shall be credited to each Participant's
Annual Matching Contribution Account; and (v) any other terms and
conditions applicable to such Annual Matching Contribution.
3.3 Selection of Investment Benchmarks. In connection with a Participant's
election to make an Annual Participant Deferral in respect of a Plan Year,
the Participant shall
-9-
<PAGE> 10
select one or more Investment Benchmarks and the percentage of the
Participant's Annual Deferral Account and Annual Matching Contribution
Account (if any) for such Plan Year to be adjusted to reflect the
performance of each selected Investment Benchmark. All selections of
Investment Benchmarks shall be in multiples of 10% unless the Committee
determines that lower increments are acceptable. A Participant may make
changes in his or her selected Investment Benchmarks with respect to any
Plan Account at such times as the Committee may designate by completing
and submitting to the Committee an Amended Election Form in accordance
with such procedures and time frames as may be established from time to
time at the sole discretion of the Committee, provided, however, that the
Committee may limit a Participant's ability to make such changes with
respect to any Restricted Investment Benchmark to the extent deemed by the
Committee, in its good faith judgement, to be consistent with the nature
of the investment on which such Restricted Investment Benchmark is based.
3.4 Adjustment of Plan Accounts. While a Participant's Plan Accounts do not
represent the Participant's ownership of, or any ownership interest in,
any particular assets, the Participant's Plan Accounts shall be adjusted
in accordance with the Investment Benchmark(s), subject to the conditions
and procedures set forth herein or established by the Committee from time
to time. Any cash earnings generated under an Investment Benchmark (such
as interest and cash dividends and distributions) shall, at the
Committee's sole discretion, either be deemed to be reinvested in that
Investment Benchmark or reinvested in one or more other Investment
Benchmark(s) designated by the Committee. All notional acquisitions and
dispositions of Investment Benchmarks under a Participant's Plan Accounts
shall be deemed to occur at such times as the Committee shall determine to
be administratively feasible in its sole discretion and the Participant's
Plan Accounts shall be adjusted accordingly. In addition, a Participant's
Plan Accounts may be adjusted from time to time, in accordance with
procedures and practices established by the Committee, in its sole
discretion, to reflect any notional transactional costs and other fees and
expenses relating to the deemed investment, disposition or carrying of any
Investment Benchmark for the Participant's Plan Accounts. Adjustments made
in accordance herewith shall be referred to as Investment Adjustments.
Notwithstanding anything to the contrary, any Investment Adjustments made
to any Plan Account following a Change in Control shall be made in a
manner no less favorable to Participants than the practices and procedures
employed under the Plan, or as otherwise in effect, as of the date of the
Change in Control.
3.5 FICA and Other Taxes.
(a) Annual Deferral Amounts.For each Plan Year in which an Annual
Participant Deferral is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary or Bonus Amounts that is not being
deferred, in a manner determined by the Employer(s), the
Participant's share of FICA and other employment taxes, provided,
however, that the Committee may reduce the Annual Participant
Deferral if necessary to comply with applicable withholding
requirements.
-10-
<PAGE> 11
(b) Distributions.The Participant's Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other
taxes required to be withheld by the Employer(s), or the trustee of
the Trust, in connection with such payments, in amounts and in a
manner to be determined in the sole discretion of the Employer(s)
and the trustee of the Trust.
3.6 Vesting
(a) Forfeiture of Unvested Amounts. As of the date of a Participant's
Termination of Employment, Retirement, Disability or death, the
amounts credited to each of the Participant's Plan Accounts shall be
reduced by the amount which has not become vested in accordance with
the vesting provisions set forth below and in the Annual Deferral
Agreement applicable to such Plan Account, and such unvested amounts
shall be forfeited by the Participant.
(b) Vesting of Amounts. The Participant shall be vested in the amounts
credited to his or her Annual Deferral Account and Annual Matching
Contribution Account in respect of each given Plan Year as set forth
in the Annual Deferral Agreement pertaining to such Plan Year. The
vesting terms set forth in each Annual Deferral Agreement shall be
established by the Committee in its sole discretion and may vary for
each Participant and each Plan Year. Such vesting terms may, in the
Committee's discretion, provide for acceleration of vesting upon a
Change in Control.
(c) Vesting After Covered Termination. Unless otherwise specifically
provided under the terms of a particular Annual Deferral Agreement,
in the event of a Participant's Covered Termination, such
Participant, as of the effective date of such Covered Termination,
shall be 100% vested in all amounts credited to each of the
Participant's Plan Accounts, as adjusted for the applicable
Investment Adjustments and all prior withdrawals and distributions.
(d) Vesting Upon Plan Termination. In the event of a termination of the
Plan as it relates to any Participant, all amounts credited to any
and all Plan Accounts of such Participant as of the effective date
of such termination shall be 100% vested.
(e) Acceleration of Vesting by Committee. Notwithstanding anything to
the contrary contained in the Plan or any Annual Deferral Agreement,
the Committee shall have the authority, exercisable in its sole
discretion, to accelerate the vesting of any amounts credited to any
Plan Account of any Participant and any such acceleration shall be
evidenced by a written notice to the Participant setting forth in
detail the Plan Account(s) and the amounts affected by the
Committee's decision to accelerate vesting and the terms of the new
vesting schedule applicable to such amounts.
-11-
<PAGE> 12
ARTICLE 4
Suspension of Deferrals
4.1 Unforeseeable Financial Emergencies. If a Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the
Committee to suspend any deferrals required to be made by the Participant.
The Committee shall determine, in its sole discretion, whether to approve
the Participant's petition. If the petition for a suspension is approved,
suspension shall take effect upon the date of approval.
4.2 Disability. From and after the date that a Participant is deemed have
suffered a Disability, any standing deferral election of the Participant
shall automatically be suspended and no further deferrals shall be made
with respect to the Participant.
4.3 Resumption of Deferrals. If deferrals by a Participant have been suspended
during a Plan Year due to an Unforeseen Financial Emergency or a
Disability, the Participant will not be eligible to make any further
deferrals in respect of that Plan Year. The Participant may be eligible to
make deferrals for subsequent Plan Years provided the Participant is
selected to make deferrals for such subsequent Plan Years and the
Participant complies with the election requirements under the Plan.
ARTICLE 5
Distribution of Plan Accounts
5.1 Elective Distribution of Specified Plan Accounts. A Participant may elect,
at the time he or she makes an Annual Deferral Election with respect to a
given Plan Year, to have the Vested Account Balance of the Participant's
Annual Deferral Account and Annual Matching Contribution Account (if any)
for that Plan Year distributed in a lump sum as of January 15 of the tenth
(10th) Plan Year following the end of the Plan Year in respect of which
the Annual Deferral Election was made (a "Pre-Retirement Distribution
Election"). The Participant may revoke his or her Pre-Retirement
Distribution Election with respect to any Plan Account at such times as
the Committee may designate by completing and submitting to the Committee
an Amended Election Form setting forth such revocation in accordance with
such procedures and time frames as may be established from time to time at
the sole discretion of the Committee, provided that such Amended Election
Form is submitted prior to the commencement of the calendar year in which
the Account Balance of such Plan Account would otherwise be distributed
and at least three (3) months prior to the date that the distribution was
otherwise scheduled to occur, and such Amended Election Form is accepted
by the Committee in its sole discretion. Notwithstanding a Participant's
Pre-Retirement Distribution Election with respect to the Vested Account
Balance of any Plan Account, some or all of such Vested Account Balance
may be subject to earlier distribution pursuant to Section 5.2 or deferred
distribution pursuant to Sections 5.4 and 5.5.
-12-
<PAGE> 13
5.2 Non-Elective Distribution of Aggregate Vested Balance. Notwithstanding any
Pre-Retirement Distribution Election, distribution of a Participant's
Aggregate Vested Balance shall be made upon the earliest of the
Participant's (i) Termination of Employment, (ii) Retirement, (iii)
Disability, or (iv) death, in each case subject to and in accordance with
the applicable provisions of Articles 6 through 9, provided, however, that
the distribution of some or all of a Participant's Aggregate Vested
Balance may be deferred pursuant to Sections 5.4 and 5.5.
5.3 Withdrawal in the Event of an Unforeseeable Financial Emergency. Subject
to Sections 5.4 and 5.5, in the event that a Participant or (after a
Participant's death) a Participant's Beneficiary experiences an
Unforeseeable Financial Emergency, the Participant or Beneficiary may
petition the Committee to receive a partial or full payout of amounts
credited to one or more of the Participant's Plan Accounts. The Committee
shall determine, in its sole discretion, whether the requested payout
shall be made, the amount of the payout and the Plan Accounts from which
the payout will be made; provided, however, that the payout shall not
exceed the lesser of the Participant's Aggregate Vested Benefit or the
amount reasonably needed to satisfy the Unforeseeable Financial Emergency.
In making any determinations under this Section 5.3, the Committee shall
be guided by the prevailing authorities under the Code. If, subject to the
sole discretion of the Committee, the petition for a payout is approved,
the payout shall be made within 60 days of the date of approval.
5.4 Distribution Limitations on Certain Investments. Notwithstanding anything
to the contrary contained in this Plan or in any Enrollment Form, Benefit
Election and Beneficiary Designation Form or any other document, the
Committee may impose limitations and restrictions on the payment of
amounts allocated by a Participant to any Restricted Investment
Benchmark(s) and may defer payment of those amounts for such time periods
as the Committee determines, in its good faith judgement, to be consistent
with the nature of the investment on which such Restricted Investment
Benchmark is based. The Committee shall determine the amounts affected,
the nature of the limitations and restrictions on benefit payments, and
the length of deferral and time of payment of such amounts.
5.5 Deduction Limitation. Notwithstanding anything to the contrary contained
in this Plan or in any Enrollment Form, Benefit Election and Beneficiary
Designation Form or any other document, if the Committee determines in
good faith that there is a reasonable likelihood that any compensation
paid to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Committee to
ensure that the entire amount of any distribution to the Participant
pursuant to this Plan is deductible, the Committee may defer all or any
portion of a distribution under this Plan to the extent necessary to
ensure the full deductibility of such amounts.
5.6 Valuation of Plan Accounts Pending Distribution. To the extent that the
distribution of any portion of any Plan Account is deferred, whether
pursuant to the limitations imposed under this Article 5 or pursuant to
any installment payment schedule under
-13-
<PAGE> 14
Articles 6 and 9 or for any other reason, any amounts remaining to the
credit of the Plan Account shall continue to be adjusted by the applicable
Investment Adjustments in accordance with Article 3.
ARTICLE 6
Termination Benefit
6.1 Termination Benefit. Subject to Article 5, a Participant shall receive a
Termination Benefit, which shall be equal to the Participant's Aggregate
Vested Balance if a Participant experiences a Termination of Employment
prior to his or her Retirement, Disability, or death.
6.2 Payment of Termination Benefit. If the Participant's Aggregate Vested
Balance at the time of his or her Termination of Employment is less than
$25,000, payment of his or her Termination Benefit shall be paid in a lump
sum. If his or her Aggregate Vested Balance at such time is equal to or
greater than that amount, the Committee, in its sole discretion, may cause
the Termination Benefit to be paid in a lump sum or in substantially equal
monthly installment payments over a period of time that does not exceed
five (5) years in duration. Subject to Article 5, the lump sum payment
shall be made, or installment payments shall commence, no later than 60
days after the date of the Participant's Termination of Employment.
6.3 Death Prior to Completion of Termination Benefit. If a Participant dies
after a Termination of Employment but before the Termination Benefit is
paid in full, the Participant's unpaid Termination Benefit payments shall
continue and shall be paid to the Participant's Beneficiary (a) over the
remaining number of months and in the same amounts as that benefit would
have been paid to the Participant had the Participant survived, or (b)
subject to Article 5, in a lump sum, if requested by the Beneficiary and
allowed in the sole discretion of the Committee, that is equal to the
Participant's unpaid remaining Aggregate Vested Balance.
ARTICLE 7
Retirement Benefit
7.1 Retirement Benefit. Subject to Article 5, a Participant who Retires shall
receive, as a Retirement Benefit, his or her Aggregate Vested Balance.
7.2 Payment of Retirement Benefit. A Participant, in connection with his or
her commencement of participation in the Plan, shall elect on a Benefit
Election and Beneficiary Designation Form to receive the Retirement
Benefit in a lump sum or in substantially equal monthly payments over a
period of 36, 60, 120 or 180 months. The Participant may change his or her
election to an allowable alternative payout period by completing and
submitting to the Committee an Amended Benefit Election and Beneficiary
Designation Form setting forth such change, in accordance with such
-14-
<PAGE> 15
procedures and time frames as may be established from time to time at the
sole discretion of the Committee, provided that any such Amended Benefit
Election and Beneficiary Designation Form is submitted prior to the
commencement of the calendar year of the Participant's Retirement and at
least three (3) months prior to the Participant's Retirement, and such
Amended Benefit Election and Beneficiary Designation Form is accepted by
the Committee in its sole discretion. The Benefit Election and Beneficiary
Designation Form most recently accepted by the Committee shall govern the
payout of the Retirement Benefit. If a Participant does not make any
election with respect to the payment of the Retirement Benefit, then such
benefit shall be payable as provided in Section 6.2. Subject to Article 5,
the lump sum payment shall be made, or installment payments shall
commence, no later than 60 days after the date the Participant Retires.
7.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and shall
be paid to the Participant's Beneficiary (a) over the remaining number of
months and in the same amounts as that benefit would have been paid to the
Participant had the Participant survived, or (b) subject to Article 5, in
a lump sum, if requested by the Beneficiary and allowed in the sole
discretion of the Committee, that is equal to the Participant's unpaid
remaining Aggregate Vested Balance.
ARTICLE 8
Pre-Retirement Survivor Benefit
8.1 Pre-Retirement Survivor Benefit. Subject to Article 5, a Participant's
Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to the
Participant's Aggregate Vested Balance, if the Participant dies before he
or she Retires, experiences a Termination of Employment or suffers a
Disability.
8.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in connection
with his or her commencement of participation in the Plan, shall elect on
a Benefit Election and Beneficiary Designation Form whether the
Pre-Retirement Survivor Benefit shall be received by his or her
Beneficiary in a lump sum or in substantially equal monthly payments over
a period of 60, 120 or 180 months. The Participant may change this
election to an allowable alternative payout period by completing and
submitting to the Committee an Amended Benefit Election and Beneficiary
Designation Form in accordance with such procedures and time frames as may
be established from time to time at the sole discretion of the Committee,
which form must be accepted by the Committee in its sole discretion. The
Benefit Election and Beneficiary Designation Form most recently accepted
by the Committee prior to the Participant's death shall govern the payout
of the Participant's Pre-Retirement Survivor Benefit. If a Participant
does not make any election with respect to the payment of the
Pre-retirement Survivor Benefit, then such benefit shall be paid in a lump
sum, provided, however that if the Participant's Aggregate Vested Balance
at the time of his or her death is greater than
-15-
<PAGE> 16
$25,000, payment may be made, in the sole discretion of the Committee, in
a lump sum or in monthly installment payments that do not exceed five (5)
years in duration. Subject to Article 5, the lump sum payment shall be
made, or installment payments shall commence, no later than 60 days after
the date the Committee is provided with proof that is satisfactory to the
Committee of the Participant's death.
ARTICLE 9
Disability Benefit
9.1 Disability Benefit. A Participant suffering a Disability shall receive a
Disability Benefit equal to his or her Aggregate Vested Balance. Subject
to Article 5, the Disability Benefit shall be paid in a lump sum within 60
days of the Committee's exercise of such right, provided, however, that
should the Participant otherwise have been eligible to Retire, he or she
shall be paid a Retirement Benefit in accordance with Article 7.
ARTICLE 10
Beneficiary Designation
10.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent)
to receive any benefits payable under the Plan to a beneficiary upon the
death of a Participant. The Beneficiary designated under this Plan may be
the same as or different from the Beneficiary designation under any other
plan of an Employer in which the Participant participates.
10.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall
designate his or her Beneficiary by completing and signing a Benefit
Election and Beneficiary Designation Form, and returning it to the
Committee or its designated agent. A Participant shall have the right to
change a Beneficiary by completing, signing and submitting to the
Committee an Amended Benefit Election and Beneficiary Designation Form in
accordance with the Committee's rules and procedures, as in effect from
time to time. If the Participant names someone other than his or her
spouse as a Beneficiary, a spousal consent, in the form designated by the
Committee, must be signed by that Participant's spouse and returned to the
Committee. Upon the acceptance by the Committee of an Amended Benefit
Election and Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall be entitled to
rely on the last Benefit Election and Beneficiary Designation Form filed
by the Participant and accepted by the Committee prior to his or her
death.
10.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by
the Committee or its designated agent.
-16-
<PAGE> 17
10.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above or, if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has
no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of
the Participant's estate.
10.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Plan, the Committee shall
have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
10.6 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and each of the Participant's Annual Deferral Agreements
shall terminate upon such full payment of benefits.
ARTICLE 11
Leave of Absence
11.1 Paid Leave of Absence. If a Participant is authorized by the Participant's
Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the appropriate amounts shall
continue to be withheld from the Participant's compensation pursuant to
the Participant's then current Annual Election Form.
11.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to be
considered employed by the Employer and the Participant shall be excused
from making deferrals until the earlier of the date the leave of absence
expires or the Participant returns to a paid employment status. Upon such
expiration or return, deferrals shall resume for the remaining portion of
the Plan Year in which the expiration or return occurs, based on the
deferral election, if any, made for that Plan Year. If no election was
made for that Plan Year, no deferral shall be withheld.
ARTICLE 12
Termination, Amendment or Modification
12.1 Termination. Although the Employers anticipate that they will continue the
Plan for an indefinite period of time, there is no guarantee that any
Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right to
discontinue its sponsorship of the Plan and to terminate the Plan, at any
time, with respect to its participating Employees by action of its board
of directors.
-17-
<PAGE> 18
Upon the termination of the Plan with respect to any Employer, subject to
Sections 5.4 and 5.5, all amounts credited to each of the Plan Accounts of
each affected Participant shall be 100% vested and shall be paid to the
Participant or, in the case of the Participant's death, to the
Participant's Beneficiary, in a lump sum notwithstanding any elections
made by the Participant, and the Annual Deferral Agreements relating to
each of the Participant's Plan Accounts shall terminate upon full payment
of such Aggregate Vested Balance.
12.2 Amendment. The Company may, at any time, amend or modify the Plan in whole
or in part with respect to any or all Employers by the actions of the
Board; provided, however, that (i) no amendment or modification shall be
effective to decrease or restrict the value of a Participant's Aggregate
Vested Balance in existence at the time the amendment or modification is
made, calculated as if the Participant had experienced a Termination of
Employment as of the effective date of the amendment or modification, or,
if the amendment or modification occurs after the date upon which the
Participant was eligible to Retire, the Participant had Retired as of the
effective date of the amendment or modification, and (ii) except as
specifically provided in Section 12.1, no amendment or modification shall
be made after a Change in Control which adversely affects the vesting,
calculation or payment of benefits hereunder or diminishes any other
rights or protections any Participant or Beneficiary would have had but
for such amendment or modification, unless each affected Participant or
Beneficiary consents in writing to such amendment.
12.3 Effect of Payment. The full payment of the applicable benefit under the
provisions of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan and
each of the Participant's Annual Deferral Agreements shall terminate.
ARTICLE 13
Administration
13.1 Committee Duties. This Plan shall be administered by a Committee which
shall consist of the Board, or such committee as the Board shall appoint.
Members of the Committee may be Participants under this Plan. The
Committee shall also have the discretion and authority to (i) make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all
questions including interpretations of this Plan, as may arise in
connection with the Plan. Any individual serving on the Committee who is a
Participant shall not vote or act on any matter relating solely to himself
or herself. When making a determination or calculation, the Committee
shall be entitled to rely on information furnished by a Participant or the
Company.
13.2 Agents. In the administration of this Plan, the Committee may, from time
to time, employ agents and delegate to them such administrative duties as
it sees fit (including
-18-
<PAGE> 19
acting through a duly appointed representative) and may from time to time
consult with counsel who may be counsel to any Employer.
13.3 Binding Effect of Decisions. The decision or action of the Committee with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.
13.4 Indemnity of Committee. All Employers shall indemnify and hold harmless
the members of the Committee, and any Employee to whom duties of the
Committee may be delegated, against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with
respect to this Plan, except in the case of willful misconduct by the
Committee or any of its members or any such Employee.
13.5 Employer Information. To enable the Committee to perform its functions,
each Employer shall supply full and timely information to the Committee on
all matters relating to the compensation of its Participants, the date and
circumstances of the Retirement, Disability, death or Termination of
Employment of its Participants, and such other pertinent information as
the Committee may reasonably require.
ARTICLE 14
Other Benefits and Agreements
The benefits provided for a Participant and Participant's Beneficiary
under the Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Participant's
Employer. The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly provided.
ARTICLE 15
Claims Procedures
15.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after such
notice was received by the Claimant. The claim must state with
particularity the determination desired by the Claimant. All other claims
must be made within 180 days of the date on which the event that caused
the claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
15.2 Notification of Decision. The Committee shall consider a Claimant's claim
within a reasonable time, and shall notify the Claimant in writing:
-19-
<PAGE> 20
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or any
part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary;
and
(iv) an explanation of the claim review procedure set forth in
Section 15.3 below.
15.3 Review of a Denied Claim. Within 60 days after receiving a notice from the
Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the
Committee a written request for a review of the denial of the claim.
Thereafter, but not later than 30 days after the review procedure began,
the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
15.4 Decision on Review. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written request
for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's
decision must be rendered within 120 days after such date. Such decision
must be written in a manner calculated to be understood by the Claimant,
and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
-20-
<PAGE> 21
15.5 Arbitration. A Claimant's compliance with the foregoing provisions of this
Article 15 is a mandatory prerequisite to a Claimant's right to commence
any arbitration with respect to any claim for benefits under this Plan.
Any and all claims that are not resolved to the satisfaction of a Claimant
under the above provisions of this Article 15 shall be subject to
arbitration conducted in Albany, New York before a panel of three (3)
arbitrators pursuant to rules of the National Association of Securities
Dealers. Unless otherwise provided herein each party shall bear its own
costs and expenses in connection with such arbitration and the parties
shall contribute equally the arbitrator's fees. The arbitrator's decision
in any dispute shall be final and binding and shall not be subject to
appeal or judicial review.
ARTICLE 16
Trust
16.1 Establishment of the Trust. The Company may establish one or more Trusts
to which the Employers may transfer such assets as the Employers determine
in their sole discretion to assist in meeting their obligations under the
Plan.
16.2 Interrelationship of the Plan and the Trust. The provisions of the Plan
and the relevant Annual Deferral Agreements shall govern the rights of a
Participant to receive distributions pursuant to the Plan. The provisions
of the Trust shall govern the rights of the Employers, Participants and
the creditors of the Employers to the assets transferred to the Trust.
16.3 Distributions From the Trust. Each Employer's obligations under the Plan
may be satisfied with Trust assets distributed pursuant to the terms of
the Trust, and any such distribution shall reduce the Employer's
obligations under this Agreement.
ARTICLE 17
Miscellaneous
17.1 Status of Plan. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employee" within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent. All Plan Accounts and
all credits and other adjustments to such Plan Accounts shall be
bookkeeping entries only and shall be utilized solely as a device for the
measurement and determination of amounts to be paid under the Plan. No
Plan Accounts, credits or other adjustments under the Plan shall be
interpreted as an indication that any benefits under the Plan are in any
way funded.
-21-
<PAGE> 22
17.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the
payment of benefits under this Plan, any and all of an Employer's, assets,
shall be, and remain, the general, unpledged unrestricted assets of the
Employer. An Employer's obligation under the Plan shall be merely that of
an unfunded and unsecured promise to pay money in the future.
17.3 Employer's Liability. An Employer's liability for the payment of benefits
shall be defined only by the Plan and the Plan Agreement, as entered into
between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in
the Plan and his or her Plan Agreement.
17.4 Nonassignability. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any
part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable. No part of the amounts payable
shall, prior to actual payment, be subject to seizure, attachment,
garnishment or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person,
be transferable by operation of law in the event of a Participant's or any
other person's bankruptcy or insolvency or be transferable to a spouse as
a result of a property settlement or otherwise.
17.5 Not a Contract of Employment. The terms and conditions of this Plan and
the Annual Deferral Agreements under this Plan shall not be deemed to
constitute a contract of employment between any Employer and the
Participant. Such employment is hereby acknowledged to be an "at will"
employment relationship that can be terminated at any time for any reason,
or no reason, with or without cause, and with or without notice, except as
otherwise provided in a written employment agreement. Nothing in this Plan
or any Annual Deferral Agreement shall be deemed to give a Participant the
right to be retained in the service of any Employer as an Employee or to
interfere with the right of any Employer to discipline or discharge the
Participant at any time.
17.6 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested
in order to facilitate the administration of the Plan and the payments of
benefits hereunder, including but not limited to taking such physical
examinations as the Committee may deem necessary.
17.7 Terms. Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the
plural or the singular, as the case may be, in all cases where they would
so apply.
-22-
<PAGE> 23
17.8 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
17.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of
New York without regard to its conflicts of laws principles.
17.10 Notice. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
First Albany Companies Inc.
30 South Pearl Street
Albany, New York 12207
Attn: General Counsel
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
17.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and
the Participant and the Participant's designated Beneficiaries.
17.12 Spouse's Interest. The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall automatically pass
to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such
interest pass under the laws of intestate succession.
17.13 Validity. In case any provision of this Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as
if such illegal or invalid provision had never been inserted herein.
17.14 Incompetent. If the Committee determines in its discretion that a benefit
under this Plan is to be paid to a minor, a person declared incompetent or
to a person incapable of handling the disposition of that person's
property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of
such minor, incompetent or incapable person. The Committee may require
proof of minority, incompetence, incapacity or guardianship, as it may
deem appropriate prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant's Beneficiary, as the case
-23-
<PAGE> 24
may be, and shall be a complete discharge of any liability under the Plan
for such payment amount.
17.15 Distribution in the Event of Taxation. If, for any reason, all or any
portion of a Participant's benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee
before a Change in Control, or the trustee of the Trust after a Change in
Control, for a distribution of that portion of his or her benefit that has
become taxable. Upon the grant of such a petition, which grant shall not
be unreasonably withheld, a Participant's Employer shall, subject to
Sections 5.4 and 5.5, distribute to the Participant immediately available
funds in an amount equal to the taxable portion of his or her benefit
(which amount shall not exceed a Participant's unpaid Aggregate Vested
Balance under the Plan). If the petition is granted, the tax liability
distribution shall be made within 90 days of the date when the
Participant's petition is granted. Such a distribution shall affect and
reduce the benefits to be paid under this Plan.
17.16 Insurance. The Employers, on their own behalf or on behalf of the trustee
of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such
forms as the Trust may choose. The Employers or the trustee of the Trust,
as the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such
policy or policies, and at the request of the Employers shall submit to
medical examinations and supply such information and execute such
documents as may be required by the insurance company or companies to whom
the Employers have applied for insurance.
17.17 Legal Fees To Enforce Rights After Change in Control. The Company and each
Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of the Participant's Employer (which might
then be composed of new members) or a shareholder of the Company or the
Participant's Employer, or of any successor corporation might then cause
or attempt to cause the Company or the Participant's Employer or such
successor to refuse to comply with its obligations under the Plan and
might cause or attempt to cause the Company or the Participant's Employer
to institute, or may institute, arbitration or litigation seeking to deny
Participants the benefits intended under the Plan. In these circumstances,
the purpose of the Plan could be frustrated. Accordingly, if, following a
Change in Control, it should appear to any Participant that the Company,
the Participant's Employer or any successor corporation has failed to
comply with any of its obligations under the Plan or any agreement
thereunder or, if the Company, such Employer or any other person takes any
action to declare the Plan void or unenforceable or institutes any
arbitration, litigation or other legal action designed to deny, diminish
or to recover from any Participant the benefits intended to be provided,
then the Company and the Participant's Employer irrevocably authorize such
Participant to retain counsel of his or her choice at the expense of the
Company and the Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense of
any arbitration, litigation or other legal action, whether by or against
the Company, the
-24-
<PAGE> 25
Participant's Employer or any director, officer, shareholder or other
person affiliated with the Company, the Participant's Employer or any
successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
______________, 1998.
First Albany Companies Inc.,
a New York corporation
By:__________________________________
Name:________________________________
Title:_______________________________
-25-
<PAGE> 1
EXHIBIT 4(b)
FIRST ALBANY COMPANIES INC.
INVESTMENT EXECUTIVES
DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1998
<PAGE> 2
FIRST ALBANY COMPANIES INC.
INVESTMENT EXECUTIVES
DEFERRED COMPENSATION PLAN
Effective January 1, 1998
PURPOSE
The purpose of this Plan is to provide specified benefits to a
select group of highly compensated Employees who contribute materially to the
continued growth, development and future business success of First Albany
Companies Inc. and its subsidiaries, if any, that sponsor this Plan. This Plan
shall be unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE 1
DEFINITIONS
For purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the meanings indicated:
1.1 "Aggregate Vested Balance" or "Aggregate Vested Benefit" shall mean,
with respect to the Plan Accounts of any Participant as of a given date, the sum
of the amounts that have become vested under all of the Participant's Plan
Accounts, as adjusted to reflect all applicable Investment Adjustments and all
prior withdrawals and distributions, in accordance with Article 3 of the Plan
and the provisions of the applicable Enrollment Forms.
1.2 "Amended Election Form" shall mean the Amended Election Form required
by the Committee to be signed and submitted by a Participant to effect a
permitted change in the elections previously made by the Participant under any
Annual Election Form.
1.3 "Annual Deferral Account" shall mean a Participant's Annual
Participant Deferral for a Plan Year, as adjusted to reflect all applicable
Investment Adjustments and all prior distributions and withdrawals.
1.4 "Annual Deferral Agreement" shall mean the Annual Deferral Agreement
required by the Committee to be signed and submitted by a Participant in
connection with the Participant's deferral election with respect to a given Plan
Year.
1.5 "Annual Election Form" shall mean the Annual Election Form required by
the Committee to be signed and submitted by a Participant in connection with the
Participant's deferral election with respect to a given Plan Year.
1.6 "Annual Matching Contribution" shall mean the aggregate amount
credited by the Company to a Participant in respect of a particular Plan Year
under Section 3.2.
<PAGE> 3
1.7 "Annual Matching Contribution Account" shall mean a Participant's
Annual Matching Contributions for a Plan Year, as adjusted to reflect all
applicable Investment Adjustments and all prior distributions and withdrawals.
1.8 "Annual Participant Deferral" shall mean the aggregate amount deferred
by a Participant in respect of a particular Plan Year under Section 3.1.
1.9 "Base Annual Salary" shall mean the annual base salary payable to a
Participant by an Employer in cash in respect of services rendered during a Plan
Year, including any Elective Deductions, but excluding Bonus Amounts,
Commissions or other additional incentives or awards payable to the Participant.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 10, that are entitled to
receive a Participant's Aggregate Account Balance under this Plan in the event
of the Participant's death.
1.11 "Board" shall mean the board of directors of the Company.
1.12 "Bonus Amounts" shall mean the amounts payable to a Participant in
cash by an Employer in respect of services rendered during a Plan Year under any
bonus or incentive plan or arrangement of an Employer, including any Elective
Deductions, but excluding Commissions, stock-related awards and other
non-monetary incentives.
1.13 "Change in Control" shall mean the earliest to occur of the following
events:
(a) The consummation of any transaction or series of transactions as
a result of which any "Person" (as the term person is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than an "Excluded Person" (as hereinafter defined) has or
obtains ownership or control, directly or indirectly, of fifty percent (50%) or
more of the combined voting power of all securities of the Company or any
successor or surviving corporation of any merger, consolidation or
reorganization involving the Company (the "Voting Securities"). The term
"Excluded Person" means any one or more of the following: (i) the Company or any
majority-owned subsidiary of the Company, (ii) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
majority-owned subsidiary of the Company, (iii) any Person who as of the initial
effective date of this Plan owned or controlled, directly or indirectly, ten
percent (10%) or more of the then outstanding Voting Securities, or any
individual, entity or group that was part of such a Person;
(b) A merger, consolidation or reorganization involving the Company
as a result of which the holders of Voting Securities immediately before such
merger, consolidation or reorganization do not immediately following such
merger, consolidation or reorganization own or control, directly or indirectly,
at least fifty percent (50%) of the Voting Securities in substantially the same
proportion as their ownership or control of the Voting Securities immediately
before such merger, consolidation or reorganization; or
(c) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a majority-owned
subsidiary of the Company).
3
<PAGE> 4
1.14 "Claimant" shall have the meaning set forth in Section 15.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.16 "Commissions" shall mean the amounts payable to a Participant by an
Employer in cash in respect of services rendered during a Plan Year under any
commission scheme or commission draw arrangement, including any Elective
Deductions, but excluding Bonus Amounts, stock-related awards and other
non-monetary incentives.
1.17 "Committee" shall mean the committee described in Article 13.
1.18 "Company" shall mean First Albany Companies Inc., a New York
corporation, and any successor to all or substantially all of its assets or
business.
1.19 "Covered Termination" shall mean the termination of a Participant's
employment with the Company and all other Employers within two (2) years
following a Change in Control as a result of the Participant's resignation for
good reason or a termination by the Participant's Employer without cause. For
these purposes a Participant's resignation for good reason shall mean a
Participant's resignation following (i) a diminution in the Participant's
status, title, position or responsibilities, or an assignment to the Participant
of duties inconsistent with the Participant's status, title or position other
than for cause or (ii) a material reduction in the Participant's aggregate
annualized compensation rate solely as a result of a change adopted unilaterally
by the Company. A Participant's resignation shall not be treated as a
resignation for good reason unless it occurs after one of the foregoing events
and the Participant provides the Employer with written notice of the event
within six (6) months of the occurrence of the event and within seven (7) days
before the effective date of the Participant's resignation and the Employer
shall not have cured such event prior to such resignation. A termination by the
Participant's Employer without cause shall mean an involuntary termination of
the Participant's employment by Participant's Employer other than by reason of
the Participant's (i) willful and continued failure to perform the duties of his
or her position after receiving notice of such failure and being given
reasonable opportunity to cure such failure; (ii) willful misconduct which is
demonstrably and materially injurious to the Employer; (iii) conviction of a
felony; or (iv) material breach of applicable federal or state securities laws,
regulations or licensing requirements or the applicable rules or regulations of
any self-regulatory body. No act or failure to act on the part of a Participant
shall be considered "willful" unless it is done or omitted to be done in bad
faith or without reasonable belief that the action or omission was in the best
interest of the Employer. No termination shall be considered a termination for
cause unless it is effected by a written notice to the Participant stating in
detail the grounds constituting cause.
1.20 "Disability" shall mean a period of disability during which a
Participant qualifies for total permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a Participant does
not participate in such a plan, a period of disability during which the
Participant would have qualified for total permanent disability benefits under
such a plan had the Participant been a participant in such a plan, as determined
in the sole discretion of the Committee. If the Participant's Employer does not
sponsor such a plan, or discontinues to sponsor such a plan, Disability shall be
determined by the Committee in its sole discretion.
4
<PAGE> 5
1.21 "Disability Benefit" shall mean the benefit set forth in Article 9.
1.22 "Election Form" shall mean, with respect to any Plan Account, the
Annual Election Form or the Amended Election Form last signed and submitted by
the Participant and accepted by the Committee with respect to that Plan Account.
1.23 "Elective Deductions" shall mean deductions made from a Participant's
Base Annual Salary, Bonus Amounts and Commissions for amounts voluntarily
deferred or contributed by the Participant pursuant to all qualified and
non-qualified compensation deferral plans, including, without limitation,
amounts not included in the Participant's gross income under Code Sections 125,
402(e)(3) and 402(h), provided, however, that all such amounts would have been
payable in cash to the Employee had there been no such plan.
1.24 "Employee" shall mean a person who is an employee of any Employer.
1.25 "Employer" shall mean the Company and/or any of its subsidiaries (now
in existence or hereafter formed or acquired) that have been selected by the
Board to participate in the Plan and have adopted the Plan as a sponsor.
1.26 "Enrollment Forms" shall mean, for any Plan Year, the Annual Deferral
Agreement, the Annual Election Form and any other forms or documents which may
be required of a Participant by the Committee, in its sole discretion.
1.27 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.28 "Investment Adjustment" shall mean an adjustment made to the balance
of any Plan Account in accordance with Section 3.4 to reflect the performance of
an Investment Benchmark pursuant to which the value of the Plan Account is
measured.
1.29 "Investment Benchmark" shall mean a benchmark made available under
the Plan from time to time by the Committee for purposes of valuing Plan
Accounts.
1.30 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan, (iii) who
signs the applicable Enrollment Forms and Benefit Election and Beneficiary
Designation Form (and other forms required by the Committee), (iv) whose signed
Enrollment Forms and Benefit Election and Beneficiary Designation Form (and
other required forms) are accepted by the Committee, (v) who commences
participation in the Plan, and (vi) whose participation has not terminated. A
spouse or former spouse of a Participant shall not be treated as a Participant
in the Plan or have an account balance under the Plan, even if he or she has an
interest in the Participant's benefits under the Plan as a result of applicable
law or property settlements resulting from legal separation or divorce.
1.31 "Plan" shall mean the First Albany Companies Inc. Investment
Executives Deferred Compensation Plan, which shall be evidenced by this
instrument and by each Enrollment Form, as they may be amended from time to
time.
5
<PAGE> 6
1.32 "Plan Accounts" shall mean the Annual Deferral Accounts and Annual
Matching Accounts established under the Plan.
1.33 "Plan Year" shall mean the period beginning on January 1 of each year
and ending December 31.
1.34 "Pre-Retirement Distribution Election" shall mean an election made in
accordance with Section 5.1.
1.35 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 8.
1.36 "Restricted Investment Benchmark" means an Investment Benchmark which
is designated as a Restricted Investment Benchmark by the Committee at the time
such Investment Benchmark is initially made available under the Plan.
1.37 "Retirement," "Retires" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers (and all other affiliates
of the Company) for any reason other than an authorized leave of absence,
Disability, death or for cause on or after the earlier of the attainment of age
sixty-five (65) with ten (10) Years of Service.
1.38 "Retirement Benefit" shall mean the benefit set forth in Article 7.
1.39 "Retirement Benefit and Beneficiary Designation Form" shall mean the
Retirement Benefit and Beneficiary Designation Form or Amended Retirement
Benefit and Beneficiary Designation Form last signed and submitted by a
Participant and accepted by the Committee.
1.40 "Termination Benefit" shall mean the benefit set forth in Article 6.
1.41 "Termination of Employment" shall mean the severing of employment
with all Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death, an authorized leave of absence or for cause.
1.42 "Trust" shall mean the trust established in accordance with Article
16.
1.43 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting from (i)
a sudden and unexpected illness or accident of the Participant or a dependent of
the Participant, (ii) a loss of the Participant's property due to casualty, or
(iii) such other extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant, all as determined in the
sole discretion of the Committee. In making its determination the Committee
shall be guided by the prevailing authorities applicable under the Code.
1.44 "Vested Account Balance" shall mean, with respect to any Plan Account
as of a given date, the sum of the amounts that have become vested, as adjusted
to reflect all applicable Investment Adjustments and all prior withdrawals and
distributions, in accordance with Article 3 of the Plan and the provisions of
applicable Enrollment Forms.
6
<PAGE> 7
1.45 "Years of Service" shall mean the total number of full Plan Years
during which a Participant has been continuously employed by one or more
Employers. Any partial Plan Year during which a Participant has been employed by
an Employer shall not be counted.
ARTICLE 2
ELIGIBILITY, SELECTION, ENROLLMENT
Section 2.1 Selection by Committee. Participation in the Plan shall be limited
to a select group of highly compensated Employees of the Employers, as
determined by the Committee in its sole discretion. From that group, the
Committee shall select, in its sole discretion, the Employees who shall be
eligible to make an Annual Participant Deferral in respect of each Plan Year.
The Committee's selection of an Employee to make an Annual Participant Deferral
in respect of a particular Plan Year will not entitle that Employee to make an
Annual Participant Deferral for any subsequent Plan Year, unless the Employee is
again selected by the Committee to make an Annual Participant Deferral for such
subsequent Plan Year.
Section 2.2 Enrollment Requirements. As a condition to being eligible to make an
Annual Participant Deferral for any Plan Year, each selected Employee shall
complete, execute and return to the Committee each of the required Enrollment
Forms, and shall have on file with the Committee a completed Retirement Benefit
and Beneficiary Designation Form, all prior to the date specified by the
Committee. In addition, the Committee shall establish from time to time such
other enrollment requirements as it determines necessary, in its sole
discretion.
Section 2.3 Commencement of Participation. Provided an Employee selected to make
an Annual Participant Deferral in respect of a particular Plan Year has met all
enrollment requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the specified
time period, the Employee's designated deferrals shall commence as of the date
established by the Committee in its sole discretion. If an Employee fails to
meet all such requirements within the specified time period with respect to any
Plan Year, the Employee shall not be eligible to make any deferrals for that
Plan Year.
Section 2.4 Subsequent Elections. The Enrollment Forms submitted by a
Participant in respect of a particular Plan Year will not be effective with
respect to any subsequent Plan Year. If an Employee is selected to participate
in the Plan for a subsequent Plan Year and the required Enrollment Forms are not
timely delivered for the subsequent Plan Year, the Participant shall not be
eligible to make any deferrals with respect to such subsequent Plan Year.
Section 2.5 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a member of a
select group of highly compensated employees, as membership in such group is
determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA,
the Committee shall have the right, in its sole discretion, to (i) terminate any
Annual Participant Deferral and Annual Matching Contribution not yet credited to
the Participant's Plan Accounts and/or (ii) immediately distribute the
Participant's then Aggregate Vested Balance as a Termination Benefit and
terminate the Participant's participation in the Plan. Any Annual Matching
Contribution made on behalf of the
7
<PAGE> 8
Participant that is not vested prior to the date of the Committee's
determination shall be forfeited by the Participant. If the Committee chooses to
terminate the Participant's participation in the Plan, the Committee may, in its
sole discretion, select the Participant to participate in the Plan at such time
in the future as the Participant again becomes a member of the select group
described above. If a Participant's Employer terminates the Participant's
employment for cause (as described in Section 1.19), then, (i) the Participant's
participation in the Plan shall automatically terminate, (ii) the Committee
shall distribute to the Participant, at the time and in the manner described in
Section 6.2, the remainder of the Participant's Annual Participant Deferrals
that were credited to the Participant's Plan Accounts prior to the date of
termination after adjustment for all prior withdrawals and distributions and
(iii) all other amounts in any of the Participant's Plan Accounts shall be
forfeited by the Participant. Any distribution made pursuant to this Section 2.5
may be subject to deferred distribution pursuant to Section 5.4.
ARTICLE 3
PARTICIPANT DEFERRALS, COMMITMENTS, MATCHING CONTRIBUTIONS,
INVESTMENT ADJUSTMENTS, TAXES AND VESTING
Section 3.1 Participant Deferrals.
(a) Deferral Election. A Participant may make an election to defer the
receipt of amounts payable to the Participant in the form of Base
Annual Salary, Bonus Amounts and Commissions for services rendered
during a Plan Year. The Participant's election shall be evidenced by
an Annual Deferral Agreement and Annual Election Form completed and
submitted to the Committee in accordance with such procedures and
time frames as may be established by the Committee in its sole
discretion. Amounts deferred by a Participant in respect of services
rendered during a Plan Year shall be referred to collectively as an
Annual Participant Deferral and shall be credited to an Annual
Deferral Account established in the name of the Participant. A
separate Annual Deferral Account shall be established and maintained
for each Annual Participant Deferral. The Committee shall have sole
discretion to determine in respect of each Plan Year: (i) whether a
Participant shall be eligible to make an Annual Participant
Deferral; (ii) the form(s) of compensation which may be the subject
of any Annual Participant Deferral; and (iii) any other terms and
conditions applicable to the Annual Participant Deferral.
(b) Minimum Deferral.
(i) Minimum. For each Plan Year the Committee may permit a
Participant to elect to defer, as his or her Annual
Participant Deferral, one or more of the following forms of
compensation in the following minimum amounts:
8
<PAGE> 9
<TABLE>
<CAPTION>
Minimum
Deferral Amount
-------- ------
<S> <C>
Base Annual Salary $3,000
Bonus Amounts $3,000
Commissions $3,000
</TABLE>
If an election is made for less than stated minimum
amounts, or if no election is made, the amount deferred shall
be zero.
(ii) Short Plan Year. If a Participant first becomes a
Participant after the first day of a Plan Year, the minimum
deferral of each of the Participant's Base Annual Salary,
Bonus Amounts and Commissions shall be an amount equal to the
minimum set forth above, multiplied by a fraction, the
numerator of which is the number of complete months remaining
in the Plan Year and the denominator of which is 12.
(c) Maximum Deferral. For each Plan Year the Committee may permit a
Participant to elect to defer, as his or her Annual Participant
Deferral, one or more of the following forms of compensation payable
to the Participant, but not yet received, during the Plan Year up to
the following maximum percentages:
<TABLE>
<CAPTION>
Maximum
Deferral Percentage
-------- ----------
<S> <C>
Base Annual Salary 50%
Bonus Amounts 100%
Commissions 100%
</TABLE>
(d) Deferral Designations.
(i) Base Annual Salary. A Participant may designate the amount
of the Annual Participant Deferral to be deducted from his or
her Base Annual Salary as either a percentage of his or her
Base Annual Salary or a fixed dollar amount. Such amount shall
be withheld from each regularly scheduled Base Annual Salary
payment in equal amounts.
(ii) Bonus Amounts. A Participant may designate the amount of
the Annual Participant Deferral to be deducted from his or her
Bonus Amounts as either a percentage or a fixed dollar amount
of specified Bonus Amounts expected by the Participant.
Percentages may be expressed as percentages of Bonus Amounts
in excess of stated thresholds selected by the Participant. If
a Participant designates the Annual Participant Deferral to be
deducted from any Bonus Amount as a fixed dollar amount and
such fixed dollar amount exceeds the Bonus Amount actually
payable to the Participant, the entire amount of such Bonus
Amount shall be withheld.
9
<PAGE> 10
(iii) Commissions. A Participant may designate the amount of
the Annual Participant Deferral to be deducted from his or her
Commissions as either a percentage of his or her Commissions
or a fixed dollar amount. Percentages may be expressed as
percentages of the amount of each regularly scheduled
Commission payment in excess of a stated threshold selected by
the Participant. Such amount shall be withheld from the
Commission portion of each regularly scheduled Commission
payment in equal amounts.
Section 3.2 Annual Matching Contribution. A Participant may be credited with one
or more matching contributions in respect of any Plan Year, expressed as a
percentage of the amount of Base Annual Salary, Bonus Amounts, Commissions or
any combination of the foregoing deferred by the Participant pursuant to the
Participant's Annual Participant Deferral for the Plan Year. Such matching
contributions credited to a Participant in respect of a Plan Year shall be
referred to collectively as the Annual Matching Contribution for that Plan Year
and shall be credited to an Annual Matching Contribution Account in the name of
the Participant. A separate Annual Matching Contribution Account shall be
established and maintained for each Annual Matching Contribution. The Board
shall have sole discretion to determine in respect of each Plan Year and each
Participant: (i) whether any Annual Matching Contribution shall be made; (ii)
the Participant(s) who shall be entitled to such Annual Matching Contribution;
(iii) the amount of such Annual Matching Contribution; (iv) the date(s) on which
any portion of such Annual Matching Contribution shall be credited to each
Participant's Annual Matching Contribution Account; and (v) any other terms and
conditions applicable to such Annual Matching Contribution.
Section 3.3 Selection of Investment Benchmarks. In connection with a
Participant's election to make an Annual Participant Deferral in respect of a
Plan Year, the Participant shall select one or more Investment Benchmarks and
the percentage of the Participant's Annual Deferral Account and Annual Matching
Contribution Account (if any) for such Plan Year to be adjusted to reflect the
performance of each selected Investment Benchmark. All selections of Investment
Benchmarks shall be in multiples of 10% unless the Committee determines that
lower increments are acceptable. A Participant may make changes in his or her
selected Investment Benchmarks with respect to any Plan Account at such times as
the Committee may designate by completing and submitting to the Committee an
Amended Election Form in accordance with such procedures and time frames as may
be established from time to time at the sole discretion of the Committee,
provided, however, that the Committee may limit a Participant's ability to make
such changes with respect to any Restricted Investment Benchmark to the extent
deemed by the Committee, in its good faith judgement, to be consistent with the
nature of the investment on which such Restricted Investment Benchmark is based.
Section 3.4 Adjustment of Plan Accounts. While a Participant's Plan Accounts do
not represent the Participant's ownership of, or any ownership interest in, any
particular assets, the Participant's Plan Accounts shall be adjusted in
accordance with the Investment Benchmark(s), subject to the conditions and
procedures set forth herein or established by the Committee from time to time.
Any cash earnings generated under an Investment Benchmark (such as interest and
cash dividends and distributions) shall, at the Committee's sole discretion,
either be deemed to be reinvested in that Investment Benchmark or reinvested in
one or more other Investment
10
<PAGE> 11
Benchmark(s) designated by the Committee. All notional acquisitions and
dispositions of Investment Benchmarks under a Participant's Plan Accounts shall
be deemed to occur at such times as the Committee shall determine to be
administratively feasible in its sole discretion and the Participant's Plan
Accounts shall be adjusted accordingly. In addition, a Participant's Plan
Accounts may be adjusted from time to time, in accordance with procedures and
practices established by the Committee, in its sole discretion, to reflect any
notional transactional costs and other fees and expenses relating to the deemed
investment, disposition or carrying of any Investment Benchmark for the
Participant's Plan Accounts. Adjustments made in accordance herewith shall be
referred to as Investment Adjustments. Notwithstanding anything to the contrary,
any Investment Adjustments made to any Plan Account following a Change in
Control shall be made in a manner no less favorable to Participants than the
practices and procedures employed under the Plan, or as otherwise in effect, as
of the date of the Change in Control.
Section 3.5 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Participant Deferral is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary, Bonus Amounts, and/or Commissions
that is not being deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other employment
taxes, provided, however, that the Committee may reduce the Annual
Participant Deferral if necessary to comply with applicable
withholding requirements.
(b) Distributions. The Participant's Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other
taxes required to be withheld by the Employer(s), or the trustee of
the Trust, in connection with such payments, in amounts and in a
manner to be determined in the sole discretion of the Employer(s)
and the trustee of the Trust.
Section 3.6 Vesting.
(a) Forfeiture of Unvested Amounts. As of the date of a Participant's
Termination of Employment, Retirement, Disability or death, the
amounts credited to each of the Participant's Plan Accounts shall be
reduced by the amount which has not become vested in accordance with
the vesting provisions set forth below and in the Annual Deferral
Agreement applicable to such Plan Account, and such unvested amounts
shall be forfeited by the Participant.
(b) Vesting of Amounts. The Participant shall be vested in the amounts
credited to his or her Annual Deferral Account and Annual Matching
Contribution Account in respect of each given Plan Year as set forth
in the Annual Deferral Agreement pertaining to such Plan Year. The
vesting terms set forth in each Annual Deferral Agreement shall be
established by the Committee in its sole discretion and may vary for
each Participant and each Plan Year. Such vesting terms may,
11
<PAGE> 12
in the Committee's discretion, provide for acceleration of vesting
upon a Change in Control.
(c) Vesting After Covered Termination. Unless otherwise specifically
provided under the terms of a particular Annual Deferral Agreement,
in the event of a Participant's Covered Termination, such
Participant, as of the effective date of such Covered Termination,
shall be 100% vested in all amounts credited to each of the
Participant's Plan Accounts, as adjusted for the applicable
Investment Adjustments and all prior withdrawals and distributions.
(d) Vesting Upon Plan Termination. In the event of a termination of the
Plan as it relates to any Participant, all amounts credited to any
and all Plan Accounts of such Participant as of the effective date
of such termination shall be 100% vested.
(e) Acceleration of Vesting by Committee. Notwithstanding anything to
the contrary contained in the Plan or any Annual Deferral Agreement,
the Committee shall have the authority, exercisable in its sole
discretion, to accelerate the vesting of any amounts credited to any
Plan Account of any Participant and any such acceleration shall be
evidenced by a written notice to the Participant setting forth in
detail the Plan Account(s) and the amounts affected by the
Committee's decision to accelerate vesting and the terms of the new
vesting schedule applicable to such amounts.
ARTICLE 4
SUSPENSION OF DEFERRALS
Section 4.1 Unforeseeable Financial Emergencies. If a Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the Committee to
suspend any deferrals required to be made by the Participant. The Committee
shall determine, in its sole discretion, whether to approve the Participant's
petition. If the petition for a suspension is approved, suspension shall take
effect upon the date of approval.
Section 4.2 Disability. From and after the date that a Participant is deemed
have suffered a Disability, any standing deferral election of the Participant
shall automatically be suspended and no further deferrals shall be made with
respect to the Participant.
Section 4.3 Resumption of Deferrals. If deferrals by a Participant have been
suspended during a Plan Year due to an Unforeseen Financial Emergency or a
Disability, the Participant will not be eligible to make any further deferrals
in respect of that Plan Year. The Participant may be eligible to make deferrals
for subsequent Plan Years provided the Participant is selected to make deferrals
for such subsequent Plan Years and the Participant complies with the election
requirements under the Plan.
12
<PAGE> 13
ARTICLE 5
DISTRIBUTION OF PLAN ACCOUNTS
Section 5.1 Elective Distribution of Specified Plan Accounts. A Participant may
elect, at the time he or she makes an Annual Deferral Election with respect to a
given Plan Year, to have the Vested Account Balance of the Participant's Annual
Deferral Account and Annual Matching Contribution Account (if any) for that Plan
Year distributed in a lump sum as of January 15 of the tenth (10th) Plan Year
following the end of the Plan Year in respect of which the Annual Deferral
Election was made (a "Pre-Retirement Distribution Election"). The Participant
may revoke his or her Pre-Retirement Distribution Election with respect to any
Plan Account at such times as the Committee may designate by completing and
submitting to the Committee an Amended Election Form setting forth such
revocation in accordance with such procedures and time frames as may be
established from time to time at the sole discretion of the Committee, provided
that such Amended Election Form is submitted prior to the commencement of the
calendar year in which the Vested Account Balance of such Plan Account would
otherwise be distributed and at least three (3) months prior to the date that
the distribution was otherwise scheduled to occur, and such Amended Election
Form is accepted by the Committee in its sole discretion. Notwithstanding a
Participant's Pre-Retirement Distribution Election with respect to the Vested
Account Balance of any Plan Account, some or all of such Vested Account Balance
may be subject to earlier distribution pursuant to Section 5.2 or deferred
distribution pursuant to Section 5.4.
Section 5.2 Non-Elective Distribution of Aggregate Vested Balance.
Notwithstanding any Pre-Retirement Distribution Election, distribution of a
Participant's Aggregate Vested Balance shall be made upon the earliest of the
Participant's (i) Termination of Employment, (ii) Retirement, (iii) Disability,
or (iv) death, in each case subject to and in accordance with the applicable
provisions of Articles 6 through 9, provided, however, that the distribution of
some or all of a Participant's Aggregate Vested Balance may be deferred pursuant
to Section 5.4.
Section 5.3 Withdrawal in the Event of an Unforeseeable Financial Emergency.
Subject to Section 5.4, in the event that a Participant or (after a
Participant's death) a Participant's Beneficiary experiences an Unforeseeable
Financial Emergency, the Participant or Beneficiary may petition the Committee
to receive a partial or full payout of amounts credited to one or more of the
Participant's Plan Accounts. The Committee shall determine, in its sole
discretion, whether the requested payout shall be made, the amount of the payout
and the Plan Accounts from which the payout will be made; provided, however,
that the payout shall not exceed the lesser of the Participant's Aggregate
Vested Benefit or the amount reasonably needed to satisfy the Unforeseeable
Financial Emergency. In making any determinations under this Section 5.3, the
Committee shall be guided by the prevailing authorities under the Code. If,
subject to the sole discretion of the Committee, the petition for a payout is
approved, the payout shall be made within 60 days of the date of approval.
Section 5.4 Distribution Limitations on Certain Investments. Notwithstanding
anything to the contrary contained in this Plan or in any Enrollment Form,
Benefit Election and Beneficiary Designation Form or any other document, the
Committee may impose limitations and restrictions on the payment of amounts
allocated by a Participant to any Restricted Investment Benchmark(s)
13
<PAGE> 14
and may defer payment of those amounts for such time periods as the Committee
determines, in its good faith judgement, to be consistent with the nature of the
investment on which such Restricted Investment Benchmark is based. The Committee
shall determine the amounts affected, the nature of the limitations and
restrictions on benefit payments, and the length of deferral and time of payment
of such amounts.
Section 5.5 Valuation of Plan Accounts Pending Distribution. To the extent that
the distribution of any portion of any Plan Account is deferred, whether
pursuant to the limitations imposed under this Article 5 or pursuant to any
installment payment schedule under Articles 6 and 9 or for any other reason, any
amounts remaining to the credit of the Plan Account shall continue to be
adjusted by the applicable Investment Adjustments in accordance with Article 3.
ARTICLE 6
TERMINATION BENEFIT
Section 6.1 Termination Benefit. Subject to Article 5, a Participant shall
receive a Termination Benefit, which shall be equal to the Participant's
Aggregate Vested Balance if a Participant experiences a Termination of
Employment prior to his or her Retirement, Disability, or death.
Section 6.2 Payment of Termination Benefit. If the Participant's Aggregate
Vested Balance at the time of his or her Termination of Employment is less than
$25,000, payment of his or her Termination Benefit shall be paid in a lump sum.
If his or her Aggregate Vested Balance at such time is equal to or greater than
that amount, the Committee, in its sole discretion, may cause the Termination
Benefit to be paid in a lump sum or in substantially equal monthly installment
payments over a period of time that does not exceed five (5) years in duration.
Subject to Article 5, the lump sum payment shall be made, or installment
payments shall commence, no later than 60 days after the date of the
Participant's Termination of Employment.
Section 6.3 Death Prior to Completion of Termination Benefit. If a Participant
dies after a Termination of Employment but before the Termination Benefit is
paid in full, the Participant's unpaid Termination Benefit payments shall
continue and shall be paid to the Participant's Beneficiary (a) over the
remaining number of months and in the same amounts as that benefit would have
been paid to the Participant had the Participant survived, or (b) subject to
Article 5, in a lump sum, if requested by the Beneficiary and allowed in the
sole discretion of the Committee, that is equal to the Participant's unpaid
remaining Aggregate Vested Balance.
ARTICLE 7
RETIREMENT BENEFIT
Section 7.1 Retirement Benefit. Subject to Article 5, a Participant who Retires
shall receive, as a Retirement Benefit, his or her Aggregate Vested Balance.
Section 7.2 Payment of Retirement Benefit. A Participant, in connection with his
or her commencement of participation in the Plan, shall elect on a Benefit
Election and Beneficiary
14
<PAGE> 15
Designation Form to receive the Retirement Benefit in a lump sum or in
substantially equal monthly payments over a period of 36, 60, 120 or 180 months.
The Participant may change his or her election to an allowable alternative
payout period by completing and submitting to the Committee an Amended Benefit
Election and Beneficiary Designation Form setting forth such change, in
accordance with such procedures and time frames as may be established from time
to time at the sole discretion of the Committee, provided that any such Amended
Benefit Election and Beneficiary Designation Form is submitted prior to the
commencement of the calendar year of the Participant's Retirement and at least
three (3) months prior to the Participant's Retirement, and such Amended Benefit
Election and Beneficiary Designation Form is accepted by the Committee in its
sole discretion. The Benefit Election and Beneficiary Designation Form most
recently accepted by the Committee shall govern the payout of the Retirement
Benefit. If a Participant does not make any election with respect to the payment
of the Retirement Benefit, then such benefit shall be payable as provided in
Section 6.2. Subject to Article 5, the lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the date the
Participant Retires.
Section 7.3 Death Prior to Completion of Retirement Benefit. If a Participant
dies after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and shall be
paid to the Participant's Beneficiary (a) over the remaining number of months
and in the same amounts as that benefit would have been paid to the Participant
had the Participant survived, or (b) subject to Article 5, in a lump sum, if
requested by the Beneficiary and allowed in the sole discretion of the
Committee, that is equal to the Participant's unpaid remaining Aggregate Vested
Balance.
ARTICLE 8
PRE-RETIREMENT SURVIVOR BENEFIT
Section 8.1 Pre-Retirement Survivor Benefit. Subject to Article 5, a
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit equal
to the Participant's Aggregate Vested Balance, if the Participant dies before he
or she Retires, experiences a Termination of Employment or suffers
a Disability.
Section 8.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in
connection with his or her commencement of participation in the Plan, shall
elect on a Benefit Election and Beneficiary Designation Form whether the
Pre-Retirement Survivor Benefit shall be received by his or her Beneficiary in a
lump sum or in substantially equal monthly payments over a period of 60, 120 or
180 months. The Participant may change this election to an allowable alternative
payout period by completing and submitting to the Committee an Amended Benefit
Election and Beneficiary Designation Form in accordance with such procedures and
time frames as may be established from time to time at the sole discretion of
the Committee, which form must be accepted by the Committee in its sole
discretion. The Benefit Election and Beneficiary Designation Form most recently
accepted by the Committee prior to the Participant's death shall govern the
payout of the Participant's Pre-Retirement Survivor Benefit. If a Participant
does not make any election with respect to the payment of the Pre-retirement
Survivor Benefit, then such benefit shall be paid in a lump sum, provided,
however that if the Participant's Aggregate Vested Balance at the time of his or
her death is greater than $25,000, payment may be made, in the sole
15
<PAGE> 16
discretion of the Committee, in a lump sum or in monthly installment payments
that do not exceed five (5) years in duration. Subject to Article 5, the lump
sum payment shall be made, or installment payments shall commence, no later than
60 days after the date the Committee is provided with proof that is satisfactory
to the Committee of the Participant's death.
ARTICLE 9
DISABILITY BENEFIT
Section 9.1 Disability Benefit. A Participant suffering a Disability shall
receive a Disability Benefit equal to his or her Aggregate Vested Balance.
Subject to Article 5, the Disability Benefit shall be paid in a lump sum within
60 days of the Committee's exercise of such right, provided, however, that
should the Participant otherwise have been eligible to Retire, he or she shall
be paid a Retirement Benefit in accordance with Article 7.
ARTICLE 10
BENEFICIARY DESIGNATION
Section 10.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.
Section 10.2 Beneficiary Designation; Change; Spousal Consent. A Participant
shall designate his or her Beneficiary by completing and signing a Benefit
Election and Beneficiary Designation Form, and returning it to the Committee or
its designated agent. A Participant shall have the right to change a Beneficiary
by completing, signing and submitting to the Committee an Amended Benefit
Election and Beneficiary Designation Form in accordance with the Committee's
rules and procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal consent, in the
form designated by the Committee, must be signed by that Participant's spouse
and returned to the Committee. Upon the acceptance by the Committee of an
Amended Benefit Election and Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be entitled
to rely on the last Benefit Election and Beneficiary Designation Form filed by
the Participant and accepted by the Committee prior to his or her death.
Section 10.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged in
writing by the Committee or its designated agent.
Section 10.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant's benefits,
then the Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
16
<PAGE> 17
benefits remaining under the Plan to be paid to a Beneficiary shall be payable
to the executor or personal representative of the Participant's estate.
Section 10.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
Section 10.6 Discharge of Obligations. The payment of benefits under the Plan to
a Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and each of the Participant's Annual Deferral Agreements shall
terminate upon such full payment of benefits.
ARTICLE 11
LEAVE OF ABSENCE
Section 11.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the appropriate amounts shall continue to be
withheld from the Participant's compensation pursuant to the Participant's then
current Annual Election Form.
Section 11.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence from
the employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the Participant shall be excused from making
deferrals until the earlier of the date the leave of absence expires or the
Participant returns to a paid employment status. Upon such expiration or return,
deferrals shall resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any, made for
that Plan Year. If no election was made for that Plan Year, no deferral shall be
withheld.
ARTICLE 12
TERMINATION, AMENDMENT OR MODIFICATION
Section 12.1 Termination. Although the Employers anticipate that they will
continue the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right to discontinue its
sponsorship of the Plan and to terminate the Plan, at any time, with respect to
its participating Employees by action of its board of directors. Upon the
termination of the Plan with respect to any Employer, subject to Section 5.4,
all amounts credited to each of the Plan Accounts of each affected Participant
shall be 100% vested and shall be paid to the Participant or, in the case of the
Participant's death, to the Participant's Beneficiary, in a lump sum
notwithstanding any elections made by the Participant, and the Annual Deferral
Agreements relating to each of the Participant's Plan Accounts shall terminate
upon full payment of such Aggregate Vested Balance.
17
<PAGE> 18
Section 12.2 Amendment. The Company may, at any time, amend or modify the Plan
in whole or in part with respect to any or all Employers by the actions of the
Board; provided, however, that (i) no amendment or modification shall be
effective to decrease or restrict the value of a Participant's Aggregate Vested
Balance in existence at the time the amendment or modification is made,
calculated as if the Participant had experienced a Termination of Employment as
of the effective date of the amendment or modification, or, if the amendment or
modification occurs after the date upon which the Participant was eligible to
Retire, the Participant had Retired as of the effective date of the amendment or
modification, and (ii) except as specifically provided in Section 12.1, no
amendment or modification shall be made after a Change in Control which
adversely affects the vesting, calculation or payment of benefits hereunder or
diminishes any other rights or protections any Participant or Beneficiary would
have had but for such amendment or modification, unless each affected
Participant or Beneficiary consents in writing to such amendment.
Section 12.3 Effect of Payment. The full payment of the applicable benefit under
the provisions of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan and each of
the Participant's Annual Deferral Agreements shall terminate.
ARTICLE 13
ADMINISTRATION
Section 13.1 Committee Duties. This Plan shall be administered by a Committee
which shall consist of the Board, or such committee as the Board shall appoint.
Members of the Committee may be Participants under this Plan. The Committee
shall also have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this
Plan and (ii) decide or resolve any and all questions including interpretations
of this Plan, as may arise in connection with the Plan. Any individual serving
on the Committee who is a Participant shall not vote or act on any matter
relating solely to himself or herself. When making a determination or
calculation, the Committee shall be entitled to rely on information furnished by
a Participant or the Company.
Section 13.2 Agents. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative duties as
it sees fit (including acting through a duly appointed representative) and may
from time to time consult with counsel who may be counsel to any Employer.
Section 13.3 Binding Effect of Decisions. The decision or action of the
Committee with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.
Section 13.4 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, and any Employee to whom duties of the
Committee may be delegated, against any and all claims, losses, damages,
expenses or liabilities arising from any
18
<PAGE> 19
action or failure to act with respect to this Plan, except in the case of
willful misconduct by the Committee or any of its members or any such Employee.
Section 13.5 Employer Information. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants, the
date and circumstances of the Retirement, Disability, death or Termination of
Employment of its Participants, and such other pertinent information as the
Committee may reasonably require.
ARTICLE 14
OTHER BENEFITS AND AGREEMENTS
The benefits provided for a Participant and Participant's
Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the
Participant's Employer. The Plan shall supplement and shall not supersede,
modify or amend any other such plan or program except as may otherwise be
expressly provided.
ARTICLE 15
CLAIMS PROCEDURES
Section 15.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan. If
such a claim relates to the contents of a notice received by the Claimant, the
claim must be made within 60 days after such notice was received by the
Claimant. The claim must state with particularity the determination desired by
the Claimant. All other claims must be made within 180 days of the date on which
the event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.
Section 15.2 Notification of Decision. The Committee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or any
part of it;
19
<PAGE> 20
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary;
and
(iv) an explanation of the claim review procedure set forth in
Section 15.3 below.
Section 15.3 Review of a Denied Claim. Within 60 days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. Thereafter, but not
later than 30 days after the review procedure began, the Claimant (or the
Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
Section 15.4 Decision on Review. The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's decision
must be rendered within 120 days after such date. Such decision must be written
in a manner calculated to be understood by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
Section 15.5 Arbitration. A Claimant's compliance with the foregoing provisions
of this Article 15 is a mandatory prerequisite to a Claimant's right to commence
any arbitration with respect to any claim for benefits under this Plan. Any and
all claims that are not resolved to the satisfaction of a Claimant under the
above provisions of this Article 15 shall be subject to arbitration conducted in
Albany, New York before a panel of three (3) arbitrators pursuant to rules of
the National Association of Securities Dealers. Unless otherwise provided herein
each party shall bear its own costs and expenses in connection with such
arbitration and the parties shall contribute equally the arbitrator's fees. The
arbitrator's decision in any dispute shall be final and binding and shall not be
subject to appeal or judicial review.
20
<PAGE> 21
ARTICLE 16
TRUST
Section 16.1 Establishment of the Trust. The Company may establish one or more
Trusts to which the Employers may transfer such assets as the Employers
determine in their sole discretion to assist in meeting their obligations under
the Plan.
Section 16.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the relevant Annual Deferral Agreements shall govern the rights of a
Participant to receive distributions pursuant to the Plan. The provisions of the
Trust shall govern the rights of the Employers, Participants and the creditors
of the Employers to the assets transferred to the Trust.
Section 16.3 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer's obligations under
this Agreement.
ARTICLE 17
MISCELLANEOUS
Section 17.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employee"
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan
shall be administered and interpreted to the extent possible in a manner
consistent with that intent. All Plan Accounts and all credits and other
adjustments to such Plan Accounts shall be bookkeeping entries only and shall be
utilized solely as a device for the measurement and determination of amounts to
be paid under the Plan. No Plan Accounts, credits or other adjustments under the
Plan shall be interpreted as an indication that any benefits under the Plan are
in any way funded.
Section 17.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer's, assets, shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.
Section 17.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as entered
into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Plan Agreement.
Section 17.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer,
21
<PAGE> 22
hypothecate, alienate or convey in advance of actual receipt, the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are expressly declared to be, unassignable and non-transferable. No part of the
amounts payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant's or
any other person's bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.
Section 17.5 Not a Contract of Employment. The terms and conditions of this Plan
and the Annual Deferral Agreements under this Plan shall not be deemed to
constitute a contract of employment between any Employer and the Participant.
Such employment is hereby acknowledged to be an "at will" employment
relationship that can be terminated at any time for any reason, or no reason,
with or without cause, and with or without notice, except as otherwise provided
in a written employment agreement. Nothing in this Plan or any Annual Deferral
Agreement shall be deemed to give a Participant the right to be retained in the
service of any Employer as an Employee or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.
Section 17.6 Furnishing Information. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary.
Section 17.7 Terms. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
Section 17.8 Captions. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
Section 17.9 Governing Law. Subject to ERISA, the provisions of this Plan shall
be construed and interpreted according to the internal laws of the State of New
York without regard to its conflicts of laws principles.
Section 17.10 Notice. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
First Albany Companies Inc.
30 South Pearl Street
Albany, New York 12207
Attn: General Counsel
22
<PAGE> 23
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark or the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
Section 17.11 Successors. The provisions of this Plan shall bind and inure to
the benefit of the Participant's Employer and its successors and assigns and the
Participant and the Participant's designated Beneficiaries.
Section 17.12 Spouse's Interest. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.
Section 17.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.
Section 17.14 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person's property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant and the Participant's Beneficiary, as the case may be, and shall be
a complete discharge of any liability under the Plan for such payment amount.
Section 17.15 Distribution in the Event of Taxation. If, for any reason, all or
any portion of a Participant's benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee before a
Change in Control, or the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become taxable. Upon
the grant of such a petition, which grant shall not be unreasonably withheld, a
Participant's Employer shall, subject to Section 5.4, distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her benefit (which amount shall not exceed a Participant's
unpaid Aggregate Vested Balance under the Plan). If the petition is granted, the
tax liability distribution shall be made within 90 days of the date when the
Participant's petition is granted. Such a distribution shall affect and reduce
the benefits to be paid under this Plan.
Section 17.16 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms as
the Trust may choose. The Employers or the trustee of the Trust, as the case may
be, shall be the sole owner and beneficiary of any such
23
<PAGE> 24
insurance. The Participant shall have no interest whatsoever in any such policy
or policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance.
Section 17.17 Legal Fees To Enforce Rights After Change in Control. The Company
and each Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of the Participant's Employer (which might then
be composed of new members) or a shareholder of the Company or the Participant's
Employer, or of any successor corporation might then cause or attempt to cause
the Company or the Participant's Employer or such successor to refuse to comply
with its obligations under the Plan and might cause or attempt to cause the
Company or the Participant's Employer to institute, or may institute,
arbitration or litigation seeking to deny Participants the benefits intended
under the Plan. In these circumstances, the purpose of the Plan could be
frustrated. Accordingly, if, following a Change in Control, it should appear to
any Participant that the Company, the Participant's Employer or any successor
corporation has failed to comply with any of its obligations under the Plan or
any agreement thereunder or, if the Company, such Employer or any other person
takes any action to declare the Plan void or unenforceable or institutes any
arbitration, litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided, then the
Company and the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and the
Employer (who shall be jointly and severally liable) to represent such
Participant in connection with the initiation or defense of any arbitration,
litigation or other legal action, whether by or against the Company, the
Participant's Employer or any director, officer, shareholder or other person
affiliated with the Company, the Participant's Employer or any successor thereto
in any jurisdiction.
24
<PAGE> 25
IN WITNESS WHEREOF, the Company has signed this Plan document as of
______________, 1997.
First Albany Companies Inc.
a New York corporation
By:____________________________
Name:__________________________
Title:___________________________
25
<PAGE> 1
EXHIBIT 5(a)
December 31, 1997
First Albany Corporation
30 South Pearl Street
Albany, NY 12201-0052
RE: First Albany Companies Inc. - Registration Statement on
Form S-8 relating to the First Albany Companies Inc.
Executive Officers Deferred Compensation Plan and First
Albany Companies Investment Executives Deferred
Compensation Plan (the "Registration Statement")
Gentlemen:
In connection with proposed offering of up to $700,000.00 in
principle amount of deferred compensation obligations (the "Obligations") by
First Albany Companies Inc. (the "Company") pursuant to the First Albany
Companies Inc. Executive Officers Deferred Compensation Plan and First Albany
Companies Investment Executives Deferred Compensation Plan (collectively, the
"Plans") with respect to which a Registration Statement on Form S-8 has been
prepared for filing with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, I have examined such corporate records, other documents
and questions of law as I considered necessary for the purposes of this opinion.
I am of the opinion that when:
(a) the applicable provisions of the Securities Act of 1933 and of
State securities "blue sky" laws shall have been complied with; and
(b) the Company's Board of Directors shall have duly authorized the
issue and sale of the Obligations;
the Obligations will be legally issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement on Form S-8, and any amendments thereto, filed or
distributed in connection with the Plans.
Very truly yours,
/s/ Stephen P. Wink
Stephen P. Wink
General Counsel/Secretary
26
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
First Albany Companies Inc. on Form S-8 related to the First Albany Companies
Inc. Executive Officers Deferred Compensation Plan and the First Albany
Companies Inc. Investment Executives Deferred Compensation Plan (File No.
0-14140) of our report dated February 7, 1997, on our audits of consolidated
financial statements and financial statement schedule of First Albany Companies
Inc. as of December 31, 1996, and September 29, 1995, and for the year ended
December 31, 1996, the three months ended December 31, 1995, and the years ended
September 29, 1995 and September 30, 1994, which report is included in the 1996
Annual Report on Form 10-K.
/s/ Coopers, Lybrand LLP
Albany, New York
January 6, 1998
