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As filed with the Securities and Exchange Commission on May 20, 1999
Registration No. 333
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST ALBANY COMPANIES INC.
(Exact name of issuer as specified in its charter)
New York 22-2655804
(State of Incorporation) (I.R.S. Employer Identification No.)
30 S. Pearl Street
Albany, New York 12207-1599
(518) 447-8500
(Address and telephone number of principal executive offices)
FIRST ALBANY COMPANIES INC.
1999 LONG-TERM INCENTIVE PLAN
(Full Title of the Plan)
Stephen P. Wink, Esq.
Secretary and General Counsel
First Albany Companies Inc.
30 S. Pearl Street
Albany, New York 12207-1599
(518) 447-8500
(Name, address and telephone number of agent for service)
Copies to:
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
(212) 530-5000
Attention: Howard S. Kelberg, Esq.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------- --------------------- ------------------------ ----------------------- ------------------
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered Offering Price Per Aggregate Offering Registration Fee
Share Price
- ---------------------------- --------------------- ------------------------ ----------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock 800,000 shares $14.1875 $11,350,000 $3,155.30
($.01 par value)
- ---------------------------- --------------------- ------------------------ ----------------------- ------------------
</TABLE>
* The proposed maximum aggregate offering price listed above has been determined
pursuant to Rule 457(h) under the Securities Act of 1933, as amended, and
represents (i) the aggregate exercise price of all options to acquire any of the
above-registered shares granted under the Plan as of the Effective Date of this
registration, plus (ii) the product of the remaining shares registered hereunder
available for future grant under the Plan multiplied by a per share price of
$14.1875 the average price of First Albany Companies Inc. Common Stock on the
NASDAQ NMS on May 13, 1999.
<PAGE> 2
PART I
ITEM 1. PLAN INFORMATION
This Registration Statement relates to the registration of
800,000 shares of Common Stock, $.01 par value, of FIRST ALBANY COMPANIES INC.
(the "Registrant") for issuance under the First Albany Companies Inc. 1999
Long-Term Incentive Plan (the "Plan"). Documents containing the information
required by Part I of the Registration Statement will be sent or given to
participants in the Plan as specified by Rule 428(b). Such documents are not
filed with the Securities and Exchange Commission (the "Commission" or the
"SEC") either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 in reliance on Rule 428.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The Registrant will, upon written or oral request, provide
without charge to any person to whom the Prospectus relating to this
Registration Statement is delivered, a copy of any and all of the information
which has been incorporated by reference in such Prospectus and this
Registration Statement (pursuant to Item 3 of Part II below). Such requests
should be directed to the Secretary, First Albany Companies Inc., 30 S. Pearl
Street, Albany, New York 12207-1599 (telephone: (518) 447-8500).
PART II
INFORMATION REQUIRED IN THE REGISTRATION
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by First Albany
Companies Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, 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, 1998.
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarters ended March 31, 1999.
3. The description of the Company's Capital Stock contained in
the registration statement on Form 8A filed with the
Commission under the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
All documents, filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange 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 Exchange 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
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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 Common Stock being registered hereunder has been
registered pursuant to Section 12 of the Exchange Act and a description of the
Common Stock is contained in the Exchange Act registration statement which has
been filed with the Commission.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
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 to indemnification to which any officer or director of
the Company is entitled under the Business Corporation Law of the State of New
York (Sections 721 through 726), which provides for indemnification by a
Corporation of its officers and directors under certain 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 on page 8.
ITEM 9. UNDERTAKINGS.
(1) 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective
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amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement; and
(iii) 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.
Provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Company pursuant to Section 13(a) or Section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment 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.
(2) The Company hereby undertakes that, for the purpose of determining any
liability under the Securities Act, each filing of the issuer's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act of (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at the time shall be deemed to be the initial bona fide offering hereof.
(3) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the above-mentioned 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 Securities 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 Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
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 May 19,
1999.
FIRST ALBANY COMPANIES INC.
By: /s/ George C. McNamee
--------------------------------
George C. McNamee
Chairman and
Co-Chief Executive Officer
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POWER OF ATTORNEY
Each person whose signature appears below hereby severally
constitutes and appoints George C. McNamee and Alan P. Goldberg and each of them
acting singly, as his or her true and lawful attorney-in-fact and agent, with
full and several power of substitution and resubstitution, to sign for him or
her and in his or her name, place and stead in any and all capacities indicated
below, the registration statement on Form S-8 filed herewith and any and all
pre-effective and post-effective amendments and supplements to the said
registration statement, and to file the same, with 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 fully to all
intents and purposes as he or she might or could do in person hereby ratifying
and confirming all that said attorney-in-fact and agent, or his or her
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the date indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George C. McNamee Chairman and May 19, 1999
- -------------------------------- Co-Chief Executive Officer
George C. McNamee
/s/ Alan P. Goldberg President and Co-Chief May 19, 1999
- -------------------------------- Executive Officer
Alan P. Goldberg
/s/ Hugh A. Johnson, Jr. Senior Vice-President, May 19, 1999
- -------------------------------- and Chief Investment
Hugh A. Johnson, Jr. Officer
/s/ Timothy R. Welles Vice President and May 19, 1999
- -------------------------------- Chief Financial Officer
Timothy R. Welles
/s/ Stephen P. Wink Secretary and General May 19, 1999
- -------------------------------- Counsel
Stephen P. Wink
/s/ Peter Barton Director May 19, 1999
- --------------------------------
Peter Barton
/s/ J. Anthony Boeckh, Ph.D. Director May 19, 1999
- --------------------------------
J. Anthony Boeckh, Ph.D.
/s/ Walter M. Fiederowicz Director May 19, 1999
- --------------------------------
Walter M. Fiederowicz
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Daniel V. McNamee, III Director May 19, 1999
- ------------------------------
Daniel V. McNamee, III
/s/ Charles L. Schwager Director May 19, 1999
- ------------------------------
Charles L. Schwager
/s/ Benaree P. Wiley Director May 19, 1999
- ------------------------------
Benaree P. Wiley
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4(a) Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1a to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1998, Commission File No. 33-1353).
4(b) By-laws of the Company, as amended, (incorporated by reference
to Exhibit 3.2d to the Company's Annual Report on Form 10-K
for the year ended December 31, 1998, Commission File No.
33-1353).
5(a) Opinion of Company's General Counsel as to legality of
securities offered under the Plan.
5(b) Opinion of Milbank, Tweed, Hadley & McCloy LLP as to the
legality of the Company's Common Stock.
23(a) Consent of Milbank, Tweed, Hadley & McCloy LLP (included in
the Opinion filed as Exhibit 5 hereto).
23(b) Consent of PricewaterhouseCoopers LLP, independent auditors.
24 Power of Attorney (set forth on the signature page hereof).
99(a) First Albany Companies Inc. 1999 Long-Term Incentive Plan
</TABLE>
8
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Exhibit 5(a)
[First Albany Companies Inc. letterhead]
May 19, 1999
First Albany Companies Inc.
30 South Pearl Street
Albany, NY 12207
RE: First Albany Companies Inc. - Registration Statement on Form S-8
relating to the First Albany Companies Inc. Long-Term Incentive Plan
(the "Registration Statement")
Ladies and Gentlemen:
I am Secretary and General Counsel of First Albany Companies Inc., a
New York corporation ("First Albany"), and I am familiar with the corporate
proceedings taken by First Albany in connection with the proposed registration
of an aggregate of 800,000 shares of First Albany common stock, par value $.01
(the "Shares"), pursuant to the First Albany Companies Inc. Long-Term Incentive
Plan (the "Plan"), with respect to which the Registration Statement has been
prepared for filing with the Securities and Exchange Commission under the
Securities Act of 1933.
In arriving at the opinions expressed below, I have reviewed the
Registration Statement and the Plan. In addition, I reviewed the originals or
copies certified or otherwise identified to my satisfaction of all such
corporate records of First Albany and such other instruments and other
certificates of public officials, officers and representatives of First Albany
and such other persons, and I have made such investigations of law, as I have
deemed appropriate as a basis for the opinion express below.
In rendering the opinions expressed below, I have assumed the
authenticity of all documents submitted to me as originals and the conformity to
the originals of all documents submitted to me as copies. In addition, I have
assumed and have not verified the accuracy as to factual matters of each
document I have reviewed.
Based upon the foregoing, and subject to the further assumptions and
qualifications set forth below, it is my opinion that the Shares have been duly
authorized by all necessary corporate action of First Albany and, when
certificates representing the Shares shall have been executed in facsimile by
proper officers of the Company, authenticated by the transfer agent and
registrar for the Shares, delivered to persons entitled thereto pursuant to the
Plan in accordance with the terms thereof and paid for in cash (or other
consideration acceptable under New York law) in an amount not less than the par
value of the Shares, the Shares will have been legally and validly issued, and
will be fully paid and nonassessable.
Insofar as the foregoing opinions relate to the legality, validity,
binding effect or
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enforceability of any agreement or obligation of First Albany, (a) I have
assumed that each other party to such agreement or obligation has satisfied
those legal requirements that are applicable to it to the extent necessary to
make such agreement or obligation enforceable against it and (b) such opinion is
subject to applicable bankruptcy, insolvency and similar laws affecting
creditor's rights generally and to general principles of equity.
The foregoing opinion is limited to the Federal laws of the United
States of America and the law of the State of New York.
I hereby to the filing of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ Stephen P. Wink
Secretary
General Counsel
2
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Exhibits 5(b) and 23(a)
[Milbank, Tweed, Hadley & McCloy LLP letterhead]
May 19, 1999
First Albany Companies Inc.
30 S. Pearl Street
Albany, New York 12207-1599
Dear Sirs:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") which First Albany Companies Inc., a New York
corporation (the "Company"), proposes to file with the Securities and Exchange
Commission for the purpose of registering under the Securities Act of 1933, as
amended, an aggregate of 800,000 shares of Common Stock, $.01 par value, of the
Company (the "Shares") pursuant to the First Albany Companies Inc. 1999
Long-Term Incentive Plan (the "Plan"). In connection with the forgoing
registration, we have acted as counsel for the Company, and as such counsel, we
are familiar with the corporate proceedings taken by the Company in connection
with the authorization and sales of the Shares and with the provisions of the
Plan, in accordance with which the sales of the Shares are to be made, in the
form incorporated by reference as an exhibit to the Registration Statement.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company, agreements and other
instruments, certificates of public officials, certificates of officers and
representatives of the Company and other documents as we have deemed it
necessary to require as a basis for the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity with the original
documents of all documents submitted to us as copies and the authenticity of the
originals of such letter documents. As to various questions of fact material to
such opinions we have, when relevant facts were not independently established,
relied upon certifications by officers of the Company and other appropriate
persons and statements contained in the Registration Statement.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that the Shares
have been duly authorized and, when certificates representing the Shares shall
have been executed in facsimile by proper officers of the Company, authenticated
by the transfer agent and registrar for the Shares, delivered to persons
entitled thereto pursuant to the Plan in accordance with the terms thereof and
paid for in cash (or other consideration acceptable under New York law) in an
amount not less than the par value of the Shares, the Shares will have been
legally and validly issued, and will be fully paid and nonassessable.
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We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & McCLOY LLP
HSK/FCK
2
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Exhibit 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
First Albany Companies Inc.:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 12, 1999 relating to the
financial statements and financial statement schedule, which appears in First
Albany Companies Inc.'s Annual Report on Form 10-K for the year ended December
31, 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
Albany, New York
May 17, 1999
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Exhibit 99(a)
FIRST ALBANY COMPANIES INC.
1999 LONG-TERM INCENTIVE PLAN
* * * * *
1. PURPOSE. The purpose of the 1999 Long-Term Incentive Plan (the
"Plan") is to further and promote the interests of First Albany Companies Inc.
(the "Company"), its Subsidiaries and its shareholders by enabling the Company
and its Subsidiaries to attract, retain and motivate employees and officers or
those who will become employees or officers, and to align the interests of those
individuals and the Company's shareholders. To do this, the Plan offers
performance-based incentive awards and equity-based opportunities providing such
employees and officers with a proprietary interest in maximizing the growth,
profitability and overall success of the Company and its Subsidiaries.
2. DEFINITIONS. For purposes of the Plan, the following terms shall
have the meanings set forth below:
2.1 "AWARD" means an award or grant made to a Participant
under Sections 6, 7, 8 and/or 9 of the Plan.
2.2 "AWARD AGREEMENT" means the agreement executed by a
Participant pursuant to Sections 3.2 and 17.7 of the Plan in connection with the
granting of an Award.
2.3 "BOARD" means the Board of Directors of the Company, as
constituted from time to time.
2.4 "CODE" means the Internal Revenue Code of 1986, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.
2.5 "COMMITTEE" means the committee of the Board established
to administer the Plan, as described in Section 3 of the Plan.
2.6 "COMMON STOCK" means the Common Stock, par value $.01 per
share, of the Company or any security of the Company issued by the Company in
substitution or exchange therefor.
2.7 "COMPANY" means First Albany Companies Inc., a New York
corporation, or any successor corporation to First Albany Companies Inc.
2.8 "DISABILITY" means disability as defined in the
Participant's then effective employment agreement, or if the participant is not
then a party to an effective employment agreement with the Company which defines
disability, "Disability" means disability as determined by the Committee in
accordance with standards and procedures similar to those under the Company's
long-term disability plan, if any. Subject to the first sentence of this Section
2.8, at any
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time that the Company does not maintain a long-term disability plan,
"Disability" shall mean any physical or mental disability which is determined to
be total and permanent by a physician selected in good faith by the Company.
2.9 "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as in effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.
2.10 "FAIR MARKET VALUE" means on, or with respect to, any
given date(s), the average of the highest and lowest market prices of the Common
Stock, as reported on the NASDAQ NMS for such date(s) or, if the Common Stock
was not traded on such date(s), on the next preceding day or days on which the
Common Stock was traded. If at any time the Common Stock is not traded on such
exchange, the Fair Market Value of a share of the Common Stock shall be
determined in good faith by the Board.
2.11 "INCENTIVE STOCK OPTION" means any stock option granted
pursuant to the provisions of Section 6 of the Plan (and the relevant Award
Agreement) that is intended to be (and is specifically designated as) an
"incentive stock option" within the meaning of Section 422 of the Code.
2.12 "NON-QUALIFIED STOCK OPTION" means any stock option
granted pursuant to the provisions of Section 6 of the Plan (and the relevant
Award Agreement) that is not (and is specifically designated as not being) an
Incentive Stock Option.
2.13 "PARTICIPANT" means any individual who is selected from
time to time under Section 5 to receive an Award under the Plan.
2.14 "PERFORMANCE UNITS" means the monetary units granted
under Section 9 of the Plan and the relevant Award Agreement.
2.15 "PLAN" means the First Albany Companies Inc. 1999
Long-Term Incentive Plan, as set forth herein and as in effect and as amended
from time to time (together with any rules and regulations promulgated by the
Committee with respect thereto).
2.16 "RESTRICTED SHARES" means the restricted shares of Common
Stock granted pursuant to the provisions of Section 8 of the Plan and the
relevant Award Agreement.
2.17 "RETIREMENT" means the voluntary retirement by the
Participant from active employment with the Company and its Subsidiaries on or
after the attainment of (i) age 65, or (ii) 60, with the consent of the Board.
2.18 "STOCK APPRECIATION RIGHT" means an Award described in
Section 7.2 of the Plan and granted pursuant to the provisions of Section 7 of
the Plan.
2.19 "SUBSIDIARY(IES)" means any corporation (other than the
Company) in an unbroken chain of corporations, including and beginning with the
Company, if each of such corporations, other than the last corporation in the
unbroken chain, owns, directly or indirectly, more than fifty percent (50%) of
the voting stock in one of the other corporations in such chain.
3. ADMINISTRATION.
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3.1 THE COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall be appointed from time to time by the Board and
shall be comprised of not less than two (2) of the then members of the Board who
are Non-Employee Directors (within the meaning of SEC Rule 16b-3(b)(3)) of the
Company and Outside Directors (within the meaning of Section 162(m) of the
Code). No member of the Committee shall be eligible to receive awards under the
Plan. Consistent with the Bylaws of the Company, members of the Committee shall
serve at the pleasure of the Board and the Board, subject to the immediately
preceding sentence, may at any time and from time to time remove members from,
or add members to, the Committee.
3.2 PLAN ADMINISTRATION AND PLAN RULES. The Committee is
authorized to construe and interpret the Plan and to promulgate, amend and
rescind rules and regulations relating to the implementation, administration and
maintenance of the Plan. Subject to the terms and conditions of the Plan, the
Committee shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan including, without
limitation, (a) selecting the Plan's Participants, (b) making Awards in such
amounts and form as the Committee shall determine, (c) imposing such
restrictions, terms and conditions upon such Awards as the Committee shall deem
appropriate, and (d) correcting any technical defect(s) or technical
omission(s), or reconciling any technical inconsistency(ies), in the Plan and/or
any Award Agreement. The Committee may designate persons other than members of
the Committee to carry out the day-to-day ministerial administration of the Plan
under such conditions and limitations as it may prescribe, except that the
Committee shall not delegate its authority with regard to the selection for
participation in the Plan and/or the granting of any Awards to Participants. The
Committee's determinations under the Plan need not be uniform and may be made
selectively among Participants, whether or not such Participants are similarly
situated. Any determination, decision or action of the Committee in connection
with the construction, interpretation, administration, implementation or
maintenance of the Plan shall be final, conclusive and binding upon all
Participants and any person(s) claiming under or through any Participants. The
Company shall effect the granting of Awards under the Plan, in accordance with
the determinations made by the Committee, by execution of written agreements
and/or other instruments in such form as is approved by the Committee. The
Committee may, in its sole discretion, delegate its authority to one or more
senior executive officers for the purpose of making Awards to Participants who
are not subject to Section 16 of the Exchange Act.
3.3 LIABILITY LIMITATION. Neither the Board nor the Committee,
nor any member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan (or
any Award Agreement), and the members of the Board and the Committee shall be
entitled to indemnification and reimbursement by the Company in respect of any
claim, loss, damage or expense (including, without limitation, attorneys' fees)
arising or resulting therefrom to the fullest extent permitted by law and/or
under any directors and officers liability insurance coverage which may be in
effect from time to time.
4. TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.
4.1 TERM. The Plan shall terminate on December 31, 2009,
except with respect to Awards then outstanding. After such date no further
Awards shall be granted under the Plan.
4.2 COMMON STOCK. The maximum number of shares of Common Stock
in respect of which Awards may be granted or paid out under the Plan, subject to
adjustment as provided in Section 14.2 of the Plan, shall not exceed 800,000
shares. In the event of a change in
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the Common Stock of the Company that is limited to a change in the designation
thereof to "Capital Stock" or other similar designation, or to a change in the
par value thereof, or from par value to no par value, without increase or
decrease in the number of issued shares, the shares resulting from any such
change shall be deemed to be the Common Stock for purposes of the Plan. Common
Stock which may be issued under the Plan may be either authorized and unissued
shares or issued shares which have been reacquired by the Company (in the
open-market or in private transactions) and which are being held as treasury
shares. No fractional shares of Common Stock shall be issued under the Plan.
4.3 COMPUTATION OF AVAILABLE SHARES. For the purpose of
computing the total number of shares of Common Stock available for Awards under
the Plan, there shall be counted against the limitations set forth in Section
4.2 of the Plan the maximum number of shares of Common Stock potentially subject
to issuance upon exercise or settlement of Awards granted under Sections 6 and 7
of the Plan, the number of shares of Common Stock issued under grants of
Restricted Shares pursuant to Section 8 of the Plan and the maximum number of
shares of Common Stock potentially issuable under grants or payments of
Performance Units pursuant to Section 9 of the Plan, in each case determined as
of the date on which such Awards are granted. If any Awards expire unexercised
or are forfeited, surrendered, cancelled, terminated or settled in cash in lieu
of Common Stock, the shares of Common Stock which were theretofore subject (or
potentially subject) to such Awards shall again be available for Awards under
the Plan to the extent of such expiration, forfeiture, surrender, cancellation,
termination or settlement of such Awards.
5. ELIGIBILITY. Individuals eligible for Awards under the Plan shall
consist of key employees and officers, or those who will become key employees or
officers, of the Company and/or its Subsidiaries whose performance or
contribution, in the sole discretion of the Committee, benefits or will benefit
the Company or any Subsidiary.
6. STOCK OPTIONS.
6.1 TERMS AND CONDITIONS. Stock options granted under the Plan
shall be in respect of Common Stock and may be in the form of Incentive Stock
Options or Non-Qualified Stock Options (sometimes referred to collectively
herein as the "Stock Option(s))". Such Stock Options shall be subject to the
terms and conditions set forth in this Section 6 and any additional terms and
conditions, not inconsistent with the express terms and provisions of the Plan,
as the Committee shall set forth in the relevant Award Agreement.
6.2 GRANT. Stock Options may be granted under the Plan in such
form as the Committee may from time to time approve. Stock Options may be
granted alone or in addition to other Awards under the Plan or in tandem with
Stock Appreciation Rights. Special provisions shall apply to Incentive Stock
Options granted to any employee who owns (within the meaning of Section
422(b)(6) of the Code) more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or its parent corporation or any
subsidiary of the Company, within the meaning of Sections 424(e) and (f) of the
Code (a "10% Shareholder").
6.3 EXERCISE PRICE. The exercise price per share of Common
Stock subject to a Stock Option shall be determined by the Committee, including,
without limitation, a determination based on a formula determined by the
Committee; provided, however, that the exercise price of an Incentive Stock
Option shall not be less than one hundred percent (100%) of the Fair Market
Value of the Common Stock on the date of the grant of such Incentive Stock
Option; provided, further, however, that, in the case of a 10% Shareholder, the
exercise price of an Incentive Stock Option
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shall not be less than one hundred ten percent (110%) of the Fair Market Value
of the Common Stock on the date of grant.
6.4 TERM. The term of each Stock Option shall be such period
of time as is fixed by the Committee; provided, however, that the term of any
Incentive Stock Option shall not exceed ten (10) years (five (5) years, in the
case of a 10% Shareholder) after the date immediately preceding the date on
which the Incentive Stock Option is granted.
6.5 METHOD OF EXERCISE. A Stock Option may be exercised, in
whole or in part, by giving written notice of exercise to the Secretary of the
Company, or the Secretary's designee, specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the exercise
price in cash, by certified check, bank draft, or money order payable to the
order of the Company, by delivery of shares of Common Stock already owned by the
Participant for at least six (6) months, or, if permitted by the Committee (in
its sole discretion) and applicable law, by delivery of, alone or in conjunction
with a partial cash or instrument payment, (a) a fully-secured promissory note
or notes, or (b) some other form of payment acceptable to the Committee. Payment
instruments shall be received by the Company subject to collection. The proceeds
received by the Company upon exercise of any Stock Option may be used by the
Company for general corporate purposes. Any portion of a Stock Option that is
exercised may not be exercised again.
6.6 EXERCISABILITY. In respect of any Stock Option granted
under the Plan, unless otherwise (a) determined by the Committee (in its sole
discretion) at any time and from time to time in respect of any such Stock
Option, or (b) provided in the Award Agreement or in the Participant's
employment agreement in respect of any such Stock Option, such Stock Option
shall become exercisable as to the aggregate number of shares of Common Stock
underlying such Stock Option, as determined on the date of grant, as follows:
- 25%, on the first anniversary of the date of grant of the
Stock Option, provided the Participant is then employed by the
Company and/or one of its Subsidiaries;
- 50%, on the second anniversary of the date of grant of the
Stock Option, provided the Participant is then employed by the
Company and/or one of its Subsidiaries;
- 75%, on the third anniversary of the date of grant of the
Stock Option, provided the Participant is then employed by the
Company and/or one of its Subsidiaries;
- 100%, on the fourth anniversary of the date of grant of the
Stock Option, provided the Participant is then employed by the
Company and/or one of its Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 6.6, such
Stock Option shall become one hundred percent (100%) exercisable as to the
aggregate number of shares of Common Stock underlying such Stock Option upon the
death, Disability or Retirement of the Participant.
6.7 TANDEM GRANTS. If Non-Qualified Stock Options and Stock
Appreciation Rights are granted in tandem, as designated in the relevant Award
Agreements, the right of a
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Participant to exercise any such tandem Stock Option shall terminate to the
extent that the shares of Common Stock subject to such Stock Option are used to
calculate amounts or shares receivable upon the exercise of the related tandem
Stock Appreciation Right.
7. STOCK APPRECIATION RIGHTS.
7.1 TERMS AND CONDITIONS. The grant of Stock Appreciation
Rights under the Plan shall be subject to the terms and conditions set forth in
this Section 7 and any additional terms and conditions, not inconsistent with
the express terms and provisions of the Plan, as the Committee shall set forth
in the relevant Award Agreement.
7.2 STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is
an Award granted with respect to a specified number of shares of Common Stock
entitling a Participant to receive an amount equal to the excess of the Fair
Market Value of a share of Common Stock on the date of exercise over the Fair
Market Value of a share of Common Stock on the date of grant of the Stock
Appreciation Right, multiplied by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised.
7.3 GRANT. A Stock Appreciation Right may be granted in
addition to any other Award under the Plan or in tandem with or independent of a
Non-Qualified Stock Option.
7.4 DATE OF EXERCISABILITY. Unless otherwise provided in the
Participant's employment agreement or the Award Agreement in respect of any
Stock Appreciation Right, a Stock Appreciation Right may be exercised by a
Participant, in accordance with and subject to all of the procedures established
by the Committee, in whole or in part at any time and from time to time during
its specified term. Notwithstanding the preceding sentence, in no event shall a
Stock Appreciation Right be exercisable prior to the date which is six (6)
months after the date on which the Stock Appreciation Right was granted or prior
to the exercisability of any Non-Qualified Stock Option with which it is granted
in tandem. The Committee may also provide, as set forth in the relevant Award
Agreement and without limitation, that some Stock Appreciation Rights shall be
automatically exercised and settled on one or more fixed dates specified therein
by the Committee.
7.5 FORM OF PAYMENT. Upon exercise of a Stock Appreciation
Right, payment may be made in cash, in Restricted Shares or in shares of
unrestricted Common Stock, or in any combination thereof, as the Committee, in
its sole discretion, shall determine and provide in the relevant Award
Agreement.
7.6 TANDEM GRANT. The right of a Participant to exercise a
tandem Stock Appreciation Right shall terminate to the extent such Participant
exercises the Non-Qualified Stock Option to which such Stock Appreciation Right
is related.
8. RESTRICTED SHARES.
8.1 TERMS AND CONDITIONS. Grants of Restricted Shares shall be
subject to the terms and conditions set forth in this Section 8 and any
additional terms and conditions, not inconsistent with the express terms and
provisions of the Plan, as the Committee shall set forth in the relevant Award
Agreement. Restricted Shares may be granted alone or in addition to any other
Awards under the Plan. Subject to the terms of the Plan, the Committee shall
determine the number of Restricted Shares to be granted to a Participant and the
Committee may provide or impose different terms and conditions on any particular
Restricted Share grant made to any Participant.
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With respect to each Participant receiving an Award of Restricted Shares, there
shall be issued a stock certificate (or certificates) in respect of such
Restricted Shares. Such stock certificate(s) shall be registered in the name of
such Participant, shall be accompanied by a stock power duly executed by such
Participant, and shall bear, among other required legends, the following legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including, without limitation, forfeiture events)
contained in the First Albany Companies Inc. 1999 Long-Term
Incentive Plan and an Award Agreement entered into between the
registered owner hereof and First Albany Companies Inc. Copies
of such Plan and Award Agreement are on file in the office of
the Secretary of First Albany Companies Inc., 30 S. Pearl
Street, Albany, New York 12207. First Albany Companies Inc.
will furnish to the recordholder of the certificate, without
charge and upon written request at its principal place of
business, a copy of such Plan and Award Agreement. First
Albany Companies Inc. reserves the right to refuse to record
the transfer of this certificate until all such restrictions
are satisfied, all such terms are complied with and all such
conditions are satisfied."
Such stock certificate evidencing such shares shall, in the sole discretion of
the Committee, be deposited with and held in custody by the Company until the
restrictions thereon shall have lapsed and all of the terms and conditions
applicable to such grant shall have been satisfied.
8.2 RESTRICTED SHARE GRANTS. A grant of Restricted Shares is
an Award of shares of Common Stock granted to a Participant, subject to such
restrictions, terms and conditions as the Committee deems appropriate,
including, without limitation, (a) restrictions on the sale, assignment,
transfer, hypothecation or other disposition of such shares, (b) the requirement
that the Participant deposit such shares with the Company while such shares are
subject to such restrictions, and (c) the requirement that such shares be
forfeited upon termination of employment for specified reasons within a
specified period of time or for other reasons (including, without limitation,
the failure to achieve designated performance goals).
8.3 RESTRICTION PERIOD. In accordance with Sections 8.1 and
8.2 of the Plan and unless otherwise determined by the Committee (in its sole
discretion) at any time and from time to time, Restricted Shares shall only
become unrestricted and vested in the Participant in accordance with such
vesting schedule relating to such Restricted Shares, if any, as the Committee
may establish in the relevant Award Agreement (the "Restriction Period").
Notwithstanding the preceding sentence, in no event shall the Restriction Period
be less than six (6) months after the date of grant. During the Restriction
Period, such stock shall be and remain unvested and a Participant may not sell,
assign, transfer, pledge, encumber or otherwise dispose of or hypothecate such
Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Participant shall be entitled to receive
payment of the Restricted Shares or a portion thereof, as the case may be, as
provided in Section 8.4 of the Plan.
8.4 PAYMENT OF RESTRICTED SHARE GRANTS. After the satisfaction
and/or lapse of the restrictions, terms and conditions established by the
Committee in respect of a grant of Restricted Shares, a new certificate, without
the legend set forth in Section 8.1 of the Plan, for the number of shares of
Common Stock which are no longer subject to such restrictions, terms and
conditions shall, as soon as practicable thereafter, be delivered to the
Participant.
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8.5 SHAREHOLDER RIGHTS. A Participant shall have, with respect
to the shares of Common Stock underlying a grant of Restricted Shares, all of
the rights of a shareholder of such stock (except as such rights are limited or
restricted under the Plan or in the relevant Award Agreement). Any stock
dividends paid in respect of unvested Restricted Shares shall be treated as
additional Restricted Shares and shall be subject to the same restrictions and
other terms and conditions that apply to the unvested Restricted Shares in
respect of which such stock dividends are issued.
9. PERFORMANCE UNITS.
9.1 TERMS AND CONDITIONS. Performance Units shall be subject
to the terms and conditions set forth in this Section 9 and any additional terms
and conditions, not inconsistent with the express provisions of the Plan, as the
Committee shall set forth in the relevant Award Agreement.
9.2 PERFORMANCE UNIT GRANTS. A Performance Unit is an Award of
units (with each unit representing such monetary amount as is designated by the
Committee in the Award Agreement) granted to a Participant, subject to such
terms and conditions as the Committee deems appropriate, including, without
limitation, the requirement that the Participant forfeit such units (or a
portion thereof) in the event certain performance criteria or other conditions
are not met within a designated period of time.
9.3 GRANTS. Performance Units may be granted alone or in
addition to any other Awards under the Plan. Subject to the terms of the Plan,
the Committee shall determine the number of Performance Units to be granted to a
Participant and the Committee may impose different terms and conditions on any
particular Performance Units granted to any Participant.
9.4 PERFORMANCE GOALS AND PERFORMANCE PERIODS. Participants
receiving a grant of Performance Units shall only earn into and be entitled to
payment in respect of such Awards if the Company and/or the Participant achieves
certain performance goals (the "Performance Goals") during and in respect of a
designated performance period (the "Performance Period"). The Performance Goals
and the Performance Period shall be established by the Committee, in its sole
discretion. The Committee shall establish Performance Goals for each Performance
Period prior to, or as soon as practicable after, the commencement of such
Performance Period. The Committee shall also establish a schedule or schedules
for Performance Units setting forth the portion of the Award which will be
earned or forfeited based on the degree of achievement, or lack thereof, of the
Performance Goals at the end of the relevant Performance Period. In setting
Performance Goals, the Committee may use, but shall not be limited to, such
measures as total shareholder return, return on equity, net earnings growth,
sales or revenue growth, cash flow, comparisons to peer companies, individual or
aggregate Participant performance or such other measure or measures of
performance as the Committee, in its sole discretion, may deem appropriate. Such
performance measures shall be defined as to their respective components and
meaning by the Committee (in its sole discretion). During any Performance
Period, the Committee shall have the authority to adjust the Performance Goals
and/or the Performance Period in such manner as the Committee, in its sole
discretion, deems appropriate at any time and from time to time.
9.5 PAYMENT OF UNITS. With respect to each Performance Unit,
the Participant shall, if the applicable Performance Goals have been achieved,
or partially achieved, as determined
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by the Committee in its sole discretion, by the Company and/or the Participant
during the relevant Performance Period, be entitled to receive payment in an
amount equal to the designated value of each Performance Unit times the number
of such units so earned. Payment in settlement of earned Performance Units shall
be made as soon as practicable following the conclusion of the respective
Performance Period in cash, in unrestricted Common Stock, or in Restricted
Shares, or in any combination thereof, as the Committee in its sole discretion,
shall determine and provide in the relevant Award Agreement.
10. DEFERRAL ELECTIONS/TAX REIMBURSEMENTS/OTHER PROVISIONS.
10.1 DEFERRALS. The Committee may permit a Participant to
elect to defer receipt of any payment of cash or any delivery of shares of
Common Stock that would otherwise be due to such Participant by virtue of the
exercise, earn out or settlement of any Award made under the Plan. If any such
election is permitted, the Committee shall establish rules and procedures for
such deferrals, including, without limitation, the payment or crediting of
reasonable interest on such deferred amounts credited in cash, and the payment
or crediting of dividend equivalents in respect of deferrals credited in units
of Common Stock. The Committee may also provide in the relevant Award Agreement
for a tax reimbursement cash payment to be made by the Company in favor of any
Participant in connection with the tax consequences resulting from the grant,
exercise, settlement, or earn out of any Award made under the Plan.
10.2 PERFORMANCE-BASED AWARDS. Performance Units,
performance-based Restricted Shares, and other Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of section 162(m) and the regulations thereunder. Until otherwise
determined by the Committee, the performance goals shall be the attainment of
preestablished levels of any of net income, market price per share, earnings per
share, return on equity, return on capital employed and/or cash flow. The payout
of any such Award to a Covered Employee may be reduced, but not increased, based
on the degree of attainment of other performance criteria or otherwise at the
discretion of the Committee. For purposes of the Plan, "Covered Employee" has
the same meaning as set forth in Section 162(m) of the Code.
10.3 MAXIMUM YEARLY AWARDS. The maximum annual Common Stock
amounts in this Section 10.3 are subject to adjustment under Section 14.2 and
are subject to the Plan maximum under Section 4.2.
10.3.1 PERFORMANCE-BASED AWARDS. All Participants in
the aggregate may not receive in any calendar year Performance Units,
performance-based Restricted Shares and other Awards subject to
performance criteria exceeding, in the aggregate, 500,000 underlying
shares of Common Stock. The maximum amount payable in respect of such
Awards in any calendar year may not exceed 500,000 shares of Common
Stock (or the then equivalent Fair Market Value thereof) in the
aggregate to all Participants and 300,000 shares of Common Stock (or
the then equivalent Fair Market Value thereof) in the case of any
individual Participant.
10.3.2 STOCK OPTIONS AND SARS. All Participants in
the aggregate may not receive in any calendar year Awards of Options
and Stock Appreciation Rights, in the aggregate, exceeding 500,000
underlying shares of Common Stock. Each individual
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Participant may not receive in any calendar year Awards of Options or
Stock Appreciation Rights exceeding 300,000 underlying shares of Common
Stock.
11. DIVIDEND EQUIVALENTS. In addition to the provisions of Section 8.5
of the Plan, Awards of Stock Options, and/or Stock Appreciation Rights, may, in
the sole discretion of the Committee and if provided for in the relevant Award
Agreement, earn dividend equivalents. In respect of any such Award which is
outstanding on a dividend record date for Common Stock, the Participant shall be
credited with an amount equal to the amount of cash or stock dividends that
would have been paid on the shares of Common Stock covered by such Award had
such covered shares been issued and outstanding on such dividend record date.
The Committee shall establish such rules and procedures governing the crediting
of such dividend equivalents, including, without limitation, the amount, the
timing, form of payment and payment contingencies and/or restrictions of such
dividend equivalents, as it deems appropriate or necessary.
12. TERMINATION OF EMPLOYMENT.
12.1 GENERAL. Except as is otherwise provided (a) in the
relevant Award Agreement as determined by the Committee (in its sole
discretion), or (b) in the Participant's then effective employment agreement, if
any, the following terms and conditions shall apply as appropriate and as not
inconsistent with the terms and conditions, if any, contained in such Award
Agreement and/or such employment agreement:
12.1.1 OPTIONS/SARS. Subject to any determination of
the Committee pursuant to Section 6.6 of the Plan, if a Participant's
employment with the Company terminates for any reason, any then
unexercisable Stock Options and/or Stock Appreciation Rights shall be
forfeited and cancelled by the Company. Except as otherwise provided in
this Section 12.1.1, if a Participant's employment with the Company and
its Subsidiaries terminates for any reason, such Participant's rights,
if any, to exercise any then exercisable Stock Options and/or Stock
Appreciation Rights, if any, shall terminate ninety (90) days after the
date of such termination (but not beyond the stated term of any such
Stock Option and/or Stock Appreciation Right as determined under
Sections 6.4 and 7.4) and thereafter such Stock Options or Stock
Appreciation Rights shall be forfeited and cancelled by the Company.
The Committee, in its sole discretion, may determine that any such
Participant's Stock Options and/or Stock Appreciation Rights, if any,
to the extent exercisable immediately prior to any termination of
employment (other than a termination due to death, Retirement or
Disability), may remain exercisable for an additional specified time
period after such ninety (90) day period expires (subject to any other
applicable terms and provisions of the Plan and the relevant Award
Agreement), but not beyond the stated term of any such Stock Option
and/or Stock Appreciation Right. If any termination of employment is
due to death, Retirement or Disability, a Participant (and such
Participant's estate, designated beneficiary or other legal
representative, as the case may be and as determined by the Committee)
shall have the right, to the extent exercisable immediately prior to
any such termination, to exercise such Stock Options and/or Stock
Appreciation Rights, if any, at any time within the one (1) year period
following such termination due to death, Retirement or Disability (but
not beyond the term of any such Stock Option and/or Stock Appreciation
Right as determined under Sections 6.4 and 7.4).
12.1.2 RESTRICTED SHARES. If a Participant's
employment with the Company and its Subsidiaries terminates for any
reason (other than due to Disability, Retirement or death) prior to the
satisfaction and/or lapse of the restrictions, terms and conditions
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applicable to a grant of Restricted Shares, such Restricted Shares
shall immediately be cancelled and the Participant (and such
Participant's estate, designated beneficiary or other legal
representative) shall forfeit any rights or interests in and with
respect to any such Restricted Shares. Notwithstanding anything to the
contrary in this Section 12, the Committee, in its sole discretion, may
determine, prior to or within ninety (90) days after the date of such
termination, that all or a portion of any such Participant's Restricted
Shares shall not be so cancelled and forfeited. If the Participant's
employment terminates due to death, Disability or Retirement, the
Participant shall become 100% vested in any such Participant's
restricted Shares as of the date of any such termination.
12.1.3 PERFORMANCE UNITS. If a Participant's
employment with the Company and its Subsidiaries terminates for any
reason (other than due to Disability, Retirement or death) prior to the
completion of any Performance Period, any Performance Units granted in
respect of such Performance Period shall immediately be cancelled by
the Company and the Participant (and such Participant's estate,
designated beneficiary or other legal representative) shall forfeit any
rights or interests in and with respect to any such Performance Units.
Notwithstanding anything to the contrary in this Section 12, the
Committee, in its sole discretion may determine, prior to or within
ninety (90) days after the date of any such termination, that all or a
portion of any such Participant's Performance Units shall not be so
cancelled and forfeited upon termination of employment for any reason
or for a particular reason. If the Participant's employment terminates
due to death, Disability or Retirement, the Participant shall be
entitled to earn into such Participant's Performance Units in
accordance with Section 9 of the Plan; provided, however, that any such
earn out (determined in good faith by the Committee) shall be
proportionately reduced based on the number of days transpired in the
relevant Performance Periods prior to such death, Disability or
Retirement over the total number of calendar days in any such relevant
Performance Period.
13. NON-TRANSFERABILITY OF AWARDS. Unless otherwise provided in the
Award Agreement, no Award under the Plan or any Award Agreement, and no rights
or interests herein or therein, shall or may be assigned, transferred, sold,
exchanged, encumbered, pledged, or otherwise hypothecated or disposed of by a
Participant or any beneficiary(ies) of any Participant, except by testamentary
disposition by the Participant or the laws of intestate succession. No such
interest shall be subject to execution, attachment or similar legal process,
including, without limitation, seizure for the payment of the Participant's
debts, judgements, alimony, or separate maintenance. Unless otherwise provided
in the Award Agreement, during the lifetime of a Participant, Stock Options and
Stock Appreciation Rights are exercisable only by the Participant.
14. CHANGES IN CAPITALIZATION AND OTHER MATTERS.
14.1 NO CORPORATE ACTION RESTRICTION. The existence of the
Plan, any Award Agreement and/or the Awards granted hereunder shall not limit,
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger, consolidation or
change in the ownership of the Company or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stocks ahead of or
affecting the Company's or any Subsidiary's capital stock or the rights thereof,
(d) any dissolution or liquidation of the Company or any Subsidiary, (e) any
sale or transfer of all or any part of the Company's or any Subsidiary's assets
or business, or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, beneficiary or any
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other person shall have any claim against any member of the Board or the
Committee, the Company or any Subsidiary, or any employees, officers or agents
of the Company or any subsidiary, as a result of any such action.
Notwithstanding anything herein contained to the contrary, any Award granted
hereunder shall be cancelled immediately prior to the effective time of a
transaction between the Company and another party pursuant to a written
agreement whereby the consummation of the transaction is conditioned upon the
availability of "pooling of interests" accounting treatment (within the meaning
of A.P.B. No. 16 or any successor thereto); provided, however, that the
cancellation of such Awards shall be subject to the following conditions:
(i) the existence of the Awards would (in the opinion of the
firm of independent certified public accountants regularly engaged to
audit the Company's financial statements) render the transaction
ineligible for pooling of interests accounting treatment;
(ii) the cancellation of the Awards would (in the opinion of
the firm of independent certified public accountants regularly engaged
to audit the Company's financial statements) render the transaction
eligible for pooling of interests accounting treatment;
(iii) the transaction is, in fact, consummated; and
(iv) the written agreement providing for the transaction
provides for each Participant to whom an Award has been granted and
whose Award must be cancelled in accordance with this provision to
receive, upon the effective date of such transaction, property with a
fair market value at least equal to the monetary payment that would be
made upon exercise of such Award.
14.2 RECAPITALIZATION ADJUSTMENTS. In the event of any change
in capitalization affecting the Common Stock of the Company, including, without
limitation, a distribution, stock split, reverse stock split, recapitalization,
consolidation, subdivision, split-up, spin-off, split-off, combination or
exchange of shares or other form of reorganization or recapitalization, or any
other change affecting the Common Stock, the Board shall authorize and make such
proportionate adjustments, if any, as the Board deems appropriate to reflect
such change, including, without limitation, with respect to the aggregate number
of shares of the Common Stock for which Awards in respect thereof may be granted
under the Plan, the maximum number of shares of the Common Stock which may be
granted or awarded to any Participant, the number of shares of the Common Stock
covered by each outstanding Award, and the exercise price or other price per
share of Common Stock in respect of outstanding Awards. Notwithstanding the
foregoing, in the event of a stock dividend, the proportionate adjustments
described in this Section 14.2 shall occur automatically, without any Board
action being required.
14.3 CERTAIN MERGERS.
14.3.1 If the Company enters into or is involved in
any merger, reorganization or other business combination with any
person or entity (such merger, reorganization or other business
combination to be referred to herein as a "Merger Event") and as a
result of any such Merger Event the Company will be or is the surviving
corporation, a Participant shall be entitled, as of the date of the
execution of the agreement evidencing the Merger Event (the "Execution
Date") and with respect to both exercisable and unexercisable Stock
Options and/or Stock Appreciation Rights (but only to the extent
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not previously exercised), to receive substitute stock options and/or
stock appreciation rights in respect of the shares of the surviving
corporation on such terms and conditions, as to the number of shares,
pricing and otherwise, which shall substantially preserve the value,
rights and benefits of any affected Stock Options or Stock Appreciation
Rights granted hereunder as of the date of the consummation of the
Merger Event. Notwithstanding anything to the contrary in this Section
14.3, if any Merger Event occurs, the Company shall have the right, but
not the obligation, to pay to each affected Participant an amount in
cash or certified check equal to the excess of the Fair Market Value of
the Common Stock underlying any affected unexercised Stock Options or
Stock Appreciation Rights as of the Execution Date (whether then
exercisable or not) over the aggregate exercise price of such
unexercised Stock Options and/or Stock Appreciation Rights, as the case
may be. However, the Company shall not make any such payments where the
consummation of the Merger Event is pursuant to a written agreement
between the Company and another party conditioned upon the availability
of "pooling of interests" accounting treatment (within the meaning of
A.P.B. No. 16 or any successor thereto).
14.3.2 If, in the case of a Merger Event in which the
Company will not be, or is not, the surviving corporation, and the
Company determines not to make the cash or certified check payment
described in Section 14.3.1 of the Plan, the Company shall compel and
obligate, as a condition of the consummation of the Merger Event, the
surviving or resulting corporation and/or the other party to the Merger
Event, as necessary, or any parent, subsidiary or acquiring corporation
thereof, to grant, with respect to both exercisable and unexercisable
Stock Options and/or Stock Appreciation Rights (but only to the extent
not previously exercised), substitute stock options or stock
appreciation rights in respect of the shares of common or other capital
stock of such surviving or resulting corporation on such terms and
conditions, as to the number of shares, pricing and otherwise, which
shall substantially preserve the value, rights and benefits of any
affected Stock Options and/or Stock Appreciation Rights previously
granted hereunder as of the date of the consummation of the Merger
Event.
14.3.3 Upon receipt by any affected Participant of
any such cash, certified check, or substitute stock options or stock
appreciation rights as a result of any such Merger Event, such
Participant's affected Stock Options and/or Stock Appreciation Rights
for which such cash, certified check or substitute awards was received
shall be thereupon cancelled without the need for obtaining the consent
of any such affected Participant.
14.3.4 The foregoing adjustments and the manner of
application of the foregoing provisions, including, without limitation,
the issuance of any substitute stock options and/or stock appreciation
rights, shall be determined in good faith by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of
fractional shares.
15. CHANGE OF CONTROL.
15.1 ACCELERATION OF AWARDS VESTING. Anything in the Plan to
the contrary notwithstanding, if a Change of Control of the Company occurs (a)
all Stock Options and/or Stock Appreciation Rights then unexercised and
outstanding shall become fully vested and exercisable as of the date of the
Change of Control, (b) all restrictions, terms and conditions applicable to all
Restricted Shares then outstanding shall be deemed lapsed and satisfied as of
the date of the Change of Control, and (c) the Performance Period shall be
deemed completed, all Performance Goals shall
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be deemed attained at the highest levels and all Performance Units shall be
deemed to have been fully earned as of the date of the Change of Control. The
immediately preceding sentence shall apply to only those Participants (i) who
are employed by the Company and/or one of its Subsidiaries as of the date of the
Change of Control, or (ii) to whom Section 15.3 below is applicable.
15.2 PAYMENT AFTER CHANGE OF CONTROL. Notwithstanding anything
to the contrary in the Plan, within thirty (30) days after a Change of Control
occurs, (a) the holder of an Award of Restricted Shares vested under Section
15.1(b) above shall receive a new certificate for such shares without the legend
set forth in Section 8 of the Plan (and, in the case only of a Change of Control
under Section 15.4.1 of the Plan, such holder shall have the right, but not the
obligation, to elect, within ten (10) business days after the Participant has
actual or constructive knowledge of the occurrence of such Change of Control, to
require the Company to purchase such shares from the Participant at their then
Fair Market Value, (b) the holder of Performance Units shall receive payment of
the value of such grants in cash at the highest levels, and (c) in the case only
of a Change of Control under Section 15.4.1 of the Plan, the holders of any
Stock Options and/or Stock Appreciation Rights shall have the right, but not the
obligation, to elect, within ten (10) business days after the Participant has
actual or constructive knowledge of the occurrence of such Change of Control, to
require the Company to purchase such Stock Options and/or Stock Appreciation
Rights from the Participant for an aggregate amount equal to the then aggregate
Fair Market Value of the Common Stock underlying such Awards tendered, less the
aggregate exercise price of such tendered Awards.
15.3 TERMINATION AS A RESULT OF A CHANGE OF CONTROL. Anything
in the Plan to the contrary notwithstanding, if a Change of Control occurs and
if the Participant's employment is terminated before such Change of Control and
it is reasonably demonstrated by the Participant that such employment
termination (a) was at the request, directly or indirectly, of a third party who
has taken steps reasonably calculated to effect the Change of Control, or (b)
otherwise arose in connection with or in anticipation of the Change of Control,
then for purposes of this Section 15, the Change of Control shall be deemed to
have occurred immediately prior to such Participant's employment termination
(for all purposes other than those set forth in Section 15.2(c) of the Plan).
15.4 CHANGE OF CONTROL. For the purpose of this Agreement,
"Change of Control" shall mean:
15.4.1 The acquisition, after the effective date of
the Plan, by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (a) the shares of the Common
Stock, or (b) the combined voting power of the voting securities of the
Company entitled to vote generally in the election of directors (the
"Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition by any individual who, on the effective date of the Plan
beneficially owned 10% or more of the Common Stock, (ii) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Subsidiary, (iii) any acquisition
by any underwriter in connection with any firm commitment underwriting
of securities to be issued by the Company, or (iv) any acquisition by
any corporation if, immediately following such acquisition, more than
70% of the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities
of such corporation (entitled to vote generally in the election of
directors), is beneficially owned,
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directly or indirectly, by all or substantially all of the individuals
and entities who, immediately prior to such acquisition, were the
beneficial owners of the Common Stock and the Voting Securities in
substantially the same proportions, respectively, as their ownership,
immediately prior to such acquisition, of the Common Stock and Voting
Securities; or
15.4.2 Individuals who, as of the effective date of
the Plan, constitute the Board (the "Incumbent Board") cease thereafter
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent
to the effective date of the Plan whose election, or nomination for
election by the Company's shareholders, was approved by at least a
majority of the directors then serving and comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents; or
15.4.3 Approval by the shareholders of the Company of
a reorganization, merger or consolidation, other than a reorganization,
merger or consolidation with respect to which all or substantially all
of the individuals and entities who were the beneficial owners,
immediately prior to such reorganization, merger or consolidation, of
the Common Stock and Voting Securities beneficially own, directly or
indirectly, immediately after such reorganization, merger or
consolidation more than 70% of the then outstanding common stock and
voting securities (entitled to vote generally in the election of
directors) of the corporation resulting from such reorganization,
merger or consolidation in substantially the same proportions as their
respective ownership, immediately prior to such reorganization, merger
or consolidation, of the Common Stock and the Voting Securities; or
15.4.4 Approval by the shareholders of the Company of
(a) a complete liquidation or substantial dissolution of the Company,
or (b) the sale or other disposition of all or substantially all of the
assets of the Company, other than to a Subsidiary, wholly-owned,
directly or indirectly, by the Company.
16. AMENDMENT, SUSPENSION AND TERMINATION.
16.1 IN GENERAL. The Board may suspend or terminate the Plan
(or any portion thereof) at any time and may amend the Plan at any time and from
time to time in such respects as the Board may deem advisable to insure that any
and all Awards conform to or otherwise reflect any change in applicable laws or
regulations, or to permit the Company or the Participants to benefit from any
change in applicable laws or regulations, or in any other respect the Board may
deem to be in the best interests of the Company or any Subsidiary. No such
amendment, suspension or termination shall (x) materially adversely effect the
rights of any Participant under any outstanding Stock Options, Stock
Appreciation Rights, Performance Units, or Restricted Share grants, without the
consent of such Participant, or (y) make any change that would disqualify the
Plan, or any other plan of the Company or any Subsidiary intended to be so
qualified, from the benefits provided under Section 422 of the Code, or any
successor provisions thereto.
16.2 AWARD AGREEMENT MODIFICATIONS. The Committee may (in its
sole discretion) amend or modify at any time and from time to time the terms and
provisions of any outstanding Stock Options, Stock Appreciation Rights,
Performance Units, or Restricted Share grants, in any manner to the extent that
the Committee under the Plan or any Award Agreement
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could have initially determined the restrictions, terms and provisions of such
Stock Options, Stock Appreciation Rights, Performance Units, and/or Restricted
Share grants, including, without limitation, changing or accelerating (a) the
date or dates as of which such Stock Options or Stock Appreciation Rights shall
become exercisable, (b) the date or dates as of which such Restricted Share
grants shall become vested, or (c) the performance period or goals in respect of
any Performance Units. No such amendment or modification shall, however,
materially adversely affect the rights of any Participant under any such Award
without the consent of such Participant.
17. MISCELLANEOUS.
17.1 TAX WITHHOLDING. The Company shall have the right to
deduct from any payment or settlement under the Plan, including, without
limitation, the exercise of any Stock Option or Stock Appreciation Right, or the
delivery, transfer or vesting of any Common Stock or Restricted Shares, any
federal, state, local or other taxes of any kind which the Committee, in its
sole discretion, deems necessary to be withheld to comply with the Code and/or
any other applicable law, rule or regulation. Shares of Common Stock may be used
to satisfy any such tax withholding. Such Common Stock shall be valued based on
the Fair Market Value of such stock as of the date the tax withholding is
required to be made, such date to be determined by the Committee.
17.2 NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan,
the granting of any Award, nor the execution of any Award Agreement, shall
confer upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.
17.3 UNFUNDED PLAN. The Plan shall be unfunded and the Company
shall not be required to segregate any assets in connection with any Awards
under the Plan. Any liability of the Company to any person with respect to any
Award under the Plan or any Award Agreement shall be based solely upon the
contractual obligations that may be created as a result of the Plan or any such
award or agreement. No such obligation of the Company shall be deemed to be
secured by any pledge of, encumbrance on, or other interest in, any property or
asset of the Company or any Subsidiary. Nothing contained in the Plan or any
Award Agreement shall be construed as creating in respect of any Participant (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary thereof or any other person.
17.4 PAYMENTS TO A TRUST. The Committee is authorized to cause
to be established a trust agreement or several trust agreements or similar
arrangements from which the Committee may make payments of amounts due or to
become due to any Participants under the Plan.
17.5 OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments
and other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant's compensation for purposes of
the determination of benefits under any other employee welfare or benefit plans
or arrangements, if any, provided by the Company or any Subsidiary unless
expressly provided in such other plans or arrangements, or except where the
Board expressly determines in writing that inclusion of an Award or portion of
an Award should be
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included to accurately reflect competitive compensation practices or to
recognize that an Award has been made in lieu of a portion of competitive annual
base salary or other cash compensation. Awards under the Plan may be made in
addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.
17.6 LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE. No
Awards or shares of the Common Stock shall be required to be issued or granted
under the Plan unless legal counsel for the Company shall be satisfied that such
issuance or grant will be in compliance with all applicable federal and state
securities laws and regulations and any other applicable laws or regulations.
The Committee may require, as a condition of any payment or share issuance, that
certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be executed or
provided to the Company to assure compliance with all such applicable laws or
regulations. Certificates for shares of the Restricted Shares and/or Common
Stock delivered under the Plan may be subject to such stock-transfer orders and
such other restrictions as the Committee may deem advisable under the rules,
regulations, or other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities law. In addition, if, at any time
specified herein (or in any Award Agreement or otherwise) for (a) the making of
any Award, or the making of any determination, (b) the issuance or other
distribution of Restricted Shares and/or Common Stock, or (c) the payment of
amounts to or through a Participant with respect to any Award, any law, rule,
regulation or other requirement of any governmental authority or agency shall
require either the Company, any Subsidiary or any Participant (or any estate,
designated beneficiary or other legal representative thereof) to take any action
in connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of SEC Rule 16b-3. To
the extent any provision of the Plan or any action by the administrators of the
Plan fails to so comply with such rule, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
17.7 AWARD AGREEMENTS. Each Participant receiving an Award
under the Plan shall enter into an Award Agreement with the Company in a form
specified by the Committee. Each such Participant shall agree to the
restrictions, terms and conditions of the Award set forth therein and in the
Plan.
17.8 DESIGNATION OF BENEFICIARY. Each Participant to whom an
Award has been made under the Plan may designate a beneficiary or beneficiaries
to exercise any option or to receive any payment which under the terms of the
Plan and the relevant Award Agreement may become exercisable or payable on or
after the Participant's death. At any time, and from time to time, any such
designation may be changed or cancelled by the Participant without the consent
of any such beneficiary. Any such designation, change or cancellation must be on
a form provided for that purpose by the Committee and shall not be effective
until received by the Committee. If no beneficiary has been designated by a
deceased Participant, or if the designated beneficiaries have predeceased the
Participant, the beneficiary shall be the Participant's estate. If the
Participant designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be
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made in equal shares unless the Participant has expressly designated otherwise,
in which case the payments shall be made in the shares designated by the
Participant.
17.9 LEAVES OF ABSENCE/TRANSFERS. The Committee shall have the
power to promulgate rules and regulations and to make determinations, as it
deems appropriate, under the Plan in respect of any leave of absence from the
Company or any Subsidiary granted to a Participant. Without limiting the
generality of the foregoing, the Committee may determine whether any such leave
of absence shall be treated as if the Participant has terminated employment with
the Company or any such Subsidiary. If a Participant transfers within the
Company, or to or from any Subsidiary, such Participant shall not be deemed to
have terminated employment as a result of such transfers.
17.10 LOANS. Subject to applicable law, the Committee may
provide, pursuant to Plan rules, for the Company or any Subsidiary to make loans
to Participants to finance the exercise price of any Stock Options, as well as
the withholding obligation under Section 17.1 of the Plan and/or the estimated
or actual taxes payable by the Participant as a result of the exercise of such
Stock Option and the Committee may prescribe the terms and conditions of any
such loan.
17.11 GOVERNING LAW. The Plan and all actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
New York, without reference to the principles of conflict of laws thereof. Any
titles and headings herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or interpretation of
any provisions of the Plan.
17.12 EFFECTIVE DATE. The Plan shall be effective upon its
approval by the Board and adoption by the Company, subject to the approval of
the Plan by the Company's shareholders in accordance with Sections 162(m) and
422 of the Code.
IN WITNESS WHEREOF, this Plan is adopted by the Company on
this 18th day of May, 1999.
FIRST ALBANY COMPANIES INC.
By: /s/ Stephen P. Wink
Name: Stephen P. Wink
Title: Secretary and General Counsel
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