<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
FIRST ALBANY COMPANIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
FIRST ALBANY COMPANIES INC.
April 25, 2000
Dear Shareholder:
The 2000 Annual Meeting of Shareholders of First Albany Companies Inc. will
be held at the offices of the Company at 30 South Pearl Street, Albany, New York
on Tuesday, May 23, 2000, at 10:00 A.M. (EDT).
The enclosed material includes the Notice of Annual Meeting and Proxy
Statement which describes the business to be transacted at the meeting. We ask
that you give it your careful attention.
As in the past, we will be reporting on your Company's activities and you
will have an opportunity to ask questions about its operations.
We hope that you are planning to attend the Annual Meeting personally and
we look forward to seeing you. Whether or not you are able to attend in person,
it is important that your shares be represented at the Meeting. Accordingly, the
return of the enclosed Proxy as soon as possible will be appreciated and will
ensure that your shares are represented at the Annual Meeting. Over 95% of the
outstanding shares were represented at last year's Annual Meeting. If you do
attend the Annual Meeting, you may, of course, withdraw your Proxy should you
wish to vote in person.
On behalf of the Board of Directors and management of First Albany
Companies Inc., I would like to thank you for your continued support and
confidence.
Sincerely yours,
GEORGE C. MCNAMEE
Chairman of the Board
<PAGE> 3
FIRST ALBANY COMPANIES INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 23, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Albany Companies Inc. (the "Company") will be held at the offices of the
Company, 30 South Pearl Street, Albany, New York, on Tuesday, May 23, 2000 at
10:00 a.m. (EDT), for the following purposes:
(1) To elect three directors whose terms will expire at the 2003 Annual
Meeting of Shareholders;
(2) To consider and act upon a proposal to approve the adoption of the
First Albany Companies Inc. 2000 Employee Stock Purchase Plan;
(3) To approve an amendment to the Company's Certificate of Incorporation
increasing from 10,000,000 to 50,000,000 the number of authorized
shares of Common Stock;
(4) To ratify the selection of PricewaterhouseCoopers L.L.P. as independent
auditors of the Company for the fiscal year ending December 31, 2000;
and
(5) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Holders of Common Stock of record as of the close of business on April 20,
2000, are entitled to receive notice of and vote at the Annual Meeting of
Shareholders. A list of such shareholders may be examined at the offices of the
Company during regular business hours for ten full days prior to the Annual
Meeting as well as at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting. For
that reason we ask that you promptly sign, date, and mail the enclosed Proxy
card in the return envelope provided. Shareholders who attend the Annual Meeting
may revoke their proxies and vote in person.
By Order of the Board of Directors
STEPHEN P. WINK
Secretary
Albany, New York
April 25, 2000
<PAGE> 4
FIRST ALBANY COMPANIES INC.
30 SOUTH PEARL STREET
ALBANY, NEW YORK 12207
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
------------------------
MAY 23, 2000
This Proxy Statement is being furnished to the Shareholders of First Albany
Companies Inc., a New York corporation (the "Company"), in connection with the
solicitation by the Board of Directors of the Company (the "Board") of proxies
for use at the Annual Meeting of Shareholders of the Company to be held at the
offices of the Company, 30 South Pearl Street, Albany, New York, on Tuesday, May
23, 2000 at 10:00 A.M. (EDT), and any postponements or adjournments thereof (the
"Meeting"). The mailing address of the Company is 30 South Pearl Street, Albany,
New York 12207 and its telephone number is (518) 447-8500.
At the Meeting, the Shareholders of the Company will be asked (i) to elect
three directors of the Company whose terms will expire at the 2003 Annual
Meeting of Shareholders, (ii) to consider and act upon a proposal to adopt the
First Albany Companies Inc. 2000 Employee Stock Purchase, (iii) to approve an
amendment to the Company's Certificate of Incorporation increasing from
10,000,000 to 50,000,000 the number of authorized shares of Common Stock, and
(iv) to ratify the selection by the Board of PricewaterhouseCoopers L.L.P. to
serve as the Company's independent auditors for fiscal 2000.
This Proxy Statement and the enclosed form of proxy are expected to be
mailed on or about April 25, 2000. The cost of solicitation of proxies will be
borne by the Company. All expenses of the Company in connection with this
solicitation will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by directors, officers and other employees of the
Company, by telephone, telegraph, telex, in person or otherwise, without
additional compensation. The Company will also request brokerage firms,
nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares held of record by such persons and will reimburse
such persons and the Company's transfer agent for their reasonable out-of-pocket
expenses in forwarding such materials. Proxies in the form enclosed, properly
executed by Shareholders and returned to the Company and not revoked, will be
voted at the Meeting. A proxy may be revoked at any time before it is exercised
by giving notice of revocation to the Secretary of the Company, by executing a
later-dated proxy or by attending and voting in person at the Meeting.
<PAGE> 5
THE COMPANY
The Company, which was incorporated under the laws of the State of New York
in November 1985, is a holding company which, through its principal wholly-owned
subsidiary, First Albany Corporation ("First Albany"), is an investment banking,
securities trading, and brokerage firm serving corporations, governments, and
institutional and individual investors.
VOTING, RECORD DATE AND QUORUM
Proxies will be voted as specified or, if no direction is indicated on a
proxy, will be voted "FOR" the election of the three persons named under the
caption "Election of Directors"; "FOR" the adoption of the First Albany
Companies Inc. 2000 Employee Stock Purchase Plan; "FOR" the approval of an
amendment to the Company's Certificate of Incorporation increasing from
10,000,000 to 50,000,000 the number of authorized shares of Common Stock and
"FOR" the ratification of the selection of PricewaterhouseCoopers L.L.P. as
independent auditors for fiscal 2000. The persons named in the proxy also may
vote in favor of a proposal to adjourn the Meeting to a subsequent date or dates
without further notice in order to solicit and obtain sufficient votes to
approve the matters being considered at the Meeting. If a proxy is returned
which specifies a vote against a proposal, such discretionary authority will not
be used to adjourn the Meeting in order to solicit additional votes in favor of
such proposal. As to any other matter or business which may be brought before
the Meeting, a vote may be cast pursuant to the proxy in accordance with the
judgment of the person or persons voting the same, but the Board does not know
of any such other matter or business.
The close of business on April 20, 2000 has been fixed as the record date
for the determination of Shareholders entitled to vote the 7,755,921 shares of
Common Stock that were outstanding as of that date at the Meeting. Each
Shareholder will be entitled to cast one vote, in person or by proxy, for each
share of Common Stock held. The presence, in person or by proxy, of the holders
of at least a majority of the shares of Common Stock entitled to vote at the
Meeting is necessary to constitute a quorum at the Meeting. The affirmative vote
of the holders of a plurality of the shares of Common Stock cast at the Meeting
is required for the election of directors. The affirmative vote of the holders
of a majority of the votes cast at the Meeting is required for the adoption of
the First Albany Companies Inc. Employee Stock Purchase Plan. The affirmative
vote of the holders of a majority of the votes cast at the Meeting is required
for the approval to amend the Company's Certificate of Incorporation increasing
from 10,000,000 to 50,000,000 the number of authorized shares of common stock.
The affirmative vote of the holders of a majority of the votes cast at the
Meeting is required for ratification of the selection of PricewaterhouseCoopers
L.L.P. as independent auditors. Accordingly, abstentions and broker non-votes
will have no effect on the items to be voted on at the Meeting. THE BOARD
RECOMMENDS THE ELECTION OF THE THREE PERSONS NAMED AS NOMINEES UNDER "ELECTION
OF DIRECTORS", APPROVAL OF THE PROPOSAL TO ADOPT THE FIRST ALBANY COMPANIES INC.
2000 EMPLOYEE STOCK PURCHASE PLAN, APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION INCREASING FROM 10,000,000 TO 50,000,000 THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK AND RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS.
2
<PAGE> 6
STOCK OWNERSHIP OF PRINCIPAL OWNERS AND MANAGEMENT
The following table sets forth information concerning the beneficial
ownership of Common Stock of the Company as of April 4, 2000, by (i) persons
owning more than 5% of the Common Stock, (ii) each director of the Company and
the executive officers included in the Summary Compensation Table and (iii) all
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED(6)
----------------------
NAME NUMBER PERCENT
---- ---------- --------
<S> <C> <C>
George C. McNamee(1)(2)(4).................................. 1,290,231 15.07%
Alan P. Goldberg(2)(4)...................................... 996,415 11.64%
Hugh A. Johnson, Jr.(2)(4).................................. 240,814 2.8%
Peter Barton................................................ 1,713 <1%
J. Anthony Boeckh........................................... 10,383 <1%
Walter Fiederowicz(5)....................................... 11,274 <1%
Daniel V. McNamee III(1).................................... 116,614 1.36%
Charles L. Schwager......................................... 22,398 <1%
Benaree P. Wiley............................................ 3,277 <1%
Timothy R. Welles(2)........................................ 16,782 <1%
Stephen P. Wink(2).......................................... 14,929 <1%
First Albany Employee Stock Bonus Plan(2)................... 1,899,193 22.18%
All officers and directors of the Company as a
group(2)(3)(4)............................................ 4,669,494 54.54%
</TABLE>
- ---------------
(1) Does not include interest as residual beneficiary under the McNamee Family
Trust, and with respect to Daniel V. McNamee III as trustee under the Trust.
Mr. G. McNamee disclaims beneficial ownership of any such interest.
(2) The Board of Directors of the Company serves as the Administrative Committee
of the First Albany Companies Inc. Stock Bonus Plan (the "Stock Bonus
Plan"). Daniel V. McNamee III serves as Trustee of the Trust created
thereby. Pursuant to the terms of the Stock Bonus Plan, individual employees
are permitted to direct the vote of shares allocated to their respective
accounts. The number of shares beneficially owned by Messrs. G. McNamee,
Goldberg, Johnson, Welles and Wink includes the shares allocated to the
respective accounts of such person under the Stock Bonus Plan as of December
31, 1999, all of which shares are fully vested. Under the terms of the Stock
Bonus Plan Trust Agreement, the Trustee, under the direction of the
Administrative Committee, has the authority and power to dispose of the
assets of the Trust Fund, and therefore, the Trustee may be deemed to have
beneficial ownership of all the shares held in the Stock Bonus Plan.
(3) Includes all shares beneficially owned by such person, shares owned by the
McNamee Family Trust, and all shares held under the Stock Bonus Plan.
(4) Includes 368,919, 355,061, 59,381 and 13,110 and 8,946 options to purchase
shares, granted to Messrs. G. McNamee, Goldberg, Johnson, Welles and Wink,
respectively, all of which options are vested and exercisable in accordance
with the Stock Incentive Plan.
(5) Includes 6,853 shares owned by Geraldine Fiederowicz, of which Mr.
Fiederowicz disclaims ownership.
(6) Except as noted, all shares are held individually or jointly with a spouse
and the named person has or shares the right to vote and to dispose of the
shares indicated.
3
<PAGE> 7
ELECTION OF DIRECTORS
The Bylaws of the Company currently provide that the Board shall consist of
nine directors elected in three classes. The Board recommends the election of
Messrs. Hugh A. Johnson, Jr., Charles L. Schwager and Daniel V. McNamee for a
three-year term expiring at the Annual Meeting of Shareholders in 2003.
Accordingly, if the enclosed proxy card is duly executed and received in time
for the Meeting, and if no contrary specification is made as provided therein,
it will be voted in favor of the election as directors of such nominees.
Should any nominee for director become unable or unwilling to accept
election, proxies will be voted for a nominee selected by the Board, or the size
of the Board may be reduced accordingly. The Board has no reason to believe that
any of the nominees will be unable or unwilling to serve if elected to office
and, to the knowledge of the Board, such nominees intend to serve the entire
term for which election is sought. Any vacancy occurring during the term of
office of any director may be filled by the remaining directors for a term
expiring at the next meeting of Shareholders at which the election of directors
is in the regular order of business. All the nominees for directors are
presently directors of the Company.
The information set forth below, based upon the information obtained in
part from the respective nominees and in part from the records of the Company,
sets forth information regarding each nominee as of April 4, 2000.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The directors nominated for election are as follows:
HUGH A. JOHNSON, JR., age 59, joined First Albany in 1977. He is currently
Senior Vice President and the Chief Investment Officer. He has also been
Chairman of First Albany Asset Management Corporation, a subsidiary of the
Company, since 1991. He has served on the Board of Directors of First Albany
since 1985. Mr. Johnson is a Director of the New York State Business Development
Corporation and serves on other state and community boards. Mr. Johnson has
served as a director of the Company since 1990.
CHARLES L. SCHWAGER, age 56, founded Loanet, Inc. in 1981, a provider of
on-line, real time accounting services to support financial institutions engaged
in the business of borrowing and lending securities. Mr. Schwager served as
President of Loanet, Inc. from 1981 to 1994, when the company was sold. He
continues to be employed by Loanet, Inc. in a consulting capacity. Mr. Schwager
is a member of the Audit and Executive Compensation Committees and has been a
director of the Company since 1995.
DANIEL V. McNAMEE III, age 55, has been Chairman of The Publishing and
Media Group, formerly McNamee Consulting Company Inc., a management consulting
firm specializing in the media communications industry, since 1981. Mr. McNamee
is a member of the Audit Committee and has been a director of the Company since
its incorporation in 1985. Mr. McNamee also serves on the Board of Directors of
each of the E.N. Huyck Preserve, the Nature Conservatory (Eastern NY Chapter),
the Yale Alumni Magazine, Quadrant Media, Inc. and TechRepublic, Inc.
The following directors' terms shall expire at the Annual Meeting of
Shareholders in 2001:
ALAN P. GOLDBERG, age 54, joined First Albany in 1980. Mr. Goldberg became
President of First Albany in 1989 and Co-Chief Executive Officer in 1993. Mr.
Goldberg is a Director of Mechanical Technology Incorporated. He is a past
member of the Board of Governors of the Boston Stock Exchange and past Chairman
of the District Business Conduct Committee of the National Association of
Securities Dealers. He also serves on other industry and community boards. Mr.
Goldberg has been a director of the Company since its incorporation in 1985.
J. ANTHONY BOECKH, Ph.D., age 61, has been Chairman and Chief Executive
Officer of BCA Publications Ltd., Montreal, Canada, and has been Editor-in-Chief
of The Bank Credit Analyst since 1971. Mr. Boeckh was a principal of Greydanus,
Boeckh and Associates Inc., Montreal, Canada, a fixed income specialty manager
through December, 1999 when the company was sold. He also serves on other
industry and
4
<PAGE> 8
community boards. Mr. Boeckh has been a director of the Company since 1986, and
serves as a member of the Executive Compensation Committee.
BENAREE P. WILEY, age 53, is President and Chief Executive Officer of The
Partnership, a Boston-based organization formed by business and civic leaders to
promote the development of professionals of color through access to corporate,
municipal and state leaders. Ms. Wiley is a member of the Board of Directors of
Dreyfus/Laurel Funds and formerly a director of The Boston Company. Ms. Wiley is
Trustee of Boston College and Director of the Greater Boston Chamber of
Commerce. From 1989 to 1991, Ms. Wiley served as Director of Graduate Admissions
for Harvard Law School and from 1987 through 1991, she maintained a private
consulting practice. Ms. Wiley serves as Chairperson of the Audit Committee and
has been a director of the Company since 1993.
The following directors' terms shall expire at the Annual Meeting of
Shareholders in 2002:
GEORGE C. McNAMEE, age 53, joined First Albany in 1969. Mr. Namee is
Chairman and Co-Chief Executive Officer of the Company. Mr. McNamee is also
Chairman of Plug Power Inc. and Mechanical Technology Inc., a director of
MapInfo Corporation and a director of The Meta Group, Inc. He also serves on the
Board of Directors of each of the New York Stock Exchange, the New York State
Science and Technology Foundation and the New York Conservation Education Fund.
PETER BARTON, age 48, is President of Barton and Associates, a private
investment firm specializing in technology and software. From August 1994
through April 1997, Mr. Barton was President and Chief Executive Officer of
Liberty Media Corporation and Executive Vice President of Tele-Communications,
Inc. From its inception in 1991 to August 1994, Mr. Barton served as a President
and CEO of Liberty Media Corporation, then a separate public company. Mr. Barton
has been a director of the Company since July 1997.
WALTER W. FIERDEROWICZ, age 53, has been a private investor and consultant
since August 1997. From April 1997 until August 1997, he served as the President
and Chief Executive Officer of WorldCorp., Inc., a holding company owning shares
of common stock of World Airways, Inc. (a provider of long-range passenger and
cargo air transportation services to major airlines) and of InteliData
Technologies Corporation (a provider of caller identification based
telecommunications devices, smart telephones and on-line electronic information
services). Mr. Fiederowicz served as chairman of Colonial Data Technologies
Corp., (a distributor of telecommunications equipment which subsequently merged
into InteliData Technologies Corporation) from August 1994 to March 1996. From
January 1991 until July 1994, he held various positions, including executive
vice president and chairman and served as director of Conning & Company (the
parent company of an investment firm). Mr. Fiederowicz also serves as a director
of Photronics, Inc. (a photomask manufacturer) and Compensation Value Alliance,
Inc. (a provider of workers' compensation-related services). Since 1998, Mr.
Fiederowicz served as Chairman of CDT Corporation and Meacock Capital, PLC. Mr.
Fiederowicz has been a director of the Company since .
George C. McNamee and Daniel V. McNamee, III are brothers.
The executive officers who are not nominated for election as directors are
as follows:
STEVEN R. JENKINS, age 35, joined First Albany Corporation in February 1999
as Senior Vice President and Chief Financial Officer. Mr. Jenkins was named Vice
President and Chief Financial Officer of the Company in January, 2000.
STEPHEN P. WINK, age 41, joined First Albany in 1996. He has been Secretary
and General Counsel of the Company since August 1997. Mr. Wink has been Senior
Vice President, General Counsel and Secretary of First Albany since 1996, and
was Assistant Secretary of the Company from 1996 through July 1997. Before
joining First Albany, Mr. Wink was an attorney for the law firm of Cleary,
Gottlieb, Steen & Hamilton. Mr. Wink participates on a number of
industry-related committees, including the New York Stock Exchange's Compliance
Advisory Committee, the BMA's Litigation Advisory Committee and several
community boards.
5
<PAGE> 9
BOARD AND COMMITTEE MEETINGS
The Board of Directors held six meetings during the Company's fiscal year
ended December 31, 1999. Each current Director attended 75% or more of the
aggregate number of meetings of the Board of Directors and each committee to
which he/she was appointed that were held during the period in which he/she was
a director, with the exception of Ms. Wiley who attended 66% of such meetings.
The Audit Committee, responsible for reviewing the Company's financial
statements, met two times during the fiscal year. Among other matters, the Audit
Committee reviews the Company's expenditures, reviews the Company's internal
accounting controls and financial statements, reviews with the Company's
independent auditors the scope of their audit, their report, and their
recommendations, and recommends the selection of the Company's independent
auditors. During fiscal year 1999, the Audit Committee was comprised of Messrs.
Schwager and D. McNamee, and Ms. Wiley.
The Executive Compensation Committee is responsible for reviewing and
approving the compensation of executive officers of the Company, compensation
under the Management Bonus Compensation Plan, and the granting of stock options
under the Company's 1999 Long-Term Incentive Plan. The Executive Compensation
Committee met once during the fiscal year. During fiscal year 1999, the
Executive Compensation Committee was comprised of Messrs. Boeckh and Schwager.
The Board of Directors does not have a nominating committee.
During 1999, the Company paid directors who are not executive officers of
the Company an annual retainer of $6,000 and $2,500 per meeting attended ($1,000
for attendance by conference call), plus reimbursement of reasonable expenses.
In addition, the Chair of any committee and non-employee members of such
committees were paid $1,250 and $1,000, respectively, per meeting attended.
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE THREE DIRECTOR NOMINEES.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of its business, First Albany extends credit to
employees, including directors and executive officers, under Regulation T, which
regulates credit in cash and margin accounts. Such extensions of credit are
performing and are made on the same terms as for customers.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to each of the
Co-Chief Executive Officers of the Company during fiscal year 1999, and the
other executive officers at the end of fiscal year 1999 constituting the most
highly compensated executive officers of the Company (the "Named Executive
Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARD
------------
ANNUAL COMPENSATION SHARES
------------------------------- UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION YEAR(1) SALARY BONUS OPTIONS COMPENSATION(1)
- ------------------------- ------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
George C. McNamee.............. 1999 $300,000 $ $6,400
Chairman & Co-Chief 1998 300,000 350,000 50,000 6,400
Executive Officer 1997 250,000 200,000 50,000 6,400
Alan P. Goldberg............... 1999 300,000 6,400
President & Co-Chief 1998 300,000 350,000 50,000 6,400
Executive Officer 1997 250,000 200,000 50,000 6,400
</TABLE>
6
<PAGE> 10
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARD
------------
ANNUAL COMPENSATION SHARES
------------------------------- UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION YEAR(1) SALARY BONUS OPTIONS COMPENSATION(1)
- ------------------------- ------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Hugh A. Johnson, Jr. .......... 1999 200,000 6,400
Senior Vice President 1998 200,000 300,000 30,000 6,400
1997 200,000 200,000 20,000 6,400
Timothy R. Welles(2)........... 1999 175,000 6,400
Vice President and 1998 175,000 250,000 20,000 5,375
Chief Financial Officer 1997 75,609 54,006 25,000 0
Stephen P. Wink................ 1999 175,000 6,400
Secretary and 1998 175,000 135,000 15,000 2,917
General Counsel 1997 150,000 100,000 20,000 875
</TABLE>
- ---------------
(1) Represents contributions by the Company to the Employee Stock Bonus Plan, a
tax qualified employee benefit plan in which all employees of the Company
were eligible to participate.
(2) Mr. Welles joined the Company on July 28, 1997. Accordingly, the table
includes only the compensation Mr. Welles received from that day forward.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants during 1999 to
the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME (#)(1) YEAR ($/SH)(1)(2) DATE 5% 10%
- ---- ---------- ---------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
George C. McNamee...............
Alan P. Goldberg................
Hugh A. Johnson, Jr. ...........
Timothy R. Welles...............
Stephen P. Wink.................
</TABLE>
- ---------------
(1) During the 1999 fiscal year, the Company issued two 5% stock dividends. As a
result, the number of securities underlying each option granted and the
exercise price have been adjusted to reflect such dividends where
appropriate.
(2) All at fair market value at date of grant.
(3) Represents gain that would be realized assuming the options were held for
the entire option term and the stock price increased at annual compounded
rates of 5% and 10%. These amounts represent assumed rates of appreciation
only. Actual gains, if any, on stock option exercises and common stock
holdings will be dependent on overall market conditions and on the future
performance of the Company and its common stock. There can be no assurance
that the amounts reflected in this table will be achieved.
7
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides information concerning the exercise of stock
options during 1999 by each of the Named Executive Officers and the year-end
value of their unexercised options.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
FISCAL OPTIONS AT
YEAR-END(#) FISCAL YEAR-END($)
SHARES ------------- ------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ------------- ------------------
<S> <C> <C> <C> <C>
George C. McNamee................... -- --
Alan P. Goldberg.................... -- --
Hugh A. Johnson, Jr. ............... -- --
Timothy R. Welles................... -- --
Stephen P. Wink.....................
</TABLE>
- ---------------
(1) Represents the difference between the fair market value of the shares at
date of exercise and the exercise price multiplied by the number of options
exercised.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of reports filed by directors, executive
officers and 10% shareholders of the Company on Forms 3, 4 and 5 pursuant to
Section 16 of the Securities Exchange Act of 1934, all such reports were filed
on a timely basis during fiscal year 1999.
EXECUTIVE COMPENSATION COMMITTEE REPORT
OVERVIEW
The Executive Compensation Committee establishes the compensation policies
applicable to the executive officers of the Company.
COMPENSATION POLICIES
Compensation for senior executives of the Company has been strongly
influenced by the principle that the compensation of senior executives should be
structured to directly link the executives' financial reward to Company
performance. Thus, senior executives would both share in the success of the
Company as a whole and be adversely affected by poor Company performances,
thereby aligning their interests with the interests of the Company's
shareholders.
Salaries of executive officers are intended to be relatively moderate, and
are set at levels which the Executive Compensation Committee believes are
generally competitive with salaries of executives in similar positions at
comparable financial services companies. In addition, substantial emphasis is
placed on incentive compensation directly related to short and long-term
corporate performance through annual cash bonuses and stock option grants.
As is common in the financial services industry, a significant portion of
total compensation of the Company's executive officers is paid in the form of
annual bonuses. For example, generally, over the last five years, most of the
annual cash compensation of Messrs. G. McNamee and Goldberg, the Company's
Co-Chief Executive Officers (the "Co-CEOs"), was paid as an annual bonus. This
is intended to maximize the portion of an individual's compensation that is
subject to fluctuation each year based upon corporate and individual
performance, as discussed below. The compensation program is structured to
recognize each executive's level of responsibility and to reward exceptional
individual and corporate performance.
8
<PAGE> 12
BASE SALARY
A competitive base salary is important in fostering a career orientation
among executives consistent with the long-term nature of the Company's business
objectives. The Executive Compensation Committee determines the salary of each
of the executive officers based on its consideration of the Co-CEOs'
recommendations.
Salaries and salary adjustments are based on the responsibilities,
performance, and experience of each executive, regular reviews of competitive
positioning (comparing the Company's salary structure with that of similar
companies) and business performance. While there is no specific weighing of
these factors, the responsibilities, performance and experience of each
executive and reviews of competitive positioning are the most important
considerations.
THE STOCK INCENTIVE PLAN
From time to time, awards under the Stock Incentive Plan have supplemented
the bonuses paid to Named Executive Officers. The number of options granted to
the executive officers, in general, reflect the decision of the Executive
Compensation Committee to allocate a portion of compensation in stock options,
the value of which is directly linked to the future financial success of the
Company.
COMPENSATION OF CO-CHIEF EXECUTIVE OFFICERS
The total compensation paid to each of the Company's Co-CEOs for the fiscal
year ended December 31, 1999, was $ . For fiscal year 1998, each of
the Co-CEOs received a base salary of $300,000, additional bonus compensation of
$350,000, and stock options for 50,000 shares of Common Stock of the Company. In
determining the bonus and other compensation of the Company's Co-CEOs for the
fiscal year 1999, the Committee compared the Company's performance to that of
industry peers, as well as to the market's performance as a whole. Among other
things, the Committee considered the performance of the Company's Common Stock,
its return on investments made in other businesses, its pre-tax return on
equity, its earnings per share and comparable market data.
The specific bonus an executive receives is dependent on his level of
responsibility and individual performance. Levels of responsibility are
evaluated annually by the Executive Compensation Committee without regard to any
specific formula. Assessments of individual performance are also made annually
by the Executive Compensation Committee after receiving the recommendations of
the Co-CEOs. Such assessments are based on a number of subjective factors,
including individual and corporate performance, initiative, business judgment,
and management skills. Messrs. G. McNamee and Goldberg's fiscal year 1999 award
reflects each of their significant personal contributions to the business and
leadership in building the Company's revenues, earnings, and capital position,
and the financial results for fiscal year 1999.
EXECUTIVE COMPENSATION COMMITTEE
J. ANTHONY BOECKH
CHARLES L. SCHWAGER
9
<PAGE> 13
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's Common Stock against the
cumulative total return of the S&P Composite 500 Stock Index and the Financial
Services Analytics, Inc. Regional Index, an index of publicly traded regional
brokerage firms for the Company's last five fiscal years. The graph assumes that
the value of the investment in the Company's Common Stock and each index was
$100 at December 31, 1995, and that all dividends, if any, were reinvested.
[Line Graph]
<TABLE>
<CAPTION>
FISCAL YEAR(1) FIRST ALBANY S&P 500 INDEX FSA REGIONAL INDEX
- -------------- ------------ ------------- ------------------
<S> <C> <C> <C>
Dec 94 100.00 100.00 100.00
Dec 95 136.23 129.69 161.01
Dec 96 168.06 137.48 137.77
Dec 97 184.41 169.06 201.35
Dec 98 303.25 225.44 372.90
Dec 99 251.11 289.80 418.64
</TABLE>
- ---------------
(1) In 1996, the Company changed its fiscal year to the calendar year, requiring
the Company to report both a twelve month and a three month fiscal 1995.
Accordingly, the Company's last five fiscal years are as follows: Fiscal
1998: January 1, 1998 -- December 31, 1998; Fiscal 1997: January 1,
1997 -- December 31, 1997; Fiscal 1996: January 1, 1996 -- December 31,
1996; Fiscal 1995: October 1, 1995 -- December 31, 1995; Fiscal 1995:
October 1, 1994 -- September 30, 1995.
10
<PAGE> 14
PROPOSED ADOPTION OF THE FIRST ALBANY COMPANIES INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
The Board has determined to submit the First Albany Companies Inc. 2000
Employee Stock Purchase Plan (the "Stock Purchase Plan") to shareholders. The
Company recently terminated the First Albany Companies Inc. Stock Bonus Plan
originally adopted in 1987. The new Stock Purchase Plan is meant to continue to
provide, in an updated form, all employees of the Company with the opportunity
to participate in equity ownership of the Company. Shareholders are now
requested to approve the adoption of the Stock Purchase Plan.
A general description of the Stock Purchase Plan is set forth below. Such
description is qualified in its entirety by reference to the full text of the
Stock Purchase Plan, which is set forth in full as Appendix A to this Proxy
Statement.
SUMMARY
Employees will be eligible to purchase shares of the Company's Common Stock
at a discount through periodic payroll deductions. The Stock Purchase Plan is
intended to meet the requirements of Section 423 of the Internal Revenue Code.
After the initial period, purchases will occur at the end of six month offering
periods at a purchase price equal to 85% of the market value of the Company's
Common Stock at either the beginning of the offering period or the end of the
offering period, whichever is lower. The first offering period under the plan
will begin on June 1, 2000 and will end on November 30, 2000. Participants may
elect to have from 1% to 10% of their pay withheld for purchase of the Company's
Common Stock at the end of the offering period, up to a maximum of $12,500
within any offering period. We have reserved 500,000 shares of the Company's
Common Stock for issuance under the Stock Purchase Plan.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ADOPTION OF THE FIRST
ALBANY COMPANIES INC. 2000 EMPLOYEE STOCK PURCHASE PLAN.
PROPOSED AMENDMENT TO COMPANY'S
CERTIFICATE OF INCORPORATION
The Board of Directors has approved, and has recommended that the
shareholders of the Company approve, an amendment to the Company's Certificate
of Incorporation providing for an increase from 10,000,000 to 50,000,000 in the
number of authorized shares of Common Stock. As of April 20, 2000, the Company
had a total of shares of Common Stock outstanding and
shares of Common Stock reserved for issuance upon exercise of
[options]. The amendment is contained in Appendix B to this Proxy Statement.
If the amendment is approved, the additional 40,000,000 authorized shares
of Common Stock would be available for issuance in the future for corporate
purposes, including, without limitation, financings, stock splits, stock
dividends and employee stock incentive plans, as the Board of Directors may deem
advisable, without the necessity of further shareholder action.
The issuance of additional shares of Common Stock, while providing
desirable flexibility in connection with corporate purposes, would have the
effect of diluting the Company's current shareholders and could have the effect
of making it more difficult for a third party to acquire, or discouraging a
third party from attempting to acquire, control of the Company. The Company is
not aware of any attempts on the part of a third party to effect a change of
control of the Company and the amendment has been proposed for the reasons
stated above and not for any possible anti-takeover effects it may have.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE AMENDMENT INCREASING THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK.
11
<PAGE> 15
SELECTION OF THE COMPANY'S INDEPENDENT AUDITORS
The Board has recommended that the accounting firm of
PricewaterhouseCoopers L.L.P. be selected as the Company's independent auditors
for the fiscal year ending December 31, 2000, subject to shareholder
ratification.
PricewaterhouseCoopers L.L.P. conducted the audit for the fiscal year ended
December 31, 1999. Representatives of PricewaterhouseCoopers L.L.P. are expected
to be present at the Meeting, and will have an opportunity to make a statement
and to respond to appropriate questions.
In the event the shareholders fail to ratify the selection of
PricewaterhouseCoopers L.L.P., the selection of independent auditors will be
submitted to the Board for reconsideration and selection. Even if the selection
is ratified, the Board, in its discretion, may direct the appointment of a new
independent accounting firm at any time during the year if the Board believes
that such a change would be in the best interests of the Company and its
shareholders.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS L.L.P. AS INDEPENDENT AUDITORS OF THE
COMPANY.
OTHER MATTERS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Meeting.
If any other business should come before the Meeting, it is intended that the
persons named in the enclosed proxy will have discretionary authority to vote
the shares that they represent.
Any shareholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its Annual Meeting
of Shareholders to be held in 2001, must do so no earlier than February 14, 2001
and no later than March 6, 2001.
You are urged to sign and to return your Proxy promptly in the enclosed
return envelope to make certain your shares will be voted at the Meeting.
By Order of the Board of Directors
STEPHEN P. WINK
Secretary
April 25, 2000
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<PAGE> 16
APPENDIX A
FIRST ALBANY COMPANIES INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
The purpose of the First Albany Companies Inc. 2000 Employee Stock Purchase
Plan ("the Plan") is to provide eligible employees of First Albany Companies
Inc. (the "Company") and certain of its subsidiaries with opportunities to
purchase shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"). 500,000 shares of Common Stock in the aggregate have been
approved and reserved for this purpose. The Plan is intended to constitute an
"employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), and shall be interpreted
in accordance with that intent.
1. Administration. The Plan will be administered by the person or persons
(the "Administrator") appointed by the Company's Board of Directors (the
"Board"), or a committee thereof, for such purpose. The Administrator has
authority to make rules and regulations for the administration of the Plan, and
its interpretations and decisions with regard thereto shall be final and
conclusive. No member of the Board or individual exercising administrative
authority with respect to the Plan shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
hereunder.
2. Offerings. The Company will make one or more offerings to eligible
employees to purchase Common Stock under the Plan ("Offerings"). Unless
otherwise determined by the Administrator, the initial Offering will begin on
June 1, 2000 and will end on November 30, 2000 (the "Initial Offering").
Thereafter, unless otherwise determined by the Administrator, an Offering will
begin on the first business day occurring on or after each December 1 and June 1
and will end on the last business day occurring on or before the following
November 30 and May 31, respectively. The Administrator may, in its discretion,
designate a different period for any Offering, provided that no Offering shall
exceed one year in duration or overlap any other Offering.
3. Eligibility. All employees of the Company (including employees who are
also directors of the Company) and all employees of each Designated Subsidiary
(as defined in Section 11) are eligible to participate in any one or more of the
Offerings under the Plan, provided that as of the first day of the applicable
Offering (the "Offering Date") they are customarily employed by the Company or a
Designated Subsidiary for more than 20 hours a week and have completed at least
six (6) months of employment.
4. Participation. An employee eligible on any Offering Date may
participate in such Offering by submitting an enrollment form to his appropriate
payroll location at least 15 business days before the Offering Date (or by such
other deadline as shall be established for the Offering). The form will (a)
state a whole percentage to be deducted from his Compensation (as defined in
Section 11) per pay period, (b) authorize the purchase of Common Stock for him
in each Offering in accordance with the terms of the Plan and (c) specify the
exact name or names in which shares of Common Stock purchased for him are to be
issued pursuant to Section 10. An employee who does not enroll in accordance
with these procedures will be deemed to have waived his right to participate.
Unless an employee files a new enrollment form or withdraws from the Plan, his
deductions and purchases will continue at the same percentage of Compensation
for future Offerings, provided he remains eligible. Notwithstanding the
foregoing, participation in the Plan will neither be permitted nor be denied
contrary to the requirements of the Code.
5. Employee Contributions. Each eligible employee may authorize payroll
deductions at a minimum of one percent (1%) up to a maximum of ten percent (10%)
of his Compensation for each pay period. The Company will maintain book accounts
showing the amount of payroll deductions made by each participating employee for
each Offering. No interest will accrue or be paid on payroll deductions.
6. Deduction Changes. Except as may be determined by the Administrator in
advance of an Offering, an employee may not increase or decrease his payroll
deduction during any Offering, but may increase or decrease his payroll
deduction with respect to the next Offering (subject to the limitations of
Section 5) by filing a new enrollment form at least 15 business days before the
next Offering Date (or by such other deadline
13
<PAGE> 17
as shall be established for the Offering). The Administrator may, in advance of
any Offering, establish rules permitting an employee to increase, decrease or
terminate his payroll deduction during an Offering.
7. Withdrawal. An employee may withdraw from participation in the Plan by
delivering a written notice of withdrawal to his appropriate payroll location.
The employee's withdrawal will be effective as of the next business day.
Following an employee's withdrawal, the Company will promptly refund to him his
entire account balance under the Plan (after payment for any Common Stock
purchased before the effective date of withdrawal). Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Offering, but may enroll in a subsequent Offering in accordance with
Section 4.
8. Grant of Options. On each Offering Date, the Company will grant to each
eligible employee who is then a participant in the Plan an option ("Option") to
purchase on the last day of such Offering (the "Exercise Date"), at the Option
Price hereinafter provided for, (a) a number of shares of Common Stock, which
number shall not exceed the number of whole shares which is less than or equal
to $12,500 for six-month offering periods divided by the closing price per share
of Common Stock on the Offering Date, or (b) such other lesser maximum number of
shares as shall have been established by the Administrator in advance of the
Offering. The purchase price for each share purchased under each Option (the
"Option Price") will be 85% of the Fair Market Value of the Common Stock on the
Offering Date or the Exercise Date, whichever is less.
9. Notwithstanding the foregoing, no employee may be granted an option
hereunder if such employee, immediately after the option was granted, would be
treated as owning stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any
Parent or Subsidiary (as defined in Section 11). For purposes of the preceding
sentence, the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of an employee, and all stock which the employee
has a contractual right to purchase shall be treated as stock owned by the
employee. In addition, no employee may be granted an Option which permits his
rights to purchase stock under the Plan, and any other employee stock purchase
plan of the Company and its Parents and Subsidiaries, to accrue at a rate which
exceeds $25,000 of the fair market value of such stock (determined on the option
grant date or dates) for each calendar year in which the Option is outstanding
at any time. The purpose of the limitation in the preceding sentence is to
comply with Section 423(b)(8) of the Code.
10. Exercise of Option and Purchase of Shares. Each employee who continues
to be a participant in the Plan on the Exercise Date shall be deemed to have
exercised his Option on such date and shall acquire from the Company such number
of whole shares of Common Stock reserved for the purpose of the Plan as his
accumulated payroll deductions on such date will purchase at the Option Price,
subject to any other limitations contained in the Plan. Any amount remaining in
an employee's account at the end of an Offering solely by reason of the
inability to purchase a fractional share will be carried forward to the next
Offering; any other balance remaining in an employee's account at the end of an
Offering will be refunded to the employee promptly.
11. Issuance of Certificates. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or in the name of a broker authorized by the
employee to be his, or their, nominee for such purpose.
12. Definitions.
The term "Compensation" means the amount of total cash compensation, prior
to salary reduction pursuant to either Section 125 or 401(k) of the Code,
including base pay, overtime, commissions, and incentive or bonus awards, but
excluding allowances and reimbursements for expenses such as relocation
allowances or travel expenses, income or gains on the exercise of Company stock
options, and similar items.
The term "Designated Subsidiary" means any present or future Subsidiary (as
defined below) that has been designated by the Board to participate in the Plan.
The Board may so designate any Subsidiary, or revoke any such designation, at
any time and from time to time, either before or after the Plan is approved by
the stockholders.
14
<PAGE> 18
The term "Fair Market Value of the Common Stock" on any given date means
the fair market value of the Common Stock determined in good faith by the
Administrator; provided, however, that if the Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), NASDAQ National System or national securities exchange, the
determination shall be made by reference to market quotations. If there are no
market quotations for such date, the determination shall be made by reference to
the last date preceding such date for which there are market quotations.
The term "Parent" means a "parent corporation" with respect to the Company,
as defined in Section 424(e) of the Code.
The term "Subsidiary" means a "subsidiary corporation" with respect to the
Company, as defined in Section 424(f) of the Code.
1. Rights on Termination of Employment. If a participating employee's
employment terminates for any reason before the Exercise Date for any Offering,
no payroll deduction will be taken from any pay due and owing to the employee
and the balance in his account will be paid to him or, in the case of his death,
to his designated beneficiary as if he had withdrawn from the Plan under Section
7. An employee will be deemed to have terminated employment, for this purpose,
if the corporation that employs him, having been a Designated Subsidiary, ceases
to be a Subsidiary, or if the employee is transferred to any corporation other
than the Company or a Designated Subsidiary.
2. Special Rules. Notwithstanding anything herein to the contrary, the
Administrator may adopt special rules applicable to the employees of a
particular Designated Subsidiary, whenever the Administrator determines that
such rules are necessary or appropriate for the implementation of the Plan in a
jurisdiction where such Designated Subsidiary has employees; provided that such
rules are consistent with the requirements of Section 423(b) of the Code. Such
special rules may include (by way of example, but not by way of limitation) the
establishment of a method for employees of a given Designated Subsidiary to fund
the purchase of shares other than by payroll deduction, if the payroll deduction
method is prohibited by local law or is otherwise impracticable. Any special
rules established pursuant to this Section 13 shall, to the extent possible,
result in the employees subject to such rules having substantially the same
rights as other participants in the Plan.
3. Optionees Not Stockholders. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a holder
of the shares of Common Stock covered by an Option under the Plan until such
shares have been purchased by and issued to him.
4. Rights Not Transferable. Rights under the Plan are not transferable by
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
5. Application of Funds. All funds received or held by the Company under
the Plan may be combined with other corporate funds and may be used for any
corporate purpose.
6. Adjustment in Case of Changes Affecting Common Stock. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of a dividend
in Common Stock, the number of shares approved for the Plan, and the share
limitation set forth in Section 8, shall be increased proportionately, and such
other adjustment shall be made as may be deemed equitable by the Administrator.
In the event of any other change affecting the Common Stock, such adjustment
shall be made as may be deemed equitable by the Administrator to give proper
effect to such event.
7. Amendment of the Plan. The Board may at any time, and from time to
time, amend the Plan in any respect, except that without the approval, within 12
months of such Board action, by the stockholders, no amendment shall be made
increasing the number of shares approved for the Plan or making any other change
that would require stockholder approval in order for the Plan, as amended, to
qualify as an "employee stock purchase plan" under Section 423(b) of the Code.
8. Insufficient Shares. If the total number of shares of Common Stock that
would otherwise be purchased on any Exercise Date plus the number of shares
purchased under previous Offerings under the Plan
15
<PAGE> 19
exceeds the maximum number of shares issuable under the Plan, the shares then
available shall be apportioned among participants in proportion to the amount of
payroll deductions accumulated on behalf of each participant that would
otherwise be used to purchase Common Stock on such Exercise Date.
9. Termination of the Plan. The Plan may be terminated at any time by the
Board. Upon termination of the Plan, all amounts in the accounts of
participating employees shall be promptly refunded.
10. Governmental Regulations. The Company's obligation to sell and deliver
Common Stock under the Plan is subject to obtaining all governmental approvals
required in connection with the authorization, issuance, or sale of such stock.
11. The Plan shall be governed by New York law except to the extent that
such law is preempted by federal law.
12. Issuance of Shares. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.
13. Tax Withholding. Participation in the Plan is subject to any minimum
required tax withholding on income of the participant in connection with the
Plan. Each employee agrees, by entering the Plan, that the Company and its
Subsidiaries shall have the right to deduct any such taxes from any payment of
any kind otherwise due to the employee, including shares issuable under the
Plan.
14. Notification Upon Sale of Shares. Each employee agrees, by entering
the Plan, to give the Company prompt notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.
15. Effective Date and Approval of Shareholders. The Plan shall take
effect on the later of the date it is adopted by the Board and the date it is
approved by the holders of a majority of the votes cast at a meeting of
stockholders at which a quorum is present or by written consent of the
stockholders.
16
<PAGE> 20
APPENDIX B
FOURTH, the aggregate number of shares which the Corporation shall have
authority to issue is 50,000,000 shares of Common Stock, par value $.01 per
share and 500,000 shares of preferred stock par value $1.00 per share.
17
<PAGE> 21
FIRST ALBANY COMPANIES INC.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, May 23,
2000.
Thank you in advance for you prompt consideration of these matters.
Sincerely,
First Albany Companies Inc.
<PAGE> 22
[down Please Detach and Mail in the Envelope Provided [down
arrow] arrow]
A [X] Please mark your
votes as in this
example.
Please be sure to sign and date this Proxy.
FOR WITHHOLD
1. The Election of [ ] [ ] Nominees:
three Directors Hugh A. Johnson
whose terms will Daniel V. McNamee, III
will expire at the 2003 Annual Meeting Charles L. Schwager
of Shareholders.
[ ] For All Except:
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box, and strike a line through the nominee's name.
Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
2. The approval of the adoption of the First Albany [ ] [ ] [ ]
Companies Inc. 2000 Employee Stock Purchase Plan.
3. The approval of an amendment to the Company's
Certificate of Incorporation increasing from
10,000,000 to 50,000,000 the number of authorized [ ] [ ] [ ]
shares of common stock.
4. The ratification of the selection of [ ] [ ] [ ]
PricewaterhouseCoopers L.L.P. as Certified Public
Accountants to audit the financial statements of
the Company for the fiscal year ending, December
31, 2000.
5. In their discretion, the proxies are authorized to [ ] [ ] [ ]
vote upon any other business that may properly
come before the meeting.
Check here if you plan to attend the Annual Meeting.
- -----
Check here if an address change or comment has been noted on the reverse
side of this card.
- -----
Shareholder sign here Date
----------------------------- -----------------------
Co-owner sign here Date
------------------------------- ------------------------
