Exhibit 99(a)
First Albany Companies Inc.
Restricted Stock Inducement Plan
* * * * *
1. Purpose. In connection with the Stock Purchase Agreement, dated as of
February 18, 2004, (the "Agreement") entered into by and among FIRST ALBANY
COMPANIES INC., a New York Corporation (the "Company") and the shareholders
listed on the signature pages of such Agreement pursuant to which the Company
will acquire 100% of the outstanding stock of Descap Securities, Inc.
("Descap"), the Company will award restricted stock to certain employees of
Descap. The purpose of First Albany Companies Inc. Restricted Stock Inducement
Plan (the "Plan") is to retain and motivate employees of Descap in connection
with the acquisition of Descap by the Company and to align the interests of
those individuals and the Company's stockholders. The Company intends the Plan
to be exempt from the Nasdaq shareholder approval requirements for equity
compensation plans by virtue of being a plan providing issuances of restricted
stock to individuals not previously employed with the Company or any of its
affiliates (or following a bonafide period of non-employment) as an inducement
material to such individual's entering into employment with the Company or an
affiliate thereof in connection with the acquisition of Descap by the Company.
2. Certain Definitions. For purposes of the Plan, the following terms
shall have the meanings set forth below:
2.1 "Award" shall mean an award or grant made to a Participant under
Section 6 of the Plan.
2.2 "Award Agreement" shall mean the agreement executed by a
Participant pursuant to Sections 3.2 and 9.4 of the Plan in connection with the
granting of an Award.
2.3 "Board" shall mean the Board of Directors of the Company, as
constituted from time to time.
2.4 "Code" shall mean 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" shall mean the committee of the Board established to
administer the Plan, as described in Section 3 of the Plan.
2.6 "Common Stock" shall mean 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" shall mean First Albany Companies Inc., a New York
corporation, or any successor corporation to First Albany Companies Inc.
2.8 "Descap" shall mean Descap Securities, Inc., a New York
corporation.
2.9 "Participant" shall mean any individual who is selected from time
to time under Section 5 to receive an Award under the Plan.
2.10 "Plan" shall mean the FIRST ALBANY COMPANIES INC. Restricted
Stock Inducement Plan For Descap Employees, 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).
2.11 "Restricted Shares" shall mean the restricted shares of Common
Stock granted pursuant to the provisions of Section 6 of the Plan and the
relevant Award Agreement.
-2-
3. Administration.
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. 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 Securities Exchange Act of 1934.
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 April 27, 2014, the tenth
anniversary of the Board's approval of the Plan. 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 under the Plan, subject to adjustment as
provided in Section 7.2 of the Plan, shall not exceed 272,000 shares of Common
Stock. 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. If any Awards are forfeited, surrendered, cancelled, terminated
or settled in cash in lieu of Common Stock, the shares of Common Stock which
were subject (or potentially subject) to such Awards shall again be available
for Awards under the Plan to the extent of such forfeiture, surrender,
cancellation, termination or settlement of such Awards. No fractional shares of
Common Stock shall be issued under the Plan.
-3-
5. Eligibility. Individuals eligible for Awards under the Plan shall be
determined by the Board in its sole discretion and shall be limited to the
employees of Descap.
6. Restricted Shares.
6.1 Terms and Conditions. Awards of Restricted Shares 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 or other applicable agreement. 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.
Each issuance of Restricted Shares to a Participant shall be approved by the
Company's independent compensation committee or a majority of the Company's
independent directors (as such terms are defined by the NASD). 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, 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 RESTRICTIONS,
TERMS AND CONDITIONS (INCLUDING, WITHOUT LIMITATION,
FORFEITURE EVENTS) CONTAINED IN THE FIRST ALBANY COMPANIES
INC. RESTRICTED STOCK INDUCEMENT PLAN FOR DESCAP EMPLOYEES 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. 00 X. XXXXX XXXXXX XXXXXX, XX
00000. FIRST ALBANY COMPANIES INC. XXXX XXXXXXX 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 certificates 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.
6.2 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, if any, 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 or service for any reason or for
specified reasons within a specified period of time.
6.3 Restriction Period. In accordance with Sections 6.1 and 6.2 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 and any other applicable restrictions, terms and conditions relating to
such Restricted Shares, if any, as the Committee may
-4-
establish in the relevant Award Agreement or other applicable agreement (the
"Restriction Period"). 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. With respect to any
Restricted Share, upon satisfaction of the vesting schedule applicable to such
Restricted Share and any other applicable restrictions, terms and conditions,
the Participant shall be entitled to receive such Restricted Shares as provided
in Section 6.4 of the Plan.
6.4 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 6.1 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.
6.5 Stockholder 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 stockholder of such stock (except as such rights are limited or
restricted under the Plan or in the relevant Award Agreement or in any other
applicable 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. Any dividends (other than stock dividends) paid in respect of unvested
Restricted Shares shall be handled in such manner as the Committee, in its sole
discretion, shall determine either in an Award Agreement or otherwise.
7. Changes in Capitalization and Other Matters.
7.1 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 stockholders of the
Company to make or authorize (a) any adjustment, recapitalization,
reorganization or other change in the Company's or any affiliate's capital
structure or its business, (b) any merger, consolidation or change in the
ownership of the Company or any affiliate, (c) any issue of bonds, debentures,
capital, preferred or prior preference stocks ahead of or affecting the
Company's or any affiliate's capital stock or the rights thereof, (d) any
dissolution or liquidation of the Company or any affiliate, (e) any sale or
transfer of all or any part of the Company's or any affiliate's assets or
business, or (f) any other corporate act or proceeding by the Company or any
affiliate. No Participant, beneficiary or any other person shall have any claim
against any member of the Board, the Company or any affiliate, or any employees,
officers, stockholders or agents of the Company or any affiliate, as a result of
any such action.
7.2 Changes in Capital Structure. Awards granted under the Plan and
any agreements evidencing such Awards and the maximum number of shares of Common
Stock subject to all Awards stated in Section 4.2 shall be subject to adjustment
or substitution, as determined by the Committee in its sole discretion, as to
the number, price or kind of a share of stock or other consideration subject to
such Awards or as otherwise determined by the Committee to be equitable (i) in
the event of changes in the outstanding stock or in the capital structure of the
Company by reason of stock or extraordinary cash dividends, stock splits,
reverse stock splits, recapitalization, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such Award or (ii) in
the event of any change in applicable laws or any change in circumstances which
results in or would result in any substantial dilution or enlargement of the
rights granted to, or available for, Participants, or which otherwise warrants
equitable adjustment because it interferes with the intended operation of the
Plan. The Company shall give each Participant notice of an adjustment hereunder
and, upon notice, such adjustment shall be conclusive and binding for all
purposes.
-5-
8. Amendment, Suspension and Termination.
8.1 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 or in the best interests
of the Company or any affiliate. No such amendment, suspension or termination
shall materially and adversely affect the rights of any Participant under any
outstanding Awards, without the consent of such Participant.
8.2 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 Award in any manner to the extent that the
Committee under the Plan or any Award Agreement could have initially determined
the restrictions, terms and provisions of such Award. No such amendment or
modification shall, however, materially and adversely affect the rights of any
Participant under any such Award without the consent of such Participant.
9. Miscellaneous.
9.1 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 the delivery, transfer or vesting of Restricted
Shares, any federal, state, local, foreign 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. In addition, the
Company shall have the right to require payment from a Participant to cover any
applicable withholding or other employment taxes due upon any payment or
settlement under the Plan.
9.2 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, director or consultant of the Company or any affiliate any
right to continued employment, Board membership or consulting relationship with
the Company or any affiliate, as the case may be, nor shall it interfere in any
way with the right, if any, of the Company or any affiliate to terminate the
employment, directorship or consulting relationship of any employee, director or
consultant at any time for any reason, even if such termination adversely
affects such Participant's Awards.
9.3 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 or any Award Agreement unless legal counsel for the Company shall be
satisfied that such issuance or grant will be in compliance with all applicable
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 Common Stock delivered under the Plan
may bear appropriate legends and 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 listed, and any applicable
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 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 affiliate 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.
9.4 Award Agreements. Each Participant receiving an Award under the
Plan shall enter into an Award Agreement and any other agreement required by the
Board with the Company in such forms as specified by the Board. Each such
Participant shall agree to the restrictions, terms and conditions of the Award
set forth therein and in the Plan.
-6-
9.5 Designation of Beneficiary. Each Participant to whom an Award has
been made under the Plan may designate a beneficiary or beneficiaries 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 Board. 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 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.
9.6 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 affiliate 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 affiliate. If a Participant transfers within the Company, or
to or from any affiliate, such Participant shall not be deemed to have
terminated employment as a result of such transfers.
9.7 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.
9.8 Effective Date. The Plan shall be effective as of the date of its
approval by the Board.
IN WITNESS WHEREOF, this Plan is adopted by the Company on this April,
27, 2004.
FIRST ALBANY COMPANIES INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
