FIRST ALBANY COMPANIES INC
Stock Bonus Plan
Form 11K
For Each of the Three Plan Years Ended
December 31, 1999
Securities and Exchange Commission
Washington, DC 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
or
[ ] Transition Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
Commission file number 014140
First Albany Companies Inc. Stock Bonus Plan
(Title of Plan)
First Albany Companies Inc.
(Issuer of Securities)
30 South Pearl Street
Albany, New York 12201
(518) 447-8500
(Address of Principal Executive Office)
I.R.S. Employer I.D. No. 22-2655804
ITEMS
Item 4. Financial Statements and Schedules
- ------------------------------------------
1. Report of Independent Accountants
A. Statements of net assets available for plan benefits
as of December 31, 1999 and 1998
B. Statements of changes in net assets available for plan
benefits for the years ended December 31, 1999, 1998
and 1997
C. Notes to financial statements
D. Schedule of assets held for investment purposes as of
December 31, 1999
E. Schedule of reportable transactions for the year ended
December 31, 1999
24. Consent of Independent Accountants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
First Albany Companies Inc.
Stock Bonus Plan
DATE: June 21, 2000 BY: /s/ALAN P GOLDBERG
------------------
Alan P. Goldberg
Member of the Administrative
Committee
THE FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
For the Years Ended December 31, 1999, 1998, and 1997
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statements of net assets available for plan benefits 2
Statements of changes in net assets available for plan benefits 3
Notes to financial statements 4-7
SUPPLEMENTAL SCHEDULES
Schedule of assets held for investment purposes as of December
31, 1999 Schedule G * 8
Schedule of reportable transactions for the year ended
December 31, 1999 Schedule G* 9
* Refers to the schedule in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for plan year ended December 31, 1999.
Report of Independent Accountants
To the Administrative Committee
of First Albany Companies Inc. Stock Bonus Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for
plan benefits present fairly, in all material respects, the net assets
available for the plan benefits of First Albany Companies Inc. Stock
Bonus Plan (the Plan) at December 31, 1999 and December 31, 1998, and
the changes in net assets available for plan benefits for each of the three
years in the period ended December 31, 1999 in conformity with accounting
principals generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principals used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken
as a whole.
PricewaterhouseCoopers L.L.P.
Albany, New York
June 16, 2000
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 1999 and 1998
============================================================================
1999 1998
- ----------------------------------------------------------------------------
ASSETS
Investments, at fair value (Note 3) $28,507,522 $20,972,006
Cash and cash equivalents 358,609 416,926
------- -------
Net assets available for plan benefits $28,866,131 $21,388,932
=========== ===========
The accompanying notes are an integral
part of the financial statements.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the years ended December 31, 1999, 1998, and 1997
============================================================================
For the years ended 1999 1998 1997
- ----------------------------------------------------------------------------
Additions to net assets attributed to:
Contributions from:
Employees $ 2,096,065 $ 1,807,578 $ 1,674,282
Employer 989,605 881,283 796,123
----------- ----------- -----------
3,085,670 2,688,861 2,470,405
Net appreciation (depreciation)
in the fair value of investments 9,674,719 (4,263,584) 8,490,835
Dividend/interest income 421,676 378,163 314,784
--------- ----------- ---------
Total additions 13,182,065 (1,196,560) 11,276,024
---------- ----------- ----------
Deductions from net assets attributed to:
Benefits paid to:
Terminated participants 2,032,880 1,761,545 490,756
Active participants 3,671,986 170,960 230,588
--------- --------- -------
Total deductions 5,704,866 1,932,505 721,344
--------- --------- -------
Net increase (decrease) 7,477,199 (3,129,065) 10,554,680
Net assets available for plan benefits:
Beginning of year 21,388,932 24,517,997 13,963,317
---------- ---------- ----------
End of year $28,866,131 $21,388,932 $24,517,997
=========== =========== ===========
The accompanying notes are an integral
part of the financial statements.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan
-----------------------
The following description of the First Albany Companies Inc. (the
"Company") Stock Bonus Plan (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
a. General
-------
The Plan is a defined contribution plan covering substantially all
employees of the Company and its subsidiaries. Employees are eligible to
participate upon the first day of the calendar quarter following
completion of at least one thousand hours of service during any
consecutive twelve months of continuous recognized employment as defined
in the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). All costs and
fees incurred in administering the Plan are borne by the Company, which is
the Plan administrator and custodian.
b. Contributions
-------------
Participants elect to make after-tax contributions to the Plan up to 8% of
their gross pay up to a maximum of $12,800 for 1999. The Company may, but
is not required to, contribute to the Plan an amount equal to a percentage
of each participant's voluntary after-tax contribution. For 1999, 1998
and 1997, the Company's contribution percentage was 50%. Annually, the Board
of Directors of the Company may authorize an additional contribution to
the Plan. Forfeitures are maintained within the Plan and used to reduce
the Company's matching contribution.
c. Participants Accounts
---------------------
Each participant account is credited with the participant's and Company's
contributions and allocations of Plan earnings. Allocations are based on
participants account balances, as defined. The benefit to which the
participant is entitled is the benefit that can be provided from the
participant's vested account.
d. Vesting
-------
A participant is 100 percent vested in the employer's contribution and
earnings thereon after seven years of credited service. Participants'
contributions and earnings thereon are fully vested at all times.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
e. Payment of Benefits
--------------------
On termination of service, participants will receive payment, in cash or
shares, of their vested benefits in a lump-sum distribution equal to the
value of their accounts as of the valuation date, as defined in the Plan.
Active employees who have reached age 59 1/2 may receive a distribution, in
cash or shares, of their vested benefits, in a lump sum equal to the value of
their accounts as of the valuation date, as defined in the plan.
2. Significant Accounting Policies
-------------------------------
a. Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the accrual method
of accounting.
b. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
c. Investment Valuation and Income Recognition
-------------------------------------------
The Plan's investments are stated at fair value, which is based upon
quoted market prices in the over-the-counter market.
The Plan is limited to investing solely in the common stock of the
Company, except that interim short-term investments may be made pending
purchase of the Company's stock.
The Plan presents, in the statements of changes in net assets, the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments.
d. Payments of Benefits
--------------------
Benefits are recorded when paid.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments
-----------
The Plan's investment portfolio consists of the following as of December
31, 1999 and 1998:
1999 1998
At Quoted At Quoted
Cost Fair Value Cost Fair Value
---- ---------- ---- ----------
Common Stock:
First Albany
Companies Inc. $13,204,288 $28,507,522 $12,161,318 $20,972,006
The number of shares of First Albany Companies Inc. common stock as of
December 31, 1999, and 1998 was 1,974,547 and 1,906,546, respectively. The
realized net gain based on average costs was $3,182,173, $1,034,321, and
$378,797, for the years ended December 31, 1999, 1998 and 1997,
respectively. The unrealized net gain or (loss) based on average costs was
$6,492,546, $(5,297,905), and $8,112,038 for the years ended December 31,
1999, 1998 and 1997, respectively.
The Plan's investment portfolio is subject to daily market price
fluctuations. Since the entire investment portfolio consists of the
Company's common stock, the Plan's portfolio may be exposed to risk in the
event of a decline in the market value of the Company's stock.
5. Forfeitures
-----------
For the years ended December 31, 1999, 1998, and 1997 forfeited non-vested
accounts totaling $58,439, $22,516, and $41,029, respectively, were used to
reduce employer contributions. There were no forfeited non-vested accounts
at December 31, 1999 available to reduce future employer contributions.
6. Tax Status
----------
The Internal Revenue Service has determined and informed the Company by a
letter dated February 26, 1993, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
7. Plan Termination
----------------
The Company plans to terminate the Plan during 2000. The Company has filed
an application to terminate with the Internal Revenue Service. Management
believes that the Internal Revenue Service will rule favorably in the Plan's
termination. All participants who were
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
actively employed on or before January 1, 1999 will become 100% vested in all
account balances upon I.R.S. approval of the termination of the plan.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR.
As of December 31, 1999
(a) (b) (c) (d) (e)
Description of Current
Identity of Issue investment Cost Value
* First Albany Common stock
Companies Inc ($0.01 - par value) $13,204,288 $28,507,522
=========== ===========
. The supplemental schedule refers to schedule G in Form 5500 (Annual
Return/Report of Employee Benefit Plan).
* A party-in-interest as defined by ERISA.
FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS.
For the year ended December 31, 1999
(a) (b) (c) (d) (g) (h) (i)
Current
value
of asset on
Identity Purchase Selling Cost of transaction Net gain
of party Description price price asset date (loss)
involved of asset
* First Common Stock $3,559,106 $5,698,308 $2,516,135 $12,374,494 $3,182,173
Albany ($0.01 -
Companies par value)
Inc
. The supplemental schedule refers to Schedule G in Form 5500 (Annual
Return/Report of Employee Benefit Plan).
* A party-in-interest as defined by ERISA.