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:

[ ] Preliminary Proxy Statement
[X] 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))

FIRST ALBANY COMPANIES INC.
- --------------------------------------------------------------------------------
(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:

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2

[FIRST ALBANY COMPANIES INC LETTERHEAD]

May 2, 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,

/s/ GEORGE C. McNAMEE

George C. McNamee
Chairman of the Board

[FIRST ALBANY COMPANIES INC LETTERHEAD]

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

/s/ STEPHEN P. WINK
Stephen P. Wink
Secretary

Albany, New York
May 2, 2000

[FIRST ALBANY COMPANIES INC LETTERHEAD]

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 Plan,
(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 the fiscal year ending December 31, 2000.

This Proxy Statement and the enclosed form of proxy are expected to
be mailed on or about May 2, 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.

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 the fiscal year ending December 31, 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. 2000 Employee Stock Purchase Plan. The
affirmative vote of the holders of a majority of the votes cast at the Meeting
is required 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 for the fiscal year ending December 31, 2000.
Accordingly, abstentions and broker non-votes will have no effect on the items
to be voted on at the Meeting. THE BOARD RECOMMENDS (i) THE ELECTION OF THE
THREE PERSONS NAMED AS NOMINEES UNDER "ELECTION OF DIRECTORS", (ii) APPROVAL OF
THE PROPOSAL TO ADOPT THE FIRST ALBANY COMPANIES INC. 2000 EMPLOYEE STOCK
PURCHASE PLAN, (iii) 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 (iv) RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2000.

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.

Shares Beneficially Owned(6)
------------------------------
Name Number Percent
- ---------------------------------------------------------------------------------------------------------

George C. McNamee(1)(2)(4) 1,310,146 15.30%
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) 114,861 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) 4,687,656 54.75%

- ---------------------------------------------------

(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. Effective December 31, 1999, the Company terminated the Stock
Bonus Plan. The shares held by the trust will be distributed to participants
upon approval of the Internal Revenue Service. Such approval is expected in
mid-2000.

(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.

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 an economic advisor to the Chairman of the New York
State Assembly Committee on Ways and Means and is a Director and Vice-Chairman
of the New York State Business Development Corporation. Mr. Johnson also 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 has served
as President of First Albany since 1989 and Co-Chief Executive Officer since
1993. Mr. Goldberg is a Director of Mechanical Technology Incorporated and
SatCon Technology. He is active in industry and civic organizations and serves
on the board of several nonprofit institutions. 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
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. McNamee 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 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 1996.

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 in February 1999 as Chief
Financial Officer and Senior Vice President. In January 2000, he was named Chief
Financial Officer of the Company. Prior to joining First Albany, Mr. Jenkins
held the position of Chief Financial Officer and Senior Vice President of
Precision Imaging Solutions Inc. from July 1998 to January 1999. From July 1994
to June 1998, Mr. Jenkins served in several financial positions with Dain
Rauscher, most recently as Managing Director and Director of Finance of Dain
Rauscher Wessels, a division of Dain Rauscher Inc. Mr. Jenkins has been a
certified public accountant licensed in the State of Texas since 1991.

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 and the Bond Market Association's Litigation Advisory Committee, as
well as several community boards.

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.

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").

ANNUAL COMPENSATION
-------------------
- ------------------------------------- ------------ ---------------------------------
NAME & PRINCIPAL
POSITION YEAR(1) SALARY BONUS
- ----------------------------------- ------------ -------------------- --------------

GEORGE C. MCNAMEE 1999 $300,000 $350,000
CHAIRMAN & CO-CHIEF 1998 300,000 350,000
EXECUTIVE OFFICER 1997 250,000 200,000
- ----------------------------------- ------------ -------------------- --------------
ALAN P. GOLDBERG 1999 300,000 350,000
PRESIDENT & CO-CHIEF 1998 300,000 350,000
EXECUTIVE OFFICER 1997 250,000 200,000
- ----------------------------------- ------------ -------------------- --------------

HUGH A. JOHNSON, JR. 1999 200,000 300,000
SENIOR VICE PRESIDENT 1998 200,000 300,000
1997 200,000 200,000
- ----------------------------------- ------------ -------------------- --------------
TIMOTHY R. WELLES(2) 1999 200,000 250,000
VICE PRESIDENT AND CHIEF 1998 175,000 250,000
FINANCIAL OFFICER 1997 75,609 54,006
- ----------------------------------- ------------ -------------------- --------------
STEPHEN P. WINK 1999 175,000 135,000
SECRETARY AND 1998 175,000 135,000
GENERAL COUNSEL 1997 150,000 100,000
- ----------------------------------- ------------ -------------------- --------------

LONG TERM ALL OTHER
------------- -----------
COMPENSATION COMPENSATION(1)
------------- -------------
AWARD
------------------
- -----------------------------------------------------------------------------------------
NAME & PRINCIPAL SHARES
POSITION UNDERLYING OPTIONS
- ----------------------------------------------------------------------------------------

GEORGE C. MCNAMEE 50,000 $6,400
CHAIRMAN & CO-CHIEF 50,000 6,400
EXECUTIVE OFFICER 50,000 6,400
- ----------------------------------------------------------------------------------------
ALAN P. GOLDBERG 50,000 6,400
PRESIDENT & CO-CHIEF 50,000 6,400
EXECUTIVE OFFICER 50,000 6,400
- ----------------------------------------------------------------------------------------

HUGH A. JOHNSON, JR. 30,000 6,400
SENIOR VICE PRESIDENT 30,000 6,400
20,000 6,400
- ----------------------------------------------------------------------------------------
TIMOTHY R. WELLES(2) 20,000 6,400
VICE PRESIDENT AND CHIEF 20,000 5,375
FINANCIAL OFFICER 25,000 0
- ----------------------------------------------------------------------------------------
STEPHEN P. WINK 15,000 6,400
SECRETARY AND 15,000 2,917
GENERAL COUNSEL 20,000 875
- ----------------------------------------------------------------------------------------

(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.

INDIVIDUAL GRANTS
--------------------------------------------------------------------

NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE
SECURITIES OPTIONS AT ASSUMED RATES OF
UNDERLYING GRANTED TO STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES EXERCISE OR FOR OPTION TERM (3)
GRANTED IN FISCAL BASE PRICE EXPIRATION ----------------------------
DATE (#) (1) YEAR ($/SH)(1) (2) DATE 5% 10%
- -------------------------------------------------------------------------------------------------------------------------------

George C. McNamee 55,125 18.64 11.932 03/29/09 $413,656.38 $1,048,286.49
- ---------------------------
Alan P. Goldberg 55,125 18.64 11.932 03/29/09 $413,656.38 $1,048,286.49
- ---------------------------
Hugh A. Johnson, Jr. 33,075 11.19 11.932 03/29/09 $248,193.83 $628,971.90
- ---------------------------
Timothy R. Welles 22,051 7.46 11.932 03/29/09 $165,470.06 $419,333.61
- ---------------------------
Stephen P. Wink 16,537 5.59 11.932 03/29/09 $124,093.16 $314,476.44
- ---------------------------

- ------------------------------
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.

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

NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
SHARES FISCAL OPTIONS AT
ACQUIRED YEAR-END(#) FISCAL YEAR-END($)
------------ ------------------
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED ($) (1) UNEXERCISABLE UNEXERCISABLE
- ----------------------- ------------------------------------------------------------------------------------------------

George C. McNamee 13,000 $145,691.00 371,818/33,500 $2,939,243.61/$228,721.25
Alan P. Goldberg --- --- 338,311/33,500 $2,572,691.53/$228,721.25
Hugh A. Johnson, Jr --- --- 103,085/33,075 $890,051.00/$82,869.41
Timothy R. Welles --- --- 7,597/44,842 $20,652.44/$117,206.10
Stephen P. Wink --- --- 6,573/37,549 $34,864.75/$141,251.77

- ------------------------------
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, except for two Forms 4
required to be filed by Daniel V. McNamee, that were subsequently filed.

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.

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 $650,000. For fiscal year 1999, 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

16
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. Composite Index, an index of publicly traded 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
September 30, 1995, and that all dividends, if any, were reinvested.

FIRST ALABANY COMPANIES INC.
[LINE GRAPH]

1995 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
FIRST ALBANY 100 123.37 135.37 222.61 184.33 270.33
S&P 500 INDEX 100 137.52 169.09 225.48 289.92 350.94
FSA COMPOSITE INDEX 100 142.28 208.19 382.39 425.20 626.73

1 In 1995, the Company changed its fiscal year from ending September 30 to a
calendar year. Accordingly, the above graph reflects the performance of
the Company's common stock from September 30, 1995, the last trading day
before the beginning of the Company's fifth preceding fiscal year, through
and including the end of the Company's last completed fiscal year.

PROPOSED ADOPTION OF THE FIRST ALBANY COMPANIES INC.
2000 EMPLOYEE STOCK PURCHASE PLAN

On March 31, 2000, the Board adopted the First Albany Companies
Inc. 2000 Employee Stock Purchase Plan (the "Plan"). The Plan will be
effective on June 1, 2000, subject to approval of the Company's shareholders.

The Company recently terminated the First Albany Companies Inc.
Stock Bonus Plan originally adopted in 1987. The new 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. The Company's
shareholders are now requested to approve the adoption of the Plan.

A general description of the Plan is set forth below. Such
description is qualified in its entirety by reference to the full text of the
Plan, which is set forth in full as Appendix A to this Proxy Statement.

The Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
A maximum of 500,000 shares of the Company's common stock, par value $0.01 per
share (subject to certain anti-dilution provisions) are available for issuance
under the Plan (the "Common Stock").

ADMINISTRATION

The Plan will be administered by an administrator appointed by the
Board (the "Administrator"). The Administrator has authority to make rules and
regulations for the administration of the Plan. No member of the Board or an
individual exercising administrative authority under the Plan will be liable for
any action or determination made in good faith with respect to the Plan.

ELIGIBILITY

Generally, participation in the Plan is limited to employees of the
Company and its designated subsidiaries who have completed at least six months
of employment with the Company or its designated subsidiaries and whose
customary employment is more than twenty hours per week.

OPERATION OF THE PLAN

The Plan operates in successive six-month periods (each period being
an "Offering"), generally commencing on the first business day occurring on or
after each December 1 and June 1, and ending on the last business day occurring
on or before the following November 30 or May 31, respectively. The
Administrator may, in its discretion, designate a different period for any
Offering, provided that no Offering may exceed one year in duration or overlap
any other Offering. The initial Offering under the Plan, subject to shareholder
approval will begin on June 1, 2000.

On the first day of each Offering (the "Offering Date"), each
eligible employee who has timely filed a valid enrollment form for that Offering
(a "Participant") will be granted an option (an "Option") to purchase shares of
Common Stock. A Participant must designate on his or her enrollment form the
percentage of his or her compensation, subject to a minimum of one percent and a
maximum of ten percent, to be withheld from his or her pay during that Offering
and credited to a bookkeeping account (an "Account") maintained under the Plan
in his or her name. No

interest will accrue or be paid on any Participant's Account. Except as
determined by the Administrator in advance of an Offering, a Participant may not
increase or decrease his or her payroll deduction during an Offering, but may
increase or decrease his or her payroll deduction with respect to the next
Offering by filing a new enrollment form at least 15 business days before the
next Offering Date. Unless a Participant files a new enrollment form or
withdraws from the Plan, his or her most recently filed enrollment form will
continue in effect for all subsequent Offerings. A Participant can withdraw from
the Plan at any time by delivering a written notice of withdrawal to his or her
payroll location. Following a Participant's withdrawal, the Company will refund
his or her entire Account balance (after payment for any Common Stock purchased
before the effective date of his or her withdrawal). An employee may not begin
participation in the Plan during the remainder of the Offering in which he or
she withdrew, but may enroll in a subsequent offering.

Each Option will be for a six-month term and will automatically be
exercised on the last day of the Offering (the "Exercise Date"). Subject to
certain limitations, the number of shares of Common Stock acquired by the
Participant upon the exercise of his or her Option will be determined by
dividing the Participant's Account balance as of the Exercise Date by the
Purchase Price. The "Purchase Price" for each Option will be 85% of the Fair
Market Value (as defined in the Plan) of the Common Stock on the Offering Date
or the Exercise Date, whichever is less. The Participant's Account will be
reduced on the Exercise Date by the amount used to pay the Purchase Price. Any
amount remaining in a Participant's account at the end of an Offering solely be
reason of the inability to purchase a fractional share of Common Stock will be
carried forward to the next Offering. Any other balance in a Participant's
Account at the end of an Offering will be refunded to the Participant.

If a Participant terminates employment for any reason before the
Exercise Date for any Offering, no payroll deductions will be taken from any pay
due and owing to the Participant and the balance in his or her Account will be
paid to him, or in the case of his or her death, to his or her designated
beneficiary, as if he or she had withdrawn from the Plan.

AMENDMENT AND TERMINATION 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 "employee
stock purchase plan" under Section 423(b) of the Code. The Plan may be
terminated by the Board at any time.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

The following is a brief and general summary of some United States
federal income tax consequences applicable to the Plan. The summary does not
reflect any provisions of the income tax laws of any state, local or foreign
taxing jurisdiction. Because the tax consequences of events and transactions
under the Plan depend upon various factors, including an individual's own tax
status, each Participant in the Plan should consult a tax advisor.

The Company has designed the Plan to qualify for the favorable
federal income tax treatment provided under Section 423 of the Code.

A Participant's withheld compensation will be post-tax. In other
words, the Participant will be taxed on amounts withheld for the purchase of
shares of Common Stock as if he or she had

instead received his or her full salary or wages. Other than this, no income
will be taxable to a Participant until disposition of the shares acquired, and
the method of taxation will depend upon how long the shares were held before
disposition.

If the purchased shares of Common Stock are disposed of more than
two years after the beginning of the applicable Offering and more than one year
after the applicable Exercise Date, or if the Participant dies at any time while
holding the stock, then the lesser of (a) the excess of the fair market value of
the stock at the time of such disposition or death over the purchase price or
(b) the discount element (up to 15% of fair market value) of the stock as the
beginning of the applicable Offering will be treated as ordinary income. Any
further gain or any loss will be taxed as a long-term capital gain or loss. Net
long-term capital gains for individuals are currently subject to a maximum
marginal federal income tax rate that is less than the maximum marginal rate for
ordinary income.

If a Participant sells or disposes of the stock before the
expiration of either of the holding periods described above (a "Disqualifying
Disposition"), then the excess of the fair market value of the stock on the
Exercise Date over the Purchase Price will be treated as ordinary income at the
time of such disposition. The balance of any gain on a sale will be treated as
capital gain. Even if the stock is sold for less than its fair market value on
the Exercise Date, the same amount of ordinary income is attributed to the
Participant, and a capital loss is recognized equal to the difference between
the Purchase Price and the fair market value of the stock on the Exercise Date.
Any capital gain or loss will be long- or short-term depending on whether the
stock has been held for more than one year.

There are no federal income tax consequences to the Company by
reason of the grant or exercise of Options under the Plan. The Company will, in
general, be entitled to a deduction to the extent amounts are taxed as ordinary
income to a Participant by reason of a Disqualifying Disposition of the
purchased shares of stock, but will not be entitled to a deduction in respect of
the ordinary income realized by a Participant upon later disposition, or
realized upon death. The Company's deduction may be limited under Code Section
162(m).

APPROVAL OF THE PLAN

To become effective, the Plan must be approved by the affirmative
vote of a majority of the votes cast at the Annual Meeting on this proposal by
the holders of the shares of Common Stock entitled to vote thereat.

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 7,755,921 shares of Common Stock outstanding, 152,879 shares in
Treasury and 1,830,439 shares of Common Stock reserved for issuance upon
exercise of options under the 1989 Stock Incentive Plan and the 1999 Long-Term
Incentive Plan. The proposed Certificate of Amendment of the Company's
Certificate of Incorporation is contained in Appendix B to this Proxy Statement.

Although the Board of Directors has no immediate plans,
understandings, agreements or commitments to issue additional Common Stock for
any purposes, the Board of Directors believes the increase in the authorized
number of shares of Common Stock is in the best interests of the Company. If the
amendment is approved, the additional 40,000,000 authorized shares of Common
Stock would be available for issuance in the future for any proper corporate
purpose, including, without limitation, financings, stock splits, stock
dividends and employee stock incentive plans, as the Board of Directors may deem
advisable. No additional action or authorization by the Company's shareholders
would be necessary prior to the issuance of such additional shares, unless
required by applicable law or the rules of any stock exchange or national
securities association trading system on which the Common Stock is then listed
or quoted. Shareholders will not have preemptive rights to subscribe for shares
of Common Stock, unless the Company grants such rights at the time of issue.

The issuance of additional shares of Common Stock, while providing
desirable flexibility in connection with corporate purposes, could have a
dilutive effect on the earnings per share, voting power and shareholdings of the
Company's current shareholders. Additionally, the issuance of additional shares
of Common Stock 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. For example, the additional shares of Common Stock could
be used to dilute the stock ownership of a person seeking to obtain control of
the Company or could be privately placed with purchasers who would support the
Board of Director in opposing a hostile takeover attempt. 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.

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 FOR FISCAL YEAR ENDING DECEMBER 31, 2000.

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
22, 2001 and no later than March 14, 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

/s/ STEPHEN P. WINK

Stephen P. Wink
Secretary

May 2, 2000

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 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.
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.

9. 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.

10. 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.

11. 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.

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.

12. 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 Designated
Subsidiary, or if the employee is transferred to any corporation other
than the Company or a Designated Subsidiary.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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 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.

20. 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.

21. 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.

22. Governing Law. The Plan shall be governed by New York law except to the
extent that such law is preempted by federal law.

23. 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.

24. 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.

25. 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.

26. 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.

APPENDIX B

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
FIRST ALBANY COMPANIES INC.

Under Section 807 of the Business Corporation Law of
The State of New York

First Albany Companies Inc. (hereinafter called the "Corporation"),
organized and existing under and by virtue of the Business Corporation Law
of the State of New York, does hereby certify as follows:

The Board of Directors of the Corporation approved, subject to the
approval by the shareholders, an amendment to the Certificate of Incorporation
of the Corporation. The resolution setting forth the amendment is as follows:

RESOLVED, that the Board of Directors deems it advisable
and in the best interests of the Corporation and its
shareholders that Article Fourth of the Certificate of
Incorporation of the Corporation hereby is deleted and
is replaced in its entirety by inserting in lieu thereof
the following:

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.

IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed hereto and this Certificate of Amendment to be signed by its Chairman
this _____ day of May, 2000.

FIRST ALBANY COMPANIES INC.

By:
--------------------------------
George C. McNamee
Chairman

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.

[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
------------------------------- ------------------------