EXHIBIT 10.18

February 18, 2003

Theodore L. Gillman

923 5th Avenue, Apt. 16A

New York, NY 10021

Dear Ted:

We are delighted to offer you the opportunity to join First Albany Asset
Management Corporation ("FAAM") as Chief Executive Officer. In addition, you
will be a member of the Operating Committee, an Executive Managing Director of
First Albany Companies Inc. and a Director of FAAM.

We have agreed to pay you a base salary at the rate of $250,000 per year from
the commencement of your employment through the second anniversary of the
commencement of your employment (the "Employment Period"). In addition, we have
agreed to pay you a bonus of not less than $400,000 for each year of the
Employment Period (the "Bonuses"). We expect to establish a bonus pool based on
revenues and profits for FAAM (the "Bonus Pool"). The allocation of the Bonus
Pool will be at your discretion, subject to the approval of the Chairman of
FAAM, the Chief Executive Officer of First Albany Companies Inc. and the
Compensation Committee of First Albany Companies Inc. The Bonuses will be
payable when other firm‑wide bonuses are paid for each respective year and
payable only to the extent you remain employed by us at such times.
Notwithstanding anything to the contrary contained herein, in the event your
employment is terminated involuntarily without cause, we will pay you, as soon
as practicable following such termination, an amount equal to the remaining base
salary which would have otherwise been paid to you through the balance of the
Employment Period had you remained employed at FAAM, plus any unpaid Bonuses.
All compensation will be subject to standard payroll withholdings.

You will also be entitled to participate in the standard employee benefit plans
available to employees of FAAM, all in accordance with the terms of such plans.

      We have also agreed to recommend to the Board of the Company that you be
granted $250,000 worth of restricted stock of the Company (the "Restricted
Stock"). The Restricted Stock shall be valued using the closing price of the
Company's common stock on the commencement of your employment. Such grant shall
be made in accordance with the Plan and your execution of a Restricted Share
Award Agreement (the "Restricted Share Agreement"). The Restricted Share Award
Agreement will provide, among other things, that the Restricted Stock will vest
in equal annual increments over a three year period, only to the extent you
remain employed by us at such times.

We have agreed to recommend to the Board of Directors (the "Board") of First
Albany Companies Inc. (the "Company") that you be granted the option to purchase
50,000 shares of the common stock of the Company at the closing price of such
stock on the date of grant. Such grant shall be made in accordance with the
First Albany Companies Inc. Long‑Term Incentive Plan (the "Plan") and shall be
subject to your execution of a Stock Option Agreement and the approval of the
Board. The Stock Option Agreement will provide, among other things, that the
Stock Options will vest in equal annual increments over a three year period,
only to the extent you remain employed by us at such times.

You agree that during your employment at FAAM and for a period of three calendar
months following the termination of your employment (regardless of the reason
for termination) you will not directly or indirectly solicit (i) any customer or
client of FAAM or its affiliates to transfer its business away from FAAM or its
affiliates or (ii) any employee of FAAM or its affiliates to leave the employ of
First Albany.

You represent and warrant that (i) you have not taken and will not take, and
will return to your current employer or destroy without retaining copies, all
proprietary and confidential materials of your current employer or any member of
its corporate group; (ii) you will not use any confidential, proprietary or
trade secret information in violation of any agreement, obligation or duty to
your current employer or any member of its corporate group; (iii) your
resignation from your current employer and your accepting this offer and being
employed by FAAM and your performance of your duties do not and will not breach
any other agreement, obligation or duty that you have to your current employer
or any member of its corporate group.

      Additionally, by accepting this offer, you acknowledge that the assets
FAAM and its affiliates, including but not limited to, financial information,
strategies, new products, plans, studies, forecasts, and other non-public
information about FAAM, it affiliates and/or its clients, are confidential and
trade secrets of FAAM and its affiliates. You agree that you will not disclose
such confidential information or trade secrets without the prior written
permission of FAAM and its affiliates. You also agree that such disclosure would
cause irreparable and material damage to FAAM and its affiliates.

This offer is contingent upon a satisfactory background check verifying previous
employment history, education, credit and criminal activity.

Please note that FAAM considers this letter, and all the terms contained herein,
to be highly confidential. They should not be discussed, disclosed or shown to
anyone, other than authorized FAAM corporate employees and your immediate
family, attorney, accountant or tax advisor. In addition, this letter agreement
may not be modified or amended except by a written agreement signed by you and
FAAM. This letter contains our entire understanding and supersedes any prior
understandings, communications or agreements that we may have had. We have
agreed to employ you and you have agreed to be employed by us for the duration
of the Employment Period on the terms set forth herein. As with all our
agreements, however, you may, of course, be terminated at any time for cause. 
Upon the expiration of the Employment Period, you understand that you will
continue to be employed as an "at will" employee.

      This letter agreement shall be subject to, governed by and construed in
accordance with the laws of the State of New York without regard to its choice
of law principles.  You agree that the rights and obligations of FAAM shall be
assignable by FAAM.

      Ted, we are all excited about you joining our team. If the terms of this
letter are acceptable to you, please sign and return a copy to me for my files.

                                                                                   Best
regards,

                                                                                   Hugh
A. Johnson, Jr.

                                                                                   Chairman

HAJ/lma/Emp.1618

ACCEPTED AND AGREED:

/s/ Theodore L. Gillman

Theodore L. Gillman

bcc:      Steve Wink