Document:

EXHIBIT 10.2

                                           January _____, 2005

Mr. John F. Barry III
Prospect Energy Corporation
10 East 40th Street
44th Floor
New York, New York 10016

Re:      Appointment of William E. Vastardis as Chief Compliance Officer of
         Prospect Energy Corporation

Dear John:

EOS Compliance Services LLC ("EOS Compliance") is pleased to offer to the board
of directors (the "board") of Prospect Energy Corporation ("PEC") this proposal
to provide the services described herein in connection with the on-going
monitoring of PEC's compliance program, as mandated by Rule 38a-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"), as promulgated
by the Securities and Exchange Commission ("SEC"), and related applicable
federal laws and regulations (the "engagement" or "Agreement").

         1. Engagement of William E. Vastardis. Subject to the specific approval
of at least a majority of the directors of PEC who are not "interested persons"
within the meaning of the 1940 Act (the "independent directors") and in
accordance with Rule 38a-1 of the 1940 Act, EOS Compliance hereby designates
William E. Vastardis to serve in the capacity of the Chief Compliance Officer
(the "CCO") of PEC, an investment company that has elected to be a business
development company pursuant to the 1940 Act. The PEC board and specifically the
independent directors thereof shall receive such information about the
qualifications of and have such access in person or otherwise to Mr. Vastardis
so that the board of directors may decide upon his appointment as the CCO with
the benefit of all necessary and requested information. By signature hereto of
an authorized person, PEC shall evidence the approval by the PEC board,
including the independent directors, of the designation of William E. Vastardis
as the CCO of PEC as well as his compensation as set forth in this engagement
letter. The PEC board hereby acknowledges that William E. Vastardis is the
Co-Chief Executive Officer of EOS

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 2 of 7

Compliance and that certain employees of EOS Compliance shall assist him from
time to time as necessary in accomplishing the functions of this CCO engagement.
Nothing in this Agreement shall be construed to permit or appoint any other
individual or employee of EOS Compliance except William E. Vastardis to serve as
the PEC CCO.

         2. Independent Authority. The CCO as named herein shall have the power
and authority mandated by the PEC board to perform all functions related to that
officer capacity. These functions shall be determined as a result of EOS
Compliance's activities in connection with the review, continuation and
amendment, as needed, of PEC's compliance program and shall be approved by the
PEC board from time to time after consultation with the CCO.

         3. On-Going Monitoring of the PEC Compliance Program. EOS Compliance
shall continue to monitor PEC's compliance program as shall be required in order
for PEC to comply with current SEC rules and regulations related to compliance
matters, including without limitation Rule 38a-1 under the 1940 Act. In
connection therewith, the CCO, or EOS Compliance acting at his direction, shall:

         o    conduct on-going review of PEC's policies and procedures with
              respect to its existing compliance procedures;

         o    determine policies and procedures that must be created in order
              for PEC to comply with SEC rules and regulations, including any
              changes in law, regulations or SEC interpretations thereunder
              that occur during the term of this Agreement;

         o    edit, revise and update PEC's existing policies and procedures as
              necessary for PEC to satisfy new SEC rules and regulations;

         o    revise testing criteria and methodology with respect to PEC's
              compliance policies and procedures, as necessary;

         o    monitor the ongoing activities of PEC and its service providers,
              including Prospect Capital Management, LLC ("PCM") and Prospect
              Administration, LLC ("PA"), for compliance with PEC's policies and
              procedures and applicable laws, rules and regulations;

         o    submit new, material compliance policies and procedures, when
              prepared or updated, to PEC for board review and approval; and

         o    undertake to perform all other activities reasonably requested to
              be performed by PEC or otherwise necessary in the judgment of EOS
              Compliance to complete satisfactorily the scope of this
              engagement.

         4. Cooperation. In furtherance of this engagement and its intended
results, the CCO will be relying upon the meaningful and timely cooperation of
management and

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 3 of 7

certain selected personnel of PEC's investment adviser and fund administrator,
PCM and PA, respectively. In order for the CCO, or EOS Compliance acting at his
direction, to conduct proper and effective on-going monitoring of the PEC
compliance programs, PEC acknowledges that the CCO, or EOS Compliance acting at
his direction, will require complete and unfettered access to (i) PEC's books
and records, (ii) PCM's officers and employees, (iii) all officers and employees
of PEC's portfolio companies, (iv) all books and records of PEC's portfolio
companies, and (v) a number of third parties (including, without limitation,
service providers) with whom PEC has dealings or agreements.

         5. In-Person Visits. The CCO shall attend each PEC board meeting upon
receipt of reasonable advance notice thereof. The CCO shall also meet privately
with the independent directors of the board at their request and no less
frequently than annually. In addition, the CCO (or his designee, when
appropriate) shall visit PCM or any of PEC's third-party service providers in
the ordinary course of performing his duties and as often as is required to
discharge the CCO's duties and responsibilities.

         6. Term. The term of the CCO role shall be from month to month,
starting as of the date hereof, and shall be automatically renewed on a monthly
basis unless either the CCO or the PEC board shall otherwise advise the other
party by reasonable written notice prior to the next renewal date.

         7. Fees. PEC will compensate EOS Compliance for allowing William E.
Vastardis to serve as the Chief Compliance Officer of PEC at the monthly rate of
US$ 6,250.00. EOS Compliance determines the compensation to be paid to the CCO
based on the company's experience in providing compliance services to the
investment industry and a case-by-case evaluation of the time and resources that
would be required in order to effectively fulfill the duties of the CCO with
respect to each registered investment company (or business development company)
or registered investment adviser. Any differential in fees paid by an investment
company (or business development company) and its affiliated investment adviser
with respect to the CCO of each who has or have been appointed by or through the
offices of EOS Compliance shall be based solely upon the determination by EOS
Compliance that the different CCO roles require different degrees of resources
and effort by EOS Compliance personnel. Accordingly, each of a client registered
investment company (or business development company) and its affiliated
investment adviser for whom EOS Compliance has appointed the CCO shall be billed
solely according to the amount of work, effort and services that EOS Compliance
determines to have been supplied to each such entity. A registered investment
company shall not be permitted to advance or pay for the fees and expenses of
its affiliated investment adviser that are due to EOS Compliance.

         Upon an initial review of the current compliance program in effect at
PEC, EOS Compliance has determined that certain special projects outside the
purview of the role and office of the CCO may be required in order to amend,
make current or further

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 4 of 7

strengthen PEC's compliance policies and procedures, and evaluate and further
organize PEC's books and records in order to comply with applicable federal
securities laws and regulations. Such services shall be billed monthly in
arrears at the rate of US$ 275.00 per hour. EOS Compliance shall confer with PEC
and provide written work orders, as requested, prior to the commencement of any
services described or contemplated in this paragraph.

         PEC will also reimburse EOS Compliance Services LLC for out-of-pocket
costs of the CCO and EOS Compliance (including reasonable travel costs required
for the CCO and personnel of EOS Compliance acting at his direction to conduct
necessary on-site evaluations, due diligence inquiries and other on-going
compliance monitoring at PEC's offices or elsewhere on behalf of PEC).

         Fees for Mr. Vastardis' Chief Compliance Officer services will be
invoiced on a monthly basis, payable in advance to EOS Compliance Services LLC,
in full by wire transfer upon receipt. Fees for services outside of the CCO role
will be invoiced on a monthly basis as incurred, payable to EOS Compliance
Services LLC, in full by wire transfer upon receipt. Expenses will be invoiced
on a monthly basis, as incurred at the end of each month, payable to EOS
Compliance Services LLC, in full by wire transfer upon receipt.

         In the event that the CCO is terminated for cause pursuant to Section 8
below, EOS Compliance shall rebate any prepaid fees for the month in which the
termination occurs.

         8. Termination. The PEC board reserves the right to terminate the
engagement of the CCO at any time by written notice, subject to Rule 38a-1 under
the 1940 Act. If the PEC board terminates the engagement of the CCO without
"cause" (as hereinafter defined), then PEC shall be liable to pay the remaining
unpaid fees if any that would have accrued to the CCO under Section 7 hereof for
the remainder of the then current term of this engagement.

         Termination for "cause" means that the CCO has materially breached the
terms of this engagement letter, has been convicted of a felony, has willfully
neglected the performance of his duties as set forth herein, or has been
otherwise rendered unable or unqualified to serve as an officer of an investment
company pursuant to the applicable provisions of Section 9 of the 1940 Act. This
Agreement shall terminate immediately if Mr. Vastardis is no longer associated
with EOS Compliance or is for any other reason unable or unwilling to serve as
PEC's CCO.

         9. Indemnification. Except to the extent prohibited by any federal or
state laws to the contrary, the CCO and EOS Compliance shall not be liable to
PEC or any affiliate thereof for any errors, acts or omissions in the
performance of services hereunder

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 5 of 7

except for losses arising out of the CCO's reckless disregard of the duties
involved in the conduct of the office of the CCO, EOS Compliance's reckless
disregard for any of its duties hereunder, or the CCO's or EOS Compliance's
willful misconduct or gross negligence in the performance of their respective
duties and obligations hereunder. PEC agrees to, and hereby does, indemnify the
CCO and EOS Compliance for any claims, losses, costs, damages or expenses
whatsoever arising from or due to the CCO's acts or omissions or those of EOS
Compliance in the performance or attempted performance of their respective
duties hereunder, except for those claims, losses, costs, damages and expenses
resulting from the reckless disregard of the duties involved in the conduct of
the CCO's office or the willful misconduct or gross negligence of the CCO or the
employees, agents or contractors of EOS Compliance acting at the CCO's direction
during the course of such performance or attempted performance. Notwithstanding
anything to the contrary herein, PEC agrees that the CCO shall be covered as an
officer of PEC at all times during this engagement under the directors and
officers/errors and omissions insurance policy then in place for PEC's officers
and directors.

                  PEC further agrees to hold harmless and indemnify EOS
Compliance and the CCO, from any claims, losses, costs, damages and expenses
whatsoever arising from the errors, acts or omissions of any of PEC, its
affiliates, or any predecessors thereof, and PEC's directors, officers,
employees and agents that:

                  (a) occurred or commenced prior or contemporaneous to the
         engagement of EOS Compliance and the CCO or pursuant to such engagement
         for any errors, acts or omissions, including the willful misconduct or
         gross negligence of any of PEC, its affiliates and PEC's directors,
         officers, employees and agents (excluding EOS Compliance and the CCO)
         that may arise and of which neither EOS Compliance nor Mr. Vastardis
         has prior knowledge despite their reasonable efforts under this
         Agreement;

                  (b) occur pursuant to such engagement and of which neither EOS
         Compliance nor the CCO has prior knowledge despite their reasonable
         efforts under this Agreement;

                  (c) occur despite contrary advice or instructions given by
         the CCO, pursuant to the CCO's duties under this Agreement; or

                  (d) occur in violation of established policies and procedures
         of PEC or PCM.

                  Furthermore, the parties to this Agreement acknowledge that
the CCO and EOS Compliance may reasonably rely upon the statements,
representations, and information provided by any of PEC, its affiliates and
PEC's directors, officers, employees, counsel and agents in the course of their
performance or attempted performance under this Agreement except in so far that
the CCO becomes aware of circumstances, facts, or allegations that require, in
the CCO's best judgment, reasonable efforts to investigate further in compliance
with applicable federal securities and other laws and regulations.

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 6 of 7

             The provisions of this Section 9 shall survive any early
termination of the engagement of the CCO without cause, as discussed in Section
8 above. This Section 9 may not be construed in violation of the limitations on
indemnification under the 1940 Act, including indemnification for claims,
losses, costs, damages and expenses arising as a result of any willful
misconduct or gross negligence by the CCO or EOS Compliance under the terms of
this Agreement. PEC may, at its option, at any time upon written notice to EOS
Compliance, direct the defense of any proceeding subject to this indemnity and
may designate counsel reasonably satisfactory to the CCO in connection
therewith, provided that the counsel so designated would have no actual or
potential conflict of interest in connection with such representation.

         10. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement, subject to applicable
disclosure requirements under federal securities and other laws and regulations,
and all information provided by each party to the other regarding its business
and operations. All confidential information provided by a party hereto, shall
be used by any other party hereto solely for the purpose of rendering services
pursuant to this Agreement. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
required to be disclosed by any regulatory authority, by judicial or
administrative process or otherwise by applicable law or regulation.

         11. Assignment. This Agreement may not be assigned by any party without
the express written consent of each other party.

         12. Governing Law. This Agreement shall be construed in accordance with
laws of the State of New York and the applicable provisions of the 1940 Act, if
any. To the extent that the applicable laws of the State of New York, or any of
the provisions herein, conflict with the applicable provisions of the Investment
Company Act, if any, the latter shall control.

         13. Entire Agreement. This Agreement contains the entire agreement of
the parties and supersedes all prior agreements, understandings and arrangements
with respect to the subject matter hereof.

         14. Saving Clause. If any provision of this Agreement, or the
application of such provision to any party or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to parties or circumstances other than those as to which it is held invalid,
shall not be affected thereby. If the operation of any provision of this
Agreement would contravene the provisions of the 1940 Act, such provision shall
be void and ineffectual.

         15. Notices. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed, postage prepaid, to the other party at its
principal office.

                                                                       PEC  ____
                                                                        WEV ____

<PAGE>

Prospect Energy Corporation
Chief Compliance Officer Appointment
Page 7 of 7

         16. Counterparts. The Agreement may be executed in several counterparts
by facsimile, and all so executed shall constitute one (1) agreement, binding on
all the parties hereto, even though all parties are not signatories to the
original or the same counterpart. Any counterpart of the Agreement shall for all
purposes be deemed a fully executed instrument. The parties hereto shall
promptly exchange original signatures in the case that this Agreement is
executed by facsimile.

If this letter clearly sets forth for the PEC board the scope of the intended
engagement of William E. Vastardis as the PEC CCO, as well as the agreement to
pay the CCO's compensation and fees, then please sign and return the attached
copy of this letter to the undersigned at your earliest convenience.

Sincerely,

William E. Vastardis
EOS Compliance Services LLC

ACKNOWLEDGMENT OF PROSPECT ENERGY CORPORATION:

On behalf of the Prospect Energy Corporation and its board of directors, and
intending to bind PEC, I hereby acknowledge that this engagement letter sets out
the full and complete understanding by PEC of the scope and objectives of the
described engagement of William E. Vastardis as the PEC CCO, as well as the
agreement to pay the fees and costs described hereinabove to EOS Compliance
Services LLC.

----------------------------
Name:  John F. Barry III
Title: Chairman of the Board
Date:  January 7, 2005

                                                                       PEC  ____
                                                                        WEV ____<PAGE>

                                                                    EXHIBIT 4(f)

                           FIRST ALBANY COMPANIES INC.

                         2005 DEFERRED COMPENSATION PLAN

             FOR PROFESSIONAL AND OTHER HIGHLY COMPENSATED EMPLOYEES

                            EFFECTIVE JANUARY 1, 2005

<PAGE>

                           FIRST ALBANY COMPANIES INC.
                         2005 DEFERRED COMPENSATION PLAN
             FOR PROFESSIONAL AND OTHER HIGHLY COMPENSATED EMPLOYEES

                            Effective January 1, 2005

                                     PURPOSE

            The purpose of this Plan is to provide eligible Employees the
opportunity to defer receipt of a portion of their salary, bonuses and
commissions in order to defer taxes on such compensation and save for planned
events during employment, and to provide incentives, in the form of Matching
Contributions, for such Employees to remain in the employ of the Company during
periods of deferral. This Plan is not intended to provide a source of retirement
income to Employees. This Plan shall be unfunded for tax purposes and is exempt
from ERISA.

                                    Article 1

                                   Definitions

            For purposes of this Plan, unless otherwise clearly apparent from
the context, the following phrases or terms shall have the meanings indicated:

1.1   "Aggregate Vested Balance" or "Aggregate Vested Benefit" shall mean, with
      respect to the Plan Accounts of any Participant as of a given date, the
      sum of the amounts that have become vested under all of the Participant's
      Plan Accounts, as adjusted to reflect all applicable Investment
      Adjustments and all prior withdrawals and distributions, in accordance
      with Article 3 of the Plan and the provisions of the applicable Enrollment
      Forms.

1.2   "Amended Annual Election Form" shall mean the Amended Annual Election Form
      required by the Committee to be signed and submitted by a Participant to
      effect a permitted change in the elections previously made by the
      Participant under any Annual Election Form.

1.3   [Reserved].

1.4   "Annual Company Match" shall mean the aggregate amount credited by the
      Company to a Participant in respect of a particular Plan Year under
      Section 3.02.

1.5   "Annual Company Match Account" shall mean a Participant's Annual Company
      Match for a Plan Year, as adjusted to reflect all applicable Investment
      Adjustments and all prior distributions and withdrawals.

                                       1
<PAGE>

1.6   "Annual Deferral Account" shall mean a Participant's Annual Participant
      Deferral for a Plan Year, as adjusted to reflect all applicable Investment
      Adjustments and all prior distributions and withdrawals.

1.7   "Annual Deferral Agreement" shall mean the Annual Deferral Agreement
      required by the Committee to be signed and submitted by a Participant in
      connection with the Participant's deferral election with respect to a
      given Plan Year.

1.8   "Annual Discretionary Allocation" shall mean the aggregate amount credited
      by the Company to a Participant in respect of a particular Plan Year under
      Section 3.03.

1.9   "Annual Discretionary Allocation Account" shall mean a Participant's
      Annual Discretionary Allocation for a Plan Year, as adjusted to reflect
      all applicable Investment Adjustments and all prior distributions and
      withdrawals.

1.10  "Annual Election Form" shall mean the Annual Election Form required by the
      Committee to be signed and submitted by a Participant in connection with
      the Participant's deferral election with respect to a given Plan Year.

1.11  "Annual Participant Deferral" shall mean the aggregate amount deferred by
      a Participant in respect of a particular Plan Year under Section 3.01.

1.12  "Base Annual Salary" shall mean the annual base salary payable to a
      Participant by an Employer in cash in respect of services rendered during
      a Plan Year, including any Elective Deductions, but excluding Bonus
      Amounts, Commission Payouts or other additional incentives or awards
      payable to the Participant.

1.13  "Beneficiary" shall mean one or more persons, trusts, estates or other
      entities, designated in accordance with Article 10, that are entitled to
      receive a Participant's Aggregate Account Balance under this Plan in the
      event of the Participant's death.

1.14  "Beneficiary Designation Form" shall mean the Beneficiary Designation Form
      or Amended Beneficiary Designation Form last signed and submitted by a
      Participant and accepted by the Committee.

1.15  "Board" shall mean the board of directors of the Company.

1.16  "Bonus Amounts" shall mean Discretionary Bonus Amounts and Guaranteed
      Bonus Amounts.

1.17  "Change in Control" shall mean the earliest to occur of the following
      events:

      (a)   The consummation of any transaction or series of transactions as a
            result of which any "Person" (as the term person is used for
            purposes of Section 13(d) or 14(d) of the Securities Exchange Act of
            1934, as amended (the "Exchange Act")) other than an "Excluded
            Person" (as hereinafter defined) has or obtains ownership or
            control, directly or indirectly, of fifty percent (50%) or more of
            the combined voting power of all securities of the Company or any
            successor or

                                       2
<PAGE>

            surviving corporation of any merger, consolidation or reorganization
            involving the Company (the "Voting Securities"). The term "Excluded
            Person" means any one or more of the following: (i) the Company or
            any majority-owned subsidiary of the Company, (ii) an employee
            benefit plan (or a trust forming a part thereof) maintained by (A)
            the Company or (B) any majority-owned subsidiary of the Company,
            (iii) any Person who as of the initial effective date of this Plan
            owned or controlled, directly or indirectly, ten percent (10%) or
            more of the then outstanding Voting Securities, or any individual,
            entity or group that was part of such a Person;

      (b)   A merger, consolidation or reorganization involving the Company as a
            result of which the holders of Voting Securities immediately before
            such merger, consolidation or reorganization do not immediately
            following such merger, consolidation or reorganization own or
            control, directly or indirectly, at least fifty percent (50%) of the
            Voting Securities in substantially the same proportion as their
            ownership or control of the Voting Securities immediately before
            such merger, consolidation or reorganization; or

      (c)   The sale or other disposition of all or substantially all of the
            assets of the Company to any Person (other than a transfer to a
            majority-owned subsidiary of the Company).

1.18  "Claimant" shall have the meaning set forth in Section 13.1.

1.19  "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
      from time to time.

1.20  "Commission Payouts" shall mean the amounts payable to a Participant by an
      Employer in cash in respect of services rendered during a Plan Year under
      any commission scheme or commission draw arrangement, including any
      Elective Deductions, but excluding Bonus Amounts, stock-related awards and
      other non-monetary incentives.

1.21  "Committee" shall mean the committee described in Article 11.

1.22  "Company" shall mean First Albany Companies Inc., a New York corporation,
      and any successor to all or substantially all of its assets or business.

1.23  "Company Stock" shall mean the common stock, par value $.01 per share, of
      the Company.

1.24  "Covered Termination" shall mean the Participant's Termination of
      Employment within two (2) years following a Change in Control as a result
      of the Participant's resignation for good reason or a termination by the
      Participant's Employer without cause. For these purposes a Participant's
      resignation for good reason shall mean a Participant's resignation
      following (i) a diminution in the Participant's status, title, position or
      responsibilities, or an assignment to the Participant of duties
      inconsistent

                                       3
<PAGE>

      with the Participant's status, title or position other than for cause or
      (ii) a reduction of more than ten percent (10%) in the Participant's
      aggregate annualized compensation rate solely as a result of a change
      adopted unilaterally by the Company. A Participant's resignation shall not
      be treated as a resignation for good reason unless it occurs after one of
      the foregoing events and the Participant provides the Employer with
      written notice of the event within six (6) months of the occurrence of the
      event and within seven (7) days before the effective date of the
      Participant's resignation and the Employer shall not have cured such event
      prior to such resignation. A termination by the Participant's Employer
      without cause shall mean an involuntary termination of the Participant's
      employment by Participant's Employer other than a termination for cause.
      For this purpose, a termination for cause includes any termination by
      reason of the Participant's (i) willful and continued failure to perform
      the duties of his or her position after receiving notice of such failure
      and being given reasonable opportunity to cure such failure; (ii) willful
      misconduct which is demonstrably and materially injurious to the Employer;
      (iii) conviction of a felony; or (iv) material breach of applicable
      federal or state securities laws, regulations or licensing requirements or
      the applicable rules or regulations of any self-regulatory body. No act or
      failure to act on the part of a Participant shall be considered "willful"
      unless it is done or omitted to be done in bad faith or without reasonable
      belief that the action or omission was in the best interest of the
      Employer. No termination shall be considered a termination for cause
      unless it is effected by a written notice to the Participant stating in
      detail the grounds constituting cause.

1.25  "Disability" shall mean a period of disability during which a Participant
      (i) is unable to engage in any substantial gainful activity by reason or
      any medically determinable physical or mental impairment which can be
      expected to result in death or can be expected to last for a continuous
      period of not less than 12 months or (ii) is, by reason of any medically
      determinable physical or mental impairment which can be expected to last
      for a continuous period of not less than 12 months, receiving income
      replacement benefits for a period of not less than 3 months under an
      accident and health plan covering employees of the Participant's Employer,
      all as determined in the sole discretion of the Committee.

1.26  "Disability Benefit" shall mean the benefit set forth in Article 9.

1.27  "Discretionary Bonus Amounts" shall mean such amounts that are determined
      in the sole discretion of an Employer and are payable in cash to a
      Participant in respect of services rendered during a Plan Year under any
      bonus or incentive plan or arrangement of an Employer, including any
      Elective Deductions, but excluding Commission Payouts, stock-related
      awards and other non-monetary incentives.

1.28  "Distribution Election" shall mean an election made in accordance with
      Section 5.01.

1.29  "Distribution Election Form" shall mean the Distribution Election Form
      required by the Committee to be signed and submitted by a Participant with
      respect to a Distribution Election.

                                       4
<PAGE>

1.30  "Election Form" shall mean, with respect to any Plan Account, the Annual
      Election Form or the Amended Annual Election Form last signed and
      submitted by the Participant and accepted by the Committee with respect to
      that Plan Account.

1.31  "Elective Deductions" shall mean deductions made from a Participant's Base
      Annual Salary, Bonus Amounts and Commission Payouts for amounts
      voluntarily deferred or contributed by the Participant pursuant to all
      qualified and non-qualified compensation deferral plans, including,
      without limitation, amounts not included in the Participant's gross income
      under Code Sections 125, 132(f)(4), 402(e)(3) and 402(h), provided,
      however, that all such amounts would have been payable in cash to the
      Employee had there been no such plan.

1.32  "Employee" shall mean a person who is an employee of any Employer.

1.33  "Employer" shall mean the Company and/or any of its subsidiaries (now in
      existence or hereafter formed or acquired) that have been selected by the
      Board to participate in the Plan and have adopted the Plan as a sponsor.

1.34  "Enrollment Forms" shall mean, for any Plan Year, the Annual Deferral
      Agreement, the Annual Election Form, the Distribution Election Form, the
      Beneficiary Designation Form, the Subordination Agreement and any other
      forms or documents which may be required of a Participant by the
      Committee, in its sole discretion.

1.35  "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
      it may be amended from time to time.

1.36  "Guaranteed Bonus Amounts" shall mean predetermined amounts that are not
      subject to Employer discretion and are payable in cash to a Participant in
      respect of services rendered during a Plan Year under any bonus or
      incentive plan or arrangement of an Employer, including any Elective
      Deductions, but excluding Commission Payouts, stock-related awards and
      other non-monetary incentives.

1.37  "Investment Adjustment" shall mean an adjustment made to the balance of
      any Plan Account in accordance with Section 3.05 to reflect the
      performance of an Investment Benchmark pursuant to which the value of the
      Plan Account is measured.

1.38  "Investment Benchmark" shall mean a benchmark made available under the
      Plan from time to time by the Committee for purposes of valuing Plan
      Accounts.

1.39  "Key Employee" shall mean, with respect to any Plan Year, an Employee who
      has been selected to participate in the First Albany Companies, Inc.
      Deferred Compensation Plan For Key Employees for that Plan Year.

1.40  "Participant" shall mean any eligible Employee (i) who is selected to
      participate in the Plan, (ii) who elects to participate in the Plan, (iii)
      who signs the applicable Enrollment Forms (and other forms required by the
      Committee), (iv) whose signed Enrollment Forms (and other required forms)
      are accepted by the Committee, (v) who commences

                                       5
<PAGE>

      participation in the Plan, and (vi) whose participation has not
      terminated. A spouse or former spouse of a Participant shall not be
      treated as a Participant in the Plan or have an account balance under the
      Plan, even if he or she has an interest in the Participant's benefits
      under the Plan as a result of applicable law or property settlements
      resulting from legal separation or divorce.

1.41  "Plan" shall mean the First Albany Companies Inc. 2005 Deferred
      Compensation Plan for Professional and Other Highly Compensated Employees,
      which shall be evidenced by this instrument and by each Enrollment Form,
      as they may be amended from time to time.

1.42  "Plan Accounts" shall mean the Annual Deferral Accounts, Annual Company
      Match Accounts and Annual Discretionary Allocation Accounts established
      under the Plan.

1.43  "Plan Year" shall mean the period beginning on January 1 of each year and
      ending December 31.

1.44  "Restricted Investment Benchmark" means an Investment Benchmark which is
      designated as a Restricted Investment Benchmark by the Committee at the
      time such Investment Benchmark is initially made available under the Plan.

1.45  "Specified Employee" shall mean a key employee (as defined in Code Section
      416(i) without regard to paragraph (5) thereof) of the Company.

1.46  "Subordination Agreement" means the New York Stock Exchange Subordination
      Agreement required by the Committee to be signed and submitted by a
      Participant in connection with the Participant's deferral election with
      respect to a given Plan Year.

1.47  "Subordinated Amount" shall mean, with respect to a Plan Year, that
      portion of a Participant's Annual Participant Deferral, Annual
      Discretionary Allocation and Annual Company Match that are subject to the
      restrictions and limitations set forth in the Subordination Agreement
      executed by the Participant in respect of such Plan Year. A Participant's
      Subordinated Amount shall not include (i) any portion of the Participant's
      Annual Participant Deferral, Annual Discretionary Allocation and Annual
      Company Match that is allocated to an Investment Benchmark that tracks the
      performance of First Albany Companies Inc. Common Stock or that is
      otherwise payable in shares of First Albany Companies Inc. Common Stock or
      (ii) any earnings credited to a Participant's Annual Participant Deferral
      Account, Annual Discretionary Allocation Account or Annual Company Match
      Account. Subordinated Amounts shall be determined based on the Investment
      Benchmark election made by a Participant at the time of annual
      enrollment." For each Participant that is a party to a Subordination
      Agreement for a given Plan Year, the Company shall, as soon as practicable
      after the end of such Plan Year, notify the New York Stock Exchange of the
      Subordinated Amount that was credited to the Participant's Plan Accounts
      in respect of such Plan Year.

1.48  "Survivor Benefit" shall mean the benefit set forth in Article 6.

                                       6
<PAGE>

1.49  "Termination of Employment" shall mean the severing of employment with all
      Employers, voluntarily or involuntarily, for any reason.

1.50  "Trust" shall mean the trust established in accordance with Article 14.

1.51  "Unforeseeable Financial Emergency" shall mean a severe financial hardship
      to the Participant resulting from (i) an illness or accident of the
      Participant, the Participant's spouse or a dependent (as defined in
      section 152(a) of the Code) of the Participant, (ii) loss of the
      Participant's property due to casualty, or (iii) such other similar
      extraordinary and unforeseeable circumstances arising as a result of
      events beyond the control of the Participant, all as determined in the
      sole discretion of the Committee. In making its determination the
      Committee shall be guided by the prevailing authorities applicable under
      the Code.

1.52  "Vested Account Balance" shall mean, with respect to any Plan Account as
      of a given date, the sum of the amounts that have become vested, as
      adjusted to reflect all applicable Investment Adjustments and all prior
      withdrawals and distributions, in accordance with Article 3 of the Plan
      and the provisions of applicable Enrollment Forms.

1.53  "Years of Service" shall mean the total number of full Plan Years during
      which a Participant has been continuously employed by one or more
      Employers. Any partial Plan Year during which a Participant has been
      employed by an Employer shall not be counted.

                                    Article 2

                       Eligibility, Selection, Enrollment

      2.01 Eligibility; Selection by Committee. All Employees, other than Key
Employees, are eligible to participate in the Plan in any particular Plan Year.
For each Plan Year, the Committee shall select, in its sole discretion, the
Employees who shall be given the opportunity to make an Annual Participant
Deferral and/or receive an Annual Discretionary Allocation in respect of that
Plan Year. The Committee's selection of an Employee to make an Annual
Participant Deferral and/or receive an Annual Discretionary Allocation in
respect of a particular Plan Year will not entitle that Employee to make an
Annual Participant Deferral or receive an Annual Discretionary Allocation for
any subsequent Plan Year, unless the Employee is again selected by the Committee
to make an Annual Participant Deferral and/or receive an Annual Discretionary
Allocation for such subsequent Plan Year.

      2.02 Enrollment Requirements. As a condition to being eligible to make an
Annual Participant Deferral for any Plan Year, each selected Employee shall
complete, execute and return to the Committee each of the required Enrollment
Forms (including without limitation, the Subordination Agreement) no later than
the last day of the immediately preceding Plan Year (or such earlier date as the
Committee may establish from time to time). Notwithstanding the

                                       7
<PAGE>

foregoing, (i) in the case of an Employee who first becomes eligible to
participate in the Plan during any Plan Year, such Employee shall complete,
execute and return to the Committee each of the required Enrollment Forms
(including without limitation, the Subordination Agreement) no later than 30
days following the date on which such Employee first becomes eligible to
participate in the Plan (or such earlier date as the Committee may establish
from time to time) provided that such Annual Participant Deferral shall apply
only with respect to services performed subsequent to the time such Enrollment
Forms are filed with the Committee and (ii) in the case of any performance-based
compensation (as such term is used in Section 409A of the Code) based on
services performed over a period of at least 12 months, the Enrollment Forms
with respect to such performance-based compensation must be filed no later than
6 months before the end of the performance period (or such earlier date as the
Committee may establish from time to time). In addition, each selected Employee
shall have on file with the Committee a completed Beneficiary Designation Form
prior to the date specified by the Committee, and the Committee shall establish
from time to time such other enrollment requirements as it determines necessary,
in its sole discretion.

      2.03 Commencement of Participation. Provided an Employee selected to make
an Annual Participant Deferral in respect of a particular Plan Year has met all
enrollment requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the specified
time period, the Employee's designated deferrals shall commence as of the date
established by the Committee in its sole discretion. If an Employee fails to
meet all such requirements within the specified time period with respect to any
Plan Year, the Employee shall not be eligible to make any deferrals for that
Plan Year. In addition, an Employee's eligibility to make deferrals for a Plan
Year is expressly conditioned on the approval by the New York Stock Exchange of
the Subordination Agreement executed by the Employee in respect of such Plan
Year.

      2.04 Subsequent Elections. The Enrollment Forms submitted by a Participant
in respect of a particular Plan Year will not be effective with respect to any
subsequent Plan Year, except that the Beneficiary Designation Form on file with
the Committee will remain effective for all subsequent Plan Years unless and
until an Amended Beneficiary Designation Form is submitted. If an Employee is
selected to participate in the Plan for a subsequent Plan Year and the required
Enrollment Forms are not timely delivered for the subsequent Plan Year, the
Participant shall not be eligible to make any deferrals with respect to such
subsequent Plan Year.

      2.05 Termination of Participation and/or Deferrals. If a Participant's
Employer terminates the Participant's employment for cause (as described in
Section 1.24), then, (i) the Participant's participation in the Plan shall
automatically terminate, (ii) the Committee shall distribute to the Participant,
in a single lump sum, the remainder of the Participant's Annual Participant
Deferrals that were credited to the Participant's Plan Accounts prior to the
date of termination after adjustment for all prior withdrawals and distributions
within ninety days of such termination, or, in the case of a Specified Employee,
6 months after the date of such termination and (iii) all other amounts in any
of the Participant's Plan Accounts (including without limitation, any investment
gains on Annual Participant Deferrals) shall be forfeited by the Participant. In
addition, if an Employee's eligibility to make deferrals for a Plan Year is
expressly conditioned on the approval by the New York Stock Exchange of a
Subordination Agreement executed by the

                                       8
<PAGE>

Employee in respect of such Plan Year and the New York Stock Exchange declines
to issue such approval, the Committee shall have the right, in its sole
discretion, to (i) terminate any Annual Participant Deferral and Annual Company
Match in respect of such Plan Year and (ii) immediately distribute to the
Participant any Subordinated Amounts that have already been credited to the
Participant's Plan Accounts in respect of such Plan Year. Any distribution made
pursuant to this Section 2.05 may be subject to deferred distribution pursuant
to Section 5.03.

                                    Article 3

          Participant Deferrals, Commitments, Company Match, Investment
                         Adjustments, Taxes and Vesting

      3.01 Participant Deferrals.

                  (a) Deferral Election. A Participant may make an election to
      defer the receipt of amounts payable to the Participant in the form of
      Base Annual Salary, Bonus Amounts and Commission Payouts for services
      rendered during a Plan Year. The Participant's election shall be evidenced
      by an Annual Deferral Agreement and Annual Election Form completed and
      submitted to the Committee in accordance with such procedures and time
      frames as may be established by the Committee in its sole discretion.
      Amounts deferred by a Participant in respect of services rendered during a
      Plan Year shall be referred to collectively as an Annual Participant
      Deferral and shall be credited to an Annual Deferral Account established
      in the name of the Participant. A separate Annual Deferral Account shall
      be established and maintained for each Annual Participant Deferral. The
      Committee shall have sole discretion to determine in respect of each Plan
      Year: (i) whether an Employee shall be eligible to make an Annual
      Participant Deferral; (ii) the form(s) of compensation which may be the
      subject of any Annual Participant Deferral; and (iii) any other terms and
      conditions applicable to the Annual Participant Deferral.

                  (b) Minimum Deferral.

                        (i) Minimum. For each Plan Year the Committee may permit
            a Participant to elect to defer, as his or her Annual Participant
            Deferral, one or more of the following forms of compensation,
            payable with respect to the Plan but not yet received, in the
            following minimum amounts:

<TABLE>
<CAPTION>
                                              Minimum
        Deferral                              Amount
        --------                              ------
<S>                                          <C>
Base Annual Salary                           $3,000
Guaranteed Bonus Amounts                     $3,000
Discretionary Bonus Amounts                  $3,000
Commission Payouts                           $3,000
</TABLE>

                                       9
<PAGE>

            If an election is made for less than stated minimum amounts, or if
            no election is made, the amount deferred shall be zero.

                        (ii) Short Plan Year. If a Participant first becomes a
            Participant after the first day of a Plan Year, the minimum deferral
            of each of the Participant's Base Annual Salary, Bonus Amounts and
            Commission Payouts shall be an amount equal to the minimum set forth
            above, multiplied by a fraction, the numerator of which is the
            number of complete months remaining in the Plan Year and the
            denominator of which is 12.

                  (c) Maximum Deferral. For each Plan Year, the Committee may
            permit a Participant to elect to defer, as his or her Annual
            Participant Deferral, one or more of the following forms of
            compensation, payable to the Participant with respect to the Plan
            Year but not yet received, up to the following maximum percentages:

<TABLE>
<CAPTION>
                                         Maximum
       Deferral                        Percentage
       --------                        ----------
<S>                                    <C>
Base Annual Salary                        50%
Guaranteed Bonus Amounts                  50%
Discretionary Bonus Amounts               50%
Commission Payouts                        50%
</TABLE>

                  (d) Deferral Designations.

                        (i) Base Annual Salary. A Participant may designate the
            amount of the Annual Participant Deferral to be deducted from his or
            her Base Annual Salary as either a percentage of his or her Base
            Annual Salary, a fixed dollar amount or a percentage of Base Annual
            Salary up to a fixed dollar amount. Such amount shall be withheld
            from each regularly scheduled Base Annual Salary payment in equal
            amounts.

                        (ii) Bonus Amounts. A Participant may designate the
            amount of the Annual Participant Deferral to be deducted from his or
            her Bonus Amounts as either a percentage or a fixed dollar amount of
            specified Bonus Amounts expected by the Participant. If a
            Participant designates the Annual Participant Deferral to be
            deducted from any Bonus Amount as a fixed dollar amount and such
            fixed dollar amount exceeds the Bonus Amount actually payable to the
            Participant, the entire amount of such Bonus Amount shall be
            withheld.

                        (iii) Commission Payouts. A Participant may designate
            the amount of the Annual Participant Deferral to be deducted from
            his or her Commission Payouts as either a percentage of his or her
            Commission Payouts, a fixed dollar amount or a percentage of his or
            her Commission Payouts up to a fixed dollar amount. Such amount
            shall be withheld from the Commission Payout

                                       10
<PAGE>

            portion of each regularly scheduled Commission Payout payment in
            equal amounts.

      3.02 Annual Company Match. A Participant may be credited with one or more
Company matches in respect of any Plan Year, expressed as a percentage of the
amount of Base Annual Salary, Bonus Amounts, Commission Payouts or any
combination of the foregoing deferred by the Participant pursuant to the
Participant's Annual Participant Deferral for the Plan Year. Such Company
matches credited to a Participant in respect of a Plan Year shall be referred to
collectively as the Annual Company Match for that Plan Year and shall be
credited to an Annual Company Match Account in the name of the Participant. A
separate Annual Company Match Account shall be established and maintained for
each Annual Company Match. The Board shall have sole discretion to determine in
respect of each Plan Year and each Participant: (i) whether any Annual Company
Match shall be made; (ii) the Participant(s) who shall be entitled to such
Annual Company Match; (iii) the amount of such Annual Company Match; (iv) the
date(s) on which any portion of such Annual Company Match shall be credited to
each Participant's Annual Company Match Account; (v) the Investment Benchmark(s)
that shall apply to such Annual Company Match; and (v) any other terms and
conditions applicable to such Annual Company Match.

      3.03 Annual Discretionary Allocation. A Participant may be credited with
one or more discretionary allocations in respect of any Plan Year, expressed as
either a flat dollar amount or as a percentage of the Participant's Base Annual
Salary, Bonus Amounts, Commission Payouts or any combination of the foregoing.
Such discretionary allocations credited to a Participant in respect of a Plan
Year shall be referred to collectively as the Annual Discretionary Allocation
for that Plan Year and shall be credited to an Annual Discretionary Allocation
Account in the name of the Participant. A separate Annual Discretionary
Allocation Account shall be established and maintained for each Annual
Discretionary Allocation. The Board shall have sole discretion to determine in
respect of each Plan Year and each Participant: (i) whether any Annual
Discretionary Allocation shall be made; (ii) the Participant(s) who shall be
entitled to such Annual Discretionary Allocation; (iii) the amount of such
Annual Discretionary Allocation; (iv) the date(s) on which any portion of such
Annual Discretionary Allocation shall be credited to each Participant's Annual
Discretionary Allocation Account; (v) the Investment Benchmark(s) that shall
apply to such Annual Discretionary Allocation; and (v) any other terms and
conditions applicable to such Annual Discretionary Allocation.

      3.04 Selection of Investment Benchmarks. In connection with a
Participant's election to make an Annual Participant Deferral in respect of a
Plan Year, the Participant shall select one or more Investment Benchmarks and
the percentage of the Participant's Annual Deferral Account, Annual Company
Match Account (if any) and Annual Discretionary Allocation Account (if any) for
such Plan Year to be adjusted to reflect the performance of each selected
Investment Benchmark; provided, however, that a Participant's ability to select
Investment Benchmarks with respect to his or her Annual Company Match Account
and/or Annual Discretionary Allocation Account is subject to, and may be limited
by, the Board's discretion under Sections 3.02 and 3.03 to designate the
Investment Benchmarks that shall apply to all or a portion of such Annual
Company Match Account and/or Annual Discretionary Allocation Account. All
selections of Investment Benchmarks shall be in multiples of 10% unless the

                                       11
<PAGE>

Committee determines that lower increments are acceptable. A Participant may
make changes in his or her selected Investment Benchmarks with respect to any
Plan Account at such times as the Committee may designate by completing and
submitting to the Committee an Amended Election Form in accordance with such
procedures and time frames as may be established from time to time at the sole
discretion of the Committee; provided, however, that in no event shall the
Committee permit a Participant to reallocate any Subordinated Amounts to an
Investment Benchmark that tracks the performance of First Albany Companies Inc.
Common Stock nor shall the Committee permit a Participant to reallocate any
portion of his Plan Account from an Investment Benchmark that tracks the
performance of First Albany Companies Inc. Common Stock to another Investment
Benchmark offered under the Plan. The Committee, in its sole discretion, may
place additional limits on a Participant's ability to make changes with respect
to certain Investment Benchmarks.

      3.05 Adjustment of Plan Accounts. While a Participant's Plan Accounts do
not represent the Participant's ownership of, or any ownership interest in, any
particular assets, the Participant's Plan Accounts shall be adjusted in
accordance with the Investment Benchmark(s), subject to the conditions and
procedures set forth herein or established by the Committee from time to time.
Any cash earnings generated under an Investment Benchmark (such as interest and
cash dividends and distributions) shall, at the Committee's sole discretion,
either be deemed to be reinvested in that Investment Benchmark or reinvested in
one or more other Investment Benchmark(s) designated by the Committee. All
notional acquisitions and dispositions of Investment Benchmarks under a
Participant's Plan Accounts shall be deemed to occur at such times as the
Committee shall determine to be administratively feasible in its sole discretion
and the Participant's Plan Accounts shall be adjusted accordingly. In addition,
a Participant's Plan Accounts may be adjusted from time to time, in accordance
with procedures and practices established by the Committee, in its sole
discretion, to reflect any notional transactional costs and other fees and
expenses relating to the deemed investment, disposition or carrying of any
Investment Benchmark for the Participant's Plan Accounts. Adjustments made in
accordance herewith shall be referred to as Investment Adjustments.
Notwithstanding anything to the contrary, any Investment Adjustments made to any
Plan Account following a Change in Control shall be made in a manner no less
favorable to Participants than the practices and procedures employed under the
Plan, or as otherwise in effect, as of the date of the Change in Control.

      3.06 FICA and Other Taxes.

                  (a) Annual Deferral Amounts. For each Plan Year in which an
      Annual Participant Deferral is being withheld from a Participant, the
      Participant's Employer(s) shall withhold from that portion of the
      Participant's Base Annual Salary, Bonus Amounts, and/or Commission Payouts
      that is not being deferred, in a manner determined by the Employer(s), the
      Participant's share of FICA and other employment taxes; provided, however,
      that the Committee may reduce the Annual Participant Deferral if necessary
      to comply with applicable withholding requirements.

                  (b) Distributions. The Participant's Employer(s), or the
      trustee of the Trust, shall withhold from any payments made to a
      Participant under this Plan all federal, state and local income,
      employment and other taxes required to be withheld by the Employer(s), or
      the trustee of the Trust, in connection with such payments, in amounts

                                       12
<PAGE>

      and in a manner to be determined in the sole discretion of the Employer(s)
      and the trustee of the Trust.

      3.07 Vesting; Forfeitures.

                  (a) Forfeiture of Matching Contributions Upon Termination. In
      the event a Participant incurs a Termination of Employment, Disability or
      death prior to receiving a complete distribution of amounts credited to
      his or her Annual Company Match Account, all amounts remaining in such
      Annual Company Match Account as of the date of such Termination of
      Employment, Disability or death shall be forfeited by the Participant.

                  (b) Forfeiture of Unvested Participant Deferrals and
      Discretionary Allocations. As of the date of a Participant's Termination
      of Employment, Disability or death, the amounts credited to the
      Participant's Annual Deferral Account and Annual Discretionary Allocation
      Account shall be reduced by the amount that has not become vested in
      accordance with the vesting provisions set forth below and in the Annual
      Deferral Agreement and/or the document announcing an Annual Discretionary
      Allocation (if any) applicable to such Account, and such unvested amounts
      shall be forfeited by the Participant.

                  (c) Vesting of Amounts in Annual Deferral Account and Annual
      Discretionary Allocation Account. The Participant shall be vested in the
      amounts credited to his or her Annual Deferral Account in respect of each
      given Plan Year as set forth in the Annual Deferral Agreement pertaining
      to such Plan Year. The Participant shall be vested in the amounts credited
      to his or her Annual Discretionary Allocation Account in respect of each
      given Plan Year as set forth in the document announcing the Annual
      Discretionary Allocation for such Plan Year. The vesting terms set forth
      in each Annual Deferral Agreement and Annual Discretionary Allocation
      announcement shall be established by the Committee in its sole discretion
      and may vary for each Participant and each Plan Year. Such vesting terms
      may, in the Committee's discretion, provide for acceleration of vesting
      upon a Change in Control.

                  (d) Vesting After Covered Termination. Notwithstanding any of
      the foregoing, unless otherwise specifically provided under the terms of a
      particular Annual Deferral Agreement and/or the document announcing an
      Annual Discretionary Allocation (if any), in the event of a Participant's
      Covered Termination, as of the effective date of such Covered Termination,
      all amounts credited to each of the Participant's Plan Accounts, as
      adjusted for the applicable Investment Adjustments and all prior
      withdrawals and distributions, shall be 100% vested and non-forfeitable.

                  (e) Vesting Upon Plan Termination. In the event of a
      termination of the Plan as it relates to any Participant, all amounts
      credited to any and all Plan Accounts of such Participant as of the
      effective date of such termination shall be 100% vested and
      non-forfeitable.

                                       13
<PAGE>

                  (f) Acceleration of Vesting by Committee. Notwithstanding
      anything to the contrary contained in the Plan, any Annual Deferral
      Agreement and/or any document announcing an Annual Discretionary
      Allocation, the Committee shall have the authority, exercisable in its
      sole discretion, to accelerate the vesting of any amounts credited to the
      Annual Deferral Account or Annual Discretionary Allocation Account of any
      Participant and any such acceleration shall be evidenced by a written
      notice to the Participant setting forth in detail the Plan Account(s) and
      the amounts affected by the Committee's decision to accelerate vesting and
      the terms of the new vesting schedule applicable to such amounts.

                                    Article 4

                             Suspension of Deferrals

      4.01 Unforeseeable Financial Emergencies. If a Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the Committee to
suspend any deferrals required to be made by the Participant. The Committee
shall determine, in its sole discretion, whether to approve the Participant's
petition. If the petition for a suspension is approved, suspension shall take
effect upon the date of approval.

      4.02 Disability. From and after the date that a Participant is deemed have
suffered a Disability, any standing deferral election of the Participant shall
automatically be suspended and no further deferrals shall be made with respect
to the Participant.

      4.03 Resumption of Deferrals. If deferrals by a Participant have been
suspended during a Plan Year due to an Unforeseeable Financial Emergency or a
Disability, the Participant will not be eligible to make any further deferrals
in respect of that Plan Year. The Participant may be eligible to make deferrals
for subsequent Plan Years provided the Participant is selected to make deferrals
for such subsequent Plan Years and the Participant complies with the election
requirements under the Plan.

                                    Article 5

                          Distribution of Plan Accounts

      5.01 Distribution Elections.

                  (a) Initial Elections. The Participant shall make a
      Distribution Election at the time he or she makes an Annual Deferral
      Election with respect to a given Plan Year and/or at the time an Annual
      Discretionary Allocation (if any) is credited to the Participant's Annual
      Discretionary Allocation Account for a given Plan Year, to have the Vested
      Account Balance of the Participant's respective Plan Accounts for that
      Plan Year distributed in either

                                       14
<PAGE>

            (i)   A single lump sum on or about April 15 of either the third
                  (3rd), fourth (4th), or fifth (5th) Plan Year following the
                  Plan Year in respect of which the Annual Deferral Election was
                  made and/or the Annual Discretionary Allocation (if any) was
                  credited; or

            (ii)  Substantially equal annual installments commencing no earlier
                  than April 15 of the third (3rd) Plan Year following the Plan
                  Year in respect of which the Annual Deferral Election was made
                  and ending no later than April 15 of the fifth (5th) Plan Year
                  following the Plan Year in respect of which the Annual
                  Deferral Election was made and/or the Annual Discretionary
                  Allocation (if any) was credited.

                  (b) Prohibition on Subsequent Elections. Unless otherwise
      determined by the Committee, a Participant shall not be permitted to amend
      his or her Distribution Election with respect to any Plan Account.

      5.02 Withdrawal in the Event of an Unforeseeable Financial Emergency.
Subject to Section 5.03 in the event that a Participant or (after a
Participant's death) a Participant's Beneficiary experiences an Unforeseeable
Financial Emergency, the Participant or Beneficiary may petition the Committee
to receive a partial or full payout of amounts credited to one or more of the
Participant's Plan Accounts. The Committee shall determine, in its sole
discretion, whether the requested payout shall be made, the amount of the payout
and the Plan Accounts from which the payout will be made; provided, however,
that the payout shall not exceed the lesser of the Participant's Aggregate
Vested Benefit or the amount reasonably needed to satisfy the Unforeseeable
Financial Emergency plus amounts necessary to pay taxes reasonably anticipated
as a result of the distribution. In making any determinations under this Section
5.02, the Committee shall be guided by the prevailing authorities under the Code
and shall take into account the extent to which such Unforeseeable Financial
Emergency is or may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the participant's assets (to the
extent the liquidation of such assets would not itself cause severe financial
hardship). If, subject to the sole discretion of the Committee, the petition for
a payout is approved, the payout shall be made within ninety (90) days of the
date of approval.

      5.03 Distribution Restrictions.

                  (a) Restricted Investment Benchmarks. Notwithstanding anything
      to the contrary contained in this Plan or in any Enrollment Form or any
      other document, the Committee may impose limitations and restrictions on
      the payment of amounts allocated by a Participant to any Restricted
      Investment Benchmark(s) and may defer payment of those amounts for such
      time periods as the Committee determines, in its good faith judgement, to
      be consistent with the nature of the investment on which such Restricted
      Investment Benchmark is based. The Committee shall determine the amounts
      affected, the nature of the limitations and restrictions on benefit
      payments, and the length of deferral and time of payment of such amounts.

                  (b) Subordinated Amounts. Notwithstanding anything to the
      contrary contained in this Plan or in any Enrollment Form, or any other
      document, distributions of

                                       15
<PAGE>

      Subordinated Amounts under the Plan shall be subject to any constraints,
      restrictions and limitations imposed under the applicable Subordination
      Agreement(s) executed by the Participant in accordance with Section 2.02,
      including without limitation, the restriction on distribution of such
      Subordinated Amounts prior to the twelve (12)-month anniversary of the
      date of allocation. For this purpose, the date of allocation shall be
      deemed to be the last day of the Plan Year in which a Subordinated Amount
      is credited to a Participant's Plan Accounts. Such Subordination
      Agreement(s) shall be incorporated into and become a part of the Plan.

      5.04 Valuation of Plan Accounts Pending Distribution. To the extent that
the distribution of any portion of any Plan Account is deferred, whether
pursuant to the limitations imposed under this Article 5 or for any other
reason, any amounts remaining to the credit of the Plan Account shall continue
to be adjusted by the applicable Investment Adjustments in accordance with
Article 3.

      5.05 Form of Payment. Distributions under the Plan shall be paid in cash
in a single lump sum; except, however, that the Committee may provide, in its
discretion, that any distribution attributable to the portion of a Plan Account
that is deemed invested in an Investment Benchmark that tracks that value of
Company Stock shall be paid in shares of Company Stock.

                                    Article 6

                                Survivor Benefit

      6.01 Survivor Benefit. Subject to Article 5, a Participant's Beneficiary
shall receive a Survivor Benefit equal to the Participant's Aggregate Vested
Balance, if the Participant dies before he or she has received a complete
distribution of his or her Aggregate Vested Benefit.

      6.02 Payment of Survivor Benefit. The Survivor Benefit shall be payable to
the Beneficiary indicated on the Participant's Beneficiary Designation Form in a
lump sum payment, provided, however that if the Participant's Aggregate Vested
Balance at the time of his or her death is greater than $25,000, payment may be
made, in the sole discretion of the Committee, in a lump sum or in annual
installment payments that do not exceed five (5) years in duration. Subject to
Article 5, the lump sum payment shall be made, or installment payments shall
commence, no later than ninety (90) days after the date the Committee is
provided with proof that is satisfactory to the Committee of the Participant's
death.

                                    Article 7

                               Disability Benefit

                                       16
<PAGE>

       7.01 Disability Benefit. Notwithstanding any Distribution Election
under Article 5, a Participant suffering a Disability shall receive a Disability
Benefit equal to his or her Aggregate Vested Balance. Subject to Article 5, the
Disability Benefit shall be paid in a lump sum within ninety (90) days of the
Committee's determination of Disability.

                                    Article 8

                             Beneficiary Designation

      8.01 Beneficiary. Each Participant shall have the right, at any time,
to designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.

      8.02 Beneficiary Designation; Change; Spousal Consent. A Participant
shall designate his or her Beneficiary by completing and signing a Beneficiary
Designation Form, and returning it to the Committee or its designated agent. A
Participant shall have the right to change a Beneficiary by completing, signing
and submitting to the Committee an Amended Beneficiary Designation Form in
accordance with the Committee's rules and procedures, as in effect from time to
time. If the Participant names someone other than his or her spouse as a
Beneficiary, a spousal consent, in the form designated by the Committee, must be
signed by that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of an Amended Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Committee shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his or her death.

        8.03 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received, accepted and acknowledged in
writing by the Committee or its designated agent.

      8.04 No Beneficiary Designation. If a Participant fails to designate
a Beneficiary as provided above or, if all designated Beneficiaries predecease
the Participant or die prior to complete distribution of the Participant's
Aggregate Vested Benefit, then the Participant's designated Beneficiary shall be
deemed to be his or her surviving spouse. If the Participant has no surviving
spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall
be payable to the executor or personal representative of the Participant's
estate.

       8.05 Doubt as to Beneficiary. If the Committee has any doubt as to
the proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.

                                       17
<PAGE>

         8.06 Discharge of Obligations. The payment of benefits under the Plan
to a Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and each of the Participant's Annual Deferral Agreements shall
terminate upon such full payment of benefits.

                                    Article 9

                                Leave of Absence

         9.01 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the appropriate amounts shall continue to be
withheld from the Participant's compensation pursuant to the Participant's then
current Annual Election Form.

         9.02 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence from
the employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the Participant shall be excused from making
deferrals until the earlier of the date the leave of absence expires or the
Participant returns to a paid employment status. Upon such expiration or return,
deferrals shall resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any, made for
that Plan Year. If no election was made for that Plan Year, no deferral shall be
withheld.

                                   Article 10

                     Termination, Amendment or Modification

         10.01 Termination. Although the Employers anticipate that they will
continue the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, each Employer reserves the right to discontinue its
sponsorship of the Plan and to terminate the Plan, at any time, with respect to
its participating Employees by action of its board of directors. Upon the
termination of the Plan with respect to any Employer, subject to Section 5.03,
all amounts credited to each of the Plan Accounts of each affected Participant
shall be 100% vested and shall be paid to the Participant or, in the case of the
Participant's death, to the Participant's Beneficiary, in a lump sum
notwithstanding any elections made by the Participant, and the Annual Deferral
Agreements relating to each of the Participant's Plan Accounts shall terminate
upon full payment of such Aggregate Vested Balance.

         10.02 Amendment. The Company may, at any time, amend or modify the Plan
in whole or in part with respect to any or all Employers by the actions of the
Committee; provided, however, that (i) no amendment or modification shall be
effective to decrease or restrict the value of a Participant's Aggregate Vested
Balance in existence at the time the

                                       18
<PAGE>

amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification and (ii) except as specifically provided in Section
10.01, no amendment or modification shall be made after a Change in Control
which adversely affects the vesting, calculation or payment of benefits
hereunder or diminishes any other rights or protections any Participant or
Beneficiary would have had but for such amendment or modification, unless each
affected Participant or Beneficiary consents in writing to such amendment.

         10.03 Effect of Payment. The full payment of the applicable benefit
under the provisions of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan and each of
the Participant's Annual Deferral Agreements shall terminate.

                                       19
<PAGE>

                                   Article 11

                                 Administration

         11.01 Committee Duties. This Plan shall be administered by a Committee
which shall consist of the Board, or such committee as the Board shall appoint.
Members of the Committee who are eligible Employees may be Participants under
this Plan. The Committee shall also have the discretion and authority to (i)
make, amend, interpret, and enforce all appropriate rules and regulations for
the administration of this Plan and (ii) decide or resolve any and all questions
including interpretations of this Plan, as may arise in connection with the
Plan. Any individual serving on the Committee who is a Participant shall not
vote or act on any matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.

         11.02 Agents. In the administration of this Plan, the Committee may,
from time to time, employ agents and delegate to them such administrative duties
as it sees fit (including acting through a duly appointed representative) and
may from time to time consult with counsel who may be counsel to any Employer.

         11.03 Binding Effect of Decisions. The decision or action of the
Committee with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

         11.04 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, and any Employee to whom duties of the
Committee may be delegated, against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Plan, except in the case of willful misconduct by the Committee or any
of its members or any such Employee.

         11.05 Employer Information. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants, the
date and circumstances of the Retirement, Disability, death or Termination of
Employment of its Participants, and such other pertinent information as the
Committee may reasonably require.

                                       20
<PAGE>

                                   Article 12

                          Other Benefits and Agreements

         The benefits provided for a Participant and Participant's Beneficiary
under the Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Participant's
Employer. The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly provided.

                                   Article 13

                                Claims Procedures

         13.01 Presentation of Claim. Any Participant or Beneficiary of a
deceased Participant (such Participant or Beneficiary being referred to below as
a "Claimant") may deliver to the Committee a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan. If
such a claim relates to the contents of a notice received by the Claimant, the
claim must be made within 60 days after such notice was received by the
Claimant. The claim must state with particularity the determination desired by
the Claimant. All other claims must be made within 180 days of the date on which
the event that caused the claim to arise occurred. The claim must state with
particularity the determination desired by the Claimant.

         13.02 Notification of Decision. The Committee shall consider a
Claimant's claim within a reasonable time, and shall notify the Claimant in
writing:

         (a)      that the Claimant's requested determination has been made, and
                  that the claim has been allowed in full; or

         (b)      that the Committee has reached a conclusion contrary, in whole
                  or in part, to the Claimant's requested determination, and
                  such notice must set forth in a manner calculated to be
                  understood by the Claimant:

                  (i)      the specific reason(s) for the denial of the claim,
                           or any part of it;

                  (ii)     specific reference(s) to pertinent provisions of the
                           Plan upon which such denial was based;

                  (iii)    a description of any additional material or
                           information necessary for the Claimant to perfect the
                           claim, and an explanation of why such material or
                           information is necessary; and

                                       21
<PAGE>

                  (iv)     an explanation of the claim review procedure set
                           forth in Section 13.03 below.

         13.03 Review of a Denied Claim. Within 60 days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. Thereafter, but not
later than 30 days after the review procedure began, the Claimant (or the
Claimant's duly authorized representative):

         (a)      may review pertinent documents;

         (b)      may submit written comments or other documents; and/or

         (c)      may request a hearing, which the Committee, in its sole
                  discretion, may grant.

         13.04 Decision on Review. The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's decision
must be rendered within 120 days after such date. Such decision must be written
in a manner calculated to be understood by the Claimant, and it must contain:

         (a)      specific reasons for the decision;

         (b)      specific reference(s) to the pertinent Plan provisions upon
                  which the decision was based; and

         (c)      such other matters as the Committee deems relevant.

         13.05 Arbitration. A Claimant's compliance with the foregoing
provisions of this Article 13 is a mandatory prerequisite to a Claimant's right
to commence any arbitration with respect to any claim for benefits under this
Plan. Any and all claims that are not resolved to the satisfaction of a Claimant
under the above provisions of this Article 13 shall be subject to arbitration
conducted in Albany, New York before a panel of three (3) arbitrators pursuant
to rules of the National Association of Securities Dealers. Unless otherwise
provided herein each party shall bear its own costs and expenses in connection
with such arbitration and the parties shall contribute equally the arbitrator's
fees. The arbitrator's decision in any dispute shall be final and binding and
shall not be subject to appeal or judicial review.

                                       22
<PAGE>

                                   Article 14

                                      Trust

         14.01 Establishment of the Trust. The Company may establish one or more
Trusts to which the Employers may transfer such assets as the Employers
determine in their sole discretion to assist in meeting their obligations under
the Plan; provided, however, that in no event may Trust assets be used to
satisfy any obligations arising in connection with Subordinated Amounts.

         14.02 Interrelationship of the Plan and the Trust. The provisions of
the Plan and the relevant Annual Deferral Agreements shall govern the rights of
a Participant to receive distributions pursuant to the Plan. The provisions of
the Trust shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust.

         14.03 Distributions From the Trust. Each Employer's obligations under
the Plan may be satisfied with Trust assets distributed pursuant to the terms of
the Trust, and any such distribution shall reduce the Employer's obligations
under this Agreement.

                                   Article 15

                                  Miscellaneous

         15.01 Status of Plan. The Plan is intended to be (i) a "nonqualified
deferred compensation plan" within the meaning of Code Section 409A, (ii) an
unfunded plan that is not qualified within the meaning of Code Section 401(a)
and (iii) a plan that is not intended to be a "pension plan" or an "employee
benefit plan," as defined in Sections 3(2) and 3(3) of ERISA, but is instead
intended to be exempt from the coverage of ERISA. The Plan shall be administered
and interpreted to the extent possible in a manner consistent with that intent.
All Plan Accounts and all credits and other adjustments to such Plan Accounts
shall be bookkeeping entries only and shall be utilized solely as a device for
the measurement and determination of amounts to be paid under the Plan. No Plan
Accounts, credits or other adjustments under the Plan shall be interpreted as an
indication that any benefits under the Plan are in any way funded.

         15.02 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer's, assets, shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

                                       23
<PAGE>

         15.03 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Annual Deferral Agreement, as
entered into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Annual Deferral Agreement.

         15.04 Nonassignability. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable. No part of the amounts payable shall, prior
to actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise.

         15.05 Not a Contract of Employment. The terms and conditions of this
Plan and the Annual Deferral Agreements under this Plan shall not be deemed to
constitute a contract of employment between any Employer and the Participant.
Such employment is hereby acknowledged to be an "at will" employment
relationship that can be terminated at any time for any reason, or no reason,
with or without cause, and with or without notice, except as otherwise provided
in a written employment agreement. Nothing in this Plan or any Annual Deferral
Agreement shall be deemed to give a Participant the right to be retained in the
service of any Employer as an Employee or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.

         15.06 Furnishing Information. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary.

         15.07 Terms. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

         15.08 Captions. The captions of the articles, sections and paragraphs
of this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.

         15.09 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the internal laws of the State of New York without
regard to its conflicts of laws principles.

                                       24
<PAGE>

         15.10 Notice. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

                        First Albany Companies Inc.
                        30 South Pearl Street
                        Albany, New York  12207
                        Attn:  General Counsel

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or the receipt for
registration or certification.

Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.

         15.11 Successors. The provisions of this Plan shall bind and inure to
the benefit of the Participant's Employer and its successors and assigns and the
Participant and the Participant's designated Beneficiaries.

         15.12 Spouse's Interest. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.

         15.13 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.

         15.14 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person's property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant and the Participant's Beneficiary, as the case may be, and shall be
a complete discharge of any liability under the Plan for such payment amount.

         15.15 Distribution in the Event of Taxation. If, for any reason, all or
any portion of a Participant's benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee before a
Change in Control, or the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become taxable. Upon
the grant of such a petition, which grant shall not be unreasonably withheld, a
Participant's Employer shall, subject to Section 5.03, distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her benefit (which amount

                                       25
<PAGE>

shall not exceed a Participant's unpaid Aggregate Vested Balance under the
Plan). If the petition is granted, the tax liability distribution shall be made
within 90 days of the date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under this Plan.

         15.16 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms as
the Trust may choose. The Employers or the trustee of the Trust, as the case may
be, shall be the sole owner and beneficiary of any such insurance. The
Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Employers shall submit to medical examinations and
supply such information and execute such documents as may be required by the
insurance company or companies to whom the Employers have applied for insurance.

         15.17 Legal Fees To Enforce Rights After Change in Control. The Company
and each Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of the Participant's Employer (which might then
be composed of new members) or a shareholder of the Company or the Participant's
Employer, or of any successor corporation might then cause or attempt to cause
the Company or the Participant's Employer or such successor to refuse to comply
with its obligations under the Plan and might cause or attempt to cause the
Company or the Participant's Employer to institute, or may institute,
arbitration or litigation seeking to deny Participants the benefits intended
under the Plan. In these circumstances, the purpose of the Plan could be
frustrated. Accordingly, if, following a Change in Control, it should appear to
any Participant that the Company, the Participant's Employer or any successor
corporation has failed to comply with any of its obligations under the Plan or
any agreement thereunder or, if the Company, such Employer or any other person
takes any action to declare the Plan void or unenforceable or institutes any
arbitration, litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided, then the
Company and the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and the
Employer (who shall be jointly and severally liable) to represent such
Participant in connection with the initiation or defense of any arbitration,
litigation or other legal action, whether by or against the Company, the
Participant's Employer or any director, officer, shareholder or other person
affiliated with the Company, the Participant's Employer or any successor thereto
in any jurisdiction.

                                       26

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