Document:

DEFERRED COMPENSATION PLAN FOR KEY EMPLOYEES

 

Exhibit 4(f)             

FIRST ALBANY COMPANIES INC.

DEFERRED COMPENSATION PLAN

FOR KEY EMPLOYEES

Effective January 1, 1998

Amended and Restated Effective December 1, 2000

Composite Plan as of January 1, 2003

Purpose

          The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees who contribute materially
to the continued growth, development and future business success of First
Albany Companies Inc. and its subsidiaries, if any, that sponsor this Plan.
This Plan shall be unfunded for tax purposes and for purposes of Title I of
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	 	“Amended Distribution Election Form” shall mean the Amended Distribution
Election Form required by the Committee to be signed and submitted by a
Participant to effect a permitted change in the Distribution Election
previously made by the Participant under any Distribution Election Form.

 

 

	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.
	 
	1.6	 	“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 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 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
qualifies for total permanent disability benefits under the Participant’s
Employer’s long-term disability plan, or, if a Participant does not
participate in such a plan, a period of disability during which the
Participant would have qualified for total permanent disability benefits
under such a plan had the Participant been a participant in such a plan,
as determined in the sole discretion of the Committee. If the
Participant’s Employer does not sponsor such a plan, or discontinues to
sponsor such a plan, Disability shall be determined by the Committee in
its sole discretion.
	 
	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.
	 
	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	 	“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 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.
	 
	1.40	 	“Plan” shall mean the First Albany Companies Inc. Deferred Compensation
Plan For Key Employees (formerly known as the First Albany Companies Inc.
Executive Officers Deferred Compensation Plan), which shall be evidenced
by this instrument and by each Enrollment Form, as they may be amended
from time to time.
	 
	1.41	 	“Plan Accounts” shall mean the Annual Deferral Accounts, Annual Company
Match Accounts and Annual Discretionary Allocation Accounts established
under the Plan.
	 
	1.42	 	“Plan Year” shall mean the period beginning on January 1 of each year and
ending December 31.
	 
	1.43	 	“Reporting Person” shall mean an Employee who is subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as
amended.
	 
	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	 	“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. For Plan Years prior to the 2002 Plan Year, Subordinated Amounts
shall be determined based on a Participant’s Investment Benchmark
elections that are in effect on December 31, 2001. For the 2002 Plan Year
and thereafter, 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.

 

 

	1.46	 	“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	 	“Survivor Benefit” shall mean the benefit set forth in Article 6.
	 
	1.48	 	“Termination of Employment” shall mean the severing of employment with
all Employers, voluntarily or involuntarily, for any reason.
	 
	1.49	 	“Trust” shall mean the trust established in accordance with Article 14.
	 
	1.50	 	“Unforeseeable Financial Emergency” shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (i) a sudden and unexpected illness or accident of the Participant or
a dependent of the Participant, (ii) a loss of the Participant’s property
due to casualty, or (iii) such other 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.
	 
	1.51	 	“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.
	 
	1.52	 	“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 Selection by Committee. Participation in the Plan shall be limited to a
select group of management or highly compensated Employees of the Employers, as
determined by the Committee in its sole discretion. From that group, the
Committee shall select, in its sole discretion, the Employees who shall be
eligible to make an Annual Participant Deferral and/or receive an Annual
Discretionary Allocation in respect of each 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), and shall
have on file with the Committee a completed Beneficiary Designation Form, all
prior to the date specified by the Committee. In addition, 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. In addition,
effective as of the 2002 Plan Year, 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. 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.

     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 the Committee
determines in good faith that a Participant no longer qualifies as a member of
a select group of management or highly compensated employees, as membership in
such group is determined in accordance with Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion,
to (i) terminate any Annual Participant Deferral, Annual Company Match and
Annual Discretionary Allocation not yet credited to the Participant’s Plan
Accounts and/or (ii) immediately distribute the Participant’s then Aggregate
Vested Balance as a Termination Benefit and terminate the Participant’s
participation in the Plan. Any Annual Company Match and/or Annual
Discretionary Allocation credited on behalf of the Participant that is not
vested prior to the date of the Committee’s determination shall be forfeited by
the Participant. If the Committee chooses to terminate the Participant’s
participation in the Plan, the Committee may, in its sole discretion, select
the Participant to participate in the Plan at such time in the future as the
Participant again becomes a member of the select group described above. 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, at the time and in the manner described in
Section 5.02, 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 and
(iii) all other amounts in any of the Participant’s Plan Accounts 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 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
5.04.

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 a Participant 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 to the Participant but not yet received
during the Plan Year, in the following minimum amounts:

	 	 	 	 	 
	 	 	Minimum
	Deferral	 	Amount
	Base Annual Salary
	 	$	3,000	 
	Guaranteed Bonus Amounts
	 	$	3,000	 
	Discretionary Bonus Amounts
	 	$	3,000	 
	Commission Payouts
	 	$	3,000	 

	 	 	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. (i) 2001 Plan Year and After. For each Plan
Year, beginning with the 2001 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 but not yet received during the Plan
Year, up to the following maximum percentages:

	 	 	 	 	 
	 	 	Maximum
	Deferral	 	Percentage
	Base Annual Salary
	 	 	50	%
	Guaranteed Bonus Amounts
	 	 	50	%
	Discretionary Bonus Amounts
	 	 	50	%
	Commission Payouts
	 	 	50	%

	 	 	                    (ii) Plan Years Prior to 2001 Plan Year. For each Plan Year prior
to the 2001 Plan Year, the Committee permitted 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 but not yet received during the Plan Year, up to the
following maximum percentages:

 

 

	 	 	 	 	 
	 	 	Maximum
	Deferral	 	Percentage
	Base Annual Salary
	 	 	50	%
	Guaranteed Bonus Amounts
	 	 	50	%
	Discretionary Bonus Amounts
	 	 	100	%
	Commission Payouts
	 	 	100	%

	(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 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 commission
Payouts up to fixed dollar amount. Such amount shall be withheld
from the Commission Payout portion of each regularly scheduled
Commission Payout payment in equal amounts.

     (e) Reporting Persons. Notwithstanding anything in this Section 3.01 to the
contrary, commencing with the 2003 Plan Year, a participant who is a Reporting
Person shall no longer be permitted to elect to defer receipt of amounts
payable to such Reporting Person in the form of Base Annual Salary or
Commission Payouts, but shall continue to be permitted to defer receipt of
amounts payable in the form of Bonus Amounts, in accordance with Paragraph
(d)(ii) above.

     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.

   (a) Special Rule For Reporting Persons. Notwithstanding anything in
this Section 3.02 to the contrary, any portion of the 2002 Annual Company
Match that is attributable to amounts that are credited on or after
October 15, 2002 to the 2002 Annual Deferral Account of a Participant who
is a Reporting Person shall be credited to such Reporting Person’s 2002
Annual Company Match Account as of the last day of the 2002 Plan Year, or
as of such other date determined by the Committee in its discretion,
provided that such Reporting Person has not experienced a Termination of
Employment as of such date. If such Reporting Person has experienced a
Termination of Employment on or prior to such date, such Reporting Person
shall not be entitled to receive a credit for such portion of his or her
2002 Annual Company Match.

   For Plan Years beginning on or after January 1, 2003, the Annual
Company Match, if any, shall be credited to the Annual Company Match
Account of a Participant who is a Reporting Person at the same time that
the amounts giving rise to such Annual Company Match are credited to such
Reporting Person’s Annual Deferral Account.

     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 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.

     Notwithstanding the foregoing, in no event shall a Participant who is a
Reporting Person be permitted to elect on or after October 15, 2002 to have an
Investment Benchmark that tracks the performance of First Albany Companies Inc.
Common Stock apply to any portion of his or her 2002 Annual Deferral Account.

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

3.07 Vesting. (a) Forfeiture of Unvested Amounts. As of the date of a
Participant’s Termination of Employment, Disability or death, the amounts
credited to each of the Participant’s Plan Accounts shall be reduced by the
amount which 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 Plan
Account, and such unvested amounts shall be forfeited by the Participant.

     (b) Vesting of Amounts. The Participant shall be vested in the amounts
credited to his or her Annual Deferral Account and Annual Company Match 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.

     (c) Vesting After Covered Termination. 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, such Participant, as of the effective date
of such Covered Termination, shall be 100% vested in all amounts credited to
each of the Participant’s Plan Accounts, as adjusted for the applicable
Investment Adjustments and all prior withdrawals and distributions.

     (d) 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.

     (e) 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 any Plan 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) 2001 Plan Year and After. For Plan Years
beginning with the 2001 Plan Year with respect to all of a Participant’s Annual
Plan Accounts and the 2000 Plan Year with respect to a Participant’s Annual
Discretionary Allocation Account (if any) only, 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

	(i)	 	A single lump sum as of the first April 15 after
the end of either the third (3rd), fourth (4th), fifth (5th),
sixth (6th) seventh (7th) eighth (8th), ninth (9th) or tenth
(10th) 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 the first April 15 after the end 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 the first April 15 after the end of the tenth
(10th) 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) Plan Years Prior to 2001 Plan Year. For Plan Years prior to the 2001 Plan
Year, a Participant was permitted to make a Distribution Election at the time
he or she made an Annual Deferral Election with respect to such Plan Year, to
have the Vested Account Balance of the Participant’s Annual Deferral Account
and Annual Company Match Account (if any) for that Plan Year distributed in
either

	(i)	 	A single lump sum as of the first April 15 after
the end of either the fifth (5th), sixth (6th) seventh (7th)
eighth (8th), ninth (9th) or tenth (10th) Plan Year following
the Plan Year in respect of which the Annual Deferral Election
was made; or
	 
	(ii)	 	Substantially equal annual installments
commencing no earlier than the first April 15 after the end of
the fifth (5th) Plan Year following the Plan Year in respect
of which the Annual Deferral Election was made and ending no
later than the first April 15 after the end of the tenth
(10th) Plan Year following the Plan Year in respect of which
the Annual Deferral Election was made.

     (c) Subsequent Elections. Subject to any restrictions that may be imposed by
the Committee, a Participant may amend his or her Distribution Election with
respect to any Plan Account by completing and submitting to the Committee
within such time frame as the Committee may designate, an Amended Distribution
Election Form; provided, however, that such Amended Election Form is submitted
no later than April 15 of the Plan Year prior to the Plan Year in which
distribution of the Vested Account Balance of such Plan Account was scheduled
to be made in accordance with the Participant’s original Distribution Election,
and such Amended Election Form is approved and accepted by the Committee in its
sole discretion. A Participant may amend his or her Distribution Election to
change the distribution method from a lump sum to installments, or from
installments to a lump sum, and/or choose a later distribution date (but in no
event later than April 15 of the tenth (10th) Plan Year following the end of
the Plan Year in respect of which the Annual Deferral Election was made).
Notwithstanding a Participant’s Distribution Election with respect to the
Vested Account Balance of any Plan Account, some or all of such Vested Account
Balance may be subject to earlier distribution pursuant to Section 5.02 or
deferred distribution pursuant to Section 5.04.

5.02 Early Distribution of Vested Account Balance. Notwithstanding any
Distribution Election, and subject to the provisions of Section 5.04,
distribution of a Participant’s Vested Account Balance in the case of a
Participant who incurs a Termination of Employment prior to the end of the
third (3rd) Plan Year following the end of the Plan Year in respect of which
the Annual Deferral Election was made (or the end of the fifth (5th) Plan Year
for Annual Deferral Elections made with respect to the 2000 Plan Year or
earlier) or, with respect to Annual Discretionary Allocations (if any), prior
to the end of the third (3rd) Plan Year following the end of the Plan Year in
which the Annual Discretionary Allocation was credited to the Participant’s

 

 

Annual Discretionary Allocation Account, shall be made no later than ninety
(90) days following such Participant’s Termination of Employment.

     For Plan Years beginning with the 2002 Plan Year, this Section 5.02 shall
no longer apply. Instead, subject to Section 5.04, distribution of the vested
portion of a Participant’s Annual Plan Accounts for the 2002 Plan Year and
thereafter shall be made in accordance with the Participant’s Distribution
Election made in accordance with Section 5.01, regardless of when any
Termination of Employment occurs.

 

 

5.03 Withdrawal in the Event of an Unforeseeable Financial Emergency. Subject
to Section 5.04, 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. In making any determinations under this
Section 5.03, the Committee shall be guided by the prevailing authorities under
the Code. 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.

5.04 Distribution Restrictions.

     (a) Restricted Investment Benchmarks. Notwithstanding anything to the
contrary contained in this Plan or in any Enrollment Form, Amended Distribution
Election 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 judgment, 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, Amended Distribution Election Form or
any other document, distributions of 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.

     5.05 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.

     5.06 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

     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.

     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 5.04,
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 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.

 

 

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 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.

 

 

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

 

 

	(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.

 

 

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 a plan that is not qualified
within the meaning of Code Section 401(a) and that “is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employee”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). 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.

     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. Subject to ERISA, 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.

     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 5.4, distribute
to the Participant immediately available funds in an amount equal to the
taxable portion of his or her benefit (which amount 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.<PAGE>

                                                                    Exhibit 4.01

                  This Note is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository named below or a nominee of the Depository. This Note is not
exchangeable for Notes registered in the name of a Person other than the
Depository or its nominee except in the limited circumstances described herein
and in the Indenture, and no transfer of this Note (other than a transfer of
this Note as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in the limited circumstances described
herein.

                  Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (the
"Depository"), to the Company or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of the Depository (and any payment is made to Cede & Co. or to such other entity
as is requested by an authorized representative of the Depository), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

                                 CITIGROUP INC.
                          5.125% NOTES DUE MAY 5, 2014

REGISTERED                                                            REGISTERED

                                                              CUSIP: 172967 CK 5
                                                            ISIN: US172967 CK 51
                                                         Common Code: 019203905

No. R-                                                                   $

                  CITIGROUP INC., a Delaware corporation (the "Company", which
term includes any successor Person under the Indenture), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of $____________ on May 5, 2014 and to pay interest thereon from and including
May 5, 2004 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually, on May 5 and November 5 of each
year, commencing November 5, 2004, at the rate of 5.125% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the Record Date for such interest, which
shall be the April 15 and October 15 (whether or not a Business Day) immediately
preceding such Interest Payment Date.

<PAGE>

                  Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the holder on such Record Date and may
either be paid to the Person in whose name this Note is registered at the close
of business on a subsequent Record Date, such subsequent Record Date to be not
less than five days prior to the date of payment of such defaulted interest,
notice whereof shall be given to holders of Notes of this series not less than
15 days prior to such subsequent Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes of this series may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.

                  Interest hereon will be calculated on the basis of a 360-day
year comprised of twelve 30-day months.

                  If either an Interest Payment Date or the Maturity of the
Notes falls on a day that is not a Business Day, such Interest Payment Date or
Maturity will be the next succeeding Business Day. If a date for payment of
interest or principal on the Notes falls on a day that is not a business day in
the place of payment, such payment will be made on the next succeeding business
day in such place of payment as if made on the date the payment was due. No
interest will accrue on any amounts payable for the period from and after the
due date for payment of such principal or interest.

                  For these purposes, "Business Day" means any day which is a
day on which commercial banks settle payments and are open for general business
in The City of New York.

                  Payment of the principal of and interest on this Note will be
made at the office or agency of the Trustee maintained for that purpose in The
City of New York.

                  Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by the Trustee or by an authenticating agent on behalf of the Trustee
by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

                                        2
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.

Dated:  May 5, 2004

                                            CITIGROUP INC.

                                            By: ________________________________
                                            Title: Assistant Treasurer

ATTEST:

By:___________________________
Title: Assistant Secretary

                                        3
<PAGE>

                  This is one of the Notes of the series issued under the
within-mentioned Indenture.

Dated:  May 5, 2004

                                            THE BANK OF NEW YORK,
                                            as Trustee

                                            By: ________________________________
                                                Name:
                                                Title:

                                            -or-

                                            CITIBANK, N.A.,
                                            as Authenticating Agent

                                            By: ________________________________
                                                Name:
                                                Title:

                                        4
<PAGE>

         This Note is one of a duly authorized issue of Securities of the
Company (the "Notes"), issued and to be issued in one or more series under the
Indenture, dated as of March 15, 1987 (as amended and supplemented to date, the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. This Note is one of the series designated on the face hereof,
initially limited in aggregate principal to $1,250,000,000.

         If an event of default (as defined in the Indenture) with respect to
Notes of this series shall occur and be continuing, the principal of the Notes
of this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

         The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth in Sections 11.03 and 11.04 thereof, which provisions apply
to this Note.

         The Indenture contains provisions permitting the Company and the
Trustee, without the consent of the holders of the Securities, to establish,
among other things, the form and terms of any series of Securities issuable
thereunder by one or more supplemental indentures, and, with the consent of the
holders of not less than 66 2/3% in aggregate principal amount of Securities at
the time outstanding which are affected thereby, to modify the Indenture or any
supplemental indenture or the rights of the holders of Securities of such series
to be affected, provided that no such modification will (i) extend the fixed
maturity of any Securities, reduce the rate or extend the time of payment of
interest thereon, reduce the principal amount thereof or the premium, if any,
thereon, reduce the amount of the principal of Original Issue Discount
Securities payable on any date, change the currency in which Securities are
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof, without the consent of the holder of
each Security so affected, or (ii) reduce the aforesaid percentage of Securities
of any series the consent of the holders of which is required for any such
modification without the consent of the holders of all Securities of such series
then outstanding, or (iii) modify, without the written consent of the Trustee,
the rights, duties or immunities of the Trustee.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.

         This Note is a Global Security registered in the name of a nominee of
the Depository. This Note is exchangeable for Notes registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances hereinafter described. Unless and until it is exchanged in whole
or in part for definitive Notes in certificated form, this Note may not be

                                        5
<PAGE>

transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository.

         The Notes represented by this Global Security are exchangeable for
definitive Notes in certificated form of like tenor as such Notes in
denominations of $1,000 and integral multiples thereof only if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Notes or (ii) the Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, or (iii) the
Company in its sole discretion decides to allow the Notes to be exchanged for
definitive Notes in registered form. Any Notes that are exchangeable pursuant to
the preceding sentence are exchangeable for certificated Notes issuable in
authorized denominations and registered in such names as the Depository shall
direct. As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of definitive Notes in certificated form is registrable
in the register maintained by the Company in The City of New York for such
purpose, upon surrender of the definitive Note for registration of transfer at
the office or agency of the registrar, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
registrar duly executed by, the holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Notes of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. Subject to the
foregoing, this Note is not exchangeable, except for a Global Security or Global
Securities of this issue of the same principal amount to be registered in the
name of the Depository or its nominee.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Company will pay additional amounts ("Additional Amounts") to the
beneficial owner of any Note that is a non-United States person in order to
ensure that every net payment on such Note will not be less, due to payment of
U.S. withholding tax, than the amount then due and payable. For this purpose, a
"net payment" on a Note means a payment by the Company or a paying agent,
including payment of principal and interest, after deduction for any present or
future tax, assessment or other governmental charge of the United States. These
Additional Amounts will constitute additional interest on the Note.

         The Company will not be required to pay Additional Amounts, however, in
any of the circumstances described in items (1) through (13) below.

         (1)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner:

                                        6
<PAGE>

                  (a)      having a relationship with the United States as a
                           citizen, resident or otherwise;

                  (b)      having had such a relationship in the past or

                  (c)      being considered as having had such a relationship.

         (2)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner:

                  (a)      being treated as present in or engaged in a trade or
                           business in the United States;

                  (b)      being treated as having been present in or engaged in
                           a trade or business in the United States in the past
                           or

                  (c)      having or having had a permanent establishment in the
                           United States.

         (3)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner being or having been any of the
                  following (as such terms are defined in the Internal Revenue
                  Code of 1986, as amended):

                  (a)      personal holding company;

                  (b)      foreign personal holding company;

                  (c)      foreign private foundation or other foreign
                           tax-exempt organization;

                  (d)      passive foreign investment company;

                  (e)      controlled foreign corporation or

                  (f)      corporation which has accumulated earnings to avoid
                           United States federal income tax.

         (4)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner owning or having owned,
                  actually or constructively, 10 percent or more of the total
                  combined voting power of all classes of stock of the Company
                  entitled to vote or by reason of the beneficial owner being a
                  bank that has invested in a Note as an extension of credit in
                  the ordinary course of its trade or business.

For purposes of items (1) through (4) above, "beneficial owner" means a
fiduciary, settlor, beneficiary, member or shareholder of the holder if the
holder is an estate, trust, partnership, limited liability company, corporation
or other entity, or a person holding a power over an estate or trust
administered by a fiduciary holder.

         (5)      Additional Amounts will not be payable to any beneficial owner
                  of a Note that is a:

                                        7
<PAGE>

                  (a)      fiduciary;

                  (b)      partnership;

                  (c)      limited liability company or

                  (d)      other fiscally transparent entity

                  or that is not the sole beneficial owner of the Note, or any
                  portion of the Note. However, this exception to the obligation
                  to pay Additional Amounts will only apply to the extent that a
                  beneficiary or settlor in relation to the fiduciary, or a
                  beneficial owner or member of the partnership, limited
                  liability company or other fiscally transparent entity, would
                  not have been entitled to the payment of an Additional Amount
                  had the beneficiary, settlor, beneficial owner or member
                  received directly its beneficial or distributive share of the
                  payment.

         (6)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the failure of the beneficial owner or any other
                  person to comply with applicable certification,
                  identification, documentation or other information reporting
                  requirements. This exception to the obligation to pay
                  Additional Amounts will only apply if compliance with such
                  reporting requirements is required by statute or regulation of
                  the United States or by an applicable income tax treaty to
                  which the United States is a party as a precondition to
                  exemption from such tax, assessment or other governmental
                  charge.

         (7)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is collected or imposed by any method
                  other than by withholding from a payment on a Note by the
                  Company or a paying agent.

         (8)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld by reason of a
                  change in law, regulation, or administrative or judicial
                  interpretation that becomes effective more than 15 days after
                  the payment becomes due or is duly provided for, whichever
                  occurs later.

         (9)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld by reason of
                  the presentation by the beneficial owner of a Note for payment
                  more than 30 days after the date on which such payment becomes
                  due or is duly provided for, whichever occurs later.

         (10)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any:

                  (a)      estate tax;

                  (b)      inheritance tax;

                                        8
<PAGE>

                  (c)      gift tax;

                  (d)      sales tax;

                  (e)      excise tax;

                  (f)      transfer tax;

                  (g)      wealth tax;

                  (h)      personal property tax or

                  (i)      any similar tax, assessment, withholding, deduction
                           or other governmental charge.

         (11)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment, or other
                  governmental charge required to be withheld by any paying
                  agent from a payment of principal or interest on a Note if
                  such payment can be made without such withholding by any other
                  paying agent.

         (12)     Additional amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is required to be made pursuant to
                  any European Union directive on the taxation of savings income
                  or any law implementing or complying with, or introduced to
                  conform to, any such directive.

         (13)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any combination of items (1) through
                  (12) above.

         Except as specifically provided herein, the Company will not be
required to make any payment of any tax, assessment or other governmental charge
imposed by any government or a political subdivision or taxing authority of such
government.

         As used in this Note, "United States person" means:

         (a)      any individual who is a citizen or resident of the United
                  States;

         (b)      any corporation, partnership or other entity created or
                  organized in or under the laws of the United States;

         (c)      any estate if the income of such estate falls within the
                  federal income tax jurisdiction of the United States
                  regardless of the source of such income and

         (d)      any trust if a United States court is able to exercise primary
                  supervision over its administration and one or more United
                  States persons have the authority to control all of the
                  substantial decisions of the trust.

         Additionally, "non-United States person" means a person who is not a
United States person, and "United States" means the United States of America,
including the States and the District of Columbia, but excluding its territories
and its possessions.

         Except as provided below, the Notes may not be redeemed prior to
maturity.

         (1)      The Company may, at its option, redeem the Notes if:

                                        9
<PAGE>

                  (a)      the Company becomes or will become obligated to pay
                           Additional Amounts as described above;

                  (b)      the obligation to pay Additional Amounts arises as a
                           result of any change in the laws, regulations or
                           rulings of the United States, or an official position
                           regarding the application or interpretation of such
                           laws, regulations or rulings, which change is
                           announced or becomes effective on or after April 28,
                           2004 and

                  (c)      the Company determines, in its business judgment,
                           that the obligation to pay such Additional Amounts
                           cannot be avoided by the use of reasonable measures
                           available to it, other than substituting the obligor
                           under the Notes or taking any action that would
                           entail a material cost to the Company.

         (2)      The Company may also redeem the Notes, at its option, if:

                  (a)      any act is taken by a taxing authority of the United
                           States on or after April 28, 2004, whether or not
                           such act is taken in relation to the Company or any
                           affiliate, that results in a substantial probability
                           that the Company will or may be required to pay
                           Additional Amounts as described above;

                  (b)      the Company determines, in its business judgment,
                           that the obligation to pay such Additional Amounts
                           cannot be avoided by the use of reasonable measures
                           available to it, other than substituting the obligor
                           under the Notes or taking any action that would
                           entail a material cost to the Company and

                  (c)      the Company receives an opinion of independent
                           counsel to the effect that an act taken by a taxing
                           authority of the United States results in a
                           substantial probability that the Company will or may
                           be required to pay the Additional Amounts described
                           under above, and delivers to the Trustee a
                           certificate, signed by a duly authorized officer,
                           stating that based on such opinion the Company is
                           entitled to redeem the Notes pursuant to their terms.

Any redemption of the Notes as set forth in clauses (1) or (2) above shall be in
whole, and not in part, and will be made at a redemption price equal to 100% of
the principal amount of the Notes Outstanding plus accrued interest thereon to
the date of redemption. Holders shall be given not less than 30 days nor more
than 60 days prior notice by the Trustee of the date fixed for such redemption.

         All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Notes are governed by
the laws of the State of New York.

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