Cto Employment Agreement

Page # of 16

Robert Fine

May 14, 2004


Exhibit 10.19

PERSONAL & CONFIDENTIAL

May 14, 2004

Mr. Robert Fine

355 East 72nd Street, Apt. 16E

New York, NY 10021

Telephone 212-472-0796

Re:

Employment Agreement

Dear Rob:

This letter (this " Agreement" ) confirms the terms and conditions of your employment with Descap Securities, Inc. (" Descap" ) or another of the wholly-owned subsidiaries of First Albany Companies Inc. (collectively, the " Company" ).

1.

This Agreement is being entered into as a condition of the agreement of First Albany Companies Inc. to enter into that certain Stock Purchase Agreement with the Shareholders of Descap Securities Inc. dated as of February 18, 2004 (the " Stock Purchase Agreement" ). The covenants contained herein are given by you in consideration for the payments and the other benefits conferred upon you by the Stock Purchase Agreement. You acknowledge and agree that these covenants are reasonable and necessary to protect the Company' s Confidential Information, customer goodwill and other business interests. You further agree and declare that the restraints contained in this Agreement are intended to be enforceable in view of the legitimate interests of the Company.

2.

Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Stock Purchase Agreement.

3.

The term of this Agreement shall commence on the Closing Date and shall continue for a period of thirty-six (36) months or until the end of the last Earnout Period, if later, unless terminated earlier in accordance with Paragraph 7 of this Agreement or extended by mutual agreement of the parties (the " Employment Period" ).

4.

Duties. You will serve in the position of President and Director of Descap and Executive Managing Director of the Company. You will also serve as a member of the Operating Committee of the Company.

5.

Compensation and Benefits.

(a)

We will pay you a base salary at the rate of $300,000 per year (the " Annual Base Salary" ) during the Employment Period, which shall be payable in accordance with the Company' s regular payroll practices. Your Annual Base Salary may be increased at the discretion of the Company.

(b)

During the Earnout Periods, you will be eligible to receive forty-five percent (45%) of the Descap Management Bonus Pool (the " Bonus Pool" ), which shall be payable for each Earnout Period in the following two parts:

(i)

The first part of the Bonus Pool shall consist of: $2.5 million less the aggregate Annual Base Salary of the Key Employees and shall be paid out quarterly.

(ii)

The second part of the Bonus Pool shall consist of an amount equal to any excess above $2.5 million of: (A) Descap' s " Pre-Tax Net Income" (as such term is defined in the Stock Purchase Agreement) for such Earnout Period (including giving effect to the $2.5 million in aggregate compensation payable to the Key Employees for such period), less (B) fifty percent (50%) of Descap' s total net revenues for such period, and shall be paid out at the same time other bonuses are paid to other employees of the Company.

(c)

You will also be entitled to participate in the employee benefit plans available to executives of the Company, such as group health, dental, life and disability, all in accordance with the terms of such plans. By your signature below, you acknowledge that the details of such plans have been made available to you and you accept their respective terms and conditions.

(d)

You will be reimbursed for your business expenses in accordance with Company policy.

(e)

All compensation shall be subject to standard payroll withholdings.

6.

Covenants.

(a)

You acknowledge that the Company has provided substantial consideration to you in the Stock Purchase Agreement. The Company would not have entered into the Stock Purchase Agreement without your assurances and promises contained herein, which include, generally, your agreement not to misappropriate the goodwill of the Company' s customers and not to put yourself in a position during or following your employment with the Company in which Confidential Information may be compromised, and the specific covenants set forth below. You agree that the time limitation, scope of business and geographic scope set forth in this Paragraph 6 are reasonable and are properly required for the adequate protection of the business interests of the Company. You also agree that to the extent provided in this Paragraph 6, your obligations shall survive the terminati on of your employment, regardless of the reason for such termination.

(b)

You agree that at all times during your employment with the Company and for a period of three (3) years following the termination of your employment, you will not disclose any Confidential Information, directly or indirectly, to any Person without the prior written permission of the Company, except as is required in the normal course of your employment or required by law. Upon termination of your employment by the Company for any reason, or at such earlier time as the Company may request, you shall forthwith return to the Company all Confidential Information and other property in your possession belonging to the Company or any of its Affiliates.

(c)

You covenant and agree that during the Restricted Period (as defined below) neither you nor any entity controlled by you or under common control with you, shall, directly or indirectly, as a director, officer, employee, manager, advisor, consultant, independent contractor, agent or otherwise, engage in any of the following activities:

(i)

You shall not own any direct or indirect interest in, accept employment with, serve as a director, officer, employee, manager, advisor, consultant, independent contractor, agent or in any similar capacity, or accept compensation, remuneration or benefits (in any form) from, any Competing Business (as defined below) (including any new business started by you alone or with others); provided , however , that the provisions of this Paragraph 6(c)(i) shall not be deemed to prohibit your ownership of not more than four percent (4%) of the total shares of all classes of stock outstanding of any publicly held company.

(ii)

Neither you nor any entity controlled by you or under common control with you shall: (A) cause or induce or attempt to cause or induce, or make any statements or perform any acts intended to cause or induce, reasonably likely to cause or induce or having the effect of causing or inducing any present or future customer, vendor, supplier or other business relation of the Company or any Affiliate (or any of their successors) to cease, reduce or alter the nature, amount or terms of the relationship or business conducted with the Company or any Affiliate (or any of their successors), (B) solicit, attempt to solicit or accept business relating to the business of the Company from any Person that is, or in the future becomes, a client of the Company or any Affiliate (or any of their successors), or (C) employ, solicit for employment, or advise or recommend to any other P erson that they employ or solicit for employment any employee of the Company or any Affiliate (or any of their successors) or encourage any employee of the Company or any Affiliate (or any of their successors) to alter or terminate his or her employment relationship with the Company or any Affiliate (or any of their successors). For purposes of the foregoing, " employee" shall include any person who was an employee or independent contractor of or for the Company or any Affiliate (or any of their successors) at any time within six (6) months prior to the prohibited conduct.

(d)

You acknowledge and agree that any violation of the restrictions set forth in this Paragraph 6 would cause substantial, material and irreparable injury to the Company. In the event of a breach or threatened breach by you of any provision of this Paragraph 6, the Company shall be entitled to apply to any court of competent jurisdiction for a temporary and/or permanent injunction restraining you from such breach or threatened breach, notwithstanding any obligation or voluntary agreement on the Company' s part to submit any dispute regarding the obligations set forth herein to binding arbitration sponsored by the National Association of Securities Dealers (" NASD" ). Nothing herein shall be construed to preclude the Company and/or its Affiliates from pursuing any other available remedy for such breach or threatened breach in addition to, or in lieu of, such injunctive relief.

(e)

If during the Restricted Period, you receive an offer of employment or engagement from any Person that is engaged in a Competing Business, or any Person that might reasonably be viewed to be engaged in a Competing Business, regardless of whether your employment or engagement with such Person will, in any manner, directly or indirectly, involve you in that Person' s Competing Business, you will provide a copy of this Agreement to the offeror as soon as is reasonably practicable after receiving the offer and will inform the Company that the offer has been made.

(f)

For purposes of this Paragraph 6, the following terms shall have the meanings indicated:

(i)

" Competing Business" shall mean any business that in any way: (A) conducts, operates, carries out, is engaged in or is involved with institutional sales and/or trading of taxable fixed income securities, or (B) conducts, operates, carries out, engages in or is involved in any other business which the Company or any Affiliate may conduct in the course of your employment with the Company, in each case anywhere in the United States.

(ii)

" Confidential Information" shall mean all nonpublic and/or proprietary information or trade secrets respecting the business of the Company or any Affiliate and/or their respective clients, including, without limitation, its products, programs, projects, promotions, financial information, strategies, new products, plans, studies, forecasts, marketing plans and strategies, business plans and practices, business operations and employees, regardless of whether such information has been reduced to documentary form. Confidential Information also includes information concerning the Company' s or any Affiliate' s clients, customers and suppliers, such as their identity, address and other information kept by the Company or any Affiliate. Confidential Information does not include information that is, or becomes, available to the public, unles s such availability occurs (A) through an unauthorized act on your part or the part of anyone acting on your behalf or (B) as a result of a disclosure known to you to be in breach of any obligation of confidentiality to the Company.

(iii)

" Restricted Period" shall mean a period of time beginning upon the commencement of your employment with the Company and ending twelve (12) months following the end of the final Earnout Period; provided, however, that if your employment is terminated in the first twenty-four (24) months of your employment, the Restricted Period shall not extend beyond the end of the final Earnout Period.

7.

Termination of Employment. It is the intention of both you and the Company that you will devote your full time and attention to the Company for the full Employment Period. However, we agree that your employment may be terminated for the following reasons and with the consequences indicated, provided that in each such instance your rights to Earnout Payments shall continue in accordance with the terms of the Stock Purchase Agreement.

(a)

Your employment will terminate immediately upon your death, disability (as determined in accordance with the Company' s long-term disability plan) or resignation other than for Good Reason (as defined below). In such event, you or your estate, as applicable, will be paid any remaining Annual Base Salary payments due through your last day of employment. In addition, in the event of your death or disability, you or your estate, as applicable, will be paid an amount equal to any bonus the Company determined to be payable under Paragraph 5(b), pro-rated to reflect the actual number of days in the bonus year ...