UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES
EXCHANGE ACT OF 1934
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Preliminary
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for Use of the Commission Only (as permitted by
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Definitive
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Definitive
Additional Materials
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Soliciting
Material Pursuant to Section 240.14a-12
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PIPER JAFFRAY COMPANIES
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other
Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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800 Nicollet Mall, Suite 800
Mail Stop J09N05
Minneapolis, Minnesota 55402
612
303-6000
March 16, 2009
Dear Shareholders:
You are cordially invited to join us for our 2009 annual meeting
of shareholders, which will be held on Thursday, May 7,
2009, at 3:30 p.m., Central Time, in the Huber Room on the
12th floor of our Minneapolis headquarters in the
U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis,
Minnesota. The Notice of Annual Meeting of Shareholders and the
proxy statement that follow describe the business to be
conducted at the meeting.
Of the items of business described in the Notice of Annual
Meeting of Shareholders, the proposal to approve an increase in
the available shares under our Amended and Restated 2003 Annual
and Long-Term Incentive Plan is of critical importance to Piper
Jaffray. The increase in shares will allow us to strengthen our
employee ownership culture and further align employees
interests with the interests of shareholders. The Board of
Directors recommends that you vote for approval of this increase
in available shares under the plan.
Also, we are pleased to inform you this year that we are
furnishing our proxy materials to you over the Internet, which
will reduce our costs and the environmental impact of our annual
meeting. Accordingly, we mailed a Notice of Internet
Availability of Proxy Materials to you, which contains
instructions on how to access our proxy statement and annual
report and vote online. The Notice of Availability also contains
instructions on how to request a printed set of proxy materials.
Whether or not you plan to attend the meeting, your vote is
important and we encourage you to vote your shares promptly. You
may vote your shares using a toll-free telephone number or the
Internet. If you received a paper copy of the proxy card by
mail, you may sign, date and mail the proxy card in the envelope
provided. Instructions regarding the three methods of voting are
contained on the Notice of Availability and the proxy card.
We look forward to seeing you at the annual meeting.
Sincerely,
Andrew S. Duff
Chairman and Chief Executive Officer
800 Nicollet Mall, Suite 800
Mail Stop J09N05
Minneapolis, Minnesota 55402
612
303-6000
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NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
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Date and
Time:
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Thursday, May 7, 2009, at 3:30 p.m., Central Time
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Place:
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The Huber Room in our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
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Items of
Business:
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1. The election of five directors, each
for a one-year term.
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2. Approval of an amendment to our
Amended and Restated 2003 Annual and Long-Term Incentive Plan.
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3. Any other business that may properly
be considered at the meeting or any adjournment or postponement
of the meeting.
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Record
Date:
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You may vote at the meeting if you were a shareholder of record
at the close of business on March 10, 2009.
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Voting by
Proxy:
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Whether or not you plan to attend the annual meeting, please
vote your shares by proxy to ensure they are represented at the
meeting. You may submit your proxy vote by telephone or
Internet, as described in the Notice of Internet Availability of
Proxy Materials and the following proxy statement, by no later
than 11:59 p.m. Eastern Daylight Time on Wednesday,
May 6, 2009. If you received a paper copy of the proxy card
by mail, you may sign, date and mail the proxy card in the
envelope provided. The envelope is addressed to our vote
tabulator, Broadridge Financial Solutions, Inc., and no postage
is required if mailed in the United States.
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Important
Notice Regarding the Availability of Proxy Materials for
the Annual Meeting to be held on May 7, 2009
Our proxy
statement and 2008 annual report are available at
www.piperjaffray.com/proxymaterials
By Order of the Board of Directors
James L. Chosy
Secretary
March 16, 2009
PROXY
STATEMENT
TABLE OF CONTENTS
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Appendix A
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ii
PROXY
STATEMENT
2009
ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD MAY 7, 2009
The Board of Directors of Piper Jaffray Companies is soliciting
proxies for use at the annual meeting of shareholders to be held
on May 7, 2009, and at any adjournment or postponement of
the meeting. Notice of Internet Availability of Proxy Materials,
which contains instructions on how to access this proxy
statement and our annual report online, is first being mailed to
shareholders on or about March 16, 2009.
QUESTIONS AND
ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is the
purpose of the meeting?
At our annual meeting, shareholders will act upon the matters
outlined in the Notice of Annual Meeting of Shareholders, and
management will report on matters of current interest to our
shareholders and respond to questions from our shareholders. The
matters outlined in the notice include the election of directors
and the approval of an amendment to our Amended and Restated
2003 Annual and Long-Term Incentive Plan (the Incentive
Plan), which is being amended principally to increase the
number of shares of our common stock available for issuance
under the Incentive Plan by 1,500,000 shares.
With respect to the Incentive Plan proposal, the Board of
Directors believes that this proposal is critical to Piper
Jaffrays future success. The increase in shares will allow
us to strengthen our employee ownership culture and further
align employees interests with the interests of
shareholders. The Board of Directors recommends that you vote
for approval of this increase in available shares under the plan.
Who is
entitled to vote at the meeting?
The Board has set March 10, 2009, as the record date for
the annual meeting. If you were a shareholder of record at the
close of business on March 10, 2009, you are entitled to
vote at the meeting. As of the record date,
19,669,601 shares of common stock, representing all of our
voting stock, were issued and outstanding and, therefore,
eligible to vote at the meeting.
What are my
voting rights?
Holders of our common stock are entitled to one vote per share.
Therefore, a total of 19,669,601 votes are entitled to be cast
at the meeting. There is no cumulative voting.
How many
shares must be present to hold the meeting?
In accordance with our bylaws, shares equal to a majority of the
voting power of the outstanding shares of common stock entitled
to vote generally in the election of directors as of the record
date must be present at the annual meeting in order to hold the
meeting and conduct business. This is called a quorum. Shares
are counted as present at the meeting if:
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you are present and vote in person at the meeting; or
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you have properly and timely submitted your proxy as described
below under How do I submit my proxy?
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What is a
proxy?
It is your designation of another person to vote stock you own.
That other person is called a proxy. If you designate someone as
your proxy in a written document, that document also is called a
proxy or a proxy card. When you designate a proxy, you also may
direct the proxy how to vote your shares. We
refer to this as your proxy vote. Two executive
officers have been designated as proxies for our 2009 annual
meeting of shareholders. These executive officers are James L.
Chosy and Debbra L. Schoneman.
What is a
proxy statement?
It is a document that we are required to make available to you
by Internet or, if you request, by mail in accordance with
regulations of the Securities and Exchange Commission, when we
ask you to designate proxies to vote your shares of Piper
Jaffray Companies common stock at a meeting of our shareholders.
The proxy statement includes information regarding the matters
to be acted upon at the meeting and certain other information
required by regulations of the Securities and Exchange
Commission and rules of the New York Stock Exchange.
Why did I
receive a one-page Notice of Internet Availability of Proxy
Materials in the mail this year instead of a full set of proxy
materials?
As permitted by Securities and Exchange Commission rules, we
have elected to provide access to our proxy materials over the
Internet, which will reduce our costs and the environmental
impact of our annual meeting. Accordingly, we mailed a Notice of
Internet Availability of Proxy Materials to our shareholders of
record and beneficial owners. The Notice of Availability
contains instructions on how to access our proxy statement and
annual report and vote online, as well as instructions on how to
request a printed set of proxy materials.
How can I get
electronic access to the proxy materials if I dont already
receive them via
e-mail?
You will need your control number to get electronic access to
the proxy materials, which was provided to you in the Notice of
Internet Availability of Proxy Materials. Once you have your
control number, you may either go to
www.proxyvote.com
and enter your control number when prompted, or send an
e-mail
requesting electronic delivery of the materials to
sendmaterial@proxyvote.com
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What is the
difference between a shareholder of record and a street
name holder?
If your shares are registered directly in your name, you are
considered the shareholder of record with respect to those
shares. If your shares are held in a stock brokerage account or
by a bank, trust or other nominee, then the broker, bank, trust
or other nominee is considered to be the shareholder of record
with respect to those shares, while you are considered the
beneficial owner of those shares. In that case, your shares are
said to be held in street name. Street name holders
generally cannot vote their shares directly and must instead
instruct the broker, bank, trust or other nominee how to vote
their shares using the method described below under How do
I submit my proxy?
How do I
submit my proxy?
If you are a shareholder of record, you can submit a proxy to be
voted at the meeting in any of the following ways:
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over the telephone by calling a toll-free number;
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through the Internet using
www.proxyvote.com;
or
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if you receive a paper copy of the proxy card after requesting
the proxy materials by mail, you may sign, date and mail the
proxy card.
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To vote by telephone or Internet, you will need to use a control
number that was provided to you by our vote tabulator Broadridge
Financial Solutions, and then follow the additional procedures
when prompted. The procedures have been designed to authenticate
your identity, allow you to give voting instructions, and
confirm that those instructions have been recorded properly. If
you hold your shares in street name, you must vote your shares
in the manner prescribed by your broker, bank, trust or other
nominee, which is similar to the voting procedures for
shareholders of record. However, if you request
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the proxy materials by mail after receiving a Notice of Internet
Availability of Proxy Materials from your broker, bank, trust or
other nominee, you will receive a voting instruction form (not a
proxy card) to use in directing the broker, bank, trust or other
nominee how to vote your shares.
How do I vote
if I hold shares in the Piper Jaffray Companies Retirement Plan
or U.S. Bancorp 401(k) Savings Plan?
If you hold shares of Piper Jaffray common stock in the Piper
Jaffray Companies Retirement Plan or U.S. Bancorp 401(k)
Savings Plan, the submission of your proxy by Internet or
telephone or your completed proxy card will serve as voting
instructions to the respective plans trustee. Your voting
instructions must be received at least five days prior to the
annual meeting in order to count. In accordance with the terms
of the Piper Jaffray Companies Retirement Plan and
U.S. Bancorp 401(k) Savings Plan, the trustee of each plan
will vote all of the shares held in the plan in the same
proportion as the actual proxy votes submitted by plan
participants at least five days prior to the annual meeting.
What does it
mean if I receive more than one Notice of Internet Availability
of Proxy Materials?
If you receive more than one Notice of Internet Availability of
Proxy Materials, it means that you hold shares registered in
more than one account. To ensure that all of your shares are
voted, vote once for each control number you receive as
described above under How do I submit my proxy?.
Can I vote my
shares in person at the meeting?
If you are a shareholder of record, you may vote your shares in
person at the meeting by completing a ballot at the meeting.
Even if you currently plan to attend the meeting, we recommend
that you submit your proxy as described above so your vote will
be counted if you later decide not to attend the meeting. If you
submit your vote by proxy and later decide to vote in person at
the annual meeting, the vote you submit at the meeting will
override your proxy vote.
If you are a street name holder, you may vote your shares in
person at the meeting only if you obtain and bring to the
meeting a signed letter or other form of proxy from your broker,
bank, trust or other nominee giving you the right to vote the
shares at the meeting.
If you are a participant in the Piper Jaffray Companies
Retirement Plan or U.S. Bancorp 401(k) Savings Plan, you
may submit voting instructions as described above, but you may
not vote your Piper Jaffray shares held in the Piper Jaffray
Companies Retirement Plan or U.S. Bancorp 401(k) Savings
Plan in person at the meeting.
How does the
Board recommend that I vote?
The Board of Directors recommends a vote:
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FOR
all of the nominees for director; and
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FOR
the amendment to the Incentive Plan to increase the
number of shares of our common stock available for issuance
under the Incentive Plan by 1,500,000 shares. The Board of
Directors believes that this proposal is critical to Piper
Jaffrays future success, so please vote your shares, or
instruct your broker, bank, trust or other nominee to vote FOR
this proposal.
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What if I do
not specify how I want my shares voted?
If you are a shareholder of record and submit a signed proxy
card or submit your proxy by Internet or telephone but do not
specify how you want to vote your shares on a particular matter,
we will vote your shares as follows:
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FOR
all of the nominees for director; and
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FOR
the amendment to the Incentive Plan.
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Your vote is important. We urge you to vote, or to
instruct your broker, bank, trust or other nominee how to vote,
on all matters before the annual meeting.
If you are a
street name holder and fail to instruct the shareholder of
record how you want to vote your shares on a particular matter,
those shares are considered to be uninstructed. New
York Stock Exchange rules determine the circumstances under
which member brokers of the New York Stock Exchange may exercise
discretion to vote uninstructed shares held by them
on behalf of their clients who are street name holders. With
respect to the election of the nominees for director, the rules
permit member brokers (other than our broker-dealer subsidiary,
Piper Jaffray & Co.) to exercise voting discretion as
to the uninstructed shares. If the broker, bank or other nominee
does not exercise this discretion, the uninstructed shares will
be referred to as a broker non-vote. With respect to
the amendment to the Incentive Plan, however, member brokers
(including Piper Jaffray & Co.) may
not
exercise voting discretion and thus uninstructed shares will
not be voted on this proposal. For more information regarding
the effect of broker non-votes on the outcome of the vote, see
below under How are votes counted?
Our broker-dealer subsidiary, Piper Jaffray & Co., is
a member broker of the New York Stock Exchange and may be a
shareholder of record with respect to shares of our common stock
held in street name on behalf of Piper Jaffray & Co.
clients. Because Piper Jaffray & Co. is our affiliate,
New York Stock Exchange rules prohibit Piper Jaffray &
Co. from voting uninstructed shares even on routine matters.
Instead, Piper Jaffray & Co. may vote uninstructed
shares on such matters only in the same proportion as the shares
represented by the votes cast by all shareholders of record with
respect to such matters.
Can I change
my vote after submitting my proxy?
Yes. You may revoke your proxy and change your vote at any time
before your proxy is voted at the annual meeting, in any of the
following ways:
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by submitting a later-dated proxy by Internet or telephone
before 11:59 p.m. Eastern Daylight Time on Wednesday,
May 6, 2009;
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by submitting a later-dated proxy to the corporate secretary of
Piper Jaffray Companies, which must be received by us before the
time of the annual meeting;
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by sending a written notice of revocation to the corporate
secretary of Piper Jaffray Companies, which must be received by
us before the time of the annual meeting; or
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by voting in person at the meeting.
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What vote is
required to approve each item of business included in the notice
of meeting?
The five director nominees who receive the most votes cast at
the meeting in person or by proxy will be elected. The
affirmative vote of the holders of a majority of the outstanding
shares of common stock present in person or represented by proxy
and entitled to vote at the annual meeting is required to amend
the Incentive Plan, provided, however, that a majority of the
total number of outstanding shares of common stock must vote on
the proposal.
How are votes
counted?
You may either vote FOR or WITHHOLD
authority to vote for each director nominee. You may vote
FOR, AGAINST or ABSTAIN on
the other proposal. If you properly submit your proxy but
withhold authority to vote for one or more director nominees or
abstain from voting on the other proposal, your shares will be
counted as present at the meeting for the purpose of determining
a quorum and for the purpose of calculating the vote on the
particular matter(s) with respect to which you abstained from
voting or withheld authority to vote. If you do not submit your
proxy or voting instructions and also do not vote by ballot at
the annual meeting, your shares will not be counted as present
at the meeting for the purpose of determining a quorum unless
you hold your shares in street name and the broker, bank, trust
or other nominee has discretion to vote your shares and does so.
For
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more information regarding discretionary voting, see the
information above under What if I do not specify how I
want my shares voted?
If you withhold authority to vote for one or more of the
director nominees or you do not vote your shares on this matter
(whether by broker non-vote or otherwise), this will have no
effect on the outcome of the vote. With respect to the proposal
to amend the Incentive Plan, if you abstain from voting this
will have the same effect as a vote against the proposal, but if
you do not vote your shares (or, for shares held in street name,
if you do not submit voting instructions and your broker, bank,
trust or other nominee does not or may not vote your shares),
this will have no effect on the outcome of the vote. However, a
failure to vote or a broker non-vote with respect to the
Incentive Plan may affect the voting to the extent that the
failure to vote or the broker non-vote causes less than a
majority of the outstanding shares of common stock to be voted
on this proposal.
How can I
attend the meeting?
All of our shareholders are invited to attend the annual
meeting. You may be asked to present valid photo identification,
such as a drivers license or passport, before being
admitted to the meeting. If you hold your shares in street name,
you also may be asked to present proof of ownership to be
admitted to the meeting. A brokerage statement or letter from
your broker, bank, trust or other nominee are examples of proof
of ownership. To help us plan for the meeting, please let us
know whether you expect to attend, by responding affirmatively
when prompted during Internet or telephone voting or by marking
the attendance box on the proxy card.
Who pays for
the cost of proxy preparation and solicitation?
Piper Jaffray pays for the cost of proxy preparation and
solicitation, including the reasonable charges and expenses of
brokerage firms, banks, trusts or other nominees for forwarding
proxy materials to street name holders. We have retained
Innisfree M&A Incorporated to assist in the solicitation of
proxies for the annual meeting for a fee of approximately
$25,000 plus reimbursement of out-of-pocket expenses. We are
soliciting proxies primarily by mail. In addition, our
directors, officers and regular employees may solicit proxies
personally, telephonically, electronically or by other means of
communication. Our directors, officers and regular employees
will receive no additional compensation for their services other
than their regular compensation.
ITEM 1
ELECTION OF DIRECTORS
The number of directors currently serving on our Board of
Directors is eight. In 2007, our Board of Directors and
shareholders approved an amendment and restatement of our
Amended and Restated Certificate of Incorporation, which
declassified our Board of Directors and provided for the annual
election of all of our directors in a manner that does not
affect the unexpired terms of the directors elected prior to our
2008 annual meeting. By staggering the implementation of the
declassified board in a manner that does not affect unexpired
terms, the directors who previously served in Classes II
and III are the only nominees for election at our 2009
annual meeting. At our 2010 annual meeting and each annual
meeting thereafter, our shareholders will be asked to vote for
the entire Board of Directors.
At this years annual meeting, the terms of our directors
who previously served as Class II and Class III
directors will expire. Michael R. Francis, B. Kristine Johnson,
Addison L. Piper, Lisa K. Polsky and Jean M. Taylor have been
nominated for reelection to the Board to serve until our 2010
annual meeting of shareholders or until their successors are
elected and qualified. Each of the nominees has agreed to serve
as a director if elected. The five nominees receiving a
plurality of the votes cast at the meeting in person or by proxy
will be elected. Proxies may not be voted for more than five
directors. If, for any reason, any nominee becomes unable to
serve before the annual meeting occurs, the persons named as
proxies may vote your shares for a substitute nominee selected
by our Board of Directors.
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The Board of Directors recommends a vote FOR the election of
the five director nominees. Proxies will be voted FOR the
election of the five nominees unless otherwise specified.
Following is biographical information for each of the nominees
for election as a director and for the directors whose terms of
office will continue after the meeting.
Nominees
for Election to the Board of Directors for a One-Year Term
Expiring in 2010
MICHAEL R. FRANCIS:
Age 46, director
since December 31, 2003. Mr. Francis is executive vice
president and chief marketing officer for Target Corporation, a
position he has held since August 2008. Target Corporation
operates Target-brand general merchandise discount stores and an
online business, Target.com. Mr. Francis began his career
with Marshall Fields department stores in 1985 and has
been with Target Corporation since its acquisition of Marshall
Fields in 1990. He previously served Target Corporation as
executive vice president, marketing from 2003 until August 2008,
senior vice president, marketing from 2001 to 2003, and as
senior vice president, marketing and visual presentation of the
department store division from 1995 to 2001. Prior to that, he
held a variety of positions within Target Corporation.
B. KRISTINE JOHNSON:
Age 57,
director since December 31, 2003. Since 2000,
Ms. Johnson has been president of Affinity Capital
Management, a Minneapolis-based venture capital firm that
invests primarily in seed and early-stage health care companies
in the United States. Ms. Johnson served as a consultant to
Affinity Capital Management in 1999. Prior to that, she was
employed for 17 years at Medtronic, Inc., a manufacturer of
cardiac pacemakers, neurological and spinal devices and other
medical products, serving most recently as senior vice president
and chief administrative officer from 1998 to 1999. Her
experience at Medtronic also included service as president of
the vascular business and president of the tachyarrhythmia
management business, among other roles.
ADDISON L. PIPER:
Age 62, director since
December 31, 2003. Mr. Piper retired from Piper
Jaffray effective at the end of 2006, having served as vice
chairman of Piper Jaffray Companies since the completion of our
spin-off from U.S. Bancorp on December 31, 2003. He
worked for Piper Jaffray from 1969 through 2006, serving as
assistant equity syndicate manager, director of securities
trading and director of sales and marketing. He served as chief
executive officer from 1983 to 2000 and as chairman from 1988 to
2003. From 1998 through August 11, 2006, Mr. Piper
also had responsibility for our venture and private capital fund
activities. Mr. Piper also is a member of the board of
directors of Renaissance Learning Corporation.
LISA K. POLSKY:
Age 52, director since
May 2, 2007. In February 2009, Ms. Polsky joined Jane
Street Capital, LLC, a New York-based quantitative proprietary
trading firm. From March 2008 until joining Jane Street Capital,
she served as partner and head of global investment solutions
for Duff Capital Advisors, which provides integrated portfolio
solutions to funding liabilities and fulfilling investment
needs, particularly in the retirement space. She previously
served as the president of Polsky Partners, a New York-based
consulting firm specializing in hedge fund allocation, risk
management and valuation policy, which she founded in 2002.
Ms. Polsky also has served as managing director, head of
client financing services and head of leveraged client channel
with Merrill Lynch & Co., Inc. from 2000 to 2002, and
as managing director, chief risk officer, head of risk policy,
chief derivative strategist and head of product development at
Morgan Stanley DW Inc. from 1996 to 2000. Ms. Polsky is a
member of the board of directors of thinkorswim Group Inc.
JEAN M. TAYLOR:
Age 46, director since
July 27, 2005. Ms. Taylor is the president and chief
executive officer of Taylor Corporation, positions she has held
since 2001 and 2007, respectively. Taylor Corporation is a
privately held group of approximately 80 affiliated
entrepreneurial companies engaged in marketing, fulfillment,
personalization and printing services. These businesses operate
throughout North America, Europe and Australia and together
employ more than 15,000 employees. Ms. Taylor joined
Taylor Corporation in 1994 as vice president and served as
executive vice president from 1999 to 2001.
6
Members of the
Board of Directors Continuing in Office
ANDREW S. DUFF:
Age 51, chairman and
chief executive officer since December 31, 2003.
Mr. Duff became chairman and chief executive officer of
Piper Jaffray Companies following completion of our spin-off
from U.S. Bancorp on December 31, 2003. He also has
served as chairman of our broker-dealer subsidiary since 2003,
as chief executive officer of our broker-dealer subsidiary since
2000 and as president of our broker-dealer subsidiary since
1996. He has been with Piper Jaffray since 1980. Prior to the
spin-off from U.S. Bancorp, Mr. Duff also was a vice
chairman of U.S. Bancorp from 1999 through 2003.
SAMUEL L. KAPLAN:
Age 72, director since
December 31, 2003. Mr. Kaplan is a partner and
founding member of the law firm of Kaplan, Strangis and Kaplan,
P.A., Minneapolis, Minnesota, and has served as the firms
president continuously since the firm was founded in 1978.
FRANK L. SIMS:
Age 58, director since
December 31, 2003. Mr. Sims retired from Cargill, Inc.
effective at the end of 2007, having served as corporate vice
president, transportation and product assurance and a member of
the management corporate center since July 2000. Cargill is a
marketer and distributor of agricultural and industrial products
and services. Mr. Sims had responsibility for global
transportation and supply chain solutions and served as a member
of the risk management and financial solutions platform. He
joined Cargill in 1972 and served in a number of executive
positions, including president of Cargills North American
Grain Division from 1998 to 2000. Mr. Sims is a member of
the board of directors of PolyMet Mining Corp.
INFORMATION
REGARDING THE BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE
The Board of Directors conducts its business through meetings of
the Board and the following standing committees: Audit,
Compensation, and Nominating and Governance. Each of the
standing committees has adopted and operates under a written
charter, all of which are available on our website at
www.piperjaffray.com
. Other corporate governance
documents available on our website include our Corporate
Governance Principles, Director Independence Standards, Director
Nominee Selection Policy, Procedures for Contacting the Board of
Directors, Codes of Ethics and Business Conduct, and Complaint
Procedures Regarding Accounting and Auditing Matters. All of
these documents also are available in print to any shareholder
who requests them.
Codes of Ethics
and Business Conduct
We have adopted a Code of Ethics and Business Conduct applicable
to our employees, including our principal executive officer,
principal financial officer, principal accounting officer,
controller and other employees performing similar functions, and
a separate Code of Ethics and Business Conduct applicable to our
directors. Directors who also serve as officers of Piper Jaffray
must comply with both codes. Both codes are available on our
website at
www.piperjaffray.com
and are available in
print to any shareholder who requests them. We will post on our
website at
www.piperjaffray.com
any amendment to, or
waiver from, a provision of either of our Codes of Ethics and
Business Conduct within four business days following the date of
such amendment or waiver.
Director
Independence
Under applicable rules of the New York Stock Exchange, a
majority of the members of our Board of Directors must be
independent, and no director qualifies as independent unless the
Board of Directors affirmatively determines that the director
has no material relationship with Piper Jaffray. To assist the
Board with these determinations, the Board has adopted the
following categorical Director Independence Standards, which are
available on our website at
www.piperjaffray.com
. Under
the Director Independence Standards, a director will be deemed
independent for purposes of service on the Board if:
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(1)
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the director does not have any relationship described in Rule
303A.02(b) of the New York Stock Exchange corporate governance
rules;
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(2)
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in the event the director has a relationship that is not of a
type described in the Director Independence Standards or that
exceeds the limits of the relationships described in the
Director Independence Standards, the Board determines in its
judgment, after broad consideration of all relevant facts and
circumstances, that the relationship is not material; and
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(3)
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the Board reviews all commercial, banking, consulting, legal,
accounting, charitable, familial and other relationships the
director has with Piper Jaffray that are not of a type described
in the Director Independence Standards and determines in its
judgment, after broad consideration of all relevant facts and
circumstances, that the relationship is not material.
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Our Director Independence Standards deem the following types of
relationships not to be material relationships that would cause
a director not to be independent:
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(a)
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Piper Jaffray has made payments for goods or services to, or has
received payments for goods or services from, the primary
business affiliation of the director or an immediate family
member of the director in an aggregate amount during a fiscal
year that does not exceed the greater of $1 million or 2%
of such other companys consolidated gross revenues for
that fiscal year;
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(b)
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lending relationships, deposit relationships, or other banking
relationships between Piper Jaffray, on one hand, and a
directors or immediate family members primary
business affiliation, on the other hand, if the relationship is
in the ordinary course of business and on substantially the same
terms as those prevailing at the time for comparable
transactions with similarly situated non-affiliates;
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(c)
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the director or an immediate family member, or their primary
business affiliation, maintains a brokerage, margin or similar
account with, or has purchased investment services, investment
products, securities or similar products and services from Piper
Jaffray, including ownership of interests in partnerships or
funds sponsored or managed by Piper Jaffray, if the relationship
is on substantially the same terms as those prevailing at the
time for comparable transactions with similarly situated
non-affiliates;
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(d)
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the director or an immediate family member is a partner or
associate of, or of counsel to, a law firm providing services to
Piper Jaffray if (i) such person has not personally
provided legal services to Piper Jaffray, and (ii) the
aggregate payments received by the law firm from Piper Jaffray
in any fiscal year do not exceed the greater of $1 million
or 2% of the law firms consolidated gross revenues for
that fiscal year;
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(e)
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a relationship arising solely from a directors, an
immediate family members, or their primary business
affiliations ownership of an equity or limited partnership
interest in an entity that engages in a transaction with Piper
Jaffray, if the directors, the immediate family
members or their primary business affiliations
ownership interest does not exceed 5% of the total equity or
partnership interests in that other entity;
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(f)
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a relationship arising solely from a directors position as
a director of another company that provides services to, or is
provided services by, Piper Jaffray;
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(g)
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a relationship arising from both an interest as described in
subsection (e) and a position as described in
subsection (f) above;
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(h)
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a relationship arising solely because an immediate family member
of the director is a director or employee of another company
that provides services to, or is provided services by, Piper
Jaffray;
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(i)
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the director or an immediate family member has received personal
loans from Piper Jaffray that are specifically permitted under
Section 402 of the Sarbanes-Oxley Act of 2002 and any
regulations adopted thereunder;
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(j)
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the director or an immediate family member is a director,
trustee or executive officer of a foundation, university or
other non-profit organization that receives from Piper Jaffray
or the
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Piper Jaffray Foundation charitable contributions in an amount
that does not exceed the greater of $100,000 or 5% of the
organizations aggregate annual charitable receipts during
its preceding fiscal year; and
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(k)
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the directors primary business affiliation is a venture
capital, private equity, hedge fund, merchant bank, asset
manager or similar investment firm and a portfolio company
thereof engages Piper Jaffray or its subsidiaries to provide
investment banking or financial advisory services and such
engagement is in the ordinary course of business and on
substantially the same terms as those prevailing at the time for
comparable transactions with similarly situated companies.
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For purposes of these standards, a directors primary
business affiliation means an entity of which the director
is an executive officer, partner or employee or owns directly at
least a 10% equity interest, and an immediate family
members primary business affiliation means an
entity of which the immediate family member is an executive
officer, general partner or owns directly or indirectly at least
a 10% equity interest.
The Board has affirmatively determined, in accordance with the
foregoing Director Independence Standards, that none of our
non-employee directors other than Addison L. Piper has a
material relationship with Piper Jaffray and that other than
Mr. Piper, each non-employee director (including Michael R.
Francis, B. Kristine Johnson, Samuel L. Kaplan, Lisa K. Polsky,
Frank L. Sims and Jean M. Taylor) is independent. None of the
independent directors has a relationship described in
Rule 303A.02(b) of the New York Stock Exchange rules, and,
with one exception, every relationship between Piper Jaffray and
each of these directors is of a type described in the Director
Independence Standards and does not exceed the limits set forth
in the Director Independence Standards. Within the types of
relationships listed above, Messrs. Francis and Kaplan,
Ms. Johnson, Ms. Taylor and Ms. Polsky have
relationships with Piper Jaffray of the type described in (a);
Mr. Francis, Ms. Johnson and Ms. Taylor have
relationships with Piper Jaffray of the type described in (f);
Messrs. Francis, Kaplan and Sims and Ms. Johnson and
Ms. Taylor have relationships with Piper Jaffray of the
type described in (j); and Ms. Johnson has a relationship
with Piper Jaffray of the type described in (k). The Board also
considered that Ms. Johnsons nephew is an investment
banking analyst for our company and determined that this
relationship is not material given the nature of the family
relationship and the position.
Our other directors, Mr. Duff and Mr. Piper, cannot be
considered independent directors because of relationships with
the company that are described in Rule 303A.02(b) of the
New York Stock Exchange corporate governance rules.
Specifically, Mr. Duff is employed as our chief executive
officer, and Mr. Piper was employed as an executive officer
of Piper Jaffray within the last three years.
Lead
Director
The Board of Directors has appointed Mr. Kaplan to serve as
the lead director of the Board. The lead director has the
following duties and responsibilities, as described in our
Corporate Governance Principles:
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presides at all meetings of the board at which the chairman is
not present, including executive sessions of the independent
directors, and coordinates the agenda for and moderates these
executive sessions;
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serves formally as a liaison between the chief executive officer
and the independent directors;
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monitors board meeting schedules and agendas to ensure that
appropriate matters are covered and that there is sufficient
time for discussion of all agenda items;
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monitors information sent to the board and advises the chairman
as to the quality, quantity and timeliness of the flow of
information;
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has authority to call meetings of the independent
directors; and
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if requested by major shareholders, makes himself available for
consultation and direct communication.
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Meetings of the
Outside Directors
At both the Board and committee levels, our non-employee
directors meet regularly in executive sessions in which
Mr. Duff and other members of management do not
participate. Mr. Kaplan, our lead director, serves as the
presiding director of executive sessions of the Board, and the
chairperson of each committee serves as the presiding director
at executive sessions of that committee. At least once annually,
our independent directors meet in an executive session without
Messrs. Piper and Duff.
Committees of the
Board
Audit
Committee
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Members:
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Frank L. Sims,
Chairperson
Samuel L. Kaplan
Lisa K. Polsky
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The Audit Committees purpose is to oversee the integrity
of our financial statements, the independent auditors
qualifications and independence, the performance of our internal
audit function and independent auditor, and compliance with
legal and regulatory requirements. The Audit Committee has sole
authority to retain and terminate the independent auditor and is
directly responsible for the compensation and oversight of the
work of the independent auditor. The Audit Committee meets with
management and the independent auditor to review and discuss the
annual audited and quarterly unaudited financial statements,
reviews the integrity of our accounting and financial reporting
processes and audits of our financial statements, and prepares
the Audit Committee Report included in the proxy statement. The
responsibilities of the Audit Committee are more fully described
in the Committees charter. The Audit Committee met eight
times during 2008. The Board has determined that all members of
the Audit Committee are independent (as that term is defined in
the applicable New York Stock Exchange rules and in regulations
of the Securities and Exchange Commission), that all members are
financially literate and have the accounting or related
financial expertise required by the New York Stock Exchange
rules, and that each of Mr. Sims and Ms. Polsky is an
audit committee financial expert as defined by
regulations of the Securities and Exchange Commission.
Compensation
Committee
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Members:
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Lisa K. Polsky,
Chairperson
Michael R. Francis
Frank L. Sims
Jean M. Taylor
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The Compensation Committee discharges the Boards
responsibilities relating to compensation of the executive
officers, oversees succession planning for the executive
officers jointly with the Nominating and Governance Committee
and ensures that our compensation and employee benefit programs
are aligned with our compensation and benefits philosophy. The
Committee has full discretion to determine the amount of
compensation to be paid to the executive officers. The Committee
also has sole authority to evaluate the chief executive
officers performance and determine the compensation of the
chief executive officer based on this evaluation. In addition,
the Committee is responsible for recommending stock ownership
guidelines for the executive officers and directors, for
recommending the compensation and benefits to be provided to our
non-employee directors, for reviewing and approving the
establishment of broad-based incentive compensation,
equity-based, retirement or other material employee benefit
plans, and for discharging any duties under the terms of these
plans.
The Committee has delegated authority to our chief executive
officer under the Incentive Plan to allocate awards to employees
other than our executive officers in connection with our annual
equity
10
grants made in the first quarter of each year. The annual equity
grants are part of the payment of incentive compensation for the
preceding year. Under this delegated authority, the Committee
approves the aggregate amount of equity to be awarded to all
employees other than executive officers, and the chief executive
officer approves the award recipients and specific amount of
equity to be granted to each recipient. All other terms of the
awards are determined by the Committee. The Committee also has
delegated authority to the chief executive officer to grant
equity awards to employees other than executive officers in
connection with recruiting, retention and significant
promotions. This delegation permits the chief executive officer
to determine the recipient of the award as well the type and
amount of the award, subject to an annual share limitation set
by the Committee each year. All awards granted pursuant to this
delegated authority must be made in accordance with our equity
grant timing policy described below in Compensation
Discussion and Analysis Equity Grant Timing
Policy. All other terms of the awards are determined by
the Committee.
The work of the Committee is supported by our chief
administrative officer and our Human Resources department. These
personnel work closely with the chief executive officer and, as
appropriate, the chief financial and accounting officers and the
general counsel, to prepare and present information and
recommendations for review and consideration by the Committee,
as described below under Compensation Discussion and
Analysis Setting Compensation
Involvement of Executive Officers.
In 2008, the Compensation Committee engaged an independent
outside compensation consultant, Towers Perrin, to provide peer
group analyses, competitive assessments, program design
recommendations and advice to the Committee, as described below
under Compensation Discussion and Analysis
Setting Compensation Compensation Consultant.
The Committee reviews and discusses with management the
disclosures regarding executive compensation to be included in
our annual proxy statement, and recommends to the Board
inclusion of the Compensation Discussion and Analysis in our
annual proxy statement. The responsibilities of the Compensation
Committee are more fully described in the Committees
charter. For more information regarding the Committees
process in setting compensation, please see Compensation
Discussion and Analysis Setting Compensation
below. The Compensation Committee met five times during 2008.
The Board has determined that all members of the Compensation
Committee are independent (as that term is defined in applicable
New York Stock Exchange rules).
Nominating and
Governance Committee
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Members:
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Samuel L. Kaplan,
Chairperson
Michael R. Francis
B. Kristine Johnson
Jean M. Taylor
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The Nominating and Governance Committee identifies and
recommends individuals qualified to become members of the Board
of Directors and recommends to the Board sound corporate
governance principles and practices for Piper Jaffray. In
particular, the Committee assesses the independence of our Board
members, identifies and evaluates candidates for nomination as
directors, responds to director nominations submitted by
shareholders, recommends the slate of director nominees for
election at the annual meeting of shareholders and candidates to
fill vacancies between annual meetings, recommends qualified
members of the Board for membership on committees, oversees the
director orientation and continuing education programs, reviews
the Boards committee structure, reviews and assesses the
adequacy of our Corporate Governance Principles, evaluates the
annual evaluation process for the chief executive officer, the
Board and Board committees, and oversees the succession planning
process for the executive officers jointly with the Compensation
Committee. The Nominating and Governance Committee also oversees
administration of our related person transaction policy and
reviews the transactions submitted to it pursuant to such
policy. The responsibilities of the Nominating and Governance
Committee are more fully described in the Committees
charter. The Nominating and Governance
11
Committee met six times during 2008. The Board has determined
that all members of the Nominating and Governance Committee are
independent (as that term is defined in applicable New York
Stock Exchange rules).
Meeting
Attendance
Our Corporate Governance Principles provide that our directors
are expected to attend meetings of the Board and of the
committees on which they serve, as well as our annual meeting of
shareholders. Our Board of Directors held eight meetings during
2008. Each of our directors attended at least 75% of the
meetings of the Board of Directors and the committees on which
he or she served during 2008, other than Mr. Francis.
Mr. Francis attended 70% of the meetings of the Board of
Directors and the committees on which he served for the year as
a result of absences due to a prolonged family medical issue
during 2008. Attendance at our Board and committee meetings
during 2008 averaged 94.7% for our directors as a group, and six
of our directors attended the 2008 annual meeting of
shareholders.
Procedures for
Contacting the Board of Directors
The Board has established a process for shareholders and other
interested parties to send written communications to the Board
or to individual directors. Such communications should be sent
by U.S. mail to the attention of the Office of the
Secretary, Piper Jaffray Companies, 800 Nicollet Mall,
Suite 800, Mail Stop J09N05, Minneapolis, Minnesota 55402.
Communications regarding accounting and auditing matters will be
handled in accordance with our Complaint Procedures Regarding
Accounting and Auditing Matters. Other communications will be
collected by the secretary of the company and delivered, in the
form received, to the lead director or, if so addressed, to a
specified director.
Procedures for
Selecting and Nominating Director Candidates
The Nominating and Governance Committee will consider director
candidates recommended by shareholders and has adopted a policy
that contemplates shareholders recommending and nominating
director candidates. A shareholder who wishes to recommend a
director candidate for nomination by the Board at the annual
meeting of shareholders or for vacancies on the Board that arise
between shareholder meetings must timely provide the Nominating
and Governance Committee with sufficient written documentation
to permit a determination by the Board whether such candidate
meets the required and desired director selection criteria set
forth in our bylaws, our Corporate Governance Principles and our
Director Nominee Selection Policy described below. Such
documentation and the name of the director candidate must be
sent by U.S. mail to the Chairperson, Nominating and
Governance Committee,
c/o the
Office of the Secretary, Piper Jaffray Companies, 800 Nicollet
Mall, Suite 800, Mail Stop J09N05, Minneapolis, Minnesota
55402.
Alternatively, shareholders may directly nominate a person for
election to our Board by complying with the procedures set forth
in Article II, Section 2.4 of our bylaws, and with the
rules and regulations of the Securities and Exchange Commission.
Under our bylaws, only persons nominated in accordance with the
procedures set forth in the bylaws will be eligible to serve as
directors. In order to nominate a candidate for service as a
director, you must be a shareholder at the time you give the
Board notice of your nomination, and you must be entitled to
vote for the election of directors at the meeting at which your
nominee will be considered. In accordance with our bylaws,
director nominations generally must be made pursuant to notice
delivered to or mailed and received at our principal executive
offices at the address above, not later than the 90th day,
nor earlier than the 120th day, prior to the first
anniversary of the prior years annual meeting of
shareholders. Your notice must set forth all information
relating to the nominee that is required to be disclosed in
solicitations of proxies for the election of directors in an
election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange
Act of 1934 (including the nominees written consent to
being named in the proxy statement as a nominee and to serving
as a director if elected).
12
As required by our Corporate Governance Principles and our
Director Nominee Selection Policy, when evaluating the
appropriate characteristics of candidates for service as a
director, the Nominating and Governance Committee takes into
account many factors. At a minimum, director candidates must
demonstrate high standards of ethics, integrity and
professionalism, independence, sound judgment, community
leadership and meaningful experience in business, law or finance
or other appropriate endeavor. Candidates also must be committed
to representing the long-term interests of our shareholders. In
addition to these minimum qualifications, the Committee
considers other factors it deems appropriate based on the
current needs and desires of the Board, including specific
business and financial expertise, experience as a director of a
public company, geography, age, gender and ethnic diversity. The
Committee will reassess the qualifications of a director,
including the directors attendance and contributions at
Board and committee meetings, prior to recommending a director
for reelection.
Compensation
Program for Non-Employee Directors
Directors who are not Piper Jaffray employees receive an annual
cash retainer of $50,000 for service on our Board and Board
committees. No separate meeting fees are paid. The lead director
and the chairperson of the Audit Committee each receives an
additional annual cash retainer of $8,000. The chairperson of
each other standing committee of the Board each receives an
additional annual cash retainer of $5,000. In addition to the
cash retainer, we grant equity awards to our non-employee
directors to further align their interests with those of our
shareholders. We grant non-employee directors who continue their
service on the Board following an annual meeting of shareholders
1,000 shares of our common stock on the date of the annual
meeting. In addition, each non-employee director receives
500 shares of our common stock on the date of the
directors initial election to the Board. The equity awards
granted to our non-employee directors are granted under the
Incentive Plan. Non-employee directors who join our Board after
the first month of a calendar year are paid pro rata annual
retainers and awarded pro rata equity awards based on the period
they serve as directors during the year.
Our non-employee directors may participate in the Piper Jaffray
Companies Deferred Compensation Plan for Non-Employee Directors,
which was designed to facilitate increased equity ownership in
the company by our non-employee directors. The plan permits our
non-employee directors to defer all or a portion of the cash
payable to them and shares of common stock granted to them for
service as a director of Piper Jaffray for any calendar year.
All cash amounts and share grants deferred by a participating
director are credited to a recordkeeping account and deemed
invested in shares of our common stock as of the date the
deferred fees otherwise would have been paid or the shares
otherwise would have been issued to the director. This deemed
investment is measured in phantom stock, and no shares of common
stock are reserved, repurchased or issued pursuant to the plan.
With respect to cash amounts that have been deferred, the fair
market value of all phantom stock credited to a directors
account will be paid out to the director (or, in the event of
the directors death, to his or her beneficiary) in a
single lump-sum cash payment following the directors
cessation of service as a non-employee director. The amount paid
out will be determined based on the fair market value of the
stock on the last day of the year in which the directors
service with us terminates. Share amounts that have been
deferred will be paid out to the director (or, in the event of
the directors death, to his or her beneficiary) in the
form of shares of common stock in an amount equal to the full
number of shares credited to the non-employee directors
account as of the last day of the year in which the cessation of
service occurred. Directors who elect to participate in the plan
are not required to pay income taxes on amounts or grants
deferred but will instead pay income taxes on the amount of the
lump-sum cash payment paid to the director (or beneficiary) at
the time of such payment. Our obligations under the plan are
unsecured general obligations to pay in the future the value of
the participants account pursuant to the terms of the plan.
Non-employee directors also may participate in our charitable
gift matching program, pursuant to which we will match a
directors gifts to eligible organizations dollar for
dollar from a minimum of $50 up to an aggregate maximum of
$1,500 per year. In addition, our non-employee directors are
reimbursed for reasonable out-of-pocket expenses incurred in
connection with their service on the Board
13
and committees of the Board. Employees of Piper Jaffray who also
serve as directors receive compensation for their service as
employees, but they do not receive any additional compensation
for their service as directors. No other compensation is paid to
our Board members in their capacity as directors. Non-employee
directors do not participate in our employee benefit plans.
The following table contains compensation information for our
non-employee directors for the year ended December 31, 2008.
Non-Employee
Director Compensation for 2008
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Fees Earned or
Paid in Cash
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Annual
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Additional
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Stock
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Option
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All Other
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Retainer
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Retainer
(1)
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Awards
(2)(3)
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Awards
(3)
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Compensation
(4)
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Total
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Director
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($)
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($)
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($)
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($)
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($)
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($)
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Michael R. Francis
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50,000
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5,000
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37,630
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92,630
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B. Kristine Johnson
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50,000
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|
|
37,630
|
|
|
|
|
|
|
|
1,500
|
|
|
|
89,130
|
|
Samuel L. Kaplan
|
|
|
50,000
|
(5)
|
|
|
13,000
|
(5)
|
|
|
37,630
|
(7)
|
|
|
|
|
|
|
1,500
|
|
|
|
102,130
|
|
Addison L. Piper
|
|
|
50,000
|
|
|
|
|
|
|
|
47,691
|
(8)
|
|
|
1,824
|
(8)
|
|
|
22,566
|
|
|
|
122,081
|
|
Lisa K. Polsky
|
|
|
50,000
|
(5)
|
|
|
1,352
|
(5)
|
|
|
37,630
|
(7)
|
|
|
|
|
|
|
1,500
|
|
|
|
90,482
|
|
Frank L. Sims
|
|
|
50,000
|
|
|
|
8,000
|
|
|
|
37,630
|
(7)
|
|
|
|
|
|
|
1,500
|
|
|
|
97,130
|
|
Jean M. Taylor
|
|
|
50,000
|
(6)
|
|
|
|
|
|
|
37,630
|
(7)
|
|
|
|
|
|
|
1,500
|
|
|
|
89,130
|
|
|
|
(1)
|
The amounts in this
column reflect the additional cash retainer of $8,000 paid to
each of the lead director and the chairperson of the Audit
Committee as well as the additional cash retainer of $5,000 paid
to the chairperson of each other standing committee of the
Board. Ms. Polsky became the chairperson of the
Compensation Committee on September 23, 2008 and received a
pro rated portion of the additional cash retainer payable to the
chairperson of the Compensation Committee for 2008.
|
|
|
(2)
|
Each non-employee
director received a grant of 1,000 shares of our common
stock on May 7, 2008, the day of our 2008 annual meeting of
shareholders. The values in this column reflect the $37.63
closing sale price of our common stock on the New York Stock
Exchange on May 7, 2008 multiplied by the number of shares
granted, which is grant date fair value of each award computed
in accordance with Statement of Financial Accounting Standards
No. 123(R), Share-Based Payment
(SFAS 123(R)).
|
|
(3)
|
As of
December 31, 2008, our non-employee directors held stock
and option awards as set forth in the table below. The stock
award values are based on the $39.76 closing sale price of our
common stock on the New York Stock Exchange on December 31,
2008, and the option award values are based on the difference
between the exercise price of the in-the-money stock options and
the closing price of $39.76. The amounts for Mr. Piper
include restricted stock and stock option awards granted to him
in 2005, 2006 and 2007 during his tenure as an executive officer
of the company. Refer to Note 21 in the Notes to
Consolidated Financial Statements included in our Annual Report
on
Form 10-K
filed on February 28, 2009 for a discussion of the relevant
assumptions used to determine the valuation of our stock and
option awards for accounting purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Year-End Value
of
|
|
|
Option
|
|
|
Year-End Value
of
|
|
|
|
Awards
|
|
|
Stock Awards
|
|
|
Awards
|
|
|
Option Awards
|
|
Director
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Michael R. Francis
|
|
|
2,000
|
|
|
|
79,520
|
|
|
|
11,800
|
|
|
|
67,128
|
|
B. Kristine Johnson
|
|
|
2,000
|
|
|
|
79,520
|
|
|
|
11,800
|
|
|
|
67,128
|
|
Samuel L. Kaplan
|
|
|
2,000
|
|
|
|
79,520
|
|
|
|
11,800
|
|
|
|
67,128
|
|
Addison L. Piper
|
|
|
12,924
|
|
|
|
513,858
|
|
|
|
11,614
|
|
|
|
304
|
|
Lisa K. Polsky
|
|
|
2,169
|
|
|
|
86,239
|
|
|
|
|
|
|
|
|
|
Frank L. Sims
|
|
|
2,000
|
|
|
|
79,520
|
|
|
|
11,800
|
|
|
|
67,128
|
|
Jean M. Taylor
|
|
|
2,000
|
|
|
|
79,520
|
|
|
|
5,963
|
|
|
|
25,446
|
|
14
|
|
(4)
|
All other
compensation for non-employee directors for the year ended
December 31, 2008 consists of the following:
|
|
|
|
|
|
The amounts for
Ms. Johnson, Ms. Polsky, Ms. Taylor and
Messrs. Kaplan and Sims include charitable matching
contributions made by Piper Jaffray.
|
|
|
|
The amount for
Mr. Piper consists of the
following: (A) $16,968 for the cost of office
space that the company agreed to provide Mr. Piper
following his retirement and related moving expenses,
(B) $1,098 for travel expenses for Mr. Piper related
to a teaching engagement profiling the company conducted at a
leading universitys graduate business school,
(C) $3,000 paid to Mr. Piper for his service as a
member of an investment committee for certain funds managed by
our private equity business, and (D) $1,500 of charitable
matching contributions made by Piper Jaffray.
|
|
|
(5)
|
All of the cash fees
received were deferred pursuant to the Piper Jaffray Companies
Deferred Compensation Plan for Non-Employee Directors.
|
|
|
(6)
|
Twenty percent of
the cash fees received were deferred pursuant to the Piper
Jaffray Companies Deferred Compensation Plan for Non-Employee
Directors.
|
|
|
(7)
|
All of the
restricted shares received were deferred pursuant to the Piper
Jaffray Companies Deferred Compensation Plan for Non-Employee
Directors.
|
|
(8)
|
The amount includes
amounts amortized in accordance with restricted stock and stock
option awards granted to Mr. Piper prior to 2008 under our
Incentive Plan during his tenure as an executive officer of the
company.
|
Introduction
In 2008, global economic and financial market conditions were
extraordinarily difficult, and these conditions resulted in
Piper Jaffray posting an operating loss for the year. We
believe, however, that as a firm we fared comparatively well
overall, and remain focused on two key priorities:
1) appropriately adjusting our cost structure to enable us
to operate through the difficult period, and 2) positioning
the firm for when the markets eventually turn positive.
Given
our operating loss and these priorities, our Compensation
Committee determined, based in part upon the recommendation of
our chief executive officer, that no member of the
companys Leadership Team would receive any type of annual
incentive award for 2008 performance.
The Leadership Team consists of eleven individuals who serve as
the executive officers of the company. Within this group, five
constitute our named executive officers for purposes
of this proxy statement. These individuals are:
|
|
|
|
|
Andrew S. Duff, our chairman and chief executive officer;
|
|
|
|
Debbra L. Schoneman, our chief financial officer;
|
|
|
|
Thomas P. Schnettler, our president and chief operating officer,
who served as our vice chairman and chief financial officer
until May 2008;
|
|
|
|
Jon W. Salveson, head of our Investment Banking
business; and
|
|
|
|
Robert W. Peterson, head of our Equities business.
|
In addition to the named executive officers, the Leadership Team
includes the following six individuals: our chief executive
officer of Piper Jaffray Ltd. (our European operation), our head
of Piper Jaffray Asia, our head of Public Finance Services, our
head of Fixed Income Services, our chief administrative officer,
and our general counsel.
None of these eleven individuals
received an annual incentive award for 2008 performance.
15
Compensation
Philosophy and Objectives
The companys executive compensation program is designed to
drive and reward corporate performance annually and over the
long term, as measured by increasing shareholder value.
Compensation also must be internally equitable and externally
competitive. The company continually reviews its executive
compensation program to ensure it reflects good governance
practices and the best interests of shareholders, while meeting
the following core objectives:
|
|
|
|
|
Pay for Performance
As noted above, the
Leadership Team, which includes our named executive officers,
did not receive annual incentive compensation for 2008 based on
the companys operating results for the year. Consistent
with historic industry practice, the companys
performance-based annual incentive has typically accounted for a
significant portion of the total compensation for each named
executive officer. The amount of compensation paid is based
first on the performance of the company, then applicable
business unit performance and individual performance goals. In
2008, the company posted an operating loss, and the Compensation
Committee, based in part upon the recommendation of our chief
executive officer, determined that the companys Leadership
Team would not receive any annual incentive award. The Committee
reached this determination based on overall company performance
even though certain executive officers within this group met
their business unit and individual performance goals.
|
|
|
|
Stock Ownership
The company is committed to
increasing executive stock ownership over time. Equity ownership
better aligns the interests of executives with those of our
shareholders and helps to focus our executives on long-term
shareholder value creation. The companys practice has been
to pay a significant portion of the total compensation for our
named executive officers in the form of equity awarded under our
Incentive Plan. In addition, for the first time since our
spin-off from U.S. Bancorp on December 31, 2003, the
Committee granted the Leadership Team a long-term,
performance-based restricted stock award in May 2008, which
requires that the company meet a return on adjusted common
equity target of 11% over a twelve-month period by
April 30, 2013. This performance target is a significant
increase to the companys historic return on equity, and
the award is described in more detail below under
2008 Long-Term, Performance-Based Equity
Grant.
|
|
|
|
Recruiting and Retention
The securities
industry has historically been marked by intense competition,
and one of our key objectives has been to attract and retain
outstanding executives who are motivated to achieve our mission
to build the leading international middle-market investment bank
and institutional securities firm. In previous years, retention
has been a key area of focus for not only the Leadership Team,
but also employees throughout the organization. As the company
works to position itself for when the markets eventually turn
positive, we will be focused not only on retaining our
executives, but also on firm efforts to recruit.
|
|
|
|
Tax Deductibility and Compliance
The
companys executive compensation program is designed to
maximize the tax deductibility of compensation payments to our
named executive officers, to ensure that compensation is
delivered as cost-efficiently as possible, and to comply with
the deferred compensation rules set forth in Section 409A
of the Internal Revenue Code, to avoid the payment of punitive
excise taxes by our executive officers.
|
Setting
Compensation
The Compensation Committee of our Board of Directors (referred
to as the Committee in this Compensation Discussion
and Analysis) has responsibility for approving the compensation
paid to our executive officers and ensuring it meets our
objectives. Early each year, the Committee approves the amount
of incentive compensation to be paid to our executive officers
in recognition of prior-year performance, approves their base
salaries for the upcoming year, and establishes performance
goals for the Leadership Team under an annual incentive program.
Subject to limits on the compensation that may be paid under the
annual incentive program (as described below under
Compensation Program
16
Annual Incentive Compensation), the Committee has full
discretion to determine the amount of compensation to be paid to
the executive officers.
Involvement of
Executive Officers
The work of the Committee is supported by our chief
administrative officer and our Human Resources department. Our
chief administrative officer and head of human resources work
closely with our chief executive officer and, as appropriate,
our chief financial officer and general counsel, to prepare and
present information and recommendations for review and
consideration by the Committee in connection with its executive
compensation decisions, including regarding the performance
goals to be established under the annual incentive program;
financial information reviewed in connection with executive
compensation decisions; the firms to be included in the
compensation peer group; the performance evaluations and
compensation recommendations for the executive officers; and the
evaluation and compensation process to be followed by the
Committee.
Specifically with respect to annual incentive compensation, our
chief executive officer presents the Committee with his
recommendations for each member of the Leadership Team other
than himself. In November 2008, he made a recommendation to the
Committee that no member of our Leadership Team should receive
an annual incentive award based on the companys operating
results, and following further discussion the Committee approved
his recommendation at its first regular meeting of 2009.
Compensation
Peer Group
Our Human Resources department annually identifies a
compensation peer group of firms with which we compete for
executive talent, and this group currently consists of Cowen
Group, Inc.; FBR Capital Markets Corporation; Jefferies Group,
Inc.; KBW, Inc.; and Thomas Weisel Partners Group, Inc. We also
use data from external market surveys reflecting a broad number
of firms within our industry (including members of our peer
group), and we may review publicly available data for similar
companies that are not direct competitors. The external market
surveys that we used for 2008 were prepared by McLagan Partners,
Towers Perrin and Mercer, and generally related to our industry
and sub-sectors within our industry.
In prior years, the Committee compared the base salaries, cash
incentives and long-term incentive compensation of our executive
officers to the market median data derived from the compensation
peer group, the external market surveys and other available
data, taking into consideration the features and constraints of
this information. In 2008, our operating results took precedence
over the actions of peer firms. Also, the rapid deterioration of
global economic and financial market conditions during 2008
rendered the available data less meaningful, as prior year
comparisons failed to accurately reflect current market
conditions. Ultimately, the Committee determined not to award
annual incentives to our entire Leadership Team based on the
operating results of the company for 2008.
Compensation
Consultant
In 2008, the Committee engaged an independent outside
compensation consultant, Towers Perrin, to provide ongoing
assessments and advice to the Committee. The independent
compensation consultant participated in four Committee meetings
during the year, and advised the Committee regarding the
information presented to the Committee by our Human Resources
department. The only services provided by the compensation
consultant to the company related to its services for the
Committee, other than our Human Resources departments use
of three external market surveys prepared by Towers Perrin.
Compensation
Program and Payments
The key components of our executive compensation program are
base salary and annual incentive compensation, and the equity
portion of our annual incentive compensation has historically
served as long-term incentive compensation. In 2008, long-term
incentive compensation consisted of a one-time,
17
performance-based equity award, which is described below under
2008 Long-Term, Performance-Based Equity
Grant. Our executives also have the opportunity to
participate in our company-wide Retirement Plan and to receive
certain personal benefits, as described below. From time to
time, some of our executives receive (or may be entitled to
receive in the future) compensation paid out under historical
compensation programs in which they participated in prior years
and that continue to provide benefits, also as described below.
Base
Salary
The purpose of base salary is to provide a set amount of cash
compensation for each executive that is not variable in nature
and is generally competitive with market practices. Base
salaries for our executive officers are determined annually by
the Committee based on a review of the executives role and
responsibilities, external market data for similar positions in
companies with which we compete for executive talent, and the
recommendations of the chief executive officer. The base salary
levels of our named executive officers reflect a desire to
maintain a relatively equitable compensation baseline among the
individuals serving on our Leadership Team, other than our chief
executive officer and our president whose contributions are
distinguished by a higher base salary reflective of the
decision-making responsibility of these positions. Consistent
with industry practice and our pay-for-performance objective,
the base salary for each of our named executive officers
accounts for a relatively small portion of overall compensation.
Historically, we have not adjusted base salaries for our
Leadership Team members on an annual basis but have adjusted
salaries for individuals upon their initial appointment to the
Leadership Team, and have adjusted salaries for the Leadership
Team as a group when warranted to reflect changes in market pay
levels, as reported in external compensation sources, changes in
the officers roles or responsibilities, or changes in
contributions to the company. In light of this practice and the
operating environment of 2008, the Committee did not make any
changes to the base salaries of any named executive officers for
2009, except for two promotional increases.
Mr. Schnettlers base salary was increased to $300,000
as a result of his appointment as our president and chief
operating officer, and Ms. Schonemans base salary was
increased to $225,000 as a result of her appointment as our
chief financial officer. Since the companys spin-off from
U.S. Bancorp in December 2003, the Committee has only
increased the base salaries of the Leadership Team (outside of
promotional increases) on one occasion, which occurred in 2007.
Annual
Incentive Compensation
As noted above, the Committee determined, based in part upon the
recommendation of our chief executive officer, that no member of
the Leadership Team would receive any type of annual incentive
award for 2008 performance. This determination was based
primarily on the companys operating results and
managements inability to achieve the performance goals
established in February 2008 under the companys annual
incentive program designed to reward pay for performance.
The annual incentive program is administered by the Committee
under the Piper Jaffray Companies Amended and Restated 2003
Annual and Long-Term Incentive Plan and is designed to comply
with the requirements of Section 162(m) of the Internal
Revenue Code to ensure the tax deductibility of incentive
compensation paid to our named executive officers. Under
Section 162(m), we cannot deduct compensation in excess of
$1 million that is paid to a named executive officer in any
year unless the compensation qualifies as
performance-based compensation under
Section 162(m).
Under the annual incentive program, the Committee sets a
performance target in February of each year
typically a financial performance goal related to pre-tax
operating income that the Leadership Team must
attain before the annual incentive program will fund. Consistent
with prior years, the Committee used adjusted pre-tax operating
income as the performance goal, and granted a performance-based
award in February 2008 to each of member of the Leadership Team
in an amount equal to 5% of our 2008 adjusted pre-tax operating
income. However, these performance awards are subject to
18
an aggregate limitation for our Leadership Team as a group,
expressed as a designated percentage of our adjusted pre-tax
operating income. Adjusted pre-tax operating income equals our
total revenues less our total expenses before income taxes,
adjusted to eliminate certain compensation and benefits expenses
and certain other expenses, losses, income or gains that are
unusual in nature or infrequent in occurrence. Adjustments have
historically included the elimination of amounts expensed during
the year under our Leadership Team annual incentive program,
equity amortization expense incurred during the year for our
Leadership Team members, and expenses related to our cash award
program (described below under Cash Award
Program).
In January 2009, the Committee determined that the company
failed to achieve any adjusted pre-tax operating income for
2008.
Consequently, no member of the Leadership Team,
including the companys chief executive officer, president
and chief operating officer, chief financial officer, head of
Investment Banking and head of Equities, received any type of
annual incentive award for 2008 performance.
The amount of
base salary earnings and total incentive compensation, as
measured internally by the company, is included in the following
table. This table is not a substitute for the information
required by the rules of the Securities and Exchange Commission,
specifically the Summary Compensation Table and the related
tables that appear later in this proxy statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
|
|
|
Annual Incentive
Compensation
(1)
|
|
|
|
|
|
|
Salary
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Name
|
|
|
|
|
Earnings
|
|
|
Cash
Incentive
|
|
|
Restricted
Stock
|
|
|
Stock
Options
|
|
|
Incentive
|
|
|
Andrew S. Duff
|
|
|
2008
|
|
|
$
|
400,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2007
|
|
|
$
|
396,667
|
|
|
$
|
1,123,777
|
|
|
$
|
786,644
|
|
|
$
|
505,700
|
|
|
$
|
2,416,121
|
|
|
|
|
2006
|
|
|
$
|
380,000
|
|
|
$
|
1,633,732
|
|
|
$
|
1,560,828
|
|
|
$
|
275,440
|
|
|
$
|
3,470,000
|
|
Debbra L. Schoneman
|
|
|
2008
|
|
|
$
|
205,417
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Thomas P. Schnettler
|
|
|
2008
|
|
|
$
|
271,875
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2007
|
|
|
$
|
221,667
|
|
|
$
|
1,182,250
|
|
|
$
|
677,106
|
|
|
$
|
435,282
|
|
|
$
|
2,294,638
|
|
|
|
|
2006
|
|
|
$
|
205,000
|
|
|
$
|
1,687,105
|
|
|
$
|
1,173,305
|
|
|
$
|
207,054
|
|
|
$
|
3,067,464
|
|
Jon W. Salveson
|
|
|
2008
|
|
|
$
|
225,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2007
|
|
|
$
|
221,667
|
|
|
$
|
1,034,598
|
|
|
$
|
592,542
|
|
|
$
|
380,920
|
|
|
$
|
2,008,060
|
|
|
|
|
2006
|
|
|
$
|
180,000
|
|
|
$
|
2,045,762
|
(2)
|
|
$
|
1,111,754
|
|
|
$
|
196,192
|
|
|
$
|
3,353,708
|
|
Robert W. Peterson
|
|
|
2008
|
|
|
$
|
225,000
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2007
|
|
|
$
|
221,667
|
|
|
$
|
725,483
|
|
|
$
|
415,504
|
|
|
$
|
267,110
|
|
|
$
|
1,408,097
|
|
|
|
|
2006
|
|
|
$
|
205,000
|
|
|
$
|
1,039,144
|
|
|
$
|
722,678
|
|
|
$
|
127,531
|
|
|
$
|
1,889,353
|
|
|
|
(1)
|
Restricted stock and
stock option amounts reflect the value of equity compensation
granted to the named executive officers for 2007 performance
(paid in 2008) and 2006 performance (paid in
2007) under our Incentive Plan. Amounts shown in the
Summary Compensation Table appearing later in this proxy
statement reflect the respective dollar amounts of stock-based
compensation expense associated with equity awards for a given
year in accordance with SFAS 123(R).
|
|
|
(2)
|
$742,520 of
Mr. Salvesons cash incentive amount for 2006 was paid
outside of the annual incentive program for named executive
officers because he did not become an executive officer until
August 11, 2006, and was not covered by the annual
incentive program for executive management prior to that date.
|
2008
Long-Term, Performance-Based Equity Grant
In May 2008, the Committee granted a long-term,
performance-based restricted stock award to the companys
Leadership Team. This incremental grant is designed to improve
our executive share ownership to a more meaningful level,
further link executive performance with shareholder value, and
act as a significant retention tool for our Leadership Team.
This performance-based grant will not vest unless the company
meets a return on adjusted common equity target of 11% over a
twelve-month period, at which time it will vest in its entirety.
This performance target represents a significant increase to the
companys historic twelve-month return on adjusted common
equity levels, and the target must be met by April 30, 2013
or the awards will be forfeited. The adjustment to the return on
common equity metric eliminates the remaining goodwill
associated with the 1998 acquisition of our predecessor
19
company by U.S. Bancorp, which we acquired at the time of
our spin-off from U.S. Bancorp. We excluded this goodwill
from the definition of return on common equity because we
believe it does not accurately reflect the equity deployed in
our businesses. The award terms also require the recipient to be
employed for vesting, which acts as a retention tool for our
Leadership Team, and the Committee has the discretion to forfeit
the award if a recipient leaves the Leadership Team but remains
an employee of the company.
This performance-based grant was awarded to each member of the
Leadership Team as of May 15, 2008, which included each of
our named executive officers other than Ms. Schoneman, our
chief financial officer. Ms. Schoneman was granted a
performance-based award following her appointment as chief
financial officer, and her award has the same vesting provisions
as the other members of the Leadership Team, i.e., the award
requires a return on adjusted common equity of 11% sustained
over a twelve-month period to be attained by April 30,
2013. The total number of shares granted in connection with
these awards was 362,037, and the value of these awards and the
number of shares granted to each named executive officer is
reported below in the Grants of Plan-Based Awards table that
follows the Summary Compensation Table.
Other
Compensation
Members of our Leadership Team receive limited additional
compensation in the form of a monthly stipend to cover parking
expenses (which was discontinued effective December 31,
2008), reimbursement of dues for club memberships used for
business purposes, and certain insurance premiums. Our executive
officers who participate in our Retirement Plan, a 401(k) plan,
receive company matching contributions on 100% of their annual
contributions up to a maximum of 6% of their total pay, up to
the social security taxable wage base; their contributions are
matched on the same basis we match contributions by
non-executive employees. Some of our named executive officers
also receive payments from time to time related to historical
compensation programs, typically structured as investments made
by the company on behalf of certain employees. For example, our
named executive officers receive payments under the
U.S. Bancorp Piper Jaffray Inc. Second Century Growth
Deferred Compensation Plan (As Amended and Restated Effective
September 30, 1998) (the Second Century 1998
Plan) and the U.S. Bancorp Piper Jaffray Inc. Second
Century 2000 Deferred Compensation Plan (the Second
Century 2000 Plan). Certain key employees were eligible to
participate in these plans, under which participants were
granted one or more deferred awards that were deemed invested in
certain measuring investments. Following a liquidity event for a
particular investment, the participant receives a benefit
payment based on the deemed return to the participant and
payment of the portion of the participants account that
was deemed invested. Participants may continue to receive
payments under the plans until a liquidity or bankruptcy event
has occurred with respect to each measuring investment.
Messrs. Peterson, Salveson and Schnettler were granted
deferred awards under these plans in 1996, 1997, 1998
and/or
2000,
and received payouts in 2008, 2007 and 2006 as set forth in the
Summary Compensation Table. No new awards have been granted
under these plans since 2000, and participation in the plans is
frozen.
2003 Cash
Award Program Following Our Spin-Off From U.S.
Bancorp
In connection with our spin-off from U.S. Bancorp on
December 31, 2003, we established a cash award program
pursuant to which we granted cash awards to a large number of
our employees, including our executive officers, who were
employed by us on December 15, 2003. This cash award
program was a unique, one-time event that resulted from our
spin-off from U.S. Bancorp, and all awards under this
program have now been paid. Under the program, an employee could
receive an award that replaced the lost value of
U.S. Bancorp equity or a discretionary award to aid in
retention.
With respect to our Leadership Team, Messrs. Duff,
Schnettler, Salveson and Peterson and Ms. Schoneman were
granted cash awards replacing the lost value of
U.S. Bancorp equity, which totaled $4,567,096; $244,184;
$82,500; $559,622; and $20,564, respectively. Fifty percent of
each of these cash awards was paid on March 31, 2004, with
the remaining 50% payable in four equal installments
20
on each of March 31, 2005, 2006, 2007 and 2008. In
addition, Mr. Duff and Ms. Schoneman were granted
discretionary cash awards in the amount of $500,000 and $40,000,
respectively, which were payable in four equal installments on
each of March 31, 2004, 2005, 2006 and 2007. The Summary
Compensation Table below also includes the amount of the cash
awards paid to each named executive officer in the year
indicated.
Termination
and Change in Control Arrangements
Non-Qualified
Retirement Plan
Following our spin-off from U.S. Bancorp on
December 31, 2003, we assumed liability for the
non-qualified benefits accrued for our employees under the
defined benefit excess plan component of the U.S. Bancorp
Cash Balance Pension Plan. In 2004, we established the Piper
Jaffray Companies Non-Qualified Retirement Plan to maintain and
administer these benefits, which were transferred to us
following the spin-off. Thereafter, participation in the plan
was frozen. No new benefits may be earned by participants in
this plan, but participating employees will continue to receive
investment credits on their transferred plan balances until the
plan balance is paid out upon the employees retirement or
termination of employment. As of December 31, 2008, the
Non-Qualified Retirement Plan account balances for our named
executive officers were as follows: Mr. Duff, $383,857;
Ms. Schoneman, $12,651; Mr. Schnettler, $601,559;
Mr. Salveson, $377,649; and Mr. Peterson, $332,065.
Severance
Plans
All of our named executive officers are eligible to participate
in the Piper Jaffray Severance Plan, a broad-based plan in which
all of our full-time,
U.S.-based
employees generally are eligible to participate. In the event of
certain involuntary terminations of employment resulting from an
employer-determined severance event, employees may receive
severance pay up to a maximum of their weekly base salary
multiplied by 52, subject to a maximum dollar amount equal to
the limit in effect under Internal Revenue Code
section 401(a)(17) for the year in which the
employees employment involuntarily terminates. (For 2009,
this limit is $245,000.) Employer-determined severance events
may include, depending on the circumstances, closure of a
company facility, a permanent reduction in our workforce or
certain organizational changes that result in the elimination of
the employees position.
Other
Termination and
Change-in-Control
Provisions
Certain award agreements and plans under which compensation has
been awarded to our named executive officers include provisions
regarding the payment of the covered compensation in the event
of a termination of employment or a change in control of our
company, as follows:
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Under our Incentive Plan, following a termination of employment
(other than as a result of a change in control), our stock
option awards granted in 2007 and 2008 and our restricted stock
awards will continue to vest so long as the termination was not
for cause and the employee does not violate certain
post-termination restrictions for the remaining vesting term of
their awards. For stock option awards granted prior to 2007,
unvested stock options are immediately canceled upon termination
of employment for any reason other than death, disability or
qualifying retirement, in which case the options will either
vest immediately (in the case of death or disability) or
continue to vest according to their original vesting schedule
(in the case of retirement) and may be exercised for a
designated period or the full term of the option, as set forth
in the award agreement. For pre-2007 stock option grants, vested
stock options may be exercised only while the optionee remains
employed by us, except that vested options may be exercised for
90 days after termination of employment for a reason other
than death, disability, qualifying retirement or termination for
cause. A qualifying retirement means any termination of
employment when an optionee is age 55 or older and has at
least five years of service with Piper Jaffray. None of the
named executive officers currently meets the qualifications for
retirement under the terms of the option award agreement.
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Executive officers who are terminated during the year (other
than as a result of a change in control) will receive cash and
equity compensation for that year under our annual incentive
program in the discretion of the Committee. If a payout is made
to the terminated executive, the amount will be based on
adjusted pre-tax operating income for the portion of the year
preceding the executives termination.
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Under our Incentive Plan, following a termination of employment
as a result of a change in control, all outstanding stock
options will become fully vested and exercisable, all
outstanding restricted stock (other than the long-term,
performance-based restricted stock awards that were granted to
the Leadership Team in 2008) will vest and all restrictions
on the restricted stock will lapse. Our annual performance
awards, including the annual qualified performance-based awards
under the annual incentive program for our Leadership Team
members, will be considered to be earned and payable in full,
and such annual performance awards will be settled in cash or
shares, as determined by the Committee, as promptly as
practicable. Because annual incentive award payouts are based on
adjusted pre-tax operating income, which varies from year to
year, and because the Committee historically has needed to
reduce the size of some awards to comply with the limits on the
aggregate amount of incentive compensation that may be paid out
to the Leadership Team as a group under the annual incentive
program, the specific amounts that would be payable to our
Leadership Team upon a change in control historically have been
indeterminable.
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Under the applicable award agreements for the long-term,
performance-based restricted stock awards that were granted to
the Leadership Team in 2008, no amount of the award would vest
upon a change in control as of December 31, 2008, but 20%
of the award will vest if a change in control occurs between
April 30, 2009 and April 30, 2010 and an additional
20% will vest in each subsequent year if a change in control
occurs during that year.
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Under the Non-Qualified Retirement Plan, employees are entitled
to a payout of their vested account balance upon any employment
termination other than a termination for cause.
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Participants in the Second Century 2000 Plan remain entitled to
receive full benefits under the plan if the participants
employment terminates following a change in control or if the
participants employment terminates for any other reason,
so long as the individual is not terminated for cause and does
not violate certain post-termination restrictions; otherwise the
amount of the benefits may be limited to the lesser of
(i) the amount of the participants deferred award
plus simple interest at 6.5% per annum from the effective date
of the plan (February 28, 2000) through the
participants termination date, and (ii) the value of
the participants account under the plan.
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Participants in the Second Century 1998 Plan remain entitled to
receive full benefits under the plan if the participants
employment terminates following a change in control or if the
participants employment terminates for any other reason,
so long as the individual does not violate certain
post-termination restrictions and does not commit any act of
gross misconduct, as defined in the plan; otherwise
the benefits are forfeited.
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Our employees who are at least 55 years old and have at
least five years of service with us at the time of their
employment termination are eligible to participate in our
retiree medical insurance program following their termination of
employment. Under this program, the employee pays premiums to
cover the cost of retiree medical insurance that is negotiated
by us at a group rate and therefore may be more economical than
what is available for employees purchasing insurance on their
own. Employees who meet certain eligibility requirements accrue
credits during their employment with us that may be applied to
offset two-thirds of the cost of the employees retiree
medical insurance premiums, until the credit balance is
depleted. Such credits begin to accrue to employees when the
employee first meets one of the following age and years of
service thresholds: age of 45 plus at least 15 years of
service with us, or age of 50 plus at least 10 years of
service with us. The credits are valued at $1,200 per year and
accrue annual interest
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of 5.5%. As of December 31, 2008, our named executive
officers had accrued credit balances as follows: Mr. Duff,
$9,920; and Mr. Schnettler, $11,666; Messrs. Salveson
and Peterson and Ms. Schoneman do not meet the eligibility
requirements to receive credits. None of the named executive
officers currently meets the eligibility requirements to
participate in our retiree medical insurance program.
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Compensation
Policies
Executive
Stock Ownership
We have adopted stock ownership guidelines to ensure that each
member of the Leadership Team maintains a meaningful equity
stake in the company, which aligns managements interests
with those of our shareholders. The guidelines, which help to
drive long-term performance and strengthen retention, provide
for our Leadership Team members to hold Piper Jaffray Companies
stock as follows:
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For the chief executive officer, a value equal to seven times
base salary;
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For the president and chief operating officer, a value equal to
six times base salary;
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For the head of each business line (including the chief
executive officer of Piper Jaffray Ltd. (our European operation)
and the chief executive officer of Piper Jaffray Asia), a value
equal to five times base salary; and
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For the chief financial officer, chief administrative officer
and general counsel, a value equal to two times base salary.
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These goals must be attained within five years of joining the
Leadership Team. As of January 2, 2009, all of the named
executive officers meet the guidelines based on 2009 salary
levels. We also have adopted a share retention policy requiring
members of our Leadership Team to hold at least 50% of the
shares awarded to them through our incentive plans, or acquired
upon exercise of stock options awarded to them, net of taxes and
transaction costs, for a minimum of five years. Shares held by
Leadership Team members that were acquired prior to the member
joining the Leadership Team are not subject to these retention
guidelines.
We have an employee trading policy providing that employees may
not sell our stock short and may not enter into any derivatives
transaction in our stock if the effect of the transaction would
be substantially equivalent to a short position in our stock or
any standardized options strategy other than a covered call or
protective put, and employees may not utilize any hedging
strategy with respect to non-transferable Piper Jaffray
securities, including restricted stock. Subject to these rules,
our employees are permitted to hedge investments in our stock so
long as they do not initiate any part of the hedge or unwind any
part of such a hedge during designated trading blackout periods.
Equity Grant
Timing Policy
In 2006, we established a policy pursuant to which equity grants
to employees will be made only once each quarter, on the
15th calendar day of the month following the public release
of earnings for the preceding quarter (or, if the
15th calendar day falls on a weekend or holiday, on the
first business day thereafter). This policy covers grants made
by the Committee as well as grants made by our chief executive
officer to employees other than executive officers pursuant to
authority delegated to him by the Committee. We established this
equity grant timing policy to provide a regular, fixed schedule
for equity grants that eliminates the exercise of discretion
with respect to the grant date of employee equity awards. The
grant dates under this policy are outside of the designated
trading blackout periods that apply to our employees generally
and fall within the regularly scheduled trading window periods
during which our executive officers generally are permitted to
trade in our securities.
23
Policy on
Qualifying Compensation for Deductibility
Section 162(m) of the Internal Revenue Code limits
deductions for non-performance-based annual compensation in
excess of $1 million paid to our named executive officers
who served as executive officers at the end of the preceding
fiscal year. Our policy is to maximize the tax deductibility of
compensation paid to these officers. Accordingly, in 2004, 2006,
and 2008 we sought and obtained shareholder approval for the
Piper Jaffray Companies Amended and Restated 2003 Annual and
Long-Term Incentive Plan, under which our annual incentive
program is administered and annual cash and equity incentives
are paid. The plan is designed and administered to qualify
compensation awarded under our annual incentive program as
performance-based to ensure that the tax deduction
is available to the company. From time to time the Committee may
authorize payments to the named executive officers that may not
be fully deductible, if they believe such payments are in the
interests of shareholders.
Restatement
In February of this year, the company announced that certain
previously-issued financial statements, including the annual
financial statements for the years ended December 31, 2007
and 2006, and the related reports of our independent registered
public accounting firm, Ernst & Young LLP, should no
longer be relied upon. The company reached this conclusion after
management re-evaluated the practice of expensing our
stock-based compensation typically over a period of three years.
Management believed that expensing these awards was permitted
based on the terms of the equity award agreement and Statement
of Financial Accounting Standards No 123(R), Share-Based
Payment. Following an extensive analysis of the complex
criteria with SFAS 123(R), management concluded, in
consultation with our auditors, that the companys results
should be restated to recognize expense for all of the
outstanding affected equity awards in the year in which those
awards were deemed to be earned, rather than over the three-year
vesting period. The Committee has evaluated the impact of this
event on the prior compensation of our Leadership Team,
including the named executive officers, and determined that no
adjustment is necessary or appropriate.
COMPENSATION
COMMITTEE REPORT
The Committee has reviewed and discussed the Compensation
Discussion and Analysis with management and has recommended to
the Board of Directors the inclusion of the Compensation
Discussion and Analysis in the companys year-end
disclosure documents.
Compensation
Committee of the Board of Directors of Piper Jaffray
Companies
Lisa K. Polsky,
Chairperson
Michael R. Francis
Frank L. Sims
Jean M. Taylor
24
Summary
Compensation Table
The following table contains compensation information for our
chief executive officer, our chief financial officer, and our
three other most highly compensated executive officers.
None
of named executive officers included in the following table
received an annual incentive award for 2008 performance.
The
2008 amounts included in the following table (other than an
individuals salary) consist primarily of equity
amortization expense under SFAS 123(R) for a long-term,
performance-based restricted stock award that is subject to
forfeiture if the company does not achieve a return on adjusted
common equity target within five years, and cash awards dating
back to our spin-off from U.S. Bancorp on December 31,
2003, that were paid out on a five-year schedule.
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Stock
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Option
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All Other
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Salary
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Bonus
(2)(3)
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Awards
(4)
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Awards
(4)
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Compensation
(5)
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Total
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Name &
Principal Position
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Year
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($)
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($)
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($)
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($)
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($)
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($)
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Andrew S. Duff
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2008
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400,000
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491,990
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54,847
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585,470
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1,532,307
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Chairman and CEO
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2007
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396,667
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1,248,777
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1,192,612
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639,170
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585,200
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4,062,426
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2006
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380,000
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1,758,732
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2,910,694
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562,283
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579,206
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6,190,915
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Debbra L. Schoneman
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2008
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205,417
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117,586
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244
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12,408
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335,655
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Chief Financial
Officer
(1)
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Thomas P. Schnettler
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2008
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271,875
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429,532
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64,103
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77,896
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843,406
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President and Chief Operating Officer
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2007
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225,000
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1,182,249
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1,109,970
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563,493
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69,065
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3,149,777
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2006
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205,000
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1,687,105
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2,655,542
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339,907
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49,077
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4,936,631
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Jon W. Salveson
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2008
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225,000
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334,616
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8,937
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37,591
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606,144
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Head of Investment Banking
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2007
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225,000
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1,034,598
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835,132
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447,029
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57,000
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2,598,759
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2006
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180,000
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2,045,762
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2,420,060
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299,054
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18,608
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4,963,484
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Robert W. Peterson
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2008
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225,000
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264,631
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36,755
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100,058
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626,444
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Head of Equities
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2007
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225,000
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725,483
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631,790
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336,245
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80,023
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1,998,541
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2006
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205,000
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1,039,144
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1,567,888
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204,504
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80,622
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3,097,158
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(1)
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Ms. Schoneman
became our chief financial officer in May 2008 and was not one
of our named executive officers for 2007 or 2006. As permitted
by regulations of the Securities and Exchange Commission, the
table above includes Ms. Schonemans compensation only
for the year in which she was one of our named executive
officers.
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(2)
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The amounts in this
column include the cash compensation paid under our annual
incentive program, which is designed to permit the company to
deduct the compensation paid. The program allows the Committee
substantial discretion to determine compensation if the company
achieves adjusted pre-tax operating income, and the Committee
consistently has used this discretion in establishing
compensation following the completion of a fiscal year.
Accordingly, we report amounts paid under this program in the
Bonus column and not the Non-Equity Incentive
Plan Compensation column. For 2008, the Company failed to
achieve any adjusted pre-tax operating income and no amounts
were paid.
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(3)
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The amounts in this
column for Mr. Duff in 2007 and 2006 also include $125,000
paid to him in each of those years pursuant to a discretionary
cash award granted to him in December 2003 in connection with
our spin-off from U.S. Bancorp. In addition to these
discretionary awards, Mr. Duff received a cash award in
December 2003 to replace the lost value of U.S. Bancorp equity,
and these amounts are included in the All Other
Compensation column and footnote 5 below. These cash
awards are described in more detail above in Compensation
Discussion and Analysis Compensation Program and
Payments 2003 Cash Award Program Following Our
Spin-Off From U.S. Bancorp. The amount in this column for
Mr. Salveson in 2006 also includes $742,520 that was paid
to him outside of the annual incentive program described above
because he did not become an executive officer until
August 11, 2006.
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(4)
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The entries in the
stock awards and option awards columns reflect the respective
dollar amounts of stock-based compensation recognized for 2008,
2007 and 2006 financial statement reporting purposes in
accordance with SFAS 123(R). The amounts for 2008 relate to
the long-term, performance based restricted stock awards that
were granted to the Leadership Team in 2008 as described above
in Compensation Discussion and Analysis
Compensation Program and Payments 2008 Long-Term,
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Performance-Based
Equity Grant. These amounts have been reported on a
restated basis following a determination that resulted in the
recognition of expense associated with these equity awards in
the year in which the awards were earned rather than over the
three-year vesting period. Refer to Notes 1 and 21 in the
Notes to Consolidated Financial Statements included in our
Annual Report on
Form 10-K
filed on February 28, 2009 for a discussion of this
restatement and the relevant assumptions used to determine the
valuation of our stock and option awards for accounting purposes.
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(5)
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All other
compensation consists of the following:
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Form of All
Other
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Andrew S.
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Debbra L.
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Thomas P.
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Jon W.
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|
Robert W.
|
|
Compensation
|
|
Year
|
|
|
Duff
|
|
|
Schoneman
|
|
|
Schnettler
|
|
|
Salveson
|
|
|
Peterson
|
|
|
Parking stipend
|
|
|
2008
|
|
|
|
2,880
|
|
|
|
2,880
|
|
|
|
2,880
|
|
|
|
2,880
|
|
|
|
2,880
|
|
|
|
|
2007
|
|
|
|
2,880
|
|
|
|
n/a
|
|
|
|
2,880
|
|
|
|
2,160
|
|
|
|
2,880
|
|
|
|
|
2006
|
|
|
|
2,880
|
|
|
|
n/a
|
|
|
|
2,880
|
|
|
|
2,160
|
|
|
|
2,880
|
|
Club membership dues
|
|
|
2008
|
|
|
|
4,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
4,494
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
|
4,494
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k) matching contributions
|
|
|
2008
|
|
|
|
6,120
|
|
|
|
6,120
|
|
|
|
6,120
|
|
|
|
6,120
|
|
|
|
6,120
|
|
|
|
|
2007
|
|
|
|
5,850
|
|
|
|
n/a
|
|
|
|
5,850
|
|
|
|
5,850
|
|
|
|
5,850
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
n/a
|
|
|
|
3,768
|
|
|
|
3,768
|
|
|
|
3,768
|
|
Life and long-term
|
|
|
2008
|
|
|
|
1,089
|
|
|
|
837
|
|
|
|
1,089
|
|
|
|
855
|
|
|
|
855
|
|
disability insurance premiums
|
|
|
2007
|
|
|
|
1,089
|
|
|
|
n/a
|
|
|
|
1,089
|
|
|
|
855
|
|
|
|
855
|
|
|
|
|
2006
|
|
|
|
945
|
|
|
|
n/a
|
|
|
|
1,089
|
|
|
|
855
|
|
|
|
837
|
|
2003 cash awards (replacing the
|
|
|
2008
|
|
|
|
570,887
|
|
|
|
2,571
|
|
|
|
30,523
|
|
|
|
10,313
|
|
|
|
69,953
|
|
lost value of U.S. Bancorp equity)
|
|
|
2007
|
|
|
|
570,887
|
|
|
|
n/a
|
|
|
|
30,523
|
|
|
|
10,313
|
|
|
|
69,953
|
|
|
|
|
2006
|
|
|
|
570,887
|
|
|
|
n/a
|
|
|
|
30,523
|
|
|
|
10,313
|
|
|
|
69,953
|
|
Other
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
37,284
|
|
|
|
17,423
|
|
|
|
20,250
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
n/a
|
|
|
|
28,723
|
|
|
|
37,822
|
|
|
|
485
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
n/a
|
|
|
|
10,817
|
|
|
|
1,512
|
|
|
|
3,184
|
|
The Parking stipend has been discontinued, and the
Other amounts identified in the table above include:
|
|
|
|
|
For Messrs. Schnettler, Salveson and Peterson, amounts paid
out in 2008, 2007 and 2006 under the Second Century 1998 Plan
and the Second Century 2000 Plan.
|
|
|
|
For Mr. Salveson for 2008, the amount also includes a
$5,175 cash payment representing his proportionate share of a
venture capital fund carried interest held by the company as
part of a compensation program implemented prior to our spin-off
from U.S. Bancorp.
|
26
Grants of
Plan-Based Awards
The following table provides information regarding the grants of
plan-based awards made to the named executive officers during
the year ended December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Possible
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts
|
|
|
All Other
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
|
|
|
Stock
|
|
|
Awards:
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
Number of
|
|
|
Exercise
|
|
|
Fair Value
|
|
|
|
|
|
|
Compensation
|
|
|
Plan
|
|
|
Number of
|
|
|
Securities
|
|
|
Price of
|
|
|
of Stock
|
|
|
|
|
|
|
Committee
|
|
|
Awards
|
|
|
Shares of
|
|
|
Underlying
|
|
|
Option
|
|
|
and Option
|
|
|
|
|
|
|
Approval
|
|
|
Maximum
|
|
|
Stock
(3)(4)
|
|
|
Options
(3)(5)
|
|
|
Awards
(6)
|
|
|
Awards
(4)(5)
|
|
Name
|
|
Grant
Date
|
|
|
Date
(1)
|
|
|
($)
(2)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Andrew S. Duff
|
|
|
5/15/2008
|
|
|
|
5/2/2008
|
|
|
|
|
|
|
|
78,314
|
|
|
|
|
|
|
|
|
|
|
|
3,250,000
|
|
|
|
|
2/15/2008
|
|
|
|
1/22/2008
|
|
|
|
3,706,500
|
|
|
|
19,145
|
|
|
|
32,149
|
|
|
|
41.09
|
|
|
|
1,292,344
|
|
Debbra L. Schoneman
|
|
|
8/15/2008
|
|
|
|
7/30/2008
|
|
|
|
|
|
|
|
24,390
|
|
|
|
|
|
|
|
|
|
|
|
863,406
|
|
|
|
|
2/15/2008
|
|
|
|
1/22/2008
|
|
|
|
3,706,500
|
|
|
|
1,922
|
|
|
|
|
|
|
|
|
|
|
|
78,975
|
|
Thomas P. Schnettler
|
|
|
5/15/2008
|
|
|
|
5/2/2008
|
|
|
|
|
|
|
|
66,266
|
|
|
|
|
|
|
|
|
|
|
|
2,750,000
|
|
|
|
|
2/15/2008
|
|
|
|
1/22/2008
|
|
|
|
3,706,500
|
|
|
|
16,479
|
|
|
|
27,673
|
|
|
|
41.09
|
|
|
|
1,112,388
|
|
Jon W. Salveson
|
|
|
5/15/2008
|
|
|
|
5/2/2008
|
|
|
|
|
|
|
|
54,217
|
|
|
|
|
|
|
|
|
|
|
|
2,250,000
|
|
|
|
|
2/15/2008
|
|
|
|
1/22/2008
|
|
|
|
3,706,500
|
|
|
|
14,421
|
|
|
|
24,217
|
|
|
|
41.09
|
|
|
|
973,462
|
|
Robert W. Peterson
|
|
|
5/15/2008
|
|
|
|
5/2/2008
|
|
|
|
|
|
|
|
42,169
|
|
|
|
|
|
|
|
|
|
|
|
1,750,000
|
|
|
|
|
2/15/2008
|
|
|
|
1/22/2008
|
|
|
|
3,706,500
|
|
|
|
10,113
|
|
|
|
16,981
|
|
|
|
41.09
|
|
|
|
682,614
|
|
|
|
(1)
|
The Compensation
Committee approved a grant of stock and option awards identified
in the all other stock awards and all other option award columns
of this table at a meeting on January 22, 2008. In
accordance with the terms of this approval and our equity grant
timing policy, the awards were granted on February 15,
2008. In addition, the Compensation Committee approved a
long-term, performance-based restricted stock award to the named
executive officers other than Ms. Schoneman on May 2,
2008, and this award was granted on May 15, 2008 in
accordance with the terms of our equity grant timing policy.
Ms. Schonemans long-term, performance-based award was
approved in connection with her promotion as chief financial
officer on July 30, 2008, and the award was granted on
August 15, 2008 in accordance with the terms of our equity
grant timing policy. These long-term, performance based
restricted stock awards are identified in the all other stock
awards column of the above table, and the vesting provisions of
these awards require that the company meet a return on adjusted
common equity target of 11% over a twelve-month period, to be
achieved by April 30, 2013.
|
|
|
(2)
|
The amounts in this
column reflect an estimate of the maximum combined value of the
cash and equity that would have been payable to the named
executive officers under qualified performance-based awards
granted to the named executive officers for 2008 performance
under the annual incentive program for our Leadership Team, had
we achieved the same adjusted pre-tax operating income for 2008
as was achieved for 2007. Because the potential amounts payable
under the qualified performance-based awards are stated in the
annual incentive program as a percentage of adjusted pre-tax
operating income that can only be decreased, and not increased,
from that maximum level, and because actual amounts paid below
this maximum level are within the full discretion of the
Committee, there are no identifiable threshold or target amounts
under the awards, and the maximum amounts actually payable to
the named executive officers pursuant to the awards for 2008
performance were indeterminable at the time the awards were
granted. Accordingly, we estimated these amounts using our
adjusted pre-tax operating income for 2007. In addition, because
the Committee has full discretion to determine the total dollar
value of the respective amounts to be paid out under the awards
in the form of cash and equity, the amount of each form of
payment under the awards is indeterminable until after the
awards are paid. No amounts were actually paid under our 2008
annual incentive program as discussed above in
Compensation Discussion and Analysis
Compensation Program and Payments Annual Incentive
Compensation.
|
|
(3)
|
The amounts in these
columns reflect equity compensation paid out to the named
executive officers in 2008 pursuant to annual qualified
performance-based awards granted to these officers in 2007 under
our annual incentive program for the Leadership Team. The shares
of restricted stock and stock options
|
27
|
|
|
were granted to
these officers on February 15, 2008 following the
Compensation Committees certification of the attainment of
2007 annual financial performance goals established by the
Committee under the annual incentive program. All of the
restricted stock and stock options were granted under our
Incentive Plan and will vest in full on February 15, 2011,
assuming the award recipient complies with the terms and
conditions of the applicable award agreement, as discussed in
the Compensation Discussion and Analysis under
Compensation Program and Payouts Termination
and Change in Control Arrangements Other Termination
and
Change-in-Control
Provisions. The amounts in the all other stock awards
column also reflect the long-term, performance-based restricted
stock awards that were granted to the Leadership Team in 2008.
All of the named executive officers other than
Ms. Schoneman were granted this award on May 15, 2008,
and Ms. Schoneman was granted the award on August 15,
2008 following her appointment as chief financial officer. For
more information regarding these grants, refer to
Compensation Discussion and Analysis
Compensation Program and Payments 2008
Long-Term, Performance-Based Equity Grant.
|
|
|
(4)
|
The restricted stock
awards (other than the long-term, performance-based restricted
stock award that was granted to the Leadership Team in
2008) are subject to forfeiture prior to vesting following
certain terminations of employment or in the event the award
recipient is terminated for cause, misappropriates confidential
company information, participates in or is employed by a
competitor of Piper Jaffray, or solicits employees, customers or
clients of Piper Jaffray, all as set forth in more detail in the
applicable award agreement. Recipients have the right to vote
all shares of Piper Jaffray restricted stock they hold and to
receive dividends (if any) on the restricted stock at the same
rate paid to our other shareholders. (We currently do not pay
dividends on our common stock.) The number of shares of
restricted stock awarded to each named executive officer under
our 2007 annual incentive program was determined by dividing
specified dollar amounts representing a percentage of the
individuals total annual incentive compensation for that
year by $41.09, the closing price of our common stock on the
February 15, 2008 grant date. With respect to
Messrs. Duff, Schnettler, Salveson and Peterson, the number
of shares of restricted stock awarded in connection with our
long-term performance-based grant in May 2008 was determined by
the Compensation Committee by reference to a number of shares
for each individual that could not exceed a pre-determined
maximum value for each based on the closing price of our common
stock on the grant date. On the date of grant, this maximum
value reduced the number of shares for each individual. With
respect to Ms. Schoneman, the number of shares of
restricted stock awarded to her in August 2008 was an amount
that correlated with the awards in May for other Leadership Team
members in corporate support functions, except that the number
of shares to be awarded was not reduced on the grant date
because the maximum value had not been reached.
|
|
(5)
|
The stock option
awards granted under our 2007 annual incentive program expire on
the tenth anniversary of the grant date if not earlier
exercised; they will continue to vest following a termination of
employment so long as the termination was not for cause and the
employee does not violate certain post-termination restrictions
for the remaining vesting term of the awards. The number of
shares of stock options awarded to each officer in 2008 for 2007
performance was determined by dividing specified dollar amounts
representing a percentage of the individuals total annual
incentive compensation for that year by the Black-Scholes value
of one option share on the grant date.
|
|
|
(6)
|
The exercise price
equals the $41.09 closing sale price of one share of our common
stock on the grant date of the options (February 15, 2008).
|
28
Outstanding
Equity Awards at Fiscal Year End
The following table sets forth certain information concerning
equity awards held by the named executive officers that were
outstanding as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards
|
|
|
|
Option
Awards
|
|
|
Number of
|
|
|
|
|
|
|
Number of
Securities
|
|
|
Number of
Securities
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
Market Value
of
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock that
|
|
|
Shares of
Stock
|
|
|
|
Unexercised
Options
|
|
|
Unexercised
Options
|
|
|
Option
|
|
|
Option
|
|
|
Have Not
|
|
|
That Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Exercise Price
|
|
|
Expiration
|
|
|
Vested
(2)
|
|
|
Vested
(3)
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
(1)
|
|
|
(#)
|
|
|
($)
|
|
|
Andrew S. Duff
|
|
|
24,940
|
|
|
|
|
|
|
|
47.30
|
|
|
|
2/12/2014
|
|
|
|
135,704
|
|
|
|
5,395,591
|
|
|
|
|
11,719
|
|
|
|
|
|
|
|
39.62
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,098
|
|
|
|
47.85
|
|
|
|
2/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,641
|
|
|
|
70.13
|
|
|
|
2/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,149
|
|
|
|
41.09
|
|
|
|
2/15/2018
|
|
|
|
|
|
|
|
|
|
Debbra L. Schoneman
|
|
|
485
|
|
|
|
|
|
|
|
47.30
|
|
|
|
2/12/2014
|
|
|
|
27,478
|
|
|
|
1,092,525
|
|
|
|
|
290
|
|
|
|
|
|
|
|
39.62
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
Thomas P. Schnettler
|
|
|
1,938
|
|
|
|
|
|
|
|
47.30
|
|
|
|
2/12/2014
|
|
|
|
118,462
|
|
|
|
4,710,049
|
|
|
|
|
12,696
|
|
|
|
|
|
|
|
39.62
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,241
|
|
|
|
47.85
|
|
|
|
2/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,248
|
|
|
|
70.13
|
|
|
|
2/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,673
|
|
|
|
41.09
|
|
|
|
2/15/2018
|
|
|
|
|
|
|
|
|
|
Jon W. Salveson
|
|
|
5,729
|
|
|
|
|
|
|
|
47.30
|
|
|
|
2/12/2014
|
|
|
|
103,759
|
|
|
|
4,125,458
|
|
|
|
|
10,639
|
|
|
|
|
|
|
|
39.62
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,868
|
|
|
|
70.13
|
|
|
|
2/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,217
|
|
|
|
41.09
|
|
|
|
2/15/2018
|
|
|
|
|
|
|
|
|
|
Robert W. Peterson
|
|
|
|
|
|
|
1,938
|
|
|
|
47.30
|
|
|
|
2/12/2014
|
|
|
|
73,779
|
|
|
|
2,933,453
|
|
|
|
|
6,250
|
|
|
|
|
|
|
|
39.62
|
|
|
|
2/22/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,269
|
|
|
|
47.85
|
|
|
|
2/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,646
|
|
|
|
70.13
|
|
|
|
2/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,981
|
|
|
|
41.09
|
|
|
|
2/15/2018
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Option awards
expiring on February 21, 2016, will vest on
February 21, 2009; option awards expiring on
February 15, 2017, will vest on February 15, 2010; and
option awards expiring on February 15, 2018, will vest on
February 15, 2011; in each case so long as the award
recipient complies with the terms and conditions of the
applicable award agreement.
|
|
|
(2)
|
The shares of
restricted stock vest on the dates and in the amounts set forth
in the table below, so long as the award recipient complies with
the terms and conditions of the applicable award agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
Scheduled to Vest That Are Held
|
|
|
|
by Each Named
Executive Officer
|
|
|
|
Andrew S.
|
|
|
Debbra L.
|
|
|
Thomas P.
|
|
|
Jon W.
|
|
|
Robert W.
|
|
Vesting
Date
|
|
Duff
|
|
|
Schoneman
|
|
|
Schnettler
|
|
|
Salveson
|
|
|
Peterson
|
|
|
February 21, 2009
|
|
|
15,988
|
|
|
|
617
|
|
|
|
18,986
|
|
|
|
19,268
|
|
|
|
11,192
|
|
February 15, 2010
|
|
|
22,257
|
|
|
|
549
|
|
|
|
16,731
|
|
|
|
15,853
|
|
|
|
10,305
|
|
February 15, 2011
|
|
|
19,145
|
|
|
|
1,922
|
|
|
|
16,479
|
|
|
|
14,421
|
|
|
|
10,113
|
|
|
|
|
|
|
In addition to the
shares of restricted stock set forth in the table above, the
following number of shares of restricted stock will cliff-vest
if our company meets a return on adjusted common equity target
of 11% over a twelve-month period, assuming the award recipient
remains an employee: Mr. Duff, 78,314 shares;
Ms. Schoneman, 24,390 shares; Mr. Schnettler,
66,266 shares; Mr. Salveson,
|
29
|
|
|
|
|
54,217 shares;
and Mr. Peterson, 42,169 shares. The shares of
restricted stock are forfeited, however, if the performance
metric for the company is not met by April 30, 2013.
|
|
|
(3)
|
The values in this
column are based on the $39.76 closing sale price of our common
stock on the New York Stock Exchange on December 31, 2008.
|
Option Exercises
and Stock Vested
The following table sets forth certain information concerning
stock vested during the year ended December 31, 2008. No
stock options were exercised by any of the named executive
officers in 2008.
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards
|
|
|
|
Number of
Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
on
|
|
|
|
Vesting
|
|
|
Vesting
(1)
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
Andrew S. Duff
|
|
|
28,963
|
|
|
|
1,190,090
|
|
Debbra L. Schoneman
|
|
|
884
|
|
|
|
36,324
|
|
Thomas P. Schnettler
|
|
|
31,377
|
|
|
|
1,289,281
|
|
Jon W. Salveson
|
|
|
16,941
|
|
|
|
696,106
|
|
Robert W. Peterson
|
|
|
15,447
|
|
|
|
634,717
|
|
|
|
(1)
|
The value realized
upon vesting of the stock awards is based on the $41.09 closing
sale price of our common stock on the February 15, 2008
vesting date of the awards.
|
Non-Qualified
Deferred Compensation Plans
The following table provides information regarding amounts
accrued by the named executive officers in our Non-Qualified
Retirement Plan. As discussed in the Compensation Discussion and
Analysis, participation in this plan was frozen in 2004 and no
new benefits may be earned by participants in the plan. However,
participating employees will continue to receive investment
credits on their transferred plan balances in accordance with
the terms of the plan. The investment credits are paid in a
lump-sum on December 31 each year to employees who remain
employed by us on that date. Each employees plan balance
will be payable by us upon the employees retirement or
termination of employment. No amounts or portions of amounts
reported in the column reporting aggregate earnings in the last
fiscal year were included in the Summary Compensation Table
because the amounts earned were not earned at a preferential
rate. We previously have reported fiscal year-end balances in
our proxy statement but not in the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Earnings
(Loss)
|
|
|
Balance at
Last
|
|
|
|
in Last Fiscal
Year
|
|
|
Fiscal
Year-End
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
Andrew S. Duff
|
|
|
(106,006
|
)
|
|
|
383,857
|
|
Debbra L. Schoneman
|
|
|
(5,357
|
)
|
|
|
12,651
|
|
Thomas P. Schnettler
|
|
|
(254,753
|
)
|
|
|
601,559
|
|
Jon W. Salveson
|
|
|
(55,038
|
)
|
|
|
377,649
|
|
Robert W. Peterson
|
|
|
(140,625
|
)
|
|
|
332,065
|
|
Under the Second Century 1998 Plan and the Second Century 2000
Plan described in the Compensation Discussion and Analysis,
certain key employees were granted one or more deferred bonus
awards that were deemed invested in certain measuring
investments. Following a liquidity event for a particular
investment, the participant receives a benefit payment based on
the deemed return to the participant and payment of the portion
of the participants account that was deemed invested.
Participants may continue to receive payments under the plans
until a liquidity or bankruptcy event has occurred with respect
to each measuring investment. No new awards have been granted
under these plans since 2000, and participation in the plans is
frozen. The following table identifies the amounts
30
earned in 2008 and the deferred balances for each of the named
executive officers who received one or more deferred bonuses
under the plans. The amounts earned in 2008 are included in
All Other Compensation in the Summary Compensation
Table. We previously have not included fiscal year-end balances
in the Summary Compensation Table, but have included earnings
paid out in a given year in the Summary Compensation Table for
that year.
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
Earnings Paid
|
|
|
Deferred
Balance
|
|
|
|
Out in Last
|
|
|
(Deemed
Investment) at
|
|
|
|
Fiscal Year
|
|
|
Last Fiscal
Year-End
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
Thomas P. Schnettler
|
|
|
37,284
|
|
|
|
550,000
|
|
Jon W. Salveson
|
|
|
12,248
|
|
|
|
100,000
|
|
Robert W. Peterson
|
|
|
20,252
|
|
|
|
200,000
|
|
31
Potential
Payments Upon Termination or
Change-in-Control
The following table sets forth quantitative information with
respect to potential payments to be made to each of the named
executive officers or their beneficiaries upon termination in
various circumstances, assuming termination on December 31,
2008. In the following table, unless indicated otherwise, all
equity is listed at its dollar value as of December 31,
2008, based on the closing sale price of our common stock on
that date. Options are shown at intrinsic value, which
represents the difference between the exercise price of the
option and the stock price on December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of
Termination
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Within 24
|
|
|
|
|
|
Involuntary
|
|
|
Other
|
|
|
|
|
|
|
Control Not
|
|
|
Months
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
Followed by
|
|
|
Following a
|
|
|
|
|
|
Under
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
Employment
|
|
|
Change in
|
|
|
Voluntary
|
|
|
Severance
|
|
|
Not for
|
|
|
Termination
|
|
Name
|
|
Termination
|
|
|
Control
|
|
|
Termination
|
|
|
Plan
|
|
|
Cause
|
|
|
for
Cause
|
|
|
Andrew S. Duff
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$400,000
|
|
|
|
|
|
|
|
|
|
Restricted
Stock
(2)(3)
|
|
|
$2,281,826
|
|
|
|
$2,281,826
|
|
|
|
$2,281,826
|
|
|
|
$2,281,826
|
|
|
|
$2,281,826
|
|
|
|
|
|
Stock
Options
(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Retirement
Plan
(4)
|
|
|
$383,857
|
|
|
|
$383,857
|
|
|
|
$383,857
|
|
|
|
$383,857
|
|
|
|
$383,857
|
|
|
|
|
|
Debbra L. Schoneman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$152,308
|
|
|
|
|
|
|
|
|
|
Restricted
Stock
(2)(3)
|
|
|
$122,779
|
|
|
|
$122,779
|
|
|
|
$122,779
|
|
|
|
$122,779
|
|
|
|
$122,779
|
|
|
|
|
|
Stock
Options
(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Retirement
Plan
(4)
|
|
|
$12,651
|
|
|
|
$12,651
|
|
|
|
$12,651
|
|
|
|
$12,651
|
|
|
|
$12,651
|
|
|
|
|
|
Thomas P. Schnettler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$186,154
|
|
|
|
|
|
|
|
|
|
Restricted
Stock
(2)(3)
|
|
|
$2,075,313
|
|
|
|
$2,075,313
|
|
|
|
$2,075,313
|
|
|
|
$2,075,313
|
|
|
|
$2,075,313
|
|
|
|
|
|
Stock
Options
(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Retirement
Plan
(4)
|
|
|
$601,559
|
|
|
|
$601,559
|
|
|
|
$601,559
|
|
|
|
$601,559
|
|
|
|
$601,559
|
|
|
|
|
|
Second Century Deferred Compensation
Plans
(5)
|
|
|
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
|
|
Jon W. Salveson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$126,923
|
|
|
|
|
|
|
|
|
|
Restricted
Stock
(2)(3)
|
|
|
$1,969,790
|
|
|
|
$1,969,790
|
|
|
|
$1,969,790
|
|
|
|
$1,969,790
|
|
|
|
$1,969,790
|
|
|
|
|
|
Stock
Options
(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Retirement
Plan
(4)
|
|
|
$377,649
|
|
|
|
$377,649
|
|
|
|
$377,649
|
|
|
|
$377,649
|
|
|
|
$377,649
|
|
|
|
|
|
Second Century Deferred Compensation
Plans
(5)
|
|
|
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
|
|
Robert W. Peterson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$126,923
|
|
|
|
|
|
|
|
|
|
Restricted
Stock
(2)(3)
|
|
|
$1,197,703
|
|
|
|
$1,197,703
|
|
|
|
$1,197,703
|
|
|
|
$1,197,703
|
|
|
|
$1,197,703
|
|
|
|
|
|
Stock
Options
(2)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Retirement
Plan
(4)
|
|
|
$332,065
|
|
|
|
$332,065
|
|
|
|
$332,065
|
|
|
|
$332,065
|
|
|
|
$332,065
|
|
|
|
|
|
Second Century Deferred Compensation
Plans
(5)
|
|
|
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
(1)
|
Under our Severance
Plan, employees may be eligible for severance payments in the
event of employment termination by us due to a facility closure,
permanent work-force reduction, organizational change that
eliminates the employees position, or similar event as
determined by the company. The named executive officers
participate in the Severance Plan on the same basis as all other
employees. The amount in the table reflects salary continuation
payments calculated in accordance with the provisions of the
plan, except that salary continuation payments under the plan
are capped at $490,000. Also under this plan, the named
executive officers would be entitled to continue to participate
in our health and welfare benefits programs at employee rates
during the severance period.
|
32
|
|
(2)
|
Under our Incentive
Plan, in the event of a change in control of Piper Jaffray,
regardless of whether an employees employment is
terminated, all outstanding stock options will become fully
vested and exercisable, all outstanding restricted stock (other
than the long-term, performance-based awards that were granted
to the Leadership Team in 2008) will vest and all
restrictions on the restricted stock will lapse. Under the
applicable award agreements for the long-term, performance-based
restricted stock awards that were granted to the Leadership Team
in 2008, no amount of the award would vest upon a change in
control as of December 31, 2008, but 20% of the award will
vest if a change in control occurs between April 30, 2009
and April 30, 2010 and an additional 20% will vest in each
subsequent year if a change in control occurs during that year.
With respect to annual performance awards, including the
qualified performance-based awards granted under the annual
incentive program for the Leadership Team, the award will be
considered to be earned and payable in full, and such
performance awards will be settled in cash or shares, as
determined by the Compensation Committee, as promptly as
practicable. Because we did not generate adjusted pre-tax
operating income for 2008, no annual incentive award would have
been earned or payable for that year assuming any named
executive officers employment terminated at the end of the
year.
|
|
(3)
|
Under the applicable
award agreements, stock options granted since 2007 and all of
the restricted stock awards (other than the long-term,
performance-based awards that were granted to the Leadership
Team in 2008) will continue to vest following a termination
of employment so long as the termination was not for cause and
the employee does not violate certain post-termination
restrictions. The long-term, performance-based restricted stock
awards that were granted to the Leadership Team in 2008 will be
forfeited following a voluntary termination of employment, other
involuntary termination not for cause, or involuntary
termination for cause, but not in the event of an involuntary
termination under the Severance Plan so long as the employee
complies with the terms of the applicable severance agreement.
The stock options granted prior to 2007 will continue to vest
upon a qualifying retirement, and vesting of these stock option
awards and all the restricted stock awards will accelerate in
the event of termination due to death or disability. The
restricted stock (including the long-term, performance-based
awards that were granted to the Leadership Team in
2008) and stock option awards granted since 2007 will
continue to vest following a termination of employment under the
Severance Plan. Under the terms of the stock option awards
granted prior to 2007, vested stock options may be exercised
only while the optionee remains employed by us, except that
vested options may be exercised for 90 days after
termination of employment for a reason other than death,
disability, qualifying retirement or termination for cause, and
may be exercised for up to three years following a termination
due to death or disability. A qualifying retirement means any
termination of employment when an optionee is age 55 or
older and has at least five years of service with us. If an
optionee meets these requirements at the time of termination and
the termination is not for cause, the options granted prior to
2007 will continue to vest and may be exercised for the full
term of the option. As of December 31, 2008, none of the
named executive officers met the requirements for a qualifying
retirement. The amounts in the table reflect these terms and
conditions and assume compliance with any post-termination
vesting requirements that are within the named executive
officers control.
|
|
(4)
|
The amounts reflect
account balances under the Non-Qualified Retirement Plan as of
December 31, 2008. Under this plan, employees are entitled
to receive their account balances following a termination of
employment for any reason other than cause.
|
|
(5)
|
The amounts shown
reflect potential payouts under the Second Century 1998 Plan and
the Second Century 2000 Plan. Under these plans, participants
were granted one or more deferred awards, which were deemed
invested in certain measuring investments. Following a liquidity
event (as defined in the plan) for a particular measuring
investment, the participant receives a benefit payment based on
the deemed return to the participant with respect to the
measuring investment as well as payment of that portion of the
participants account that was deemed invested.
Participants may continue to receive payments under the plans
until a liquidity or bankruptcy event has occurred with respect
to each measuring investment in which deferred awards are deemed
to be invested. Individuals remain entitled to receive full
benefits under these plans following a termination of
employment, so long as the individual does not violate certain
post-termination restrictions and is not terminated for cause
(under
|
33
|
|
|
the 2000 plan) or as
the result of an act of gross misconduct (under the 1998 plan).
If the employee fails to comply with these provisions, under the
1998 plan the employee will lose his benefits, and under the
2000 plan the participant will receive the amount originally
deferred with interest at 6.5% per annum. The benefits that
would be payable under these plans in every event other than a
termination for cause are indeterminable because they are based
on the value to investors of liquidity events, the timing and
value of which are not ascertainable in advance. The following
is a table of deferred awards for the 1998 Plan and 2000 Plan.
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|
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Award
|
|
|
|
|
|
|
Amounts Under
|
|
|
|
Deferred Award
Amounts under 1998 Plan
|
|
|
2000 Plan
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
Thomas P. Schnettler
|
|
|
1996
|
|
|
$
|
250,000
|
|
|
|
1997
|
|
|
$
|
125,000
|
|
|
|
1998
|
|
|
$
|
75,000
|
|
|
|
2000
|
|
|
$
|
100,000
|
|
Jon W. Salveson
|
|
|
1996
|
|
|
$
|
25,000
|
|
|
|
1997
|
|
|
$
|
50,000
|
|
|
|
1998
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
Robert W. Peterson
|
|
|
1996
|
|
|
$
|
50,000
|
|
|
|
1997
|
|
|
$
|
75,000
|
|
|
|
1998
|
|
|
$
|
75,000
|
|
|
|
|
|
|
|
|
|
SECURITY
OWNERSHIP
Stock Ownership
Guidelines
We believe it is important for our directors and executive
officers to maintain a meaningful equity interest in our
company, to ensure that their interests are aligned with the
interests of our shareholders. Our Board of Directors has
adopted stock ownership guidelines to establish its minimum
expectations for our directors and executive officers with
respect to this equity stake. As discussed above in the
Compensation Discussion and Analysis, our executive officers are
subject to stock ownership guidelines that provide for equity
ownership in an amount having a market value ranging from two to
seven times the individuals annual base salary, depending
upon the individuals position, to be achieved within five
years of the date the individual became subject to the
guidelines. Both common stock and restricted stock count towards
these guidelines. The table below under Beneficial
Ownership of Directors, Nominees and Executive Officers
shows how many shares of stock were owned as of March 10,
2009, by each of our named executive officers for purposes of
measuring compliance with the guidelines. As of January 2,
2009, all of the named executive officers met the guidelines
based on 2009 salary levels and the date of their appointment to
the Leadership Team.
Our Board increased stock ownership guidelines applicable to
non-employee directors in 2007 to provide for equity ownership
by our non-employee directors in an amount equal to four times
the directors annual cash retainer, to be achieved within
four years after the directors initial election to the
Board, except that non-employee directors elected prior to
January 31, 2007 have a total of five years to achieve
these ownership levels. Accordingly, each of our current
non-employee directors other than Ms. Polsky has five years
to achieve these ownership levels. Both common stock and phantom
stock (acquired through deferral of cash or stock under our
Deferred Compensation Plan for Non-Employee Directors) are
counted towards these ownership guidelines. As of
January 2, 2009, all of the non-employee directors met the
guidelines based on the 2009 annual retainer and the date of
their election to the Board.
Beneficial
Ownership of Directors, Nominees and Executive
Officers
The following table shows how many shares of our common stock
were beneficially owned as of March 10, 2009 (except with
respect to ownership in the Piper Jaffray Companies Retirement
Plan, which is reported as of December 31, 2008) by
each of our directors, director nominees and executive officers
named in the Summary Compensation Table contained in this proxy
statement, and by all of our directors and executive officers as
a group. The table also includes the number of shares of phantom
stock that were deemed owned as of March 10, 2009 by each
of our non-employee directors. Unless
34
otherwise noted, the shareholders listed in the table have sole
voting and investment power with respect to the shares owned by
them.
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|
|
|
|
|
|
|
|
|
|
|
|
|
Phantom Shares
|
|
|
|
Shares of
|
|
|
Counted
Towards
|
|
|
|
Piper Jaffray
|
|
|
Director Stock
|
|
Name of
Beneficial Owner
|
|
Common
Stock*
|
|
|
Ownership
Guidelines**
|
|
|
Andrew S. Duff
|
|
|
210,990
|
(1)
|
|
|
|
|
Michael R. Francis
|
|
|
14,880
|
(2)
|
|
|
2,904
|
|
B. Kristine Johnson
|
|
|
16,410
|
(3)
|
|
|
1,743
|
|
Samuel L. Kaplan
|
|
|
23,523
|
(4)
|
|
|
8,795
|
|
Robert W. Peterson
|
|
|
98,652
|
(5)
|
|
|
|
|
Addison L. Piper
|
|
|
21,638
|
(6)
|
|
|
1,743
|
|
Lisa K. Polsky
|
|
|
7,500
|
(7)
|
|
|
5,279
|
|
Jon W. Salveson
|
|
|
132,162
|
(8)
|
|
|
|
|
Thomas P. Schnettler
|
|
|
161,378
|
(9)
|
|
|
|
|
Debbra L. Schoneman
|
|
|
29,333
|
(10)
|
|
|
|
|
Frank L. Sims
|
|
|
20,380
|
(11)
|
|
|
2,000
|
|
Jean M. Taylor
|
|
|
6,463
|
(12)
|
|
|
4,121
|
|
All directors, director nominees, named executive officers and
other executive officers as a group (18 persons)
|
|
|
1,025,333
|
(13)
|
|
|
26,585
|
|
|
|
*
|
None of the
individual beneficial owners identified in this table owns more
than 1% of Piper Jaffray common stock outstanding as of
March 10, 2009 with the exception of Mr. Duff who
beneficially owns 1.07%. As a group, our directors, director
nominees and executive officers hold 5.17% of Piper Jaffray
common stock as of March 10, 2009. The holders of
restricted stock identified in the footnotes below have no
investment power with respect to the restricted stock.
|
|
|
**
|
The directors have
no voting or investment power with respect to the shares of
phantom stock. All shares of phantom stock have been deferred
pursuant to the Deferred Compensation Plan for Non-Employee
Directors, as described above under Compensation Program
for Non-Employee Directors.
|
|
(1)
|
Includes
22,257 shares of restricted stock that vest in full on
February 15, 2010, 19,145 shares of restricted stock
that vest in full on February 15, 2011, 78,314 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 47,174 shares of common stock
held directly, 10 shares of common stock held by his two
minor children, 1,333 shares of common stock held in the
Piper Jaffray Companies Retirement Plan, and 42,757 shares
of common stock covered by options that are currently
exercisable.
|
|
|
(2)
|
Includes
3,000 shares of common stock held directly and
11,880 shares of common stock covered by options that are
currently exercisable.
|
|
(3)
|
Includes
1,200 shares of common stock held in an individual
retirement account, 2,330 shares of common stock held in a
family trust, 1,000 shares of common stock held directly,
and 11,880 shares of common stock covered by options that
are currently exercisable.
|
|
(4)
|
Includes
11,643 shares of common stock held in the Kaplan,
Strangis & Kaplan profit-sharing trust for the benefit
of Mr. Kaplan and 11,880 shares of common stock
covered by options that are currently exercisable.
|
|
(5)
|
Includes
10,305 shares of restricted stock that vest in full on
February 15, 2010, 10,113 shares of restricted stock
that vest in full on February 15, 2011, 42,169 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 23,111 shares of common stock
held directly, 483 shares of common stock held in the Piper
Jaffray Companies Retirement Plan, 14 shares of common
stock held in an individual retirement account, and
12,457 shares of common stock covered by options that are
currently exercisable.
|
35
|
|
(6)
|
Includes
8,797 shares of common stock held directly, 177 shares
of common stock held in the Piper Jaffray Companies Retirement
Plan, 1,000 shares of common stock held in an individual
retirement account, and 11,614 shares of common stock
covered by options that are currently exercisable. The amount
for Mr. Piper also includes 50 shares of common stock
held by Mr. Pipers spouse, as to which he disclaims
beneficial ownership because he does not have voting or
dispositive power over the shares.
|
|
|
(7)
|
All shares
beneficially owned by Ms. Polsky are held directly.
|
|
(8)
|
Includes
15,853 shares of restricted stock that vest in full on
February 15, 2010, 14,421 shares of restricted stock
that vest in full on February 15, 2011, 54,217 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 30,820 shares of common stock
held directly, 483 shares of common stock held in the Piper
Jaffray Companies Retirement Plan, and 16,368 shares of
common stock covered by options that are currently exercisable.
|
|
|
(9)
|
Includes
16,731 shares of restricted stock that vest in full on
February 15, 2010, 16,479 shares of restricted stock
that vest in full on February 15, 2011, 66,266 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 39,544 shares of common stock
held directly, 483 shares of common stock held in the Piper
Jaffray Companies Retirement Plan, and 21,875 shares of
common stock covered by options that are currently exercisable.
|
|
|
(10)
|
Includes
549 shares of restricted stock that vest in full on
February 15, 2010, 1,922 shares of restricted stock
that vest in full on February 15, 2011, 24,390 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 1,213 shares of common stock
held directly, 1 share of common stock held by her spouse,
483 shares of common stock held in the Piper Jaffray
Companies Retirement Plan, and 775 shares of common stock
covered by options that are currently exercisable..
|
|
|
(11)
|
Includes
8,500 shares of common stock held directly and
11,880 shares of common stock covered by options that are
currently exercisable.
|
|
|
(12)
|
Includes
500 shares of common stock held directly and
5,963 shares of common stock covered by options that are
currently exercisable.
|
|
(13)
|
Includes
159,681 shares of restricted stock that vest in full on
February 15, 2010, 88,367 shares of restricted stock
that vest in full on February 15, 2011, 386,134 shares
of restricted stock that will vest if the company meets a
performance target of return on adjusted common equity of 11%
over a twelve-month period, 8,084 shares of common stock
held in the Piper Jaffray Companies Retirement Plan,
16,191 shares held in a retirement or profit-sharing plan
or account other than the Piper Jaffray Companies Retirement
Plan, 192,391 shares of common stock held directly or by
family members, and 174,485 shares covered by options that
are currently exercisable.
|
36
Beneficial Owners
of More than Five Percent of Our Common Stock
Based on filings made under Section 13(d) and
Section 13(g) of the Securities Exchange Act of 1934 as of
March 10, 2009, the persons known by us to be beneficial
owners of more than 5% of our common stock were as follows:
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
|
|
Piper Jaffray
|
|
|
|
|
Name of
Beneficial Owner
|
|
Common
Stock
|
|
|
Percent of
Class
|
|
|
T. Rowe Price Associates, Inc.
|
|
|
1,656,074
|
(1)
|
|
|
8.70
|
%
|
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
|
|
|
|
|
|
Barclays Global Investors, N.A.
|
|
|
1,224,309
|
(2)
|
|
|
6.48
|
%
|
400 Howard Street
San Francisco, CA 94105
|
|
|
|
|
|
|
|
|
Advisory Research, Inc.
|
|
|
|
|
|
|
|
|
180 North Stetson Street, Suite 5500
Chicago, IL 60601
|
|
|
1,157,308
|
(3)
|
|
|
6.13
|
%
|
Dimensional Fund Advisors LP
|
|
|
970,935
|
(4)
|
|
|
5.14
|
%
|
Palisades West, Building One
6300 Bee Cave Road Austin, TX 78746
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 11, 2009 by T. Rowe Price
Associates, Inc. T. Rowe Price Associates reported that it has
sole voting power as to 350,440 shares and sole dispositive
power as to 1,656,074 shares. T. Rowe Price Associates
serves as investment adviser to certain individual and
institutional clients holding the shares listed above, and as an
investment adviser, may be deemed to have beneficial ownership
of the shares owned by its advisory clients. T. Rowe Price
Associates disclaims beneficial ownership of these shares. T.
Rowe Price Associates, Inc. is a wholly-owned subsidiary of T.
Rowe Price Group, Inc., which is a publicly traded financial
services holding company.
|
|
|
(2)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 5, 2009 by Barclays Global
Investors, N.A. and a group of affiliated entities, which
reported sole voting and dispositive power as follows: Barclays
Global Investors, N.A., sole voting power as to
334,606 shares and sole dispositive power as to
384,171 shares; Barclays Global Fund Advisors, sole
voting power as to 658,444 shares and sole dispositive
power as to 829,913 shares; and Barclays Global Investors,
Ltd., sole voting power as to 525 shares and sole
dispositive power as to 10,225 shares.
|
|
(3)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 13, 2009 by Advisory
Research, Inc. Advisory Research reported that it has sole
voting and dispositive power with respect to all
1,157,308 shares reflected in the table.
|
|
(4)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 9, 2009 by Dimensional
Fund Advisors LP. Dimensional reported that it has sole
voting power as to 969,935 shares and sole dispositive
power as to 970,935 shares. As an investment advisor,
Dimensional may be deemed to have beneficial ownership of the
shares owned by its advisory clients, but it disclaims
beneficial ownership of these shares. Dimensional reported that
none of its advisory clients was known by it to own more than 5%
of our common stock.
|
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and directors to file initial
reports of ownership of our securities and reports of changes in
ownership with the Securities and Exchange Commission. Based on
our knowledge and on written representations from our executive
officers and directors, we believe that all Section 16(a)
filing and disclosure requirements applicable to our executive
officers and directors for 2008 have been satisfied.
37
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee, comprised entirely of independent,
non-employee directors, is responsible for establishing and
administering our policies involving the compensation of our
executive officers. No employee of the company serves on the
Compensation Committee. The Committee members have no
interlocking relationships as defined by the Securities and
Exchange Commission.
Transactions with
Related Persons
From time to time in the ordinary course of business, Piper
Jaffray, through our subsidiaries, engages in transactions with
other corporations or entities whose executive officers or
directors also are directors or executive officers of Piper
Jaffray or have an affiliation with our directors or executive
officers. Such transactions are conducted on an
arms-length basis and may not come to the attention of our
directors or executive officers or those of the other
corporations or entities involved. In addition, from time to
time our executive officers and directors and their affiliates
may engage in transactions in the ordinary course of business
involving goods and services provided by Piper Jaffray, such as
investment and financial advisory services. With respect to our
executive officers and employee directors, such goods and
services are provided on terms comparable to those extended to
employees of our company generally. With respect to our
non-employee directors and their affiliates, such goods and
services are provided on substantially the same terms as those
prevailing at the time for comparable transactions with
non-employees.
T. Rowe Price Associates, Inc. acts as investment advisor
to client accounts that own greater than 5% of the outstanding
shares of our common stock, and we received institutional
brokerage revenue of approximately $1.0 million from
transactions placed by T. Rowe Price Associates, Inc. on behalf
of client accounts during 2008. During 2008, we paid
approximately $1.2 million to Faegre & Benson LLP
for legal services provided to us and our subsidiaries. The
spouse of James L. Chosy, our general counsel and secretary, is
a partner with Faegre & Benson. Mr. Chosys
spouse has not personally provided any legal services to us or
our subsidiaries. From time to time, certain of our directors,
executive officers and other employees who are accredited
investors may invest their personal funds directly in funds
managed by Piper Jaffray, through our subsidiaries, on the same
terms and with the same conditions as the other investors in
these funds. Messrs. Schnettler and Peterson each committed
to invest $150,000 in one such fund in 2008.
Review and
Approval of Transactions with Related Persons
To minimize actual and perceived conflicts of interests, our
Board of Directors has adopted a written policy governing our
companys transactions where the aggregate amount involved
is reasonably expected to exceed $120,000 and any of the
following persons has or may have a direct or indirect interest:
(a) our executive officers or directors (including
nominees), (b) shareholders who own more than 5% of our
common stock, (c) any child, stepchild, parent, stepparent,
spouse, sibling,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother-in-law,
or
sister-in-law
or person (other than a tenant or employee) sharing the same
household of any person described in (a) or (b), and
(d) the primary business affiliation of any person
described in (a), (b) or (c). These transactions are
considered related person transactions. Unless
exempted from the policy as described below, related person
transactions must be submitted for review by our Nominating and
Governance Committee. The Nominating and Governance Committee
considers the available, relevant facts and circumstances and
will approve or ratify only those related person transactions
that it determines are in, or are not inconsistent with, the
best interests of our company and its shareholders. The
chairperson of the Nominating and Governance Committee may
approve and ratify transactions if it is not practicable to wait
until the next committee meeting, but the chairperson is
required to report to the committee at its next meeting any
approval or ratification pursuant to this delegated authority.
The Board of Directors also may exercise the powers and duties
of the Nominating and Governance Committee under our
38
policy governing related person transactions. Certain
transactions that would not be required to be disclosed under
applicable rules and regulations of the Securities and Exchange
Commission are exempted from the definition of related person
transactions under our policy and therefore do not require
review and approval by the Nominating and Governance Committee.
AUDIT COMMITTEE
REPORT AND PAYMENT OF FEES TO OUR INDEPENDENT AUDITOR
Audit Committee
Report
The primary function of our Audit Committee is oversight of our
financial reporting process, publicly filed financial reports,
internal accounting and financial controls, and the independent
audit of the consolidated financial statements. The consolidated
financial statements of Piper Jaffray Companies for the year
ended December 31, 2008 were audited by Ernst &
Young LLP, independent auditor for the company.
As part of its activities, the Committee has:
|
|
|
|
1.
|
Reviewed and discussed with management and the independent
auditor the companys audited financial statements;
|
|
|
2.
|
Discussed with the independent auditor the matters required to
be communicated under
Statement on Auditing Standards
No. 61 (Communications with Audit Committees)
; and
|
|
|
3.
|
Received the written disclosures and letter from the independent
auditor required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent
accountants communications with the Audit Committee
concerning independence, and has discussed with the independent
accountant the independent accountants independence.
|
Management is responsible for the companys system of
internal controls and the financial reporting process.
Ernst & Young LLP is responsible for performing an
independent audit of the consolidated financial statements in
accordance with the standards of the Public Company Accounting
Oversight Board and for issuing a report thereon. Our
Committees responsibility is to monitor and oversee these
processes. Based on the foregoing review and discussions and a
review of the report of Ernst & Young LLP with respect
to the consolidated financial statements, and relying thereon,
we have recommended to the Board of Directors of Piper Jaffray
Companies the inclusion of the audited consolidated financial
statements in Piper Jaffrays Annual Report on
Form 10-K
for the year ended December 31, 2008, for filing with the
Securities and Exchange Commission.
Audit Committee
of the Board of Directors of Piper Jaffray Companies
Frank L. Sims,
Chairperson
Samuel L. Kaplan
Lisa K. Polsky
Auditor
Fees
Ernst & Young LLP served as our independent auditor
for 2008 and 2007. The following table presents fees for
professional audit services for the audit of our annual
consolidated financial statements for 2008 and 2007 as well as
fees for the review of our interim consolidated financial
statements for
39
each quarter in 2008 and 2007 and for all other services
performed for 2008 and 2007 by Ernst & Young LLP.
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees
|
|
$
|
1,004,300
|
|
|
$
|
949,328
|
|
Audit-Related
Fees
(1)
|
|
|
108,950
|
|
|
|
107,150
|
|
Tax Fees
|
|
|
0
|
|
|
|
0
|
|
All Other
Fees
(2)
|
|
|
15,615
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,128,865
|
|
|
$
|
1,061,478
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Audit-related
services are assurance and related services that are reasonably
related to the performance of the audit or review of our
financial statements. Specifically, the services provided for
2008 and 2007 included services relating to IRA Keogh
agreed-upon
procedures, employee benefit plan audits and the issuance of an
independent auditors report on controls placed in
operation and tests of operating effectiveness.
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|
|
(2)
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Services for all
other fees in 2008 and 2007 consist of capital markets
accounting consultations.
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Auditor Services
Pre-Approval Policy
The Audit Committee has adopted an auditor services pre-approval
policy applicable to services performed for us by our
independent auditor. In accordance with this policy, the Audit
Committees practice is to approve annually all audit,
audit-related and permissible non-audit services to be provided
by the independent auditor during the year. If a service to be
provided is not pre-approved as part of the annual process or if
it may exceed pre-approved fee levels, the service must receive
a specific and separate pre-approval by the Audit Committee,
which has delegated authority to grant such pre-approvals during
the year to the chairperson of the Audit Committee. Any
pre-approvals granted pursuant to this delegated authority are
reported to the Audit Committee at its next regular meeting.
Our Audit Committee has determined that the provision of the
non-audit services described in the table above was compatible
with maintaining the independence of our independent auditor.
The Audit Committee reviews each non-audit service to be
provided and assesses the impact of the service on the
auditors independence. On February 19, 2008, the
Audit Committee pre-approved certain services to be provided by
our independent auditor relating to engagements occurring on or
after February 19, 2008.
APPOINTMENT OF
INDEPENDENT AUDITOR
Ernst & Young LLP served as our independent auditor
for the year ended December 31, 2008, and has served in
that capacity since being appointed at the time of our spin-off
from U.S. Bancorp in January 2004. In January 2009, the
Company, in consultation with Ernst & Young LLP,
determined that the post-termination provisions for certain
equity awards granted in 2008, 2007 and 2006 did not meet the
criteria for an in-substance service condition as required by
Statement of Financial Accounting Standards No. 123(R),
Share-Based Payment, which the company adopted on
January 1, 2006. This determination necessitated restating
our financial results for 2008, 2007 and 2006 to recognize
expense for all of the outstanding affected equity awards in the
year in which those awards were deemed to be earned rather than
over the three-year vesting period. Following this determination
and restatement, and in connection with the Audit Committee
conducting its annual evaluation of the independent auditor as
required by its charter, the Audit Committee decided to review
the appointment of the independent auditor to ensure that the
Company is receiving appropriate service and value with respect
to this engagement. As a result, the Audit Committee has
reappointed Ernst & Young LLP as our independent
auditor, but has submitted a request for proposal to several
prominent independent registered public accounting firms
(including Ernst & Young LLP) to serve as the
Companys independent auditor. After receiving and
reviewing these proposals, the Audit Committee will select and
appoint an independent auditor for the remainder of the year
ending December 31, 2009. Based on this process,
40
the Company is not submitting the reappointment of
Ernst & Young LLP for ratification at the annual
meeting. While not required to do so, the Companys
historic practice has been to submit the selection of the
independent auditor for ratification in order to ascertain the
views of our shareholders, and we fully expect to resume this
practice in 2010. We also expect that representatives of
Ernst & Young LLP will be present at the annual
meeting, will be available to answer shareholder questions and
will have the opportunity to make a statement if they desire to
do so.
ITEM 2
APPROVAL OF AMENDMENT OF THE PIPER JAFFRAY COMPANIES
AMENDED AND RESTATED 2003 ANNUAL AND LONG-TERM INCENTIVE
PLAN
Our Board of Directors has unanimously approved, upon the
recommendation of the Compensation Committee, an amendment to
our Amended and Restated 2003 Annual and Long-Term Incentive
Plan (the Incentive Plan) to increase the number of
shares of our common stock that may be issued under the
Incentive Plan by 1,500,000. This amendment is subject to the
approval of our shareholders at the 2009 annual meeting. The
Incentive Plan was originally adopted at the time of our
spin-off from U.S. Bancorp in December 2003 and authorized
the issuance of 2,000,000 shares. Since 2003, we have
obtained shareholder approval to increase the shares authorized
for issuance to the current level of 5,500,000 and the 1,500,000
would increase this amount to 7,000,000.
The Board of
Directors recommends that you vote FOR this proposal.
In 2006, we launched a new mission for our firm: to build the
leading, international middle-market investment bank. Over the
past few years we have diligently executed against this mission
across sectors, products, and geographies. Our compensation
program, including equity, is a critical component to achieving
our long-term strategy. During the extraordinarily difficult
operating environment of 2008, we focused on executing our
long-term strategy through two key priorities: 1) adjusting
our cost structure to enable us to operate through the difficult
period, and 2) ensuring that we are well-positioned for
when the capital markets improve. Despite the difficult
operating environment, we continue to believe that our
compensation program, including providing equity, is a key
component to successfully executing our strategy over the
long-term. We also believe our program is structured to be
competitive and to further shareholders best interests.
Following are the key reasons we believe that shareholders
should vote
FOR
this proposal.
Equity awards will allow us to strengthen our employee
ownership culture and continue to motivate employees to create
shareholder value
. We believe that equity ownership fosters
a partnership culture within the company that motivates
employees to think and act like owners. Through ownership, we
believe that our employees will focus on shareholder value
creation and the long-term success of the company. We have
worked since our spin-off from U.S. Bancorp in December
2003 to increase employee ownership levels, primarily through
the use of equity as a significant part of our annual incentive
awards. Our employee ownership has increased from negligible
levels at the time of the spin-off to approximately 23% as of
February 28, 2009. We believe it is important to achieve a
level similar to our peers, which on average is approximately
39%. Similarly, we want to continue to increase the share
ownership of our Leadership Team (currently approximately 5%) to
be more in line with the executive share ownership of our peer
competitors, which on average is approximately 11%. We took
action in this regard as we granted the Leadership Team a
long-term, performance-based restricted stock award in 2008. The
award will not vest unless the company meets a return on
adjusted common equity target of 11% over a twelve-month period
by April 30, 2013, which represents a significant increase
compared to our historical twelve-month return on adjusted
common equity levels.
Our annual equity awards are granted in lieu of
not in addition to annual cash incentive
compensation, and over the last three years have constituted on
average 78% of the total of our shares granted.
We expect to
use the majority of the 1,500,000 shares in our annual
grant consistent with our historical performance. Under our
performance-based compensation program, employees receive a
percentage of their annual incentive compensation in the form of
equity awards in lieu of receiving all annual incentive
compensation in cash. An employees annual
performance-based incentive
41
compensation is first determined as a dollar amount, then that
amount is divided into a cash component and an equity component.
Over the last three years, annual equity awards comprised on
average approximately 78% of the total of our shares granted
each year. These annual equity awards are in lieu of
not in addition to annual cash incentive
compensation.
Equity awards constitute a significant component of our
employees total compensation.
Annual equity awards are
a significant component of our employees total
compensation. As an employees total compensation
increases, the percentage of his or her compensation paid in
equity generally increases. Over the past five years, we have
granted equity awards, on average, to approximately 38% of our
employees as part of their annual compensation, and these equity
awards constituted, on average, between 9% and 50% of annual
incentive compensation.
We need additional shares to grant equity for 2009 annual
incentive compensation to be awarded in February 2010.
We
have approximately 378,582 shares available for grant under
our existing Incentive Plan as of February 28, 2009, and we
typically use over a million shares for annual equity
compensation. The additional 1,500,000 shares for which we
are seeking approval will allow us to continue our compensation
program using the same mix of cash and equity as we have in past
annual grants. Without shares available for grant, we may need
to increase the cash component of our annual incentive
compensation to make up for the missing equity component. In the
current difficult operating environment, we believe it prudent
to conserve cash where possible and use equity to continue to
strengthen our employee ownership culture.
Equity awards are a critical recruitment and retention
tool.
We believe that our firm has a unique opportunity to
capitalize on the current turmoil in the competitive landscape.
During 2008 we added 47 senior, client-facing professionals to
strengthen our ability to capture market share. Firms in our
industry typically replace equity that is canceled by the
employees prior employer. In 2008, we granted over
220,000 shares in recruiting new talent to our company, and
we believe it is critical to have sufficient shares available
for opportunistic strategic hires in 2009. In addition, we
granted a little over 245,000 shares to key business
performers during 2008 to solidify our franchise continuity, and
91% of these key performers have been retained.
We have sought to address shareholder concerns about dilution
through share repurchases.
We are cognizant of and sensitive
to shareholder concerns about dilution and, in an effort to
reduce dilution, we have repurchased 4,983,229 shares of
our common stock during the last five years. In addition,
1,788,903 shares have been returned to the Incentive Plan
through forfeitures and tax withholdings over the same time
period. Taken together, we have more than offset the
6,227,516 shares (including shares subject to stock
options) that have been granted to employees during the past
five years. In 2008, we reduced our level of repurchases as we
believed it prudent to conserve our capital during the
extraordinarily difficult operating conditions. We remain
committed to offsetting dilution in a more normalized
environment and we have $85 million of authorization
remaining under our current share repurchase program.
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|
|
|
|
|
|
|
|
|
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Shares Returned
to
|
|
Shares Issued
and
|
|
|
Shares Granted
Under
|
|
Plan or
Repurchased
|
|
Outstanding
|
Year
|
|
Incentive
Plan
|
|
During Fiscal
Year
|
|
at Fiscal Year
End
|
|
2004
|
|
872,644
|
|
44,749
|
|
19,865,146
|
2005
|
|
1,420,271
|
|
1,487,228
|
|
19,782,621
|
2006
|
|
898,229
|
|
2,462,296
|
|
18,544,719
|
2007
|
|
829,859
|
|
1,903,715
|
|
17,483,635
|
2008
|
|
2,280,336
|
|
874,144
|
|
18,851,209
|
|
|
|
|
|
|
|
Total
|
|
6,301,339
|
|
6,772,132
|
|
N/A
|
The terms of our annual equity awards are designed to protect
shareholder interests.
The Compensation Committee determines
the vesting, payment and cancellation provisions of our annual
equity awards. Our annual awards generally do not vest for three
years, at which time they vest in full.
42
These terms are designed to encourage employees to focus on the
long-term success of the company. Furthermore, these awards
generally are subject to cancellation for, among other things,
termination for cause or failing to comply with certain
post-termination restrictions.
Our share retention policy and stock ownership guidelines
further protect shareholder interests.
Leadership Team
members are subject to our share retention policy that the
members to retain at least 50% of the shares awarded to them
through our incentive plans, or acquired by them upon exercise
of stock options awarded to them, net of taxes and transaction
costs, for at least five years. This commitment ties a portion
of their net worth to the companys stock price and
provides a continuing incentive for them to work towards
long-term stock performance. In addition, all Leadership Team
members are subject to stock ownership guidelines that provide
for each to hold company stock with a value equal to seven times
base salary for the chief executive officer, and two to five
times base salary for the other executive officers, depending on
the individuals position, to be achieved within five years
after becoming subject to the guidelines. As of January 2,
2009, each of our Leadership Team members were in compliance
with our guidelines based on 2009 salary levels on the date of
their appointment to the Leadership Team.
Description of
the Incentive Plan.
A copy of the Incentive Plan as proposed to be amended is
attached as Appendix A, marked to show changes from the
current version of the Incentive Plan. The following information
summarizes the Incentive Plan as proposed to be amended and is
qualified in its entirety by reference to Appendix A.
Summary of Key
Terms
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|
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Shares Currently Authorized
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5,500,000 shares.
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|
|
Also, shares used by a participant as full or partial payment to
us of the purchase price relating to an award, including in
connection with the satisfaction of tax obligations relating to
an award, will again be available for granting awards.
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|
|
|
Amendment to Increase Shares
|
|
Increase of 1,500,000 shares.
|
|
|
|
Shares Available for Grant
|
|
There are approximately 378,582 shares available for grant
as of February 28, 2009.
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|
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Expected Share Usage
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|
All shares that currently remain available for grant are
expected to be used in the next 12 months in connection
with 2009 recruiting, retention, director compensation and
annual incentive compensation, and
we will need additional
shares to complete our annual incentive grants to employees in
February 2010
.
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Vesting
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|
Vesting is determined by the Compensation Committee, but
historically all employee awards have had three-year cliff
vesting.
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Prohibitions
|
|
The Incentive Plan prohibits the grant of stock options at a
price below fair market value as well as the repricing of stock
options without shareholder approval.
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|
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No Other Equity Plans
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|
The Incentive Plan is our only equity plan that permits us to
grant equity awards.
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43
Purpose
The purpose of the Incentive Plan is to promote the interests of
our company and our shareholders by making us competitive in
attracting, retaining and motivating officers, employees,
directors and consultants, to offer these persons incentives
directly linked to the profitability of our businesses and
increases in shareholder value, and to provide these persons an
opportunity to acquire a proprietary interest in Piper Jaffray.
Eligibility
Our current and prospective directors, officers, employees and
consultants, as well as those of our affiliates, are eligible to
participate in the Incentive Plan. As of February 28, 2009,
approximately 1,045 persons were eligible to participate in
the Incentive Plan.
Administration
The Incentive Plan is administered by the Compensation Committee
of our Board of Directors, which has broad authority to
administer the plan. This authority includes the power to
(1)
delegate
certain administrative responsibilities with respect to the
Incentive Plan to directors and certain officers selected in the
Committees discretion, and
(2)
determine
the eligible individuals to whom and the time or times at which
awards will be granted, the number of shares subject to awards
to be granted to any eligible individual, the life of any award
and any terms and conditions of the grant that are not contained
in the Incentive Plan. Each grant under the Incentive Plan is
confirmed by and subject to the terms of an award agreement.
Authorized
Shares
The Incentive Plan was originally adopted in December 2003 in
connection with our spin-off from U.S. Bancorp and
authorized the issuance of 2,000,000 shares of our common
stock. We amended the Incentive Plan at our 2004, 2006 and 2008
annual meetings of shareholders to add 2,100,000 shares,
400,000 shares and 1,000,000 shares, respectively.
There are approximately 378,582 shares available for grant
under the companys existing Incentive Plan as of
February 28, 2009. We currently expect that shares
remaining available for grant will be used in the next
12 months in connection with 2009 recruiting, retention,
director compensation and annual incentive compensation and, as
a result, we are requesting a 1,500,000-share increase expected
to cover our annual incentive grants to employees in February
2010. We typically grant awards to employees (including
officers) based on performance and retention objectives, in
addition to any other objectives that our Compensation Committee
may determine to be relevant. With respect to our directors, our
grants are compensatory and will be in the amounts described
above under Information Regarding the Board of Directors
and Corporate Governance Compensation Program for
Non-Employee Directors.
Grants of shares that may be issued under the Incentive Plan may
be authorized but unissued shares or shares reacquired and held
in our treasury. In general, we use treasury shares to the
extent available before issuing new shares in connection with
awards. No more than 250,000 shares of common stock may be
subject to qualified performance-based awards
granted to any eligible individual in any fiscal year of the
company.
If an award entitles the holder to receive or purchase shares,
the number of shares covered by the award or to which the award
relates will be counted on the date of grant of the award
against the aggregate number of shares available for granting
awards under the Incentive Plan. Any shares that are used by a
participant as full or partial payment to us of the purchase
price relating to an award, including in connection with the
satisfaction of tax obligations relating to an award, will again
be available for granting awards under the Incentive Plan. In
addition, if any shares covered by an award or to which an award
relates are not purchased or are forfeited, or if an award
otherwise terminates without delivery of any shares, then the
number of shares counted against the aggregate number of
44
shares available under the Incentive Plan to the extent of any
such forfeiture or termination will again be available for
granting awards under the Incentive Plan.
Adjustments
In the event of certain types of corporate transactions or
restructurings, such as stock splits, mergers, consolidations,
separations, spin-offs, liquidations, reorganizations or other
distributions of stock or property of our company, including an
extraordinary stock or cash dividend, the Committee or our Board
may make adjustments to the aggregate number and kind of shares
reserved for issuance under the Incentive Plan, in the maximum
share limitations upon stock options, stock appreciation rights
and other awards to be granted to any individual, in the number,
kind and exercise price of outstanding stock options and stock
appreciation rights, in the number and kind of shares subject to
other outstanding awards granted under the Incentive Plan, and
may also make any other equitable substitutions or adjustments
that the Committee or Board determines to be appropriate;
however, any adjustments made to an award that is considered to
be deferred compensation under Section 409A of the Internal
Revenue Code must comply with Section 409A.
Restricted
Stock and Restricted Stock Units
Shares of restricted stock and restricted stock units (RSUs)
will be subject to such restrictions as the Committee may
impose, which may lapse separately or in combination at such
time or times, in installments or otherwise as the Committee may
deem appropriate. The grant or vesting of restricted stock and
RSUs may be performance-based, time-based or both. Restricted
stock and RSUs may be qualified performance-based
awards, in which event the grant or vesting of such
restricted stock or RSUs will be conditioned upon the attainment
of performance goals. Except as otherwise determined by the
Committee, upon a participants termination of employment
(as determined under criteria established by the Committee)
during the restriction period, all shares of restricted stock
and RSUs subject to restriction will be forfeited and reacquired
by the company, except that the Committee may waive in whole or
in part any or all remaining restrictions with respect to shares
of restricted stock or RSUs.
If the grant is intended to be a qualified
performance-based award, the applicable performance goals
must be based on the attainment of specified levels of one or
more of the following measures: revenue growth; earnings before
interest, taxes, depreciation, and amortization; earnings before
interest and taxes; operating income; pre- or after-tax income;
earnings per share; cash flow; cash flow per share; return on
equity; return on tangible equity; return on invested capital;
return on assets; economic value added (or an equivalent
metric); share price performance; total shareholder return;
improvement in or attainment of expense levels; or improvement
in or attainment of working capital levels.
These goals are established by the Committee and may be
established on a company-wide basis or with respect to one or
more business units, divisions or subsidiaries and can be on an
absolute or relative basis. A qualified performance-based
award is a grant of restricted stock or RSUs designated as
such by the Committee at the time of grant based upon a
determination that (a) the recipient is or may be a
covered employee within the meaning of
Section 162(m) of the Internal Revenue Code in the year in
which we would expect to be able to claim a tax deduction with
respect to such award and (b) the Committee wishes such
grant to qualify for the exemption from the limitation on
deductibility of compensation with respect to any covered
employee imposed by Section 162(m) of the Internal Revenue
Code.
The provisions of restricted stock and RSUs, including any
applicable performance goals, need not be the same with respect
to each participant. During the restriction period, the
Committee may require that any stock certificates evidencing
restricted shares be held by us. With respect to restricted
stock awards, other than restrictions on transfer and any other
restrictions the Committee may impose, the participant will have
all the rights of a shareholder holding the class or series of
stock that is the subject of the award.
45
Performance
Awards
The Committee may grant performance awards to eligible
individuals. A performance award may be denominated or payable
in cash, shares, other securities, other awards or other
property and will provide the holder with the right to receive
payments, in whole or in part, upon the achievement of specified
performance goals. Subject to the terms of the Incentive Plan,
the performance goals to be achieved, the length of any
performance period, the amount of any performance award granted,
the amount of any payment or transfer to be made pursuant to any
performance award and any other terms and conditions of any
performance award will be determined by the Committee. The
Committee may, prior to or at the time of the grant, designate
performance awards as qualified performance-based
awards, in which event it will condition the settlement of
the awards upon the attainment of one or more of the performance
goals described above under Restricted Stock
and Restricted Stock Units. Performance awards denominated
in cash that are payable to any individual participant with
respect to any calendar year are limited to a maximum of
$7.5 million.
Stock
Options
The Committee may grant stock options to eligible individuals.
Only non-qualified stock options are permitted to be granted
under the Incentive Plan. The exercise price per share
purchasable under a stock option will be determined by the
Committee, but cannot be less than 100% of the fair market value
of a share of our common stock on the date of grant of the
option. The term of each stock option will be fixed by the
Committee at the time of grant, but in no event may it be more
than ten years from the grant date. The Committee will determine
the time or times at which a stock option may be exercised in
whole or in part and the method or methods by which, and the
form or forms in which, payment of the exercise price may be
made.
Stock
Appreciation Rights
The Committee may grant stock appreciation rights to eligible
individuals. Each stock appreciation right will confer upon the
holder upon exercise the right to receive, as determined by the
Committee, cash or a number of shares equal to the excess of
(a) the fair market value of one share of our common stock
on the date of exercise (or, if the Committee determines, at any
time during a specified period before or after the date of
exercise) over (b) the grant price of the stock
appreciation right as determined by the Committee. The grant
price may not be less than 100% of the fair market value of one
share on the date of grant of the stock appreciation right.
Subject to the terms of the Incentive Plan, the grant price,
term, methods of exercise, dates of exercise, methods of
settlement and any other terms and conditions (including
conditions or restrictions on the exercise thereof) of any stock
appreciation right will be as determined by the Committee, but
in no event may the term of a stock appreciation right be longer
than ten years.
Other
Stock-Based Awards
Other awards of common stock and other awards that are valued by
reference to, or otherwise based upon, common stock, including
without limitation dividend equivalents and convertible
debentures, may also be granted under the Incentive Plan, either
alone or in conjunction with other awards.
Transferability
of Awards
Awards are non-transferable other than by will or the laws of
descent and distribution. However, in the discretion of the
Committee, non-qualified stock options may be transferred to the
holders immediate family members, directly or indirectly
or by means of a trust, partnership or otherwise. Stock options
and stock appreciation rights may be exercised only by the
initial holder, a permitted transferee or a guardian, legal
representative or beneficiary.
46
Change in
Control
Notwithstanding any other provision of the Incentive Plan,
unless otherwise provided by the Committee in any award
agreement, in the event of a change in control of Piper Jaffray
any stock options and stock appreciation rights outstanding as
of the date of such change in control, and which are not then
exercisable and vested, will become fully exercisable and
vested; the restrictions and deferral limitations applicable to
any restricted stock and RSUs will lapse, and such restricted
stock and RSUs will become free of all restrictions and become
fully vested; all performance awards will be considered to be
earned and payable in full; and any deferral or other
restriction will lapse and such performance awards will be
settled in cash or shares, as determined by the Committee, as
promptly as is practicable. All restrictions on other awards
will lapse and such awards will become free of all restrictions
and fully vested.
Amendments and
Termination
Our Board of Directors may at any time amend, alter or
discontinue the Incentive Plan, but shareholder approval is
required for any amendment that could increase the number of
shares granted under the Incentive Plan and as otherwise may be
required by applicable law or stock exchange rules.
The Committee generally may amend the terms of any outstanding
stock option or other award but may not decrease the exercise
price of an outstanding stock option or take any action that
would constitute a repricing of an outstanding stock
option unless the amendment is approved by shareholders as
required by applicable law or stock exchange rules. Further, the
Committee may not amend an award in a way that causes a
qualified performance-based award to cease to
qualify for the Section 162(m) exemption or that impairs
the rights of any holder without the holders consent.
In the event an award is granted to an individual who is
employed outside the United States and is not compensated from a
payroll maintained in the United States, the Committee may, in
its sole discretion, modify the provisions of the grant as they
pertain to such individual to achieve the purposes of the
Incentive Plan.
Term of the
Incentive Plan
If the amendment to the Incentive Plan is approved by
shareholders, the Incentive Plan will terminate on May 7,
2018, which is the tenth anniversary of the approval date of the
Incentive Plan, as amended, or on any earlier date determined by
our Board of Directors.
Registration
We have registered shares of common stock that currently may be
issued under the Incentive Plan on four registration statements
on
Form S-8.
The amount of shares registered includes shares of common stock
currently available for issuance under the Incentive Plan as
well as shares of common stock forfeited by plan participants or
used to satisfy tax obligations of plan participants and again
available for issuance pursuant to the terms of the Plan. If
this proposal is approved, we intend to register on
Form S-8
the additional 1,500,000 shares to be issued under the
Incentive Plan as well as shares that are again available for
grant due to forfeitures and tax withholdings.
Tax
Consequences of Awards
The tax consequences of options granted under the Incentive Plan
are complex and depend, in large part, on the surrounding facts
and circumstances. This section provides a brief summary of
certain significant federal income tax consequences of the
Incentive Plan under existing U.S. law. This summary is not
a complete statement of applicable law and is based upon the
Internal Revenue Code, as well as administrative and judicial
interpretations of the Internal Revenue Code, as in effect on
the date of this description. If federal tax laws, or
interpretations of such laws, change in the future, the
information
47
provided here may no longer be accurate. This section does not
consider state, local or foreign tax consequences, nor does it
discuss the effect of gift, estate or inheritance taxes.
No later than the date as of which an amount first becomes
includible in the gross income of a participant for federal
income tax purposes with respect to any award under the
Incentive Plan, the participant must pay us, or make
arrangements satisfactory to us regarding the payment of, any
federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Our obligations
under the Incentive Plan are conditional on such payment or
arrangements, and we will, to the extent permitted by law, be
entitled to take such action and establish such procedures as we
deem appropriate to withhold or collect all applicable payroll,
withholding, income or other taxes from a participant. In order
to assist a participant in paying all or a portion of the
federal, state, local and foreign taxes to be withheld or
collected upon exercise or receipt of (or the lapse of
restrictions relating to) an award, the Committee may permit a
participant to satisfy tax obligations by (a) electing to
have us withhold a portion of the shares or other property
otherwise to be delivered upon exercise or receipt of (or the
lapse of restrictions relating to) an award with a fair market
value equal to the amount of such taxes or (b) delivering
to us shares or other property other than shares issuable upon
exercise or receipt of (or the lapse of restrictions relating
to) such award with a fair market value equal to the amount of
such taxes. Any such election must be made on or before the date
that the amount of tax to be withheld is determined.
A participant will not recognize any taxable income and we will
not be entitled to a deduction at the time a non-qualified stock
option is granted. When a non-qualified stock option is
exercised, the excess of the fair market value of the shares
acquired on the exercise of the option over the exercise price
will be taxable to a participant as ordinary income. We, in
computing our U.S. federal income tax, will generally be
entitled to a deduction in an amount equal to the compensation
taxable to the participant, subject to certain limitations. When
a participant sells his or her shares of stock, the participant
generally will have a capital gain (or loss), depending on the
difference between the sale price and the fair market value of
the stock on the date the participant exercised his or her
option. The capital gain (or loss) is considered long
term or short term depending on how long the
participant has held the stock.
Unless a participant files an election to be taxed under
Section 83(b) of the Internal Revenue Code, the participant
will not realize income upon the grant of restricted stock. The
participant will realize ordinary income and Piper Jaffray will
be entitled to a corresponding deduction when the restrictions
lapse, and the amount of such ordinary income and deduction will
be the fair market value of the restricted stock on the date the
restrictions lapse. If the recipient files an election to be
taxed under Section 83(b) of the Internal Revenue Code, the
tax consequences to the participant and Piper Jaffray will be
determined as of the date the restricted stock is granted rather
than as of the date the restrictions lapse.
When a participant disposes of restricted stock, the difference
between the amount received upon disposition and the fair market
value of the shares on the date the recipient realizes ordinary
income will be treated as a capital gain or loss. The capital
gain (or loss) is considered long term or
short term depending on how long the participant has
held such stock after the date the restrictions are removed or
expire, or, if an election under Section 83(b) is filed,
after the date the restricted stock is granted.
New Plan
Benefits
Future plan awards to be received by or allocated to particular
participants are not presently determinable.
Outstanding
Equity Awards
The only equity plan we have established is our Amended and
Restated 2003 Annual and Long-Term Incentive Plan. The following
table summarizes, as of December 31, 2008, the number of
shares
48
of our common stock to be issued upon exercise of outstanding
options granted under the plan, the weighted-average exercise
price of such options, and the number of shares remaining
available for future issuance under the plan for all awards as
of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
|
|
Number of Shares
to
|
|
|
|
|
|
Remaining
Available
|
|
|
|
be Issued Opon
|
|
|
Weighted-Average
|
|
|
for Future
Issuance
|
|
|
|
Exercise of
|
|
|
Exercise Price
of
|
|
|
Under Equity
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Compensation
Plans
|
|
|
|
Options,
Warrants
|
|
|
Options,
Warrants
|
|
|
(Excluding
Shares
|
|
Plan
Category
|
|
and
Rights
|
|
|
and
Rights
|
|
|
in First
Column)
|
|
|
Equity compensation plans approved by shareholders
|
|
|
569,379
|
|
|
$
|
44.27
|
|
|
|
1,032,552
|
(1)
|
Equity compensation plans not approved by shareholders
|
|
|
None
|
|
|
|
N/A
|
|
|
|
None
|
|
|
|
(1)
|
Based on the
5,500,000 shares currently authorized for issuance under
the plan does not reflect our proposal included in
this proxy statement to increase the number of authorized
shares. In addition to the 569,379 shares to be issued upon
the exercise of outstanding options to purchase our common
stock, 3,177,945 shares of restricted stock issued under
the plan were outstanding as of December 31, 2008. All of
the shares available for future issuance under the plan as of
December 31, 2008, may be granted in the form of restricted
stock, RSUs, options or another equity-based award authorized
under the plan.
|
SHAREHOLDER
PROPOSALS FOR THE 2010 ANNUAL MEETING
In order for a shareholder proposal, including a director
nomination, to be considered for inclusion in our proxy
statement for the 2010 annual meeting of shareholders, the
written proposal must be received at our principal executive
offices on or before November 14, 2009. The proposal should
be addressed to Piper Jaffray Companies, Attention: James L.
Chosy, Secretary, 800 Nicollet Mall, Suite 800, Mail Stop
J09N05, Minneapolis, Minnesota 55402. The proposal must comply
with Securities and Exchange Commission regulations regarding
the inclusion of shareholder proposals in company-sponsored
proxy materials.
In accordance with our bylaws, in order to be properly brought
before the 2010 annual meeting, a shareholders notice of
the matter the shareholder wishes to present must be delivered
to our principal executive offices in Minneapolis, Minnesota, at
the address identified in the preceding paragraph, not less than
90 nor more than 120 days prior to the first anniversary of
the date of this years annual meeting. As a result, any
notice given by or on behalf of a shareholder pursuant to these
provisions of our bylaws (and not pursuant to
Rule 14a-8
of the Securities and Exchange Commission) must be received no
earlier than January 7, 2010, and no later than
February 6, 2010.
HOUSEHOLDING
The Securities and Exchange Commission has adopted rules that
permit companies and intermediaries such as brokers to satisfy
delivery requirements for proxy statements and annual reports
with respect to two or more shareholders sharing the same
address by delivering a single proxy statement or annual report,
as applicable, addressed to those shareholders. This process,
which is commonly referred to as householding,
potentially provides extra convenience for shareholders and cost
savings for companies. Currently, only brokers household our
proxy materials and annual reports, delivering a single proxy
statement and annual report to multiple shareholders sharing an
address unless contrary instructions have been received from the
affected shareholders.
If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy
statement or annual report, or if you are receiving multiple
copies of either document and wish to receive only one, please
contact us in writing or by telephone at Piper Jaffray
Companies,
49
Attention: Investor Relations, 800 Nicollet Mall,
Suite 800, Mail Stop J09N05, Minneapolis, Minnesota 55402,
(612) 303-6277.
We will deliver promptly upon written or oral request a separate
copy of our annual report
and/or
proxy
statement to a shareholder at a shared address to which a single
copy of either document was delivered.
OTHER
MATTERS
We do not know of any other matters that may be presented for
consideration at the annual meeting. If any other business does
properly come before the meeting, the persons named as proxies
above will vote as they deem in the best interests of Piper
Jaffray.
James L. Chosy
Secretary
Dated: March 16, 2009
50
Appendix A
PIPER JAFFRAY
COMPANIES
AMENDED AND RESTATED
2003 ANNUAL AND LONG-TERM INCENTIVE PLAN
(as amended
effective
May
7
,
200
9
)
Section 1.
Purpose
The purpose of the Plan is to promote the interests of the
Company and its stockholders by giving the Company a competitive
advantage in attracting, retaining and motivating employees,
officers, consultants and Directors capable of assuring the
future success of the Company, to offer such persons incentives
that are directly linked to the profitability of the
Companys businesses and increases in stockholder value,
and to afford such persons an opportunity to acquire a
proprietary interest in the Company.
Section 2.
Definitions
As used in the Plan, the following terms shall have the meanings
set forth below.
(a)
Affiliate
means any entity in which
the Company has, directly or indirectly through one or more
intermediaries, a controlling interest or which has, directly or
indirectly through one or more intermediaries, a controlling
interest in the Company, within the meaning of Treasury
Regulation § 1.409A-1(b)(5)(iii)(E).
(b)
Award
means any Stock Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Award, Dividend Equivalent, Other Stock Grant, Other
Stock-Based Award or Tax Offset Bonus granted under the Plan.
(c)
Award Agreement
means any written
agreement, contract or other instrument or document evidencing
any Award granted under the Plan. Each Award Agreement shall be
subject to the applicable terms and conditions of the Plan and
any other terms and conditions (not inconsistent with the Plan)
determined by the Committee.
(d)
Board
means the Board of Directors
of the Company.
(e)
Code
means the Internal Revenue Code
of 1986, as amended from time to time, and any regulations
promulgated thereunder.
(f)
Change in Control
has the meaning
set forth in Section 7.
(g)
Committee
means a committee of
Directors designated by the Board to administer the Plan, which
initially shall be the Compensation Committee of the Board. The
Committee shall be comprised of not less than such number of
Directors as shall be required to permit Awards granted under
the Plan to qualify under
Rule 16b-3
and Section 162(m) of the Code, and each member of the
Committee shall be an Outside Director.
(h)
Company
means Piper Jaffray
Companies, a Delaware corporation.
(i)
Covered Employee
means a Participant
designated prior to the grant of Restricted Stock, Restricted
Stock Units or Performance Awards by the Committee who is or may
be a covered employee within the meaning of
Section 162(m)(3) of the Code in the year in which any such
Award is expected to be taxable to such Participant.
(j)
Director
means a member of the
Board, including any Outside Director.
(k)
Dividend Equivalent
means any right
granted under Section 6(e) of the Plan.
(l)
Effective Date
has the meaning set
forth in Section 11 of the Plan.
A-1
(m)
Eligible Individual
means any
employee, officer, Director or consultant providing services to
the Company or any Affiliate, and prospective employees and
consultants who have accepted offers of employment or
consultancy from the Company or any Affiliate, whom the
Committee determines to be an Eligible Individual.
(n)
Exchange Act
means the Securities
Exchange Act of 1934, as amended from time to time.
(o)
Exercise Price
has the meaning set
forth in Section 6(a) of the Plan.
(p)
Fair Market Value
means, with
respect to any property (including, without limitation, any
Shares or other securities), the fair market value of such
property determined by such methods or procedures as shall be
established from time to time by the Committee in good faith and
in a manner consistent with Code Section 409A.
Notwithstanding the foregoing and except as otherwise provided
by the Committee, the Fair Market Value of a Share as of a given
date shall be the closing sales price for one Share on the New
York Stock Exchange or such other established securities market
as may at the time be the principal market for the Shares, or if
the Shares were not traded on such national securities market or
exchange on such date, then on the next preceding date on which
the Shares are traded, all as reported by such source as the
Committee may select.
(q)
Non
-
Qualified Stock Option
means any Stock Option that is not designated as, or is not
intended to qualify as, an incentive stock option
within the meaning of Section 422 of the Code.
(r)
Outside Director
means any Director
who qualifies as an outside director within the
meaning of Section 162(m) of the Code, as a
non-employee director within the meaning of
Rule 16b-3
and as an independent director pursuant to the
requirements of the New York Stock Exchange.
(s)
Participant
means an Eligible
Individual designated to be granted an Award under the Plan.
(t)
Performance Award
means any right
granted under Section 6(d) of the Plan.
(u)
Performance Goals
means the
performance goals established by the Committee in connection
with the grant of an Award. In the case of Qualified
Performance-Based Awards, (i) such goals shall be based on
the attainment of specified levels of one or more of the
following measures with respect to the Company or such
subsidiary, division or department of the Company for or within
which the Participant performances services: revenue growth;
earnings before interest, taxes, depreciation, and amortization;
earnings before interest and taxes; operating income; pre- or
after- tax income; earnings per share; cash flow; cash flow per
share; return on equity; return on tangible equity; return on
invested capital; return on assets; economic value added (or an
equivalent metric); share price performance; total shareholder
return; improvement in or attainment of expense levels;
improvement in or attainment of working capital levels and
(ii) such Performance Goals shall be set by the Committee
within the time period prescribed by Section 162(m) of the
Code and related regulations. Such Performance Goals also may be
based upon the attaining of specified levels of Company
performance under one or more of the measures described above
relative to the performance of other companies.
(v)
Plan
means this Piper Jaffray
Companies Amended and Restated 2003 Annual and Long-Term
Incentive Plan, as set forth herein and as hereinafter amended
from time to time.
(w)
Qualified Performance
-
Based
Award
means an Award of Restricted Stock, Restricted
Stock Units or Performance Awards designated as such by the
Committee at the time of grant, based upon a determination that
(i) the recipient is or may be a Covered Employee in the
year in which the Company would expect to be able to claim a tax
deduction with respect to such Restricted Stock or Performance
Awards and (ii) the Committee wishes such Award to qualify
for the Section 162(m) Exemption.
(x)
Restricted Stock
means any Share
granted under Section 6(c) of the Plan.
(y)
Restricted Stock Unit
means any unit
granted under Section 6(c) of the Plan evidencing the right
to receive a Share (or a cash payment equal to the Fair Market
Value of a Share) at some future date.
A-2
(z)
Rule 16b
-
3
means
Rule 16b-3,
as promulgated by the Securities and Exchange Commission under
Section 16(b) of the Exchange Act, as amended from time to
time.
(aa)
Section 162
(
m
)
Exemption
means the exemption from the limitation
on deductibility imposed by Section 162(m) of the Code that
is set forth in Section 162(m)(4)(C) of the Code.
(bb)
Share
or
Shares
means a share or shares of common stock, par value $.01 per
share, of the Company.
(cc)
Stock Appreciation Right
means any
right granted under Section 6(b) of the Plan.
(dd)
Stock Option
means a Non-Qualified
Stock Option granted under Section 6(a) of the Plan.
Section 3.
Administration
(a)
Power and Authority of the
Committee.
The Plan shall be administered by the
Committee. Subject to the terms of the Plan and to applicable
law, the Committee shall have full power and authority to:
(i) designate Participants;
(ii) determine whether and to what extent any type (or
types) of Award is to be granted hereunder;
(iii) determine the number of Shares to be covered by (or
the method by which payments or other rights are to be
determined in connection with) each Award;
(iv) determine the terms and conditions of any Award or
Award Agreement;
(v) subject to Section 9 hereof, amend the terms and
conditions of any Award or Award Agreement and accelerate the
vesting
and/or
exercisability of any Stock Option or waive any restrictions
relating to any Award;
provided
,
however
, that
(A) except for adjustments pursuant to Section 4(c) of
the Plan, in no event may any Stock Option granted under this
Plan be (x) amended to decrease the Exercise Price thereof,
(y) cancelled in conjunction with the grant of any new
Stock Option with a lower Exercise Price, or (z) otherwise
subject to any action that would be treated, for accounting
purposes, as a repricing of such Stock Option,
unless such amendment, cancellation, or action is approved by
the stockholders of the Company to the extent required by
applicable law and stock exchange rules and (B) the
Committee may not adjust upwards the amount payable to a Covered
Employee with respect to a Qualified Performance-Based Award or
waive or alter the Performance Goals associated therewith in a
manner that would violate Section 162(m) of the Code.
(vi) determine whether, to what extent and under what
circumstances the exercise price of Awards may be paid in cash,
Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended;
(vii) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards,
other property and other amounts payable with respect to an
Award under the Plan shall be deferred either automatically or
at the election of the holder thereof or the Committee;
(viii) interpret and administer the Plan and any instrument
or agreement, including an Award Agreement, relating to the Plan;
(ix) adopt, alter, suspend, waive or repeal such rules,
guidelines and practices and appoint such agents as it shall
deem advisable or appropriate for the proper administration of
the Plan; and
(x) make any other determination and take any other action
that the Committee deems necessary or desirable for the
administration of the Plan.
A-3
Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award or
Award Agreement shall be within the sole discretion of the
Committee, may be made at any time and shall be final,
conclusive and binding upon all persons, including without
limitation, the Company, its Affiliates, subsidiaries,
shareholders, Eligible Individuals and any holder or beneficiary
of any Award.
(b)
Action by the Committee
;
Delegation.
Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the
Committee may delegate all or any part of its duties and powers
under the Plan to one or more persons, including Directors or a
committee of Directors, subject to such terms, conditions and
limitations as the Committee may establish in its sole
discretion;
provided
,
however
, that the Committee
shall not delegate its powers and duties under the Plan
(i) with regard to officers or directors of the Company or
any Affiliate who are subject to Section 16 of the Exchange
Act or (ii) in a manner that would cause an Award
designated as a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m)
Exemption; and
provided
,
further
, that any such
delegation may be revoked by the Committee at any time.
(c)
Power and Authority of the
Board.
Notwithstanding anything to the contrary
contained herein, except to the extent that the grant or
exercise of such authority would cause any Award or transaction
to become subject to (or lose an exemption under) the
short-swing profit recovery provisions of Section 16 of the
Exchange Act or cause an Award designated as a Qualified
Performance-Based Award not to qualify for, or to cease to
qualify for, the Section 162(m) Exemption, the Board may,
at any time and from time to time, without any further action of
the Committee, exercise the powers and duties of the Committee
under the Plan. To the extent that any permitted action taken by
the Board conflicts with action taken by the Committee, the
Board action shall control.
Section 4.
Shares
Available for Awards
(a)
Shares Available.
Subject to
adjustment as provided in Section 4(c) of the Plan, the
aggregate number of Shares that may be issued under the Plan
shall be
7,000,000
.
Shares that may be issued under the Plan may be authorized but
unissued Shares or Shares re-acquired and held in treasury.
(b)
Accounting for Awards.
For purposes
of this Section 4, if an Award entitles the holder thereof
to receive or purchase Shares, the number of Shares covered by
such Award or to which such Award relates shall be counted on
the date of grant of such Award against the aggregate number of
Shares available for granting Awards under the Plan. Any Shares
that are used by a Participant as full or partial payment to the
Company of the purchase price relating to an Award, including in
connection with the satisfaction of tax obligations relating to
an Award, shall again be available for granting Awards under the
Plan. In addition, if any Shares covered by an Award or to which
an Award relates are not purchased or are forfeited, or if an
Award otherwise terminates without delivery of any Shares, then
the number of Shares counted against the aggregate number of
Shares available under the Plan with respect to such Award, to
the extent of any such forfeiture or termination, shall again be
available for granting Awards under the Plan.
(c)
Adjustments.
In the event of any
change in corporate capitalization (including, but not limited
to, a change in the number of Shares outstanding), such as a
stock split or a corporate transaction, such as any merger,
consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company (including any
extraordinary cash or stock dividend), any reorganization
(whether or not such reorganization comes within the definition
of such term in Section 368 of the Code) or any partial or
complete liquidation of the Company, the Committee or Board may
make such substitution or adjustments in the aggregate number
and kind of shares reserved for issuance under the Plan, and the
maximum limitation upon Stock Options and Stock Appreciation
Rights and other Awards to be granted to any Participant, in the
number, kind and Exercise Price of shares subject to outstanding
Stock Options and Stock Appreciation Rights, in the number and
kind of shares subject to other outstanding Awards granted under
the Plan
and/or
such
other equitable substitution or adjustments as it may determine
to be appropriate in its sole discretion (including, without
limitation, the provision of an amount in cash in consideration
for any such Awards);
provided
,
however
, that the
number of shares
A-4
subject to any Award shall always be a whole number. Without
limiting the generality of the foregoing, in connection with any
Disaffiliation of a subsidiary of the Company, the Committee
shall have the authority to arrange for the assumption or
replacement of Awards with new awards based on shares of the
affected subsidiary or by an affiliate of an entity that
controls the subsidiary following the Disaffiliation. For
purposes hereof, Disaffiliation of a subsidiary
shall mean the subsidiarys ceasing to be a subsidiary of
the Company for any reason (including, without limitation, as a
result of a public offering, spin-off, sale or other
distribution or transfer by the Company of the stock of the
subsidiary). Notwithstanding the foregoing, to the extent that
any Award is otherwise considered to be deferred compensation
under Section 409A of the Code, any adjustment to such
Award will comply with Section 409A of the Code (including
current and future guidance issued by the Department of Treasury
and or the Internal Revenue Service).
(d)
Award Limitations.
No more than
250,000 shares of Common Stock may be subject to Qualified
Performance-Based Awards granted to any Eligible Individual in
any fiscal year of the Company.
Section 5.
Eligibility
Any Eligible Individual shall be eligible to be designated a
Participant. In determining which Eligible Individuals shall
receive an Award and the terms of any Award, the Committee may
take into account the nature of the services rendered by the
respective Eligible Individuals, their present and potential
contributions to the success of the Company or such other
factors as the Committee, in its discretion, shall deem relevant.
Section 6.
Awards
(a)
Stock Options.
The Committee is
hereby authorized to grant Stock Options (which may only be
Non-Qualified Stock Options) to Eligible Individuals with the
following terms and conditions and with such additional terms
and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:
(i)
Exercise Price.
The purchase price
per Share purchasable under a Stock Option (the
Exercise Price
) shall be determined by the
Committee;
provided
,
however
, that such Exercise
Price shall not be less than 100% of the Fair Market Value of a
Share on the date of grant of such Stock Option.
(ii)
Option Term
. The term of each Stock Option
shall be fixed by the Committee at the time of grant, but in no
event shall be more than 10 years from the date of grant.
(iii)
Time and Method of Exercise
. The Committee
shall determine the time or times at which a Stock Option may be
exercised in whole or in part and the method or methods by
which, and the form or forms (including, without limitation,
cash, Shares, other securities, other Awards or other property,
or any combination thereof, having a Fair Market Value on the
exercise date equal to the applicable Exercise Price) in which,
payment of the Exercise Price with respect thereto may be made
or deemed to have been made.
(b)
Stock Appreciation Rights.
The
Committee is hereby authorized to grant Stock Appreciation
Rights to Eligible Individuals subject to the terms of the Plan.
Each Stock Appreciation Right granted under the Plan shall
confer on the holder upon exercise the right to receive, as
determined by the Committee, cash or a number of Shares whose
Fair Market Value is equal to the excess of (A) the Fair
Market Value of one Share on the date of exercise (or, if the
Committee shall so determine in accordance with the requirements
of Code Section 409A, at any time during a specified period
not more than 30 days before or after the date of exercise)
over (B) the grant price of the Stock Appreciation Right as
determined by the Committee, which grant price shall not be less
than 100% of the Fair Market Value of one Share on the date of
grant of the Stock Appreciation Right. Subject to the terms of
the Plan, the grant price, term, methods of exercise, dates of
exercise, methods of settlement and any other terms and
conditions (including conditions or restrictions on the exercise
thereof) of any Stock
A-5
Appreciation Right shall be as determined by the Committee,
provided
that in no event shall the term of a Stock
Appreciation Right be longer than ten years.
(c)
Restricted Stock and Restricted Stock
Units.
The Committee is hereby authorized to
grant Restricted Stock and Restricted Stock Units to Eligible
Individuals with the following terms and conditions and with
such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine:
(i)
Restrictions.
Shares of Restricted
Stock and Restricted Stock Units shall be subject to such
restrictions as the Committee may impose (including, without
limitation, limitation on transfer, forfeiture conditions,
limitation on the right to vote a Share of Restricted Stock or
the right to receive any dividend or other right or property
with respect thereto), which restrictions may lapse separately
or in combination at such time or times, in such installments or
otherwise as the Committee may deem appropriate. The grant or
vesting of Restricted Stock and Restricted Stock Units may be
performance-based or time-based or both. Restricted Stock and
Restricted Stock Units may be Qualified Performance-Based
Awards, in which event the grant or vesting, as applicable, of
such Restricted Stock or Restricted Stock Units shall be
conditioned upon the attainment of Performance Goals.
(ii)
Stock Certificates
;
Delivery of Shares
.
(A) Any Restricted Stock granted under the Plan shall be
evidenced in such manner as the Committee may deem appropriate,
including book-entry registration or issuance of one or more
stock certificates. Any certificate issued in respect of shares
of Restricted Stock shall be registered in the name of such
Participant and shall bear an appropriate legend referring to
the applicable Award Agreement and possible forfeiture of such
shares of Restricted Stock. The Committee may require that the
certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the
Participant shall have delivered a stock power, endorsed in
blank, relating to the Shares covered by such Award.
(B) In the case of Restricted Stock Units, no Shares or
other property shall be issued at the time such Awards are
granted. Upon the lapse or waiver of restrictions and the
restricted period relating to Restricted Stock Units (or at such
later time as may be determined by the Committee), Shares or
other cash or property shall be issued to the holder of the
Restricted Stock Units and evidenced in such manner as the
Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates.
(iii)
Forfeiture
. Except as otherwise determined by
the Committee, upon a Participants termination of
employment (as determined under criteria established by the
Committee) during the applicable restriction period, all
applicable Shares of Restricted Stock and Restricted Stock Units
at such time subject to restriction shall be forfeited and
reacquired by the Company;
provided
,
however
, that
the Committee may, when it finds that a waiver would be in the
best interest of the Company, waive in whole or in part any or
all remaining restrictions with respect to Shares of Restricted
Stock or Restricted Stock Units.
(d)
Performance Awards.
The Committee is
hereby authorized to grant Performance Awards to Eligible
Individuals subject to the terms of the Plan. A Performance
Award granted under the Plan (i) may be denominated or
payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities,
other Awards or other property and (ii) shall confer on the
holder thereof the right to receive payments, in whole or in
part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. Subject to
the terms of the Plan, the performance goals to be achieved
during any performance period, the length of any performance
period, the amount of any Performance Award granted, the amount
of any payment or transfer to be made pursuant to any
Performance Award and any other terms and conditions of any
Performance Award shall be determined by the Committee. The
Committee may, prior to or at the time
A-6
of the grant, designate Performance Awards as Qualified
Performance-Based Awards, in which event it shall condition the
settlement thereof upon the attainment of Performance Goals.
Performance Awards denominated in cash that are payable to any
individual Participant with respect to any calendar year will be
limited to a maximum of $7,500,000.
(e)
Dividend Equivalents.
The Committee
is hereby authorized to grant Dividend Equivalents to Eligible
Individuals under which the Participant shall be entitled to
receive payments (in cash, Shares, other securities, other
Awards or other property as determined in the discretion of the
Committee) equivalent in value to the amount of cash dividends
paid by the Company to holders of Shares with respect to a
number of Shares determined by the Committee. Subject to the
terms of the Plan, such Dividend Equivalents may have such terms
and conditions as the Committee shall determine, but no right to
a Dividend Equivalent shall be contingent, directly or
indirectly, upon the exercise of a Stock Option or Stock
Appreciation Right.
(f)
Other Stock Grants.
The Committee is
hereby authorized, subject to the terms of the Plan, to grant to
Eligible Individuals Shares without restrictions thereon as are
deemed by the Committee to be consistent with the purpose of the
Plan.
(g)
Other Stock
-
Based Awards.
The
Committee is hereby authorized to grant to Eligible Individuals,
subject to the terms of the Plan, such other Awards that are
denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into
Shares), as are deemed by the Committee to be consistent with
the purpose of the Plan. Shares or other securities delivered
pursuant to a purchase right granted under this
Section 6(g) shall be purchased for such consideration,
which may be paid by such method or methods and in such form or
forms (including, without limitation, cash, Shares, other
securities, other Awards or other property or any combination
thereof), as the Committee shall determine, the value of which
consideration, as established by the Committee, shall not be
less than 100% of the Fair Market Value of such Shares or other
securities as of the date such purchase right is granted.
(h)
Tax Offset Bonus.
The Committee may
grant to a Participant, at the time of granting an Award or at
any time thereafter, the right to receive a cash payment in an
amount specified by the Committee, to be paid at such time or
times (if ever) as the Award results in compensation income to
the Participant, for the purpose of assisting the Participant to
pay the resulting taxes, all as determined by the Committee and
on such other terms and conditions as the Committee shall
determine (a
Tax Offset Bonus
). Payment of a
Tax Offset Bonus shall be made no later than the end of the
Participants taxable year next following the taxable year
in which the Participant remits the resulting taxes.
(i)
General
.
(i)
Consideration for Awards.
Awards may
be granted for no cash consideration or for any cash or other
consideration as determined by the Committee and required by
applicable law.
(ii)
Awards May Be Granted Separately or Together
.
Awards may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with or in
substitution for any other Award or any award granted under any
plan of the Company or any Affiliate. Awards granted in addition
to or in tandem with other Awards or in addition to or in tandem
with awards granted under any such other plan of the Company or
any Affiliate may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.
(iii)
Forms of Payment Under Awards
. Subject to the
terms of the Plan, payments or transfers to be made by the
Company or an Affiliate upon the grant, exercise or settlement
of an Award may be made in such form or forms as the Committee
shall determine (including cash, Shares, other securities, other
Awards or other property or any combination thereof);
provided
,
however
, that such payments or transfers
shall not be in the form of promissory notes. Such payments or
transfers may be made in a single payment or transfer, in
installments or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such
rules and procedures may include, without limitation, provisions
for the payment or crediting of reasonable interest on
A-7
installment or deferred payments or the grant or crediting of
Dividend Equivalents with respect to installment or deferred
payments.
(iv)
Limits on Transfer of Awards
. No Award (other
than Other Stock Grants) and no right under any such Award shall
be transferable by a Participant otherwise than by will or by
the laws of descent and distribution and the Company shall not
be required to recognize any attempted assignment of such rights
by any Participant;
provided
,
however
, that, if so
determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary or
beneficiaries to exercise the rights of the Participant and
receive any property distributable with respect to any Award
upon the death of the Participant; and
provided
,
further
, that, if so determined by the Committee, a
Participant may transfer a Non-Qualified Stock Option to any
Family Member (as such term is defined in the General
Instructions to
Form S-8
(or successor to such Instructions or such Form)) at any time
that such Participant holds such Stock Option, whether directly
or indirectly or by means of a trust or partnership or
otherwise,
provided
that the Participant may not receive
any consideration for such transfer, the Family Member may not
make any subsequent transfers other than by will or by the laws
of descent and distribution and the Company receives written
notice of such transfer. Except as otherwise determined by the
Committee, each Award or right under any such Award shall be
exercisable during the Participants lifetime only by the
Participant or, if permissible under applicable law, by the
Participants guardian or legal representative. Except as
otherwise determined by the Committee, no Award or right under
any such Award may be pledged, alienated, attached or otherwise
encumbered, and any purported pledge, alienation, attachment or
other encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.
(v)
Term of Awards.
Subject to
Section 6(a)(ii) of the Plan, the term of each Award shall
be for such period as may be determined by the Committee.
(vi)
Restrictions
. All Shares or other securities
delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan,
applicable federal or state securities laws and regulatory
requirements, and the Committee may direct appropriate stop
transfer orders and cause other legends to be placed on the
certificates for such Shares or other securities to reflect such
restrictions.
Section 7.
Change
in Control
(a)
Impact of Event.
Notwithstanding any
other provision of the Plan to the contrary, unless otherwise
provided by the Committee in any Award Agreement, in the event
of a Change in Control:
(i) Any Stock Options and Stock Appreciation Rights
outstanding as of the date of such Change in Control, and which
are not then exercisable and vested, shall become fully
exercisable and vested.
(ii) The restrictions applicable to any Restricted Stock
and Restricted Stock Units shall lapse, and such Restricted
Stock and Restricted Stock Units shall become free of all
restrictions and become fully vested.
(iii) All Performance Awards shall be considered to be
earned and payable in full, and any restriction shall lapse and
such Performance Awards shall be settled in cash or Shares, as
determined by the Committee, as promptly as is practicable.
(iv) All restrictions on other Awards shall lapse and such
Awards shall become free of all restrictions and become fully
vested.
A-8
(b)
Definition of Change in Control.
For
purposes of the Plan, and unless otherwise provided in an
applicable Award Agreement, a Change in Control
shall mean the happening of any of the following events:
(i) An acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a
Person
) of beneficial
ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(1) the then outstanding shares of common stock of the
Company (the
Outstanding Company Common
Stock
) or (2) the combined voting power of the
then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the
Outstanding Company Voting Securities
);
excluding, however, the following: (1) Any acquisition
directly from the Company, other than an acquisition by virtue
of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the
Company, (2) Any acquisition by the Company, (3) Any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any entity controlled
by the Company, or (4) Any acquisition pursuant to a
transaction which complies with clauses (1), (2) and
(3) of subsection (iii) of this
Section 7(b); or
(ii) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board
(such Board shall be hereinafter referred to as the
Incumbent Board
) cease for any reason to
constitute at least a majority of the Board;
provided
,
however
, for purposes of this Section 7(b), that any
individual who becomes a member of the Board subsequent to the
Effective Date, whose election, or nomination for election by
the Companys shareholders, was approved by a vote of at
least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered
as though such individual were a member of the Incumbent Board;
but,
provided
,
further
, that any such individual
whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of
the Incumbent Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company
(
Corporate Transaction
); excluding, however,
such a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Companys assets either directly
or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(2) no Person (other than the Company, any employee benefit
plan (or related trust) of the Company or such corporation
resulting from such Corporate Transaction) will beneficially
own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting
from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such corporation entitled
to vote generally in the election of directors except to the
extent that such ownership existed prior to the Corporate
Transaction, and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the
members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(iv) The approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
A-9
Section 8.
Income
Tax Withholding
No later than the date as of which an amount first becomes
includible in the gross income of a Participant for federal or
foreign income tax purposes with respect to any Award under the
Plan, the Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment
of, any federal, state, local or foreign taxes of any kind
required by law to be withheld with respect to such amount. The
obligations of the Company under the Plan shall be conditional
on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, be entitled to
take such action and establish such procedures as it deems
appropriate to withhold or collect all applicable payroll,
withholding, income or other taxes from such Participant,
including without limitation withholding applicable tax from
Participants cash compensation paid by the Company or an
Affiliate. In order to assist a Participant in paying all or a
portion of the federal, state, local and foreign taxes to be
withheld or collected upon exercise or receipt of (or the lapse
of restrictions relating to) an Award, the Committee, in its
discretion and subject to such additional terms and conditions
as it may adopt, may permit the Participant to satisfy such tax
obligation by (i) electing to have the Company withhold a
portion of the Shares or other property otherwise to be
delivered upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value
equal to the amount of such taxes or (ii) delivering to the
Company Shares or other property other than Shares issuable upon
exercise or receipt of (or the lapse of restrictions relating
to) such Award with a Fair Market Value equal to the amount of
such taxes,
provided
that, in either case, not more than
the legally required minimum withholding may be settled with
Shares. Any such election must be made on or before the date
that the amount of tax to be withheld is determined.
Section 9.
Amendment
and Termination
(a)
Amendments to the Plan.
The Board may
amend, alter, suspend, discontinue or terminate the Plan at any
time;
provided
,
however
, that, notwithstanding any
other provision of the Plan or any Award Agreement, without the
approval of the stockholders of the Company, no amendment,
alteration, suspension, discontinuation or termination shall be
made that, absent such approval:
(i) requires stockholder approval under the rules or
regulations of the New York Stock Exchange, any other securities
exchange or the National Association of Securities Dealers, Inc.
that are applicable to the Company; or
(ii) increases the number of Shares authorized under the
Plan as specified in Section 4(a) of the Plan.
(b)
Amendments to Awards.
The Committee
may waive any conditions of or rights of the Company under any
outstanding Award, prospectively or retroactively. Except as
otherwise provided herein or in an Award Agreement, the
Committee may not amend, alter, suspend, discontinue or
terminate any outstanding Award, prospectively or retroactively,
if such action would adversely affect the rights of the holder
of such Award, without the consent of the Participant or holder
or beneficiary thereof or such amendment would cause a Qualified
Performance-Based Award to cease to qualify for the
Section 162(m) Exemption. The Committee may unilaterally
amend any Award, and it will be conclusively presumed that such
action will not adversely affect the rights of the holder of
such Award, if such amendment is determined by the Committee to
be necessary to cause the Award to be exempt from the
application of, or to comply with, Code Section 409A.
(c)
Correction of Defects
,
Omissions and
Inconsistencies.
The Committee may correct any
defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
Section 10.
General
Provisions
(a)
No Rights to Awards.
No Eligible
Individual or other person shall have any claim to be granted
any Award under the Plan, and there is no obligation for
uniformity of treatment of Eligible
A-10
Individuals or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards need not be the same
with respect to any Participant or with respect to different
Participants.
(b)
Award Agreements.
No Participant will
have rights under an Award granted to such Participant unless
and until an Award Agreement shall have been duly executed on
behalf of the Company and, if requested by the Company, signed
by the Participant. In the event that any provision of an Award
Agreement conflicts with or is inconsistent in any respect with
the terms of the Plan as set forth herein or subsequently
amended, the terms of the Plan shall control.
(c)
No Rights of Stockholders.
Except
with respect to Shares of Restricted Stock as to which the
Participant has been granted the right to vote, neither a
Participant nor the Participants legal representative
shall be, or have any of the rights and privileges of, a
stockholder of the Company with respect to any Shares issuable
to such Participant upon the exercise or payment of any Award,
in whole or in part, unless and until such Shares have been
issued in the name of such Participant or such
Participants legal representative without restrictions
thereto.
(d)
No Limit on Other Compensation Plans or
Arrangements.
Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing
in effect other or additional compensation arrangements, and
such arrangements may be either generally applicable or
applicable only in specific cases.
(e)
No Right to Employment.
The Plan
shall not constitute a contract of employment, and adoption of
the Plan or the grant of an Award shall not be construed as
giving a Participant the right to be retained as an employee of
the Company or an Affiliate, or a non-employee Director to be
retained as a Director, nor shall it affect in any way the right
of the Company or an Affiliate to terminate such employment at
any time, with or without cause. In addition, the Company or an
Affiliate may at any time dismiss a Participant from employment
free from any liability or any claim under the Plan or any
Award, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(f)
Governing Law.
The Plan and all
Awards granted and actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws
thereof.
(g)
Severability.
If any provision of the
Plan or any Award is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or would disqualify
the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed
or deemed amended without, in the determination of the
Committee, materially altering the purpose or intent of the Plan
or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such
Award shall remain in full force and effect.
(h)
Application to Participants Outside the United
States.
In the event an Award is granted to a
Participant who is employed or providing services outside the
United States and who is not compensated from a payroll
maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to
such individual to comply with applicable foreign law.
(i)
No Trust or
Fund Created.
Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or
any Affiliate and an Eligible Individual or any other person. To
the extent that any person acquires a right to receive payments
from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.
(j)
Other Benefits.
No compensation or
benefit awarded to or realized by any Participant under the Plan
shall be included for the purpose of computing such
Participants compensation under any compensation-based
retirement, disability, or similar plan of the Company unless
required by law or otherwise provided by such other plan.
A-11
(k)
No Fractional Shares.
No fractional
Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash shall be
paid in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.
(l)
Headings.
Headings are given to the
Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
(m)
Section 16 Compliance
;
Section 162
(
m
)
Administration.
The Plan is intended to comply
in all respects with
Rule 16b-3
or any successor provision, as in effect from time to time, and
in all events the Plan shall be construed in accordance with the
requirements of
Rule 16b-3.
If any Plan provision does not comply with
Rule 16b-3
as hereafter amended or interpreted, the provision shall be
deemed inoperative. The Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan with respect to persons who are
officers or directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning the Plan
with respect to other Eligible Individuals. The Company intends
that all Stock Options and Stock Appreciation Rights granted
under the Plan to individuals who are or who the Committee
believes will be Covered Employees will constitute
qualified performance-based compensation within the
meaning of Section 162(m) of the Code.
(n)
Conditions Precedent to Issuance of
Shares.
Shares shall not be issued pursuant to
the exercise or payment of the Exercise Price or purchase price
relating to an Award unless such exercise or payment and the
issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended from time to
time, the Exchange Act, the rules and regulations promulgated
thereunder, the requirements of any applicable stock exchange
and the Delaware General Corporation Law. As a condition to the
exercise or payment of the Exercise Price or purchase price
relating to such Award, the Company may require that the person
exercising or paying the Exercise Price or purchase price
represent and warrant that the Shares are being purchased only
for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the
Company, such a representation and warranty is required by law.
(o)
Conformance to Section 409A of the
Code.
To the extent that any Award constitutes a
deferral of compensation subject to Section 409A of the
Code, the following provisions shall apply notwithstanding any
other provision of the Plan:
(i) If such Award provides for a change in the time or form
of payment of such Award upon a Change in Control of the
Company, no Change in Control shall be deemed to have occurred
upon an event described in Section 7(b) of the Plan unless
such event would also constitute a change in ownership or
effective control of, or a change in the ownership of a
substantial portion of the assets of, the Company under
Section 409A of the Code.
(ii) If any amount is payable under such Award upon a
termination of employment or other service, a termination of
employment or other service will be deemed to have occurred only
at such time as the Participant has experienced a
separation from service as such term is defined for
purposes of Code Section 409A.
(iii) If any amount shall be payable with respect to any
such Award as a result of a Participants separation
from service at such time as the Participant is a
specified employee, then no payment shall be made,
except as permitted under Code Section 409A, prior to the
first day of the seventh (7th) calendar month beginning after
the Participants separation from service (or the date of
his or her earlier death). The Company may adopt a
specified employee identification policy which
specifies the identification date, the effective date of any
change in the key employee group, compensation definition and
other variables that are relevant in identifying specified
employees, and which may include an alternative method of
identifying specified
A-12
employees consistent with the regulations under Code
Section 409A. In the absence of any such policy or policy
provision, for purposes of the above, the identification
date is each December 31st, and an employee who
satisfies the above conditions will be considered to be a
specified employee from
April 1st following the identification date to
March 31st of the following year, and the compensation
and other variables, and special rules for corporate events and
special rules relating to nonresident aliens, that is necessary
in identifying specified employees will be determined and
applied in accordance with the defaults specified in the
regulations under Code Section 409A. Any Specified Employee
Identification Policy will apply uniformly to all nonqualified
deferred compensation plans subject to Code Section 409A
that are maintained by the Company or an Affiliate.
To the extent the Committee elects to exercise its discretion to
permit or require a Participant to defer receipt of cash or
Shares that would otherwise be due to him or her under the Plan
upon the vesting or settlement of any Award, such deferral shall
occur in accordance with a written plan, rules or procedures
adopted for that purpose by the Committee. Any such plan, rules
or procedures shall comply with the requirements of Code
Section 409A, including those with respect to the time when
a deferral election may be made, the period of the deferral and
the events that would result in the payment of the deferred
amount.
Section 11.
Effective
Date of Plan
Upon adoption by the Board the Plan shall be submitted for
approval by the stockholders of the Company and shall be
effective as of the date of such approval (the
Effective Date
).
Section 12.
Term
of the Plan
The Plan will terminate on the tenth anniversary of the
Effective Date or any earlier date of discontinuation or
termination established pursuant to Section 9 of the Plan.
However, unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award theretofore granted may
extend beyond such date, and the authority of the Committee
provided for hereunder with respect to the Plan and any Awards,
and the authority of the Board to amend the Plan, shall extend
beyond the termination of the Plan.
A-13
LOCATION
OF PIPER JAFFRAY COMPANIES ANNUAL MEETING OF SHAREHOLDERS
Thursday,
May 7, 2009, at 3:30 p.m.
The Huber Room in our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
Beneficial owners of common stock held in street name by a
broker, bank, trust or other nominee may need proof of ownership
to be admitted to the meeting. A brokerage statement or letter
from the broker, bank, trust or other nominee are examples of
proof of ownership.
ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 7, 2009
3:30 p.m. (Central Daylight Time)
Piper Jaffray Companies
The Huber Room in our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be
held on May 7, 2009:
The Notice and Proxy Statement and Annual Report are available at
www.piperjaffray.com/proxymaterials.
PIPER JAFFRAY COMPANIES
PROXY FOR THE 2009 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint James L. Chosy and Debbra L. Schoneman, together and separately, as proxies, to vote all
shares of common stock that I have power to vote at the annual meeting of shareholders to be held
on May 7, 2009 in Minneapolis, Minnesota, and at any adjournment or postponement thereof, in
accordance with the instructions on the reverse side of this card and with the same effect as
though I were present in person and voting such shares. The proxies are authorized, in their
discretion, to vote upon such other business as may properly come before the meeting and they may
name others to take their place.
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
(continued, and to be signed and dated on reverse side)
800 NICOLLET MALL, SUITE 800
MAIL STOP J09N05
MINNEAPOLIS,
MN 55402
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to transmit your voting
instructions and for electronic delivery of
information until 11:59 p.m. Eastern Daylight Time
on Wednesday, May 6, 2009. Have your proxy card in
hand when you access the Web site and follow the
instructions to obtain your records and to create
an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by
Piper Jaffray Companies in mailing proxy materials,
you can consent to receiving all future proxy
statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign
up for electronic delivery, please follow the
instructions above to vote using the Internet and,
when prompted, indicate that you agree to receive
or access shareholder communications electronically
in future years.
VOTE BY PHONE - 1-800-690-6903 (from the U.S. and Canada)
Use any touch-tone telephone to transmit your
voting instructions until 11:59 p.m. Eastern
Daylight Time on Wednesday, May 6, 2009. Have your
proxy card in hand when you call and then follow
the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it
in the postage-paid envelope we have provided or
return it to Piper Jaffray Companies, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
IF YOU VOTE BY PHONE OR
INTERNET,
PLEASE DO NOT MAIL YOUR PROXY CARD
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PIPER JAFFRAY COMPANIES
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For
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Withhold
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For All
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To withhold authority to vote for any individual
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All
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All
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Except
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nominee(s), mark For All Except and write the
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number(s) of the nominee(s) on the line below.
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THE BOARD OF DIRECTORS
RECOMMENDS A
VOTE
FOR
PROPOSALS 1 AND 2.
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o
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o
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o
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Vote on Directors
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1.
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Election of Directors:
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01)
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Michael R. Francis
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02)
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B. Kristine Johnson
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03)
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Addison L. Piper
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04)
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Lisa K. Polsky
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05)
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Jean M. Taylor
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Vote on Proposal
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For
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Against
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Abstain
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2.
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Approval of an amendment to the Amended and Restated 2003 Annual and Long-Term Incentive Plan.
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o
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o
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o
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This proxy will be voted as directed. If no direction is made, it will be voted
FOR
Proposals
1 and 2.
PLEASE SIGN exactly as name appears hereon. Joint owners each should sign. Executors,
administrators, trustees, etc. should so indicate when
signing. If signer is a corporation, please
sign full name by duly authorized officer.
For address changes and/or comments, please check this box and write them on
o
the back where indicated.
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Please indicate if you plan to attend this meeting.
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o
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o
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Yes
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No
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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[E-mail notice regarding electronic delivery of proxy materials sent by Broadridge Financial
Solutions, Inc. to Piper Jaffray Companies employee-shareholders and to non-employee shareholders
who have elected to receive proxy materials by electronic delivery]
PROXYVOTE.COM
You are receiving this e-mail because you are either an employee- shareholder of Piper Jaffray
Companies, with access to company e-mail, or you are a non-employee shareholder who previously
elected to receive your proxy card and other proxy materials by electronic delivery. You will not
receive a proxy card or other proxy materials by mail. Instead, this e-mail contains instructions
on how to access the 2008 Annual Report to Shareholders and the 2009 Proxy Statement for Piper
Jaffray Companies and how to vote shares via the Internet.
Please read the instructions carefully before proceeding.
Important Notice Regarding the Availability of Proxy Materials
This is a NOTIFICATION of the:
Piper Jaffray Companies 2009 Annual Meeting of Shareholders
RECORD DATE: March 10, 2009
MEETING DATE: May 7, 2009
CUSIP NUMBER:
CONTROL NUMBER:
This
e-mail represents all shares in the following account(s):
Please review the Piper Jaffray Companies 2008 Annual Report to Shareholders and 2009 Proxy
Statement before voting. The Proxy Statement discusses the proposals to be voted on, information
about the annual meeting and voting, and other information about the company. You can view the
Piper Jaffray Companies 2008 Annual Report to Shareholders and 2009 Proxy Statement and enter your
voting instructions at the following site. If your browser supports secure transactions you will be
automatically directed to a secure site.
http://www.proxyvote.com/
Note: If your e-mail software supports it, you can simply click on the above link.
To view the documents below, you may need the Adobe Acrobat Reader. To download the Adobe Acrobat
Reader, click the URL address below:
http://www.adobe.com/products/acrobat/readstep2.html
The relevant supporting documentations can also be found at the following Internet site(s):
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Notice of Proxy Statement:
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To access ProxyVote.com, you will need your four digit PIN:
- Your PIN is the last four digits of your Social Security number
- If you have forgotten your PIN number, please follow the instructions on
www.proxyvote.com
Internet voting is accepted up to 11:59 p.m. (EDT) the day before the meeting.
If you would like to cancel your enrollment, or change your e-mail address or PIN, please go to
http://www.InvestorDelivery.com
. You will need the enrollment number below, and your
four-digit PIN. If you have forgotten your PIN, you can have it sent to your enrolled e-mail
address by going to
http://www.InvestorDelivery.com
.
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Your InvestorDelivery Enrollment Number is:
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There are no charges for this service. There may be costs associated with electronic access, such
as usage charges from Internet access providers and telephone companies, which must be borne by the
shareholder.
Please do not send any e-mail to
ID@ProxyVote.com.
Please REPLY to this e-mail with any comments or
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