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SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to Section 240.14a-12 |
PIPER JAFFRAY COMPANIES
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11( a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
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Sincerely, | |
Andrew S. Duff | |
Chairman and Chief Executive Officer |
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | ||
Date and Time: | Wednesday, April 27, 2005, at 3:30 p.m., Central Time | |
Place: | Windows on Minnesota 50th Floor, IDS Center 80 South Eighth Street Minneapolis, MN 55402 | |
Items of Business: | 1. The election of two directors, each for a three-year term. | |
2. The ratification of the selection of Ernst & Young LLP as Piper Jaffray Companies’ independent auditor for the year ending December 31, 2005. | ||
3. Any other business that may properly be considered at the meeting or any adjournment or postponement of the meeting. | ||
Record Date: | You may vote at the meeting if you were a shareholder of record at the close of business on March 2, 2005. | |
Voting by Proxy: | 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 Internet or telephone, as described in the following materials, by no later than 11:59 p.m. Eastern Time on April 26, 2005, or by completing, signing and promptly returning the enclosed proxy card by mail. We encourage you to vote by Internet or telephone in order to reduce our mailing and handling expenses. If you choose to submit your proxy by mail, we have enclosed an envelope addressed to our transfer agent, Mellon Investor Services, for which no postage is required if mailed in the United States. |
By Order of the Board of Directors | |
James L. Chosy | |
Secretary |
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Appendix A | ||
Appendix B |
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• | you are present and vote in person at the meeting; or | |
• | you have properly and timely submitted your proxy as described below under “How do I submit my proxy?” |
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• | electronically, using the Internet; | |
• | over the telephone by calling a toll-free number; or | |
• | by completing, signing and mailing the enclosed proxy card. |
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• | FORboth of the nominees for director; and | |
• | FORthe ratification of the selection of Ernst & Young LLP as Piper Jaffray’s independent auditor for the year ending December 31, 2005. |
• | FORboth of the nominees for director; and | |
• | FORthe ratification of the selection of Ernst & Young LLP as Piper Jaffray’s independent auditor for the year ending December 31, 2005. |
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• | by submitting a later-dated proxy by Internet or telephone before the deadline set forth on the enclosed proxy card; | |
• | by submitting a later-dated proxy to the secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; | |
• | by sending a written notice of revocation to the secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; or | |
• | by voting in person at the meeting. |
• | all proxies, ballots and voting tabulations that identify shareholders are kept permanently confidential, except as disclosure may be required by federal or state law or expressly permitted by a shareholder; and | |
• | voting tabulations are performed by an independent third party. |
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(1) | the director does not have any relationship described in Rule 303A.02(b) of the New York Stock Exchange corporate governance rules; | |
(2) | 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 | |
(3) | 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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Audit Committee |
Members: | Richard A. Zona,Chairperson B. Kristine Johnson Frank L. Sims |
Compensation Committee |
Members: | Michael R. Francis,Chairperson Frank L. Sims Richard A. Zona |
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Nominating and Governance Committee |
Members: | Samuel L. Kaplan,Chairperson Michael R. Francis B. Kristine Johnson |
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Compensation Philosophy |
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Executive Officer Compensation Program |
Base Salary |
Annual Incentive Compensation |
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Long-Term Incentive Awards |
Executive Stock Ownership |
Chief Executive Officer Compensation |
• | Reviewed the financial performance and the total relative shareholder return of Piper Jaffray Companies, comparable public companies and other companies in the securities industry with whom Piper Jaffray competes; | |
• | Analyzed data regarding the types and amount of compensation, including incentive compensation, paid to the chief executive officers of comparable public companies and other companies in the securities industry with whom Piper Jaffray competes; | |
• | Reviewed historical compensation information for Mr. Duff, including past grants of equity; | |
• | Considered feedback from Mr. Duff, other members of management, and the Board of Directors regarding Mr. Duff’s performance for 2004; and | |
• | Independently evaluated Mr. Duff’s performance as chief executive officer against the 2004 performance goals and objectives established for him by the Compensation Committee. |
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Policy on Qualifying Compensation for Deductibility |
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Long-Term Compensation Awards | |||||||||||||||||||||||||||||
Awards | Payouts | ||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Number of | |||||||||||||||||||||||||||||
Other Annual | Restricted Stock | Securities | All Other | ||||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Compensation | Award(3) | Underlying | Compensation(6) | |||||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | Options(4)(5) | ($) | ||||||||||||||||||||||
Andrew S. Duff | 2004 | 380,000 | 1,350,000 | — | 1,147,500 | 11,719 | 6,070 | ||||||||||||||||||||||
Chairman and CEO | 2003 | 379,700 | 2,266,250 | (1) | — | 632,765 | 24,940 | 4,575,191 | |||||||||||||||||||||
2002 | 378,200 | 225,000 | — | — | — | 3,680 | |||||||||||||||||||||||
Paul D. Grangaard | 2004 | 204,700 | 687,500 | 12,903 | (2) | 478,125 | 4,883 | 9,586 | |||||||||||||||||||||
Head of Private Client | 2003 | 203,200 | 566,250 | 24,275 | (2) | 202,873 | 1,938 | 286,680 | |||||||||||||||||||||
Services | 2002 | 203,200 | 650,000 | 72,500 | (2) | — | — | 8,000 | |||||||||||||||||||||
Barry J. Nordstrand | 2004 | 200,533 | 495,000 | — | 344,250 | 3,516 | 9,496 | ||||||||||||||||||||||
Head of Fixed Income | 2003 | 178,200 | 1,278,750 | — | 458,123 | 1,938 | 42,489 | ||||||||||||||||||||||
2002 | 178,200 | 1,025,000 | — | — | — | 8,000 | |||||||||||||||||||||||
Robert W. Peterson | 2004 | 198,033 | 880,000 | 3,287 | (2) | 612,000 | 6,250 | 9,478 | |||||||||||||||||||||
Head of Investment | 2003 | 163,200 | 922,500 | 8,625 | (2) | 330,498 | 1,938 | 575,717 | |||||||||||||||||||||
Research | 2002 | 163,200 | 946,800 | 25,750 | (2) | — | — | 8,000 | |||||||||||||||||||||
Thomas P. Schnettler | 2004 | 198,033 | 1,787,500 | 12,271 | (2) | 1,243,125 | 12,696 | 9,586 | |||||||||||||||||||||
Head of Equities and | 2003 | 163,200 | 1,391,250 | 37,225 | (2) | 498,452 | 1,938 | 260,279 | |||||||||||||||||||||
Investment Banking | 2002 | 163,200 | 1,200,000 | 72,950 | (2) | — | — | 8,000 |
(1) | Consists of (a) a cash bonus of $1,766,250 and (b) a discretionary cash award of $500,000 granted in connection with our spin-off from U.S. Bancorp. The discretionary award is payable in four equal installments on each of March 31, 2004, 2005, 2006 and 2007, so long as Mr. Duff remains employed by Piper Jaffray on each payment date. See “ — Cash Award Agreement in Connection with Our Spin-Off from U.S. Bancorp” above. |
(2) | Consists of amounts paid under the U.S. Bancorp Piper Jaffray Inc. Second Century Growth Deferred Compensation Plan (As Amended and Restated Effective September 30, 1998) and the U.S. Bancorp Piper Jaffray Inc. Second Century 2000 Deferred Compensation Plan. Certain key employees were eligible to participate in these plans. Under the plans, participants were granted a deferred bonus award, which was deemed invested in certain measuring investments. Following a liquidity event (as defined in the plans) 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 participant’s account that was deemed invested. Participants may |
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continue to receive payments under the plans until a liquidity or bankruptcy event has occurred with respect to each measuring investment in which deferred bonus awards are deemed to be invested. Messrs. Grangaard, Peterson and Schnettler were granted deferred bonus awards under these plans in 1996, 1997, 1998 and/or 2000. | |
(3) | The 2004 and 2003 awards of restricted stock were granted on February 22, 2005, and February 12, 2004, respectively, as part of each executive officer’s annual incentive compensation for the year indicated. The awards will vest 100% on February 22, 2008, and February 12, 2007, respectively. The restricted stock is subject to forfeiture prior to vesting in the event the officer is terminated for cause or misappropriates confidential company information, participates in a business similar to Piper Jaffray, accepts a similar position with another company or solicits employees, customers or clients of Piper Jaffray after certain terminations of employment with Piper Jaffray. Recipients have the right to receive dividends (if any) on and to vote the shares of Piper Jaffray restricted stock they hold. For 2004, the number of shares awarded to each executive officer was determined by dividing specified dollar amounts representing a percentage of the individual’s total bonus compensation by $39.62, the closing price of our common stock on February 22, 2005. The number of shares awarded to each executive officer for 2003 was determined by dividing specified dollar amounts representing a percentage of the individual’s total bonus compensation by $47.30, the average closing price of our common stock for the five consecutive trading days ended February 11, 2004. As required by the rules of the Securities and Exchange Commission, the award value that is reported in the Summary Compensation Table was determined by multiplying the closing sales price of one share of Piper Jaffray common stock on the grant date of the restricted stock by the number of shares awarded. Mr. Grangaard will forfeit his restricted stock awards for 2004 and 2003 at the time of his resignation. |
The value of each officer’s aggregate restricted stock holdings at December 31, 2004, as determined based on a closing price of $47.95 for our common stock on December 31, 2004, and the number of restricted shares held as of December 31, 2004 were: for Mr. Duff, $596,882 and 12,448 shares; for Mr. Grangaard, $191,368 and 3,991 shares; for Mr. Nordstrand, $432,125 and 9,012 shares; for Mr. Peterson, $311,771 and 6,502 shares; and for Mr. Schnettler, $470,150 and 9,805 shares. |
(4) | The 2004 and 2003 entries for the number of securities underlying options reflect stock option awards granted to the executive officers on February 22, 2005 and February 12, 2004, respectively. These awards were not part of the annual incentive compensation paid to the executive officers for 2004 and 2003, but were granted at the same time the annual incentive compensation was awarded. Mr. Grangaard will forfeit his stock option awards at the time of his resignation. |
(5) | The table excludes U.S. Bancorp equity awards granted to the named executive officers in 2003 and 2002 while Piper Jaffray was a subsidiary of U.S. Bancorp. No U.S. Bancorp restricted stock awards were granted to the named executive officers as part of their annual incentive compensation for 2003 or 2002. In 2002, options to purchase U.S. Bancorp common stock were awarded to all of the named executive officers except Mr. Duff. The number of shares underlying U.S. Bancorp stock options awarded in 2002 that remained outstanding on December 31, 2003, were adjusted on that date to maintain the economic value of the awards in connection with the special stock dividend paid to U.S. Bancorp shareholders to effect our spin-off from U.S. Bancorp on that date. This adjustment was effected by multiplying the number of shares underlying the option by 1.0068. The adjusted number of shares of U.S. Bancorp common stock underlying U.S. Bancorp stock options granted to the named executive officers in 2002 are as follows: Mr. Duff, 0 shares; Mr. Grangaard, 12,912 shares; Mr. Nordstrand, 24,651 shares; Mr. Peterson, 12,428 shares; and Mr. Schnettler, 12,428 shares. |
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(6) | All other compensation consists of the following: |
Andrew S. | Paul D. | Barry J. | Robert W. | Thomas P. | ||||||||||||||||||
Form of All Other Compensation | Year | Duff | Grangaard | Nordstrand | Peterson | Schnettler | ||||||||||||||||
Cash award replacing value lost as | 2004 | — | — | — | — | — | ||||||||||||||||
a result of the expiration or | 2003 | $ | 4,567,096 | $ | 270,585 | $ | 26,394 | $ | 559,622 | $ | 244,184 | |||||||||||
forfeiture of U.S. Bancorp stock | 2002 | — | — | — | — | — | ||||||||||||||||
options and/or restricted stock in connection with our spin-off | ||||||||||||||||||||||
Matching contributions made | 2004 | — | $ | 3,516 | $ | 3,516 | $ | 3,516 | $ | 3,516 | ||||||||||||
under the 401(k) component of | 2003 | — | $ | 8,000 | $ | 8,000 | $ | 8,000 | $ | 8,000 | ||||||||||||
the Piper Jaffray Companies | 2002 | — | $ | 8,000 | $ | 8,000 | $ | 8,000 | $ | 8,000 | ||||||||||||
Retirement Plan (for 2004) or the U.S. Bancorp 401(k) Savings Plan (for 2003 and 2002) | ||||||||||||||||||||||
Profit-sharing contribution made | 2004 | $ | 5,125 | $ | 5,125 | $ | 5,125 | $ | 5,125 | $ | 5,125 | |||||||||||
under the Piper Jaffray Companies | 2003 | $ | 7,825 | $ | 7,825 | $ | 7,825 | $ | 7,825 | $ | 7,825 | |||||||||||
Retirement Plan | 2002 | — | — | — | — | — | ||||||||||||||||
Life Insurance Allowance | 2004 | $ | 270 | $ | 270 | $ | 180 | $ | 162 | $ | 270 | |||||||||||
2003 | $ | 270 | $ | 270 | $ | 270 | $ | 270 | $ | 270 | ||||||||||||
2002 | $ | 3,241 | — | — | — | — | ||||||||||||||||
Long-Term Disability Insurance | 2004 | $ | 675 | $ | 675 | $ | 675 | $ | 675 | $ | 675 | |||||||||||
Allowance | 2003 | — | — | — | — | — | ||||||||||||||||
2002 | — | — | — | — | — | |||||||||||||||||
Insurance Premium Rebate | 2004 | — | — | — | — | — | ||||||||||||||||
2003 | — | — | — | — | — | |||||||||||||||||
2002 | $ | 429 | — | — | — | — |
For detail regarding payment of the cash awards, see “— Cash Award Agreement in Connection with Our Spin-Off from U.S. Bancorp” above. |
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Individual Grants | ||||||||||||||||||||||||
Percent of | ||||||||||||||||||||||||
Number of | Total Options | Closing Market | ||||||||||||||||||||||
Securities | Granted to | Exercise Price | Price on Date | Grant Date | ||||||||||||||||||||
Underlying | Employees in | per Share | of Grant | Present Value | ||||||||||||||||||||
Name | Options Granted | Fiscal Year | ($) | ($) | Expiration Date | ($) | ||||||||||||||||||
Andrew S. Duff | 11,719 | 2.98 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 202,504 | (5) | |||||||||||||||
24,940 | 8.29 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 542,694 | (6) | ||||||||||||||||
Paul D. Grangaard | 4,883 | 1.24 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 84,378 | (5) | |||||||||||||||
1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
Barry J. Nordstrand | 3,516 | 0.89 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 60,756 | (5) | |||||||||||||||
1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
Robert W. Peterson | 6,250 | 1.59 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 108,000 | (5) | |||||||||||||||
1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) | ||||||||||||||||
Thomas P. Schnettler | 12,696 | 3.22 | (1) | 39.62 | (3) | 39.62 | February 22, 2015 | 219,387 | (5) | |||||||||||||||
1,938 | 0.64 | (2) | 47.30 | (4) | 51.05 | February 12, 2014 | 42,171 | (6) |
(1) | Based on options granted to employees during 2005 through March 2, 2005, to purchase a total of 393,786 shares of our common stock. |
(2) | Based on options granted to employees during 2004 to purchase a total of 300,980 shares of our common stock. |
(3) | The exercise price is the closing price of our common stock on February 22, 2005. |
(4) | The exercise price is the average closing price of our common stock for the five consecutive trading days ended February 11, 2004. |
(5) | The options to purchase shares of Piper Jaffray Companies common stock granted on February 22, 2005, were valued using a Black-Scholes option pricing method that assumed a risk-free interest rate of 3.76%, a dividend yield of zero, a stock volatility factor of 38.57% and an expected life of the options of six years, resulting in an option value of $17.28. |
(6) | The options to purchase shares of Piper Jaffray Companies common stock granted on February 12, 2004, were valued using a Black-Scholes option pricing method that assumed a risk-free interest rate of 3.25%, a dividend yield of zero, a stock volatility factor of 39.92% and an expected life of the options of six years, resulting in an option value of $21.76. |
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Number of Securities | Value of Unexercised | |||||||||||||||
Underlying Unexercised | In-the-Money Options | |||||||||||||||
Options at Fiscal Year-End | at Fiscal Year-End(1) | |||||||||||||||
Name | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||
Andrew S. Duff | — | 24,940 | — | $ | 16,211 | |||||||||||
Paul D. Grangaard | — | 1,938 | — | $ | 1,260 | |||||||||||
Barry J. Nordstrand | — | 1,938 | — | $ | 1,260 | |||||||||||
Robert W. Peterson | — | 1,938 | — | $ | 1,260 | |||||||||||
Thomas P. Schnettler | — | 1,938 | — | $ | 1,260 |
(1) | The value of unexercised in-the-money options at fiscal year-end was calculated based on the difference between the closing price of our common stock on December 31, 2004 of $47.95, and the option exercise price of $47.30, multiplied by the number of shares underlying each option. |
Number of Shares | ||||||||||||
Remaining for | ||||||||||||
Number of Shares | Future Issuance | |||||||||||
to Be Issued Upon | Weighted-Average | Under Equity | ||||||||||
Exercise of | Exercise Price of | Compensation | ||||||||||
Outstanding | Outstanding Options, | Plans (Excluding | ||||||||||
Options, Warrants | Warrants and | Shares in First | ||||||||||
Plan Category | and Rights (#) | Rights ($) | Column) (#) | |||||||||
Equity compensation plans approved by shareholders | 295,683 | $ | 47.50 | 3,272,432 | (1) | |||||||
Equity compensation plans not approved by shareholders | N/A | N/A | N/A |
(1) | A total of 4,100,000 shares currently are authorized for issuance under the plan. In addition to the 295,683 shares to be issued upon the exercise of outstanding options to purchase our common stock, 531,885 shares of restricted stock that have been issued under the plan were outstanding as of December 31, 2004. All of the 3,272,432 shares available for future issuance under the plan as of December 31, 2004, may be granted in the form of restricted stock, restricted stock units, options or another equity-based award authorized under the plan. |
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Executive Officers |
Non-Employee Directors |
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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 | 47,267 | (1) | — | |||||
Michael R. Francis | 4,205 | (2) | 584 | |||||
Paul D. Grangaard | 16,415 | (3) | — | |||||
B. Kristine Johnson | 4,705 | (4) | — | |||||
Samuel L. Kaplan | 10,248 | (5) | 1,168 | |||||
Barry J. Nordstrand | 17,947 | (6) | — | |||||
Robert W. Peterson | 22,228 | (7) | — | |||||
Addison L. Piper | 8,666 | (8) | — | |||||
Thomas P. Schnettler | 41,416 | (9) | — | |||||
Frank L. Sims | 6,705 | (10) | — | |||||
Richard A. Zona | 6,794 | (11) | 1,231 | |||||
All directors, director nominees and executive officers as a group (14 persons) | 202,321 | (12) | 2,983 |
* | The beneficial owners identified in this table do not own more than 1% of outstanding Piper Jaffray common stock either individually or as a group. The holders of restricted stock identified in the footnotes below have no investment power with respect to the restricted stock. |
** | The shares of phantom stock may be settled solely in cash based on the fair market value of our common stock on the last day of the year in which the director’s service as a director terminates. The directors have no voting or investment power with respect to the phantom stock. |
(1) | Includes 12,448 shares of restricted stock that vest in full on February 12, 2007, 28,963 shares of restricted stock that vest in full on February 22, 2008, 5,349 shares of common stock held directly and 507 shares of common stock held in the Piper Jaffray Companies Retirement Plan. |
(2) | Consists of shares of common stock covered by options that are currently exercisable. | |
(3) | Includes 3,991 shares of restricted stock that vest in full on February 12, 2007, 12,068 shares of restricted stock that vest in full on February 22, 2008, 277 shares of common stock held directly, 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan and 11 shares of common stock held in an individual retirement account. | |
(4) | Includes 500 shares of common stock held in an individual retirement account and 4,205 shares of common stock covered by options that are currently exercisable. |
(5) | Includes 6,043 shares of common stock held in the Kaplan, Strangis & Kaplan profit-sharing trust for the benefit of Mr. Kaplan and 4,205 shares of common stock covered by options that are currently exercisable. |
(6) | Includes 9,012 shares of restricted stock that vest in full on February 12, 2007, 8,689 shares of restricted stock that vest in full on February 22, 2008, 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan and 178 shares held in an individual retirement account. | |
(7) | Includes 6,502 shares of restricted stock that vest in full on February 12, 2007, 15,447 shares of restricted stock that vest in full on February 22, 2008, 197 shares of common stock held directly, 68 |
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shares of common stock held in the Piper Jaffray Companies Retirement Plan and 14 shares of common stock held in an individual retirement account. | ||
(8) | Includes 1,798 shares of restricted stock that vest in full on February 12, 2007, 5,364 shares of restricted stock that vest in full on February 22, 2008, 502 shares of common stock held directly, 1,000 shares of common stock held in an individual retirement account and 2 shares of common stock held by Mr. Piper’s spouse. | |
(9) | Includes 9,805 shares of restricted stock that vest in full on February 12, 2007, 31,377 shares of restricted stock that vest in full on February 22, 2008, 166 shares of common stock held directly and 68 shares of common stock held in the Piper Jaffray Companies Retirement Plan. |
(10) | Includes 2,500 shares of common stock held directly and 4,205 shares of common stock covered by options that are currently exercisable. |
(11) | Includes 2,589 shares of common stock held directly and 4,205 shares of common stock covered by options that are currently exercisable. |
(12) | Includes 48,182 shares of restricted stock that vest in full on February 12, 2007, 112,593 shares of restricted stock that vest in full on February 22, 2008, 983 shares of common stock held in the Piper Jaffray Companies Retirement Plan, 7,756 shares held in a retirement or profit-sharing plan or account (other than the Piper Jaffray Companies Retirement Plan), 11,783 shares of common stock held directly or by family members, and 21,025 shares covered by options that are currently exercisable. |
Shares of | |||||||||
Piper Jaffray | |||||||||
Name of Beneficial Owner | Common Stock | Percent of Class | |||||||
T. Rowe Price Associates, Inc. | 1,377,578 | (1) | 6.66% | ||||||
100 E. Pratt Street | |||||||||
Baltimore, Maryland 21202 |
(1) | This information is based on a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2005, by T. Rowe Price Associates, Inc. T. Rowe Price Associates, Inc. reported that it has sole voting power as to 208,700 shares of common stock and shared investment power as to 1,377,578 shares of common stock. |
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1. | Reviewed and discussed with management and the independent auditor the audited financial statements of Piper Jaffray Companies; | |
2. | Discussed with the independent auditor the matters required to be communicated underStatement on Auditing Standards No. 61 (Communications with Audit Committees); | |
3. | Received the written disclosures and letter from the independent auditor required byIndependence Standards Board Standard No. 1 (Independence Discussions with Audit Committees);and | |
4. | Discussed with the independent auditor its independence. |
2004 | 2003 | |||||||
Audit Fees | $ | 753,215 | $ | 494,990 | ||||
Audit-Related Fees(1) | $ | 51,000 | 66,950 | |||||
Tax Fees(2) | $ | 386,000 | 162,528 | |||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 1,190,315 | $ | 724,468 |
(1) | Audit-related services for 2004 primarily include services relating to IRA Keogh agreed-upon procedures and employee benefit plan audits. Audit-related services for 2003 primarily include services relating to agency selling group and IRA Keogh agreed-upon procedures. |
(2) | Tax fees consist of tax compliance fees and tax consultation fees. Tax compliance fees totaled $288,000 in 2004 and $139,952 in 2003. Tax compliance services in 2004 consisted of services relating to federal, state and local estimated tax calculations, federal and state partnership tax returns, and foreign tax services performed for our U.K. subsidiary Piper Jaffray Ltd. Tax compliance services in 2003 consisted of services relating to our partnership tax returns and foreign tax services performed for our subsidiary Piper Jaffray Ltd. Tax consultation services in 2004 totaled $98,000 in 2004 and $22,576 in 2003. Tax consultation services consisted of state value analysis, acquisition due diligence and transfer |
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pricing consultation and in 2003 consisted of sales and use tax review. For 2005, we have hired KPMG LLP to provide tax services, including tax compliance services and tax consultation services. As a result, we do not expect to incur tax fees from services provided by Ernst & Young LLP for 2005. |
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James L. Chosy | |
Secretary |
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(1) the director does not have any relationship described in NYSE Rule 303A.02(b); |
(2) | in the event the director has a relationship that exceeds the limits described below, the Board determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material; and | |
(3) | the Board reviews all commercial, banking, consulting, legal, accounting, charitable, familial and other relationships the director has with the Company that are not of a type described below, and determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material. |
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I. | Purpose |
II. | Membership |
III. | Meetings |
IV. | Resources and Authority |
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V. | Duties and Responsibilities |
Oversee the Relationship with the Independent Auditor |
1. | Appoint, determine the compensation and retention terms for, and oversee the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. | |
2. | Resolve disagreements between management and the independent auditor regarding financial reporting. | |
3. | At least annually, obtain and review a report by the independent auditor describing (a) its internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (c) all relationships between the independent auditor and the Company, in order to assess the auditor’s independence. | |
4. | Annually receive written notice from the independent auditor regarding its independence as required in Independence Standards Board Standard No. 1 and discuss with the independent auditor its independence. | |
5. | At least annually, evaluate the qualifications, performance and independence of the independent auditor, considering (a) whether the auditor’s quality controls are adequate, (b) whether the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, and (c) the opinions of the Company’s management and its internal auditor. The Committee shall present its conclusions with respect to the independent auditor to the Board. | |
6. | Review and evaluate the lead partner of the independent auditor team. | |
7. | Ensure the regular rotation of the lead audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit, as required by law. | |
8. | Review the Company’s hiring policies with respect to employees and former employees of the independent auditor who participated in any capacity in the audit of the Company to ensure such hiring policies do not compromise the independence of the independent auditor. | |
9. | Confirm that none of the independent auditor’s audit partners earn or receive compensation based on procuring engagements with the Company for providing products or services, other than audit review or attest services. |
10. | Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit. | |
11. | Pre-approve all audit and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by the independent auditor, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Committee prior to the completion of the audit, considering whether the provision of any non-audit services is compatible with maintaining the independent auditor’s independence. | |
12. | Discuss with the independent auditor issues on which the national office was consulted by the Company’s audit team and matters of audit quality and consistency. |
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Oversee the Integrity of the Company’s Financial Statements and Disclosures |
13. | Meet to review and discuss with management and the independent auditor the Company’s annual audited financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and recommend to the Board whether the annual audited financial statements should be included in the Company’s Form 10-K. | |
14. | Meet to review and discuss with management and the independent auditor the Company’s quarterly financial statements, including reviewing the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” prior to the filing of the Company’s Form 10-Q. | |
15. | Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles. | |
16. | Review and discuss with management and the independent auditor any major issues as to the adequacy of the Company’s internal controls, any special steps adopted in light of material control deficiencies and the adequacy of disclosures about changes in internal control over financial reporting. | |
17. | Review and discuss with management (including the senior internal audit executive) and the independent auditor the Company’s internal controls report and the independent auditor’s attestation of the report, prior to the filing of the Company’s Form 10-K. | |
18. | Review and discuss with the independent auditor (a) all critical accounting policies and practices to be used; (b) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (c) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences. | |
19. | Discuss generally with management the types of information to be disclosed and the types of presentations to be made with respect to the Company’s earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, and any financial information and earnings guidance provided to analysts and rating agencies. | |
20. | Discuss with management and the independent auditor the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Company’s financial statements. | |
21. | Review disclosures made to the Committee by the Company’s chief executive officer and chief financial officer during their certification process for the Form 10-K and Forms 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who play a significant role in the Company’s internal controls. | |
22. | Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, and review with the independent auditor any difficulties encountered in the course of the audit work, including any restrictions on the scope of the independent auditor’s activities or on its access to requested information, and any significant disagreements with management, and management’s response to such problems or difficulties. |
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Oversee the Company’s Internal Audit Function |
23. | Review the appointment and replacement of the senior internal audit executive. | |
24. | Review the significant reports to management prepared by the internal auditor and management’s responses. | |
25. | Discuss with the independent auditor and management the responsibilities, budget and staffing of the Company’s internal audit function and the planned scope of the internal audit. |
Oversee the Company’s Compliance with Legal and Regulatory Requirements |
26. | Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act has not been implicated. | |
27. | Annually review the responsibilities, budget and staffing of the Company’s compliance department. | |
28. | Review the Company’s annual report to management regarding supervisory systems and procedures required by the NYSE. | |
29. | Annually review the budgeting and expense allocation process with respect to the Company’s investment research operations to ensure that such budgeting and expense allocation are performed by senior management of the Company without input from the Company’s investment banking professionals and without regard to specific revenues or results derived from the Company’s investment banking operations, though revenues and results of the Company as a whole may be considered in determining the investment research budget and allocation of investment research expenses. | |
30. | Oversee administration of the Company’s Code of Ethics and Business Conduct and, as appropriate, consider and approve any amendments to, or waivers granted to the Company’s executive officers under, provisions of such Code. | |
31. | Establish procedures for the receipt, retention and treatment of complaints regarding the Company’s accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters. | |
32. | Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies. | |
33. | Discuss with the Company’s General Counsel legal matters that may have a material impact on the financial statements or the Company’s compliance with legal or regulatory requirements. | |
34. | Produce an annual report for inclusion in the Company’s proxy statement for its annual shareholders meeting, in accordance with applicable rules and regulations. |
Other Duties and Responsibilities |
35. | Regularly discuss the Company’s major financial risk exposures, the steps management has taken to monitor and control such exposures, and guidelines and policies to govern the Company’s risk assessment and risk management processes. | |
36. | Regularly meet with management (including the chief financial and accounting officer), the internal auditor and the independent auditor in separate executive sessions. | |
37. | Annually review and reassess the adequacy of this Charter and recommend to the Board any proposed changes to this Charter. | |
38. | Annually review and evaluate the Committee’s own performance. |
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39. | Report regularly to the Board on the Committee’s activities, specifically including a review of any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent auditor, or the performance of the Company’s internal audit function. |
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PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2005 ANNUAL MEETING OF SHAREHOLDERS
The undersigned, having received the Notice of Annual Meeting of Shareholders and Proxy Statement, revoking any proxy previously given, hereby appoint(s) Andrew S. Duff, James L. Chosy and Sandra G. Sponem, and any of them, as proxies to vote as directed all shares the undersigned is (are) entitled to vote at the Piper Jaffray Companies 2005 Annual Meeting of Shareholders and authorize(s) each to vote in his or her discretion upon other business as may properly come before the meeting or any adjournment or postponement thereof.If this signed proxy card contains no specific voting instructions, my (our) shares will be voted “FOR” both nominees for director, “FOR” Item 2, and in the discretion of the named proxies on all other matters. |
IF YOU DO NOT VOTE BY TOUCH-TONE TELEPHONE OR INTERNET, PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE. |
(Continued on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
/\FOLD AND DETACH HERE /\ |
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The Board of Directors recommends a vote FOR Items 1 and 2. | Please Mark Here for Address Change or Comments SEE REVERSE SIDE |
FOR ALL | WITHHOLD | |||||
ITEM 1. | Election of Class II Directors to serve until the annual meeting in 2008. | (except as specified below | AUTHORITY to vote for all | |||
Nominees: | ||||||
01 Michael R. Francis | ||||||
02 Addison L. Piper | o | o | ||||
To withhold authority to vote for either nominee, write the number of the nominee in the space provided below: |
Signature |
FOR | AGAINST | ABSTAIN | ||||||
ITEM 2. | Ratify selection of Ernst & Young LLP as independent auditor for 2005. | o | o | o | ||||
I PLAN TO ATTEND THE MEETING | o |
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Signature | Date |
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, or on behalf of a corporation or partnership as an authorized officer, please give full title as such.
/\FOLD AND DETACH HERE /\ |
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/pjc Use the Internet to vote your proxy. Have your proxy card in hand when you access the Web site. |
OR | Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR |
Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the Internet at www.piperjaffray.com