You are cordially invited to join us for our 2006 annual ... - Piper Jaffray

establishing our non-contributory profit-sharing plan (now included in the Piper Jaffray CompaniesRetirement Plan), Piper Jaffray withdrew as a participating employer in the U.S. Bancorp Cash BalancePension Plan. Following our spin-off from U.S. Bancorp, our employees with vested benefits in thecareer average pay plan may withdraw those benefits at the employee’s request. The liability for anybenefits payable to our employees under the career average pay plan remains with U.S. Bancorp. In2004, the following officers named in the Summary Compensation Table withdrew their vestedbalances from this plan as follows: Mr. Duff, $31,981; Mr. Peterson, $31,981; Mr. Piper, $31,981 andMr. Schnettler, $32,734. Mr. Fairman has not withdrawn his balance of $35,914 from the plan.Following the spin-off, we assumed U.S. Bancorp’s liability for the non-qualified benefits accruedto our employees under the defined benefit excess plan. In 2004, we established the Piper JaffrayCompanies Non-Qualified Retirement Plan to maintain and administer these benefits, which weretransferred to our Non-Qualified Retirement Plan following the spin-off. Following the transfer,participation in our Non-Qualified Retirement Plan was frozen and no new benefits may be earned byparticipants in this plan. However, participating employees will continue to receive investment creditson their transferred plan balances in accordance with the terms of our plan. Each employee’s planbalance will be payable by us upon the employee’s retirement or termination of employment. As ofDecember 31, 2005, the Non-Qualified Retirement Plan account balances for our named executiveofficers were as follows: Mr. Duff, $408,905; Mr. Fairman, $141,649; Mr. Peterson, $387,897;Mr. Piper, $517,312; and Mr. Schnettler, $702,703.Termination and Change-in-Control ArrangementsAll of our executive officers are eligible to participate in the Piper Jaffray Companies SeverancePlan, a broad-based plan in which all of our full-time, U.S.-based employees generally are eligible toparticipate. In the event of certain involuntary terminations of employment resulting from anemployer-determined severance event, employees may receive severance pay up to a maximum of theirweekly base salary multiplied by 52, subject to a maximum dollar amount of $205,000. Employerdeterminedseverance events may include, depending on the circumstances, closure of a companyfacility, a permanent reduction in our workforce or certain organizational changes that result in theelimination of the employee’s position.Employment Arrangement with Addison L. PiperWe have established an employment arrangement with Mr. Piper pursuant to which he serves asvice chairman and as a member of our management committee (which is comprised of all ourexecutive officers). The employment arrangement provides that Mr. Piper will be a full-time employeeof our company subject to the policies generally applicable to other executive officers and will be paidan annual base salary of $250,000 and a minimum annual bonus of $500,000 for serving in thesepositions. The bonus amount will be paid in a combination of cash and equity of our company. Thepercentage of Mr. Piper’s bonus that is to be paid in equity in any given year will be determined in thesame manner used to determine the percentage of bonus to be paid in equity for our other executiveofficers in accordance with then-applicable compensation plans and programs. This arrangement willcontinue through December 31, 2006.22