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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 Fairman has not withdrawn his balance of $35,914 from the plan.Following the spin-off, we assumed U.S. Bancorp’s liability for the non-qualified benefits accruedto our employees under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
STOCK PERFORMANCE GRAPHThe following graph compares the performance of an investment in our common stock fromJanuary 2, 2004, the date our common stock began regular-way trading on the New York StockExchange following our spin-off from U.S. Bancorp, with the S&P 500 Index and the S&P 500Diversified Financials Index. The graph assumes $100 was invested on January 2, 2004, in each of ourcommon stock, the S&P 500 Index and the S&P 500 Diversified Financial Index and that all dividendswere reinvested on the date of payment without payment of any commissions. Dollar amounts in thegraph are rounded to the nearest whole dollar. Based on these assumptions, the cumulative total returnfor 2005 would have been $93.95 for our common stock, $116.69 for the S&P 500 Index and$119.24 for the S&P 500 Diversified Financials Index. For 2004, the cumulative total return wouldhave been $111.51 for our common stock, $111.23 for the S&P 500 Index and $108.59 for theS&P 500 Diversified Financials Index. The performance shown in the graph represents pastperformance and should not be considered an indication of future performance.CUMULATIVE TOTAL RETURN FOR PIPER JAFFRAY COMMON STOCK, THE S&P 500INDEX AND THE S&P 500 DIVERSIFIED FINANCIALS INDEX$130$120$110$100$90$80$70$601/02/043/31/046/30/049/30/0412/31/043/31/056/30/059/30/0512/31/05PJCS&P 500S&P 500 Diversified Financials23
Page 1 and 2: 800 Nicollet Mall, Suite 800Mail St
Page 3 and 4: PROXY STATEMENTTABLE OF CONTENTSQUE
Page 5 and 6: PROXY STATEMENT2006 ANNUAL MEETING
Page 7 and 8: What does it mean if I receive more
Page 9 and 10: espect to which you abstained from
Page 11 and 12: CLASS I DIRECTORS — TERMS ENDING
Page 13 and 14: ) Has authority to call meetings of
Page 15 and 16: shareholder meetings must timely pr
Page 17 and 18: (3)(4)Each non-employee director ex
Page 19 and 20: Annual Incentive CompensationThe an
Page 21 and 22: strategic initiatives. His annual i
Page 23 and 24: (6)respectively; for Mr. Peterson,
Page 25: compensation program. The cash awar
Page 29 and 30: The Board of Directors recommends t
Page 31 and 32: waive in whole or in part any or al
Page 33 and 34: obligations under the plan are cond
Page 35 and 36: Beneficial Ownership of Directors,
Page 37 and 38: (2)(3)This information is based on
Page 39 and 40: Auditor FeesErnst & Young LLP serve
Page 41 and 42: ‘‘If you believe that one-year
Page 43 and 44: APPENDIX AI. PurposePIPER JAFFRAY C
Page 45 and 46: under ‘‘Management’s Discussi
Page 47 and 48: APPENDIX BSECTION 1. PurposePIPER J
Page 49 and 50: (z) ‘‘Rule 16b-3’’ means Ru
Page 51 and 52: shares subject to outstanding Stock
Page 53 and 54: (d) Performance Awards. The Committ
Page 55 and 56: (iii) All Performance Awards shall
Page 57 and 58: SECTION 10. General Provisions(a) N
Page 59 and 60: SECTION 11. Effective Date of PlanU

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