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

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weighted-average exercise price of such options, and the number of shares remaining available forfuture issuance under the plan for all awards as of December 31, 2005.Number of SharesRemainingAvailable for FutureNumber of Shares toIssuance Underbe Issued UponEquityExercise of Weighted-Average CompensationOutstanding Exercise Price of Plans (ExcludingOptions, Warrants Outstanding Options, Shares in FirstPlan Category and Rights Warrants and Rights Column)(1)Equity compensation plansapproved by shareholders ******* 643,032 $42.29 2,039,042 (1)Equity compensation plans notapproved by shareholders ******* None N/A NoneThe numbers in the third column are based on the 4,100,000 shares currently authorized for issuanceunder the plan and do not reflect our proposal included in this proxy statement to increase the numberof authorized shares. In addition to the 643,032 shares to be issued upon the exercise of outstandingoptions to purchase our common stock, 1,417,444 shares of restricted stock issued under the plan wereoutstanding as of December 31, 2005. All of the 2,039,042 shares available for future issuance underthe plan as of December 31, 2005, may be granted in the form of restricted stock, RSUs, options oranother equity-based award authorized under the plan.SECURITY OWNERSHIPStock Ownership GuidelinesWe believe it is important for our directors and executive officers to maintain a meaningful equityinterest in our company, to ensure that their interests are aligned with the interests of ourshareholders. Our Board of Directors has adopted stock ownership guidelines to establish its minimumexpectations for our directors and executive officers with respect to this equity stake.Executive OfficersOur stock ownership guidelines provide for equity ownership by our executive officers in anamount having a market value ranging from two to seven times the individual’s annual base salary,depending upon the individual’s position, to be achieved within five years of the date the individualbecame subject to the guidelines. Both common stock and restricted stock count towards theseguidelines. Each of our current executive officers, other than Mr. Fairman, became subject to theseownership guidelines in 2004, the year in which the guidelines were initially adopted. Mr. Fairmanbecame subject to the guidelines at the time he became an executive officer on July 1, 2005. The tablebelow under ‘‘Beneficial Ownership of Directors, Nominees and Executive Officers’’ shows how manyshares of stock were owned as of March 6, 2006, by each of our executive officers named in theSummary Compensation Table for purposes of measuring compliance with the guidelines.In addition to the ownership guidelines, our executive officers are subject to retention guidelinesproviding that each executive officer must retain for five years at least 50% of all shares received bythe officer upon vesting of a restricted stock award and upon exercise of a stock option award.Non-Employee DirectorsOur stock ownership guidelines provide for equity ownership by our non-employee directors in anamount equal to two times the director’s annual cash retainer, to be achieved within three years afterthe director’s initial election to the Board. Both common stock and phantom stock (acquired under ourDeferred Compensation Plan for Non-Employee Directors) are counted towards these ownershipguidelines. The table below under ‘‘Beneficial Ownership of Directors, Nominees and ExecutiveOfficers’’ includes the number of shares of our common stock and phantom stock that were deemedowned as of March 6, 2006, by each of our non-employee directors for purposes of measuringcompliance with the guidelines.30
Beneficial Ownership of Directors, Nominees and Executive OfficersThe following table shows how many shares of our common stock were beneficially owned as ofMarch 6, 2006, by each of our directors, director nominees and executive officers named in theSummary Compensation Table contained in this proxy statement, and by all of our directors andexecutive officers as a group. Unless otherwise noted, the shareholders listed in the table have solevoting and investment power with respect to the shares owned by them.Phantom SharesShares of Counted TowardsPiper Jaffray Director StockCommon OwnershipName of Beneficial Owner Stock* Guidelines**Andrew S. Duff ********************************************* 67,554 (1) —Francis E. Fairman ****************************************** 11,724 (2) —Michael R. Francis ****************************************** 10,918 (3) 584B. Kristine Johnson****************************************** 10,718 (4) —Samuel L. Kaplan ******************************************* 16,961 (5) 2,799Robert W. Peterson ***************************************** 33,655 (6) —Addison L. Piper ******************************************** 13,236 (7) —Thomas P. Schnettler**************************************** 60,637 (8) —Frank L. Sims ********************************************** 13,418 (9) —Jean M. Taylor ********************************************** 4,001 (10) 892Richard A. Zona ******************************************** 12,507 (11) 2,637All directors, director nominees and executive officers as a group(14 persons) ********************************************* 279,333 (12) 6,912* None of the individual beneficial owners identified in this table owns more than 1% of Piper Jaffraycommon stock outstanding as of March 6, 2006. As a group, our directors, director nominees andexecutive officers hold 1.35% of Piper Jaffray common stock as of March 6, 2006. The holders ofrestricted stock identified in the footnotes below have no investment power with respect to therestricted stock.** The shares of phantom stock may be settled solely in cash based on the fair market value of ourcommon stock on the last day of the year in which the director’s service as a director terminates. Thedirectors 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 ofrestricted stock that vest in full on February 22, 2008, 15,988 shares of restricted stock that vest in fullon February 21, 2009, 9,349 shares of common stock held directly and 806 shares of common stockheld in the Piper Jaffray Companies Retirement Plan.(2)Includes 3,172 shares of restricted stock that vest in full on February 12, 2007, 2,843 shares ofrestricted stock that vest in full on February 22, 2008, 5,596 shares of restricted stock that vest in fullon February 21, 2009, 32 shares of common stock held directly and 81 shares of common stock heldin the Piper Jaffray Companies Retirement Plan.(3)Includes 1,000 shares of common stock held directly and 9,918 shares of common stock covered byoptions that are currently exercisable.(4)Includes 800 shares of common stock held in an individual retirement account and 9,918 shares ofcommon stock covered by options that are currently exercisable.(5)Includes 7,043 shares of common stock held in the Kaplan, Strangis & Kaplan profit-sharing trust forthe benefit of Mr. Kaplan and 9,918 shares of common stock covered by options that are currentlyexercisable.(6)Includes 6,502 shares of restricted stock that vest in full on February 12, 2007, 15,447 shares of31
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 and 26: compensation program. The cash awar
Page 27 and 28: STOCK PERFORMANCE GRAPHThe followin
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: obligations under the plan are cond
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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