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

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Oversee the Company’s Compliance with Legal and Regulatory Requirements26. Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act hasnot been implicated.27. Annually review the responsibilities, budget and staffing of the Company’s compliancedepartment.28. Review the Company’s annual report to management regarding supervisory systems andprocedures required by the NYSE.29. Annually review the budgeting and expense allocation process with respect to the Company’sinvestment research operations to ensure that such budgeting and expense allocation areperformed by senior management of the Company without input from the Company’sinvestment banking professionals and without regard to specific revenues or results derivedfrom the Company’s investment banking operations, though revenues and results of theCompany as a whole may be considered in determining the investment research budget andallocation of investment research expenses.30. Establish procedures for the receipt, retention and treatment of complaints regarding theCompany’s accounting, internal accounting controls or auditing matters, and the confidential,anonymous submission by Company employees of concerns regarding questionable accountingor auditing matters.31. Discuss with management and the independent auditor any correspondence with regulators orgovernmental agencies and any published reports that raise material issues regarding theCompany’s financial statements or accounting policies.32. Discuss with the Company’s General Counsel legal matters that may have a material impacton the financial statements or the Company’s compliance with legal or regulatoryrequirements.33. Produce an annual report for inclusion in the Company’s proxy statement for its annualshareholders meeting, in accordance with applicable rules and regulations.Other Duties and Responsibilities34. Regularly discuss the Company’s major financial risk exposures, the steps management hastaken to monitor and control such exposures, and guidelines and policies to govern theCompany’s risk assessment and risk management processes.35. Regularly meet with management (including the chief financial and accounting officer), theinternal auditor and the independent auditor in separate executive sessions.36. Annually review and reassess the adequacy of this Charter and recommend to the Board anyproposed changes to this Charter.37. Annually review and evaluate the Committee’s own performance.38. Report regularly to the Board on the Committee’s activities, specifically including a review ofany issues that arise with respect to the quality or integrity of the Company’s financialstatements, the Company’s compliance with legal or regulatory requirements, the performanceand independence of the Company’s independent auditor, or the performance of theCompany’s internal audit function.VI.Limitation of Committee’s RoleThe Committee is not responsible for preparing financial statements, planning or conductingaudits, or determining that the Company’s financial statements and disclosures are complete andaccurate and are in accordance with generally accepted accounting principles and applicable legal andother requirements. These are the responsibilities of management and the independent auditor.A-4
APPENDIX BSECTION 1. PurposePIPER JAFFRAY COMPANIESAMENDED AND RESTATED2003 ANNUAL AND LONG-TERM INCENTIVE PLAN(as amended and restated effective May 2, 2006)The purpose of the Plan is to promote the interests of the Company and its stockholders by givingthe 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 personsincentives that are directly linked to the profitability of the Company’s businesses and increases instockholder value, and to afford such persons an opportunity to acquire a proprietary interest in theCompany.SECTION 2. DefinitionsAs used in the Plan, the following terms shall have the meanings set forth below.(a) ‘‘Affiliate’’ means any entity that, directly or indirectly through one or more intermediaries, iscontrolled by, controlling or under common control with the Company.(b) ‘‘Award’’ means any Stock Option, Stock Appreciation Right, Restricted Stock, RestrictedStock Unit, Performance Award, Dividend Equivalent, Other Stock Grant, Other Stock-Based Award orTax Offset Bonus granted under the Plan.(c) ‘‘Award Agreement’’ means any written agreement, contract or other instrument or documentevidencing any Award granted under the Plan. Each Award Agreement shall be subject to theapplicable terms and conditions of the Plan and any other terms and conditions (not inconsistent withthe 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 anyregulations 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 comprisedof not less than such number of Directors as shall be required to permit Awards granted under thePlan to qualify under Rule 16b-3 and Section 162(m) of the Code, and each member of the Committeeshall 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 ‘‘coveredemployee’’ within the meaning of Section 162(m)(3) of the Code in the year in which any such Awardis 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.(m) ‘‘Eligible Individual’’ means any employee, officer, Director or consultant providing servicesto the Company or any Affiliate, and prospective employees and consultants who have accepted offersB-1
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