def14a
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
Proxy Statement
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o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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þ Definitive
Proxy Statement
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o Definitive
Additional Materials
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o Soliciting
Material Pursuant to Section 240.14a-12
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PIPER JAFFRAY COMPANIES
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other
Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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(1) |
Title of each class of securities to which
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Aggregate number of securities to which
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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):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1) |
Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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800 Nicollet Mall, Suite 800
Mail Stop J09N05
Minneapolis, Minnesota 55402
612
303-6000
March 16, 2011
Dear Shareholders:
You are cordially invited to join us for our 2011 annual meeting
of shareholders, which will be held on Wednesday, May 4,
2011, at 2:30 p.m., Central Time, in the Huber Room on the
12th floor of our Minneapolis headquarters in the
U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis,
Minnesota. The Notice of Annual Meeting of Shareholders and the
proxy statement that follow describe the business to be
conducted at the meeting.
We are furnishing our proxy materials to you over the Internet,
which will reduce our costs and the environmental impact of our
annual meeting. Accordingly, we mailed a Notice of Internet
Availability of Proxy Materials to you, which contains
instructions on how to access our proxy statement and annual
report and vote online. The Notice of Availability also contains
instructions on how to request a printed set of proxy materials.
Whether or not you plan to attend the meeting, your vote is
important and we encourage you to vote your shares promptly. You
may vote your shares using a toll-free telephone number or the
Internet. If you received a paper copy of the proxy card by
mail, you may sign, date and mail the proxy card in the envelope
provided. Instructions regarding the three methods of voting are
contained on the Notice of Availability and the proxy card.
We look forward to seeing you at the annual meeting.
Sincerely,
Andrew S. Duff
Chairman and Chief Executive Officer
800 Nicollet Mall, Suite 800
Mail Stop J09N05
Minneapolis, Minnesota 55402
612
303-6000
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NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS |
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Date and
Time:
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Wednesday,
May 4, 2011, at 2:30 p.m., Central Time
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Place:
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The Huber Room in
our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
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Items of
Business:
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1. The election
of eight directors, each for a one-year term.
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2. Ratification
of the selection of Ernst & Young LLP as the
independent auditor of Piper Jaffray Companies for the fiscal
year ending December 31, 2011.
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3. An advisory
vote to approve the compensation of the officers disclosed in
the attached proxy statement, or a
say-on-pay
vote.
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4. An advisory
vote recommending the frequency of future
say-on-pay
votes, or a say-when-on-pay vote.
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5. Any other
business that may properly be considered at the meeting or any
adjournment or postponement of the meeting.
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Record
Date:
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You may vote at the
meeting if you were a shareholder of record at the close of
business on March 8, 2011.
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Voting by
Proxy:
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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 telephone or Internet, as described in
the Notice of Internet Availability of Proxy Materials and the
following proxy statement, by no later than 11:59 p.m.
Eastern Daylight Time on Tuesday, May 3, 2011. If you
received a paper copy of the proxy card by mail, you may sign,
date and mail the proxy card in the envelope provided. The
envelope is addressed to our vote tabulator, Broadridge
Financial Solutions, Inc., and no postage is required if mailed
in the United States.
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Important
Notice Regarding the Availability of Proxy Materials for
the Annual Meeting to be held on May 4, 2011
Our proxy
statement and 2010 annual report are available at
www.piperjaffray.com/proxymaterials
By Order of the Board of Directors
James L. Chosy
Secretary
March 16, 2011
PROXY
STATEMENT
TABLE OF CONTENTS
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ii
PROXY
STATEMENT
2011
ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD MAY 4, 2011
The Board of Directors of Piper Jaffray Companies is soliciting
proxies for use at the annual meeting of shareholders to be held
on May 4, 2011, and at any adjournment or postponement of
the meeting. Notice of Internet Availability of Proxy Materials,
which contains instructions on how to access this proxy
statement and our annual report online, is first being mailed to
shareholders on or about March 16, 2011.
QUESTIONS AND
ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is the
purpose of the meeting?
At our annual meeting, shareholders will act upon the matters
outlined in the Notice of Annual Meeting of Shareholders, and
management will report on matters of current interest to our
shareholders and respond to questions from our shareholders. The
matters outlined in the notice include the election of
directors, the ratification of the selection of our independent
auditor for 2011, an advisory vote to approve the compensation
of our officers disclosed in this proxy statement, or a
say-on-pay
vote, and an advisory vote recommending the frequency of future
say-on-pay
votes, or a say-when-on-pay vote.
Who is
entitled to vote at the meeting?
The Board has set March 8, 2011 as the record date for the
annual meeting. If you were a shareholder of record at the close
of business on March 8, 2011, you are entitled to vote at
the meeting. As of the record date, 19,344,172 shares of
common stock, representing all of our voting stock, were issued
and outstanding and, therefore, eligible to vote at the meeting.
What are my
voting rights?
Holders of our common stock are entitled to one vote per share.
Therefore, a total of 19,344,172 votes are entitled to be cast
at the meeting. There is no cumulative voting.
How many
shares must be present to hold the meeting?
In accordance with our bylaws, shares equal to a majority of the
voting power of the outstanding shares of common stock entitled
to vote generally in the election of directors as of the record
date must be present at the annual meeting in order to hold the
meeting and conduct business. This is called a quorum. Shares
are counted as present at the meeting if:
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you are present and vote in person at the meeting; or
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you have properly and timely submitted your proxy as described
below under How do I submit my proxy?
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What is a
proxy?
It is your designation of another person to vote stock you own.
That other person is called a proxy. If you designate someone as
your proxy in a written document, that document also is called a
proxy or a proxy card. When you designate a proxy, you also may
direct the proxy how to vote your shares. We refer to this as
your proxy vote. Two executive officers have been
designated as proxies for our 2011 annual meeting of
shareholders. These executive officers are James L. Chosy and
Debbra L. Schoneman.
What is a
proxy statement?
It is a document that we are required to make available to you
by Internet or, if you request, by mail in accordance with
regulations of the Securities and Exchange Commission, when we
ask you to designate proxies to vote your shares of Piper
Jaffray Companies common stock at a meeting of our shareholders.
The proxy statement includes information regarding the matters
to be acted upon at the meeting and certain other information
required by regulations of the Securities and Exchange
Commission and rules of the New York Stock Exchange.
Why did I
receive a one-page Notice of Internet Availability of Proxy
Materials instead of a full set of proxy
materials?
As permitted by Securities and Exchange Commission rules, we
have elected to provide access to our proxy materials over the
Internet, which reduces our costs and the environmental impact
of our annual meeting. Accordingly, we mailed a Notice of
Internet Availability of Proxy Materials to our shareholders of
record and beneficial owners who have not previously requested a
printed set of proxy materials. The Notice of Availability
contains instructions on how to access our proxy statement and
annual report and vote online, as well as instructions on how to
request a printed set of proxy materials.
How can I get
electronic access to the proxy materials if I dont already
receive them via
e-mail?
To get electronic access to the proxy materials, you will need
your control number, which was provided to you in the Notice of
Internet Availability of Proxy Materials or the proxy card
included in your printed set of proxy materials. Once you have
your control number, you may either go to www.proxyvote.com
and enter your control number when prompted, or send an
e-mail
requesting electronic delivery of the materials to
sendmaterial@proxyvote.com.
What is the
difference between a shareholder of record and a street
name holder?
If your shares are registered directly in your name, you are
considered the shareholder of record with respect to those
shares. If your shares are held in a stock brokerage account or
by a bank, trust or other nominee, then the broker, bank, trust
or other nominee is considered to be the shareholder of record
with respect to those shares, while you are considered the
beneficial owner of those shares. In that case, your shares are
said to be held in street name. Street name holders
generally cannot vote their shares directly and must instead
instruct the broker, bank, trust or other nominee how to vote
their shares using the method described below under How do
I submit my proxy?
How do I
submit my proxy?
If you are a shareholder of record, you can submit a proxy to be
voted at the meeting in any of the following ways:
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through the Internet using www.proxyvote.com;
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over the telephone by calling a toll-free number; or
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if you receive a paper copy of the proxy card after requesting
the proxy materials by mail, you may sign, date and mail the
proxy card.
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To vote by telephone or Internet, you will need to use a control
number that was provided to you by our vote tabulator,
Broadridge Financial Solutions, and then follow the additional
steps when prompted. The steps have been designed to
authenticate your identity, allow you to give voting
instructions, and confirm that those instructions have been
recorded properly. If you hold your shares in street name, you
must vote your shares in the manner prescribed by your broker,
bank, trust or other nominee, which is similar to the voting
procedures for shareholders of record. However, if you request
the proxy materials by mail after receiving a Notice of Internet
Availability of Proxy Materials from
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your broker, bank, trust or other nominee, you will receive a
voting instruction form (not a proxy card) to use in directing
the broker, bank, trust or other nominee how to vote your shares.
How do I vote
if I hold shares in the Piper Jaffray Companies Retirement Plan
or U.S. Bank 401(k) Savings Plan?
If you hold shares of Piper Jaffray common stock in the Piper
Jaffray Companies Retirement Plan or U.S. Bank 401(k)
Savings Plan, the submission of your proxy by Internet or
telephone or your completed proxy card will serve as voting
instructions to the respective plans trustee. Your voting
instructions must be received at least five days prior to the
annual meeting in order to count. In accordance with the terms
of the Piper Jaffray Companies Retirement Plan and
U.S. Bank 401(k) Savings Plan, the trustee of each plan
will vote all of the shares held in the plan in the same
proportion as the actual proxy votes submitted by plan
participants at least five days prior to the annual meeting.
What does it
mean if I receive more than one Notice of Internet Availability
of Proxy Materials or printed set of proxy
materials?
If you receive more than one Notice of Internet Availability of
Proxy Materials or printed set of proxy materials, it means that
you hold shares registered in more than one account. To ensure
that all of your shares are voted, vote once for each control
number you receive as described above under How do I
submit my proxy?
Can I vote my
shares in person at the meeting?
If you are a shareholder of record, you may vote your shares in
person at the meeting by completing a ballot at the meeting.
Even if you currently plan to attend the meeting, we recommend
that you submit your proxy as described above so your vote will
be counted if you later decide not to attend the meeting. If you
submit your vote by proxy and later decide to vote in person at
the annual meeting, the vote you submit at the meeting will
override your proxy vote.
If you are a street name holder, you may vote your shares in
person at the meeting only if you obtain and bring to the
meeting a signed letter or other form of proxy from your broker,
bank, trust or other nominee giving you the right to vote the
shares at the meeting.
If you are a participant in the Piper Jaffray Companies
Retirement Plan or U.S. Bank 401(k) Savings Plan, you may
submit voting instructions as described above, but you may not
vote your Piper Jaffray shares held in the Piper Jaffray
Companies Retirement Plan or U.S. Bank 401(k) Savings Plan
in person at the meeting.
How does the
Board recommend that I vote?
The Board of Directors recommends a vote:
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FOR all of the nominees for director;
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FOR the ratification of the selection of
Ernst & Young LLP as the independent auditor of Piper
Jaffray Companies for the year ending December 31, 2011;
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FOR the advisory approval of the compensation of our
officers included in this proxy statement; and
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THREE YEARS for the advisory vote on the frequency of
future
say-on-pay
votes.
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What if I do
not specify how I want my shares voted?
If you are a shareholder of record and submit a signed proxy
card or submit your proxy by Internet or telephone but do not
specify how you want to vote your shares on a particular matter,
we will vote your shares as follows:
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FOR all of the nominees for director;
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FOR the ratification of the selection of
Ernst & Young LLP as the independent auditor of Piper
Jaffray Companies for the year ending December 31, 2011;
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FOR the advisory approval of the compensation of our
officers included in this proxy statement; and
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THREE YEARS for the advisory vote on the frequency of
future
say-on-pay
votes.
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Your vote is important. We urge you to vote, or to
instruct your broker, bank, trust or other nominee how to vote,
on all matters before the annual meeting. If you are a
street name holder and fail to instruct the shareholder of
record how you want to vote your shares on a particular matter,
those shares are considered to be uninstructed. New
York Stock Exchange rules determine the circumstances under
which member brokers of the New York Stock Exchange may exercise
discretion to vote uninstructed shares held by them
on behalf of their clients who are street name holders. Other
than the ratification of the selection of Ernst &
Young LLP as our independent auditor for the year ending
December 31, 2011, the rules do not permit member
brokers to exercise voting discretion as to the uninstructed
shares on any matter included in the notice of meeting. With
respect to the ratification of the selection of
Ernst & Young as our independent auditor for the year
ending December 31, 2011, the rules permit member brokers
(other than our broker-dealer subsidiary, Piper
Jaffray & Co.) to exercise voting discretion as to the
uninstructed shares. For matters with respect to which the
broker, bank or other nominee does not have voting discretion or
has, but does not exercise, voting discretion, the uninstructed
shares will be referred to as a broker non-vote. For
more information regarding the effect of broker non-votes on the
outcome of the vote, see below under How are votes
counted?
Our broker-dealer subsidiary, Piper Jaffray & Co., is
a member broker of the New York Stock Exchange and may be a
shareholder of record with respect to shares of our common stock
held in street name on behalf of Piper Jaffray & Co.
clients. Because Piper Jaffray & Co. is our affiliate,
New York Stock Exchange rules prohibit Piper Jaffray &
Co. from voting uninstructed shares even on routine matters.
Instead, Piper Jaffray & Co. may vote uninstructed
shares on such matters only in the same proportion as the shares
represented by the votes cast by all shareholders of record with
respect to such matters.
Can I change
my vote after submitting my proxy?
Yes. You may revoke your proxy and change your vote at any time
before your proxy is voted at the annual meeting, in any of the
following ways:
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by submitting a later-dated proxy by Internet or telephone
before 11:59 p.m. Eastern Daylight Time on Tuesday,
May 3, 2011;
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by submitting a later-dated proxy to the corporate secretary of
Piper Jaffray Companies, which must be received by us before the
time of the annual meeting;
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by sending a written notice of revocation to the corporate
secretary of Piper Jaffray Companies, which must be received by
us before the time of the annual meeting; or
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by voting in person at the meeting.
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What vote is
required to approve each item of business included in the notice
of meeting?
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The eight director nominees who receive the most votes cast at
the meeting in person or by proxy will be elected.
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The affirmative vote of the holders of a majority of the
outstanding shares of common stock present in person or
represented by proxy and entitled to vote at the annual meeting
is required to ratify the selection of our independent auditor.
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If the advisory vote on the compensation of our officers
included in this proxy statement receives more votes
for than against, then it will be deemed
to be approved.
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The frequency of the advisory vote on compensation receiving the
highest number of votes (one, two or three years) by
shareholders will be considered the frequency recommended by
shareholders.
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The advisory votes on the compensation of our executives and the
frequency of future
say-on-pay
votes are not binding on us or the Board, but we will consider
the shareholders advisory input on these matters when
establishing compensation for our executive officers in future
years and recommending the frequency of future
say-on-pay
votes.
How are votes
counted?
You may either vote FOR or WITHHOLD
authority to vote for each director nominee. You may vote
FOR, AGAINST or ABSTAIN on
ratification of the selection of Ernst & Young LLP as
our independent auditor for the year ending December 31,
2011 and the advisory
say-on-pay
vote. You may vote ONE YEAR, TWO YEARS,
THREE YEARS or ABSTAIN on the advisory
vote regarding the frequency of future
say-on-pay
votes. If you properly submit your proxy but withhold authority
to vote for one or more director nominees or abstain from voting
on the other proposals, your shares will be counted as present
at the meeting for the purpose of determining a quorum and for
the purpose of calculating the vote on the particular matter(s)
with respect to which you abstained from voting or withheld
authority to vote. If you do not submit your proxy or voting
instructions and also do not vote by ballot at the annual
meeting, your shares will not be counted as present at the
meeting for the purpose of determining a quorum unless you hold
your shares in street name and the broker, bank, trust or other
nominee has discretion to vote your shares and does so. For more
information regarding discretionary voting, see the information
above under What if I do not specify how I want my shares
voted?
If you withhold authority to vote for one or more of the
director nominees or you do not vote your shares on this matter
(whether by broker non-vote or otherwise), this will have no
effect on the outcome of the vote. With respect to the proposal
to ratify the selection of Ernst & Young LLP as our
independent auditor, if you abstain from voting, doing so will
have the same effect as a vote against the proposal, but if you
do not vote your shares (or, for shares held in street name, if
you do not submit voting instructions and your broker, bank,
trust or other nominee does not or may not vote your shares),
this will have no effect on the outcome of the vote. With
respect to the proposal to approve the advisory
say-on-pay
vote, if you abstain from voting or if you do not vote your
shares or submit voting instructions, this will have no effect
on the outcome of the vote. With respect to the advisory vote
regarding the frequency of future
say-on-pay
votes, the option among one year, two years or three years that
receives the highest number of votes cast by shareholders will
be deemed to be the frequency selected by shareholders.
Abstentions, a failure to vote or broker non-votes on this
matter therefore will not affect the outcome of the vote on the
matter.
How can I
attend the meeting?
All of our shareholders are invited to attend the annual
meeting. You may be asked to present valid photo identification,
such as a drivers license or passport, before being
admitted to the meeting. If you hold your shares in street name,
you also may be asked to present proof of ownership to be
admitted to
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the meeting. A brokerage statement or letter from your broker,
bank, trust or other nominee are examples of proof of ownership.
To help us plan for the meeting, please let us know whether you
expect to attend, by responding affirmatively when prompted
during Internet or telephone voting or by marking the attendance
box on the proxy card.
Who pays for
the cost of proxy preparation and solicitation?
Piper Jaffray pays for the cost of proxy preparation and
solicitation, including the reasonable charges and expenses of
brokerage firms, banks, trusts or other nominees for forwarding
proxy materials to street name holders. We have retained
Innisfree M&A Incorporated to assist in the solicitation of
proxies for the annual meeting for a fee of approximately
$20,000 plus reimbursement of
out-of-pocket
expenses. We are soliciting proxies primarily by mail. In
addition, our directors, officers and regular employees may
solicit proxies personally, telephonically, electronically or by
other means of communication. Our directors, officers and
regular employees will receive no additional compensation for
their services other than their regular compensation.
ITEM 1
ELECTION OF DIRECTORS
The number of directors currently serving on our Board of
Directors is nine. Virginia Gambale, who currently serves on our
Board of Directors, will not be standing for re-election at the
2011 annual meeting of shareholders. Effective at the close of
the annual meeting, the size of our Board of Directors will be
decreased to eight directors. Upon the recommendation of the
Nominating and Governance Committee, the Board has nominated
eight current members of the Board for election at the 2011
annual meeting, who are Andrew S. Duff, Michael R. Francis, B.
Kristine Johnson, Addison L. Piper, Lisa K. Polsky, Frank L.
Sims, Jean M. Taylor and Michele Volpi. These individuals will
each be a candidate for election to the Board to serve until our
2012 annual meeting of shareholders or until his or her
successor is elected and qualified. Each of the nominees has
agreed to serve as a director if elected. The eight nominees
receiving a plurality of the votes cast at the meeting in person
or by proxy will be elected. Proxies may not be voted for more
than eight directors. If, for any reason, any nominee becomes
unable to serve before the annual meeting occurs, the persons
named as proxies may vote your shares for a substitute nominee
selected by our Board of Directors.
The Board of Directors recommends a vote FOR the election of
the eight director nominees. Proxies will be voted FOR the
election of the eight nominees unless otherwise specified.
Following is biographical information for each of the nominees
for election as a director.
ANDREW S. DUFF: Age 53, chairman and
chief executive officer since December 31, 2003.
Mr. Duff became chairman and chief executive officer of
Piper Jaffray Companies following completion of our spin-off
from U.S. Bancorp on December 31, 2003. He has served
as chairman of our broker-dealer subsidiary since 2003, as chief
executive officer of our broker-dealer subsidiary since 2000 and
as president of our broker-dealer subsidiary since 1996. He has
been with Piper Jaffray since 1980. Prior to the spin-off from
U.S. Bancorp, Mr. Duff also was a vice chairman of
U.S. Bancorp from 1999 through 2003.
MICHAEL R. FRANCIS: Age 48, director
since December 31, 2003. Mr. Francis is executive vice
president and chief marketing officer for Target Corporation, a
position he has held since August 2008. Target Corporation
operates Target-brand general merchandise discount stores and an
online business, Target.com. Mr. Francis began his career
with Marshall Fields department stores in 1986 and has
been with Target Corporation since its acquisition of Marshall
Fields in 1990. He previously served Target Corporation as
executive vice president, marketing from 2003 until August 2008,
senior vice president, marketing from 2001 to 2003, and as
senior vice president, marketing and visual presentation of the
department store division from 1995 to 2001. Prior to that, he
held a variety of positions within Target
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Corporation. Mr. Francis served as a director of Lenox
Group, Inc. (formerly known as Department 56, Inc.), a publicly
traded company, from July 2001 through September 2005.
B. KRISTINE JOHNSON: Age 59, director since
December 31, 2003. Since 2000, Ms. Johnson has been
president of Affinity Capital Management, a Minneapolis-based
venture capital firm that invests primarily in seed and
early-stage health care companies in the United States.
Ms. Johnson served as a consultant to Affinity Capital
Management in 1999. Prior to that, she was employed for
17 years at Medtronic, Inc., a manufacturer of cardiac
pacemakers, neurological and spinal devices and other medical
products, serving most recently as senior vice president and
chief administrative officer from 1998 to 1999. Her experience
at Medtronic also included service as president of the vascular
business and president of the tachyarrhythmia management
business, among other roles. Ms. Johnson served as a
director of ADC Telecommunications, Inc. from 1990 through 2006.
ADDISON L. PIPER: Age 64, director since
December 31, 2003. Mr. Piper retired from Piper
Jaffray effective at the end of 2006, having served as vice
chairman of Piper Jaffray Companies since the completion of our
spin-off from U.S. Bancorp on December 31, 2003. He
worked for Piper Jaffray from 1969 through 2006, serving as
assistant equity syndicate manager, director of securities
trading and director of sales and marketing. He served as chief
executive officer from 1983 to 2000 and as chairman from 1988 to
2003. From 1998 through August 11, 2006, Mr. Piper had
responsibility for our venture and private capital fund
activities. Mr. Piper also is a member of the board of
directors of Renaissance Learning Corporation.
LISA K. POLSKY: Age 54, director since
May 2, 2007. Since May 2010, Ms. Polsky has been
executive vice president, chief risk officer of CIT Group, Inc.,
a bank holding company that focuses on small business and middle
market lending and financing. Prior to joining CIT Group,
Ms. Polsky worked at Jane Street Capital, LLC, a New
York-based quantitative proprietary trading firm, from February
2009 until May 2010. From March 2008 until joining Jane Street
Capital, she served as partner and head of global investment
solutions for Duff Capital Advisors, which provided portfolio
solutions to funding liabilities and fulfilling investment
needs, particularly in the retirement space. She previously
served as the president of Polsky Partners, a New York-based
consulting firm specializing in hedge fund allocation, risk
management and valuation policy, which she founded in 2002.
Ms. Polsky also has served as managing director, head of
client financing services and head of leveraged client channel
with Merrill Lynch & Co., Inc. from 2000 to 2002, and
as managing director, chief risk officer, head of risk policy,
chief derivative strategist and head of product development at
Morgan Stanley DW Inc. from 1996 to 2000. Ms. Polsky served
as a member of the board of directors of thinkorswim Group Inc.
from 2007 until June 2009 while it was a publicly traded company.
FRANK L. SIMS: Age 60, director since
December 31, 2003. Mr. Sims retired from Cargill, Inc.
effective at the end of 2007, having served as corporate vice
president, transportation and product assurance and a member of
the management corporate center since July 2000. Cargill is a
marketer and distributor of agricultural and industrial products
and services. Mr. Sims had responsibility for global
transportation and supply chain solutions and served as a member
of the risk management and financial solutions platform. He
joined Cargill in 1972 and served in a number of executive
positions, including president of Cargills North American
Grain Division from 1998 to 2000. Mr. Sims is a member of
the board of directors of PolyMet Mining Corp., and he served as
a member of the board of directors of Tennant Company from 1999
through 2007.
JEAN M. TAYLOR: Age 48, director since
July 27, 2005. Ms. Taylor most recently served as the
president and chief executive officer of Taylor Corporation,
positions she held until July 2010. Ms. Taylor was
appointed president of Taylor Corporation in 2001 and chief
executive officer in 2007. Taylor Corporation is a privately
held group of approximately 80 affiliated entrepreneurial
companies engaged in marketing, fulfillment, personalization and
printing services. These businesses operate throughout North
America, Europe and Australia and together employ more than
15,000 employees. Ms. Taylor joined Taylor Corporation
in 1994 as vice president and served as executive vice president
from 1999 to 2001.
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MICHELE VOLPI: Age 47, director since
February 3, 2010. Mr. Volpi most recently served as
the president and chief executive officer and as a director of
H.B. Fuller Company from December 2006 to November 2010. H.B.
Fuller and its subsidiaries manufacture and market adhesives and
specialty chemical products worldwide. Prior to becoming
president and chief executive officer, he was group president,
general manager of the global adhesives division of H.B. Fuller
from December 2004 to December 2006. Prior to that position, he
served as global strategic business unit manager, assembly for
H.B. Fuller from June 2002 to December 2004. From 1999 to June
2002, Mr. Volpi served as general manager, marketing for
General Electric Company.
Each nominee brings unique capabilities to the Board. The Board
believes the nominees as a group have the experience and skills
in areas such as general business management, corporate
governance, leadership development, investment banking, finance
and risk management that are necessary to effectively oversee
our company. In addition, the Board believes that each of our
directors possesses high standards of ethics, integrity and
professionalism, sound judgment, community leadership and a
commitment to representing the long-term interests of our
shareholders. The following is information as to why each
nominee should serve as a director of our company:
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Mr. Duff has been our chairman and chief executive officer
since our spin-off from U.S. Bancorp in 2003, and has
30 years of experience in the capital markets industry with
Piper Jaffray. The Board believes he has the knowledge of our
company and its business necessary to help formulate and execute
our business plans and growth strategies.
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Mr. Francis serves as executive vice president and chief
marketing officer for Target Corporation, a Fortune 50 public
company based in Minnesota. As an executive officer of one of
the largest public companies in the United States, he brings
uniquely-suited management experience to the Board as well as
extensive marketing knowledge and expertise from his
25 years in the retail industry. Mr. Francis also has
prior experience as a public company director.
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Ms. Johnson has extensive experience in both the health
care industry and the venture capital business, with the health
care industry being one of our primary areas of focus. She has
served as president of a venture capital firm investing in
health care companies and as a senior officer in various roles
at Medtronic, a global leader in medical technology and a
Minnesota-based public company. Her deep ties to the health care
industry and the venture capital business provide the Board with
valuable insights and knowledge, both from a client and public
company perspective. Ms. Johnson also has prior experience
as a public company director in the telecommunications and
industrial manufacturing industries.
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Mr. Piper has been a part of our company since 1969,
serving in many roles, including chief executive officer from
1983 to 2000 and vice chairman following our spin-off from
U.S. Bancorp until his retirement. His experience with the
company provides deep institutional knowledge as well as a
comprehensive understanding of the financial services industry.
Mr. Piper also has experience as a public company director,
currently serving on the board of directors of Renaissance
Learning, an education software company.
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Ms. Polsky has extensive experience in the financial
services industry, having served as a managing director at both
Morgan Stanley and Merrill Lynch. Ms. Polsky currently
serves as chief risk officer of CIT Group, a position she
previously held at Morgan Stanley, providing valuable experience
and insights relating to risk management, an important
discipline for a securities firm such as our company.
Ms. Polskys significant financial experience caused
the Board to determine that she is an audit committee financial
expert under applicable rules of the Securities and Exchange
Commission. Ms. Polsky also has experience as a public
company director, having served on the board of directors of
thinkorswim Group Inc., an online brokerage specializing in
options, from 2007 until its sale to TD Ameritrade in June 2009.
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Mr. Sims has significant management, financial, and risk
management knowledge and experience gained from his role as a
senior executive of Cargill, a large, diversified, international
company.
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He has served as chairman of the Federal Reserve Bank of
Minneapolis and has current and prior experience as a public
company director. His leadership experience as an executive of
one of the countrys largest private companies and his
considerable experience in oversight roles as a director,
provides valuable experience, insight and judgment to the Board.
The Board also determined that Mr. Sims is an audit
committee financial expert under applicable rules of the
Securities and Exchange Commission.
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Ms. Taylor has extensive management and financial
experience from her service as president and chief executive
officer of Taylor Corporation, one of the largest privately held
companies in the United States. She also has a thorough
understanding of strategy, leadership development and employee
relations, which has benefited the Board and management in
shaping the companys culture.
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Mr. Volpi most recently served as the president and chief
executive officer and a director of H.B. Fuller Company, a
large, global public company based in Minnesota. His experience
from having served as chief executive officer of a public
company as well as his significant business experience with
international operations, a primary focus area of our business
and strategy, provides valuable perspective and insight to our
management and to the Board.
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INFORMATION
REGARDING THE BOARD OF DIRECTORS AND CORPORATE
GOVERNANCE
The Board of Directors conducts its business through meetings of
the Board and the following standing committees: Audit,
Compensation, and Nominating and Governance. Each of the
standing committees has adopted and operates under a written
charter, and, annually in November, each committee reviews its
charter, performs a self-evaluation and establishes a plan for
committee activity for the upcoming year. The committee charters
are all available on our website at www.piperjaffray.com,
together with our Corporate Governance Principles, Director
Independence Standards, Director Nominee Selection Policy,
Procedures for Contacting the Board of Directors, Codes of
Ethics and Business Conduct, and Complaint Procedures Regarding
Accounting and Auditing Matters.
Codes of Ethics
and Business Conduct
We have adopted a Code of Ethics and Business Conduct applicable
to our employees, including our principal executive officer,
principal financial officer, principal accounting officer,
controller and other employees performing similar functions, and
a separate Code of Ethics and Business Conduct applicable to our
directors. Directors who also serve as officers of Piper Jaffray
must comply with both codes. Both codes are available on our
website at www.piperjaffray.com. We will post on our
website at www.piperjaffray.com or file a
Form 8-K
with the Securities and Exchange Commission disclosing any
amendment to, or waiver from, a provision of either of our Codes
of Ethics and Business Conduct within four business days
following the date of such amendment or waiver.
Director
Independence
Under applicable rules of the New York Stock Exchange, a
majority of the members of our Board of Directors must be
independent, and no director qualifies as independent unless the
Board of Directors affirmatively determines that the director
has no material relationship with Piper Jaffray. To assist the
Board with these determinations, the Board has adopted Director
Independence Standards, which are available on our website at
www.piperjaffray.com.
The Board has affirmatively determined, in accordance with our
Director Independence Standards, that none of our non-employee
directors has a material relationship with Piper Jaffray and
that each of them is independent. When determining the
independence of our independent directors, the Board considered
the following types of transactions or arrangements:
(i) with respect to Messrs. Francis, Piper and Volpi,
and Ms. Gambale, Ms. Johnson, Ms. Taylor and
Ms. Polsky, the Board considered commercial relationships
between Piper Jaffray and companies with which each of those
directors is
9
associated or an immediate family member of the director is
associated that are deemed to be immaterial under our Director
Independence Standards; (ii) with respect to
Messrs. Piper and Sims, and Ms. Johnson and
Ms. Taylor, the Board considered relationships between
Piper Jaffray and charitable foundations or other non-profit
organizations with which each of those directors or an immediate
family member of the director is associated and that are deemed
to be immaterial under our Director Independence Standards;
(iii) with respect to Mr. Piper, the Board considered
relationships between him and funds formerly managed by Piper
Jaffray, including his ownership of interests in certain such
funds that are deemed to be immaterial under our Director
Independence Standards, and his service on the investment
committee for certain such funds which the Board determined to
be immaterial given the nature of the relationship to Piper
Jaffray (e.g., the funds are no longer managed by Piper Jaffray)
and the immateriality of the fees ($4,000) received by
Mr. Piper for his service on the investment committee; and
(iv) with respect to Ms. Johnson, the Board considered
our employment of her nephew as an associate in our investment
banking group and determined the relationship to be immaterial
given the nature of the family relationship (e.g., not included
in the definition of immediate family members as commonly
defined) and the junior level of the position involved.
Mr. Duff cannot be considered an independent director under
New York Stock Exchange corporate governance rules because he is
employed as our chief executive officer.
Board Leadership
Structure and Lead Director
Since our spin-off from U.S. Bancorp, Mr. Duff has
served in the combined roles of chairman and chief executive
officer. Since 2006, the Board has appointed a lead director of
the Board. Mr. Francis currently serves as the lead
director. The lead director has the following duties and
responsibilities, as described in our Corporate Governance
Principles:
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presides at all meetings of the Board at which the chairman is
not present, including executive sessions of the independent
directors, and coordinates the agenda for and moderates these
executive sessions;
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serves formally as a liaison between the chief executive officer
and the independent directors;
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monitors Board meeting schedules and agendas to ensure that
appropriate matters are covered and that there is sufficient
time for discussion of all agenda items;
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monitors information sent to the Board and advises the chairman
as to the quality, quantity and timeliness of the flow of
information;
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has authority to call meetings of the independent
directors; and
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if requested by major shareholders, makes himself available for
consultation and direct communication.
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We believe that Mr. Duffs combined service as
chairman and chief executive officer creates unified leadership
for the Board and the company, with one cohesive vision for our
organization. This leadership structure, which is common among
U.S.-based
publicly traded companies, demonstrates to our clients,
employees and shareholders that the company is under strong
leadership. As chairman and chief executive officer,
Mr. Duff helps shape the strategy ultimately set by the
entire Board and also leverages his operational experience to
balance growth and risk management. We believe the oversight
provided by the Boards independent directors, the work of
the Boards committees described below and the coordination
between the chief executive officer and the independent
directors conducted by the lead director help provide effective
oversight of our companys strategic plans and operations.
We believe having one person serve as chairman and chief
executive officer is in the best interests of our company and
our shareholders at this time.
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Board Involvement
in Risk Oversight
The companys management is responsible for defining the
various risks facing the company, formulating risk management
policies and procedures, and managing the companys risk
exposures on a
day-to-day
basis. The Boards responsibility is to monitor the
companys risk management processes by informing itself
concerning the companys material risks and evaluating
whether management has reasonable controls in place to address
the material risks; the Board is not responsible, however, for
defining or managing the companys various risks. The Audit
Committee of the Board of Directors is primarily responsible for
monitoring managements responsibility in the area of risk
oversight, and risk management is a factor the Board and the
Nominating and Governance Committee consider when determining
which directors serve on the Audit Committee. Accordingly,
management regularly reported to the Audit Committee on risk
management during 2010. The Audit Committee, in turn, reports on
the matters discussed at the committee level to the full Board.
The Audit Committee and the full Board focus on the material
risks facing the company, including operational, market, credit,
liquidity, legal and regulatory risks, to assess whether
management has reasonable controls in place to address these
risks. In addition, the Compensation Committee is charged with
reviewing and discussing with management whether the
companys compensation arrangements are consistent with
effective controls and sound risk management. The Board believes
this division of responsibilities provides an effective and
efficient approach for addressing risk management.
Meetings of the
Outside Directors
At both the Board and committee levels, our non-employee
directors meet regularly in executive sessions in which
Mr. Duff and other members of management do not
participate. Mr. Francis, our lead director, serves as the
presiding director at executive sessions of the Board, and the
chairperson of each committee serves as the presiding director
at executive sessions of that committee. At least once annually,
our independent directors meet in an executive session without
the directors who are not independent under New York Stock
Exchange rules.
Committees of the
Board
We have three standing committees of the Board: the Audit
Committee, the Compensation Committee and the Nominating and
Governance Committee. The table below shows the current
membership of these committees:
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Nominating and
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Audit
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Compensation
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Governance
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Director
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Committee
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Committee
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Committee
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Michael R. Francis
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Chair
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Virginia Gambale
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B. Kristine Johnson
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Lisa K. Polsky
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Frank L. Sims
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Chair
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Jean M. Taylor
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Michele Volpi
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Chair
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Mr. Volpi became chairperson of the Compensation Committee
on February 2, 2011, and Ms. Taylor will be appointed
to the Audit Committee on May 4, 2011, as Ms. Gambale
transitions off of the Board and this committee.
Audit
Committee
The Audit Committees purpose is to oversee the integrity
of our financial statements, the independent auditors
qualifications and independence, the performance of our internal
audit function and independent auditor, and compliance with
legal and regulatory requirements. The Audit Committee has sole
authority to retain and terminate the independent auditor and is
directly responsible for the
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compensation and oversight of the work of the independent
auditor. As discussed above, the Audit Committee is primarily
responsible for monitoring managements responsibility in
the area of risk oversight. The Audit Committee also meets with
management and the independent auditor to review and discuss the
annual audited and quarterly unaudited financial statements,
reviews the integrity of our accounting and financial reporting
processes and audits of our financial statements, and prepares
the Audit Committee Report included in the proxy statement.
The responsibilities of the Audit Committee are more fully
described in the Committees charter. The Audit Committee
met eight times during 2010. The Board has determined that all
members of the Audit Committee are independent (as that term is
defined in the applicable New York Stock Exchange rules and in
regulations of the Securities and Exchange Commission), that all
members are financially literate and have the accounting or
related financial expertise required by the New York Stock
Exchange rules, and that each of Mr. Sims and
Ms. Polsky is an audit committee financial
expert as defined by regulations of the Securities and
Exchange Commission.
Compensation
Committee
The Compensation Committee discharges the Boards
responsibilities relating to compensation of the executive
officers, oversees succession planning for the executive
officers jointly with the Nominating and Governance Committee
and ensures that our compensation and employee benefit programs
are aligned with our compensation and benefits philosophy. These
responsibilities also include reviewing and discussing with
management whether the companys compensation arrangements
are consistent with effective controls and sound risk
management. The Committee has full discretion to determine the
amount of compensation to be paid to the executive officers. The
Committee also has sole authority to evaluate the chief
executive officers performance and determine the
compensation of the chief executive officer based on this
evaluation. The Committee is responsible for recommending stock
ownership guidelines for the executive officers and directors,
for recommending the compensation and benefits to be provided to
our non-employee directors, for reviewing and approving the
establishment of broad-based incentive compensation,
equity-based, retirement or other material employee benefit
plans, and for discharging any duties under the terms of these
plans.
The Committee has delegated authority to our chief executive
officer under our 2003 Annual and Long-Term Incentive Plan (the
Incentive Plan) to allocate awards to employees
(other than our executive officers) in connection with our
annual equity grants made in the first quarter of each year (as
part of the payment of incentive compensation for the preceding
year). Under this delegated authority, the Committee approves
the aggregate amount of equity to be awarded to all employees
other than executive officers, and the chief executive officer
approves the award recipients and specific amount of equity to
be granted to each recipient. All other terms of the awards are
determined by the Committee. The Committee also has delegated
authority to the chief executive officer to grant equity awards
to employees other than executive officers in connection with
recruiting, retention and significant promotions. This
delegation permits the chief executive officer to determine the
recipient of the award as well the type and amount of the award,
subject to an annual share limitation set by the Committee each
year. All awards granted pursuant to this delegated authority
must be made in accordance with our equity grant timing policy
described below in Compensation Discussion and
Analysis Equity Grant Timing Policy. All other
terms of the awards are determined by the Committee.
The work of the Committee is supported by our human resources
department, primarily through our global head of human
resources, as well as by our finance department, primarily
through our chief financial officer. These personnel work
closely with the chief executive officer and, as appropriate,
the general counsel and assistant general counsel, to prepare
and present information and recommendations for review and
consideration by the Committee, as described below under
Compensation Discussion and Analysis Setting
Compensation Involvement of Executive Officers.
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In 2010, the Compensation Committee engaged an independent
outside compensation consultant, Towers Watson, to provide
general advice to the Committee, as described below under
Compensation Discussion and Analysis Setting
Compensation Compensation Consultant.
The Committee reviews and discusses with management the
disclosures regarding executive compensation to be included in
our annual proxy statement, and recommends to the Board
inclusion of the Compensation Discussion and Analysis in our
annual proxy statement. The responsibilities of the Compensation
Committee are more fully described in the Committees
charter. For more information regarding the Committees
process in setting compensation, please see Compensation
Discussion and Analysis Setting Compensation
below. The Compensation Committee met five times during 2010.
The Board has determined that all members of the Compensation
Committee are independent (as that term is defined in applicable
New York Stock Exchange rules).
Nominating and
Governance Committee
The Nominating and Governance Committee identifies and
recommends individuals qualified to become members of the Board
of Directors and recommends to the Board sound corporate
governance principles and practices for Piper Jaffray. In
particular, the Committee assesses the independence of our Board
members, identifies and evaluates candidates for nomination as
directors, responds to director nominations submitted by
shareholders, recommends the slate of director nominees for
election at the annual meeting of shareholders and candidates to
fill vacancies between annual meetings, recommends qualified
members of the Board for membership on committees, oversees the
director orientation and continuing education programs, reviews
the Boards committee structure, reviews and assesses the
adequacy of our Corporate Governance Principles, reviews the
annual evaluation process for the chief executive officer, the
Board and Board committees, and oversees the succession planning
process for the executive officers jointly with the Compensation
Committee. The Nominating and Governance Committee also oversees
administration of our related person transaction policy and
reviews the transactions submitted to it pursuant to such
policy. The responsibilities of the Nominating and Governance
Committee are more fully described in the Committees
charter. The Nominating and Governance Committee met four times
during 2010. The Board has determined that all members of the
Nominating and Governance Committee are independent (as that
term is defined in applicable New York Stock Exchange rules).
Meeting
Attendance
Our Corporate Governance Principles provide that our directors
are expected to attend meetings of the Board and of the
committees on which they serve, as well as our annual meeting of
shareholders. Our Board of Directors held five meetings during
2010. Each of our directors attended at least 75% of the
meetings of the Board of Directors and the committees on which
he or she served during 2010. Attendance at our Board and
committee meetings during 2010 averaged 98.0% for our directors
as a group, and all of our directors attended our 2010 annual
meeting of shareholders.
Procedures for
Contacting the Board of Directors
The Board has established a process for shareholders and other
interested parties to send written communications to the Board
or to individual directors. Such communications should be sent
by U.S. mail to the attention of the Office of the
Secretary, Piper Jaffray Companies, 800 Nicollet Mall,
Suite 800, Mail Stop J09N05, Minneapolis, Minnesota 55402.
Communications regarding accounting and auditing matters will be
handled in accordance with our Complaint Procedures Regarding
Accounting and Auditing Matters. Other communications will be
collected by the secretary of the company and delivered, in the
form received, to the lead director or, if so addressed, to a
specified director.
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Procedures for
Selecting and Nominating Director Candidates
The Nominating and Governance Committee will consider director
candidates recommended by shareholders and has adopted a policy
that contemplates shareholders recommending and nominating
director candidates. A shareholder who wishes to recommend a
director candidate for nomination by the Board at the annual
meeting of shareholders or for vacancies on the Board that arise
between shareholder meetings must timely provide the Nominating
and Governance Committee with sufficient written documentation
to permit a determination by the Board whether such candidate
meets the required and desired director selection criteria set
forth in our bylaws, our Corporate Governance Principles and our
Director Nominee Selection Policy described below. Such
documentation and the name of the director candidate must be
sent by U.S. mail to the Chairperson, Nominating and
Governance Committee,
c/o the
Office of the Secretary, Piper Jaffray Companies, 800 Nicollet
Mall, Suite 800, Mail Stop J09N05, Minneapolis, Minnesota
55402.
Alternatively, shareholders may directly nominate a person for
election to our Board by complying with the procedures set forth
in Article II, Section 2.4 of our bylaws, and with the
rules and regulations of the Securities and Exchange Commission.
Under our bylaws, only persons nominated in accordance with the
procedures set forth in the bylaws will be eligible to serve as
directors. In order to nominate a candidate for service as a
director, you must be a shareholder at the time you give the
Board notice of your nomination, and you must be entitled to
vote for the election of directors at the meeting at which your
nominee will be considered. In accordance with our bylaws,
director nominations generally must be made pursuant to notice
delivered to, or mailed and received at, our principal executive
offices at the address above, not later than the 90th day,
nor earlier than the 120th day, prior to the first
anniversary of the prior years annual meeting of
shareholders. Your notice must set forth all information
relating to the nominee that is required to be disclosed in
solicitations of proxies for the election of directors in an
election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange
Act of 1934 (including the nominees written consent to
being named in the proxy statement as a nominee and to serving
as a director if elected).
As required by our Corporate Governance Principles and our
Director Nominee Selection Policy, when evaluating the
appropriate characteristics of candidates for service as a
director, the Nominating and Governance Committee takes into
account many factors. At a minimum, director candidates must
demonstrate high standards of ethics, integrity and
professionalism, independence, sound judgment, community
leadership and meaningful experience in business, law or finance
or other appropriate endeavor. Candidates also must be committed
to representing the long-term interests of our shareholders. In
addition to these minimum qualifications, the Committee
considers other factors it deems appropriate based on the
current needs and desires of the Board, including specific
business and financial expertise, experience as a director of a
public company, and diversity. The Board considers a number of
factors in its evaluation of diversity, including geography,
age, gender, and ethnicity. Based on these factors and the
qualifications and background of each director, the Board
believes that its current composition is diverse. As indicated
above, diversity is one factor in the total mix of information
the Board considers when evaluating director candidates. The
Committee will reassess the qualifications of a director,
including the directors attendance, involvement at Board
and committee meetings and contribution to Board diversity,
prior to recommending a director for reelection.
Compensation
Program for Non-Employee Directors
During 2010, non-employee directors received a $60,000 annual
cash retainer for service on our Board and Board committees.
Also, the lead director and the chairperson of the Audit
Committee each received an additional annual cash retainer of
$20,000, the chairperson of the Compensation Committee received
an additional annual cash retainer of $10,000, and the
chairperson of the Nominating and Governance Committee received
an additional annual cash retainer of $5,000. Our non-employee
director compensation program provides that each non-employee
director receives a $60,000 grant of stock on the date of a
directors initial election or appointment to the Board for
a number of shares determined by dividing $60,000 by the closing
price of our common stock on the date of initial election
14
or appointment. Directors whose service on the Board continues
following each annual meeting of our shareholders receive an
annual equity grant of $60,000 as of the date of the annual
meeting. All equity awards granted to our non-employee directors
are granted under the Incentive Plan. Non-employee directors who
join our Board after the first month of a calendar year are paid
a pro rata annual retainer and awarded a pro rata annual equity
award based on the period they serve as a director during the
year.
Our non-employee directors may participate in the Piper Jaffray
Companies Deferred Compensation Plan for Non-Employee Directors,
which was designed to facilitate increased equity ownership in
the company. The plan permits our non-employee directors to
defer all or a portion of the cash payable to them and shares of
common stock granted to them for service as a director of Piper
Jaffray for any calendar year. All cash amounts and share grants
deferred by a participating director are credited to a
recordkeeping account and deemed invested in shares of our
common stock as of the date the deferred fees otherwise would
have been paid or the shares otherwise would have been issued to
the director. This deemed investment is measured in phantom
stock, and no shares of common stock are reserved, repurchased
or issued pursuant to the plan. With respect to cash amounts
that have been deferred, the fair market value of all phantom
stock credited to a directors account will be paid out to
the director (or, in the event of the directors death, to
his or her beneficiary) in a single lump-sum cash payment
following the directors cessation of service. The amount
paid out will be determined based on the fair market value of
the stock on the last day of the year in which the
directors service with us terminates. Share amounts that
have been deferred will be paid out to the director (or, in the
event of the directors death, to his or her beneficiary)
in the form of shares of common stock in an amount equal to the
full number of shares credited to the non-employee
directors account as of the last day of the year in which
the cessation of service occurred. Directors who elect to
participate in the plan are not required to pay income taxes on
amounts or grants deferred but will instead pay income taxes on
the amount of the lump-sum cash payment paid to the director (or
beneficiary) at the time of such payment. Our obligations under
the plan are unsecured general obligations to pay in the future
the value of the participants account pursuant to the
terms of the plan.
Non-employee directors may participate in our charitable gift
matching program, pursuant to which we will match a
directors gifts to eligible organizations dollar for
dollar from a minimum of $50 up to an aggregate maximum of
$1,500 per year. We also reimburse for reasonable
out-of-pocket
expenses incurred in connection with their service on the Board
and committees of the Board. Employees of Piper Jaffray who also
serve as directors receive compensation for their service as
employees, but they do not receive any additional compensation
for their service as directors. No other compensation is paid to
our Board members in their capacity as directors. Non-employee
directors do not participate in our employee benefit plans.
15
The following table contains compensation information for our
non-employee directors for the year ended December 31, 2010.
Non-Employee
Director Compensation for 2010
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Fees Earned or
Paid in Cash
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Annual
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Additional
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Stock
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All Other
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Retainer
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Retainer
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Awards(1)(2)
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Compensation(3)
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Total
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Director
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($)
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($)
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($)
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($)
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($)
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Michael R. Francis
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60,000
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25,000
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60,026
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(4)
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145,026
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Virginia Gambale
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60,000
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60,026
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(4)
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120,026
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B. Kristine Johnson
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60,000
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60,026
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1,000
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121,026
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Addison L. Piper
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60,000
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60,026
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5,500
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125,526
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Lisa K. Polsky
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60,000
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(4)
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10,000
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(4)
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60,026
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(4)
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1,500
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131,526
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Frank L. Sims
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60,000
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20,000
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60,026
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(4)
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1,500
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141,526
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Jean M. Taylor
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60,000
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60,026
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(4)
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120,026
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Michele Volpi
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54,578
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(5)
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114,630
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(6)
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169,208
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(1)
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Represents the
aggregate grant date fair value calculated in accordance with
generally accepted accounting principles.
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(2)
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As of
December 31, 2010, our non-employee directors held stock
and option awards as set forth in the table below. The stock
award values are based on the $35.01 closing sale price of our
common stock on the New York Stock Exchange on December 31,
2010, and the option award values are based on the difference
between the exercise price of the
in-the-money
stock options and the closing price of $35.01. The amounts for
Mr. Piper include restricted stock and stock option awards
granted to him in 2004, 2005 and 2006 during his tenure as an
executive officer of the company.
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Stock
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Year-End Value
of
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Option
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Year-End Value
of
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Awards
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Stock Awards
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Awards
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Option Awards
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Director
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(#)
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($)
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(#)
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($)
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Michael R. Francis
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4,573
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160,101
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11,800
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39,991
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Virginia Gambale
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3,033
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106,185
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B. Kristine Johnson
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4,573
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160,101
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11,800
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39,991
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Addison L. Piper
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11,868
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415,499
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11,614
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Lisa K. Polsky
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4,742
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166,017
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Frank L. Sims
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4,573
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160,101
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11,800
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39,991
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Jean M. Taylor
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4,573
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160,101
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5,963
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6,442
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Michele Volpi
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2,713
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94,982
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(3)
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All other
compensation for non-employee directors for the year ended
December 31, 2010 consists of the following:
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The amounts for
Ms. Johnson, Ms. Polsky and Mr. Sims consist of
charitable matching contributions made by Piper Jaffray.
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The amount for
Mr. Piper consists of fees paid for his service as a member
of an investment committee for certain funds previously managed
by Piper Jaffray, and charitable matching contributions.
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(4)
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These amounts were
deferred pursuant to the Piper Jaffray Companies Deferred
Compensation Plan for Non-Employee Directors.
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(5)
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Reflects a pro rata
portion of the full annual retainer for the portion of the year
Mr. Volpi served on the Board (February 3,
2010 December 31, 2010).
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(6)
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Includes
Mr. Volpis initial equity grant of $60,000 for
joining the Board of Directors (1,282 shares issued on
February 3, 2010 using the closing price of our common
stock on that day of $46.82) as well
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16
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as the pro rata
portion of his annual equity grant equal to $54,578 for the
portion of the year Mr. Volpi served on the Board
(February 3, 2010 December 31, 2010).
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EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Summary
The following is an executive summary of our 2010 compensation
program, which addresses significant compensation practices,
2010 performance highlights, and an overview of 2010
compensation.
Overview of
Significant Compensation Practices.
Our significant compensation practices include the following:
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Pay-for-performance. Our
annual incentive plan is funded through profitability, and
awards from this plan correspond with our level of profitability
for a given year. For 2010,
year-over-year
net income declined by $6 million and total compensation,
including annual incentives, for our chief executive officer and
president and chief operating officer declined. Total
compensation (as measured internally by the company) declined by
7.14% for our chief executive officer and 8.33% for our
president and chief operating officer, with annual incentives
decreasing by 17.01% and 19.44%, respectively. In 2008, we
failed to achieve profitability during the credit crisis, and no
annual incentive payments were awarded (i.e., executives were
only paid their base salary).
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No employment or
change-in-control
agreements. We do not have employment agreements
with our executive officers. Further, we do not have separate
change-in-control
agreements (often referred to as golden parachute
arrangements) that would pay a certain multiple of an
executives compensation (e.g., base salary) upon a
change-in-control
of the company.
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Annual incentives in equity. Our equity awards
each year are not in addition to other incentive amounts.
Rather, we calculate a total annual incentive, then divide that
amount between cash and equity. As an example, our chief
executive officer receives an annual incentive award (no other
annual payments) that is split evenly between cash and equity.
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Limited perquisites. Subject to a one-time
exception related to our acquisition of Advisory Research, Inc.,
our executives receive only limited perquisites.
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No tax
gross-ups. We
do not pay our executive officers additional amounts to cover
tax liability arising from compensation they receive from us.
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2010
Performance Highlights
Although the macroeconomic environment in 2010 proved more
challenging than we expected at the beginning of the year, we
took actions during the year aimed at improving our
profitability for the longer term and experienced improved
financial results in the fourth quarter.
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We generated revenues of $530.1 million, up from
$486.8 million in 2009, which is our highest level of
revenues since becoming a public company.
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Our net income was $24.4 million, which was down from
$30.4 million in 2009. Without the European restructuring
charge of $9.3 million, our net income for the year would
have exceeded that of 2009, evidencing an improved annual
performance and a significant improvement since the credit
crisis of 2008.
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17
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We materially diversified our business mix with the acquisition
of Advisory Research, Inc., a Chicago-based asset management
firm, increasing the portion of our net revenues attributable to
asset management from 13% in 2010 from 3% in 2009. In addition,
pre-tax operating income attributable to this business increased
to 28% from a small loss in 2009.
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We significantly restructured our European operations, which
will improve our financial performance going forward and allow
us to invest more resources in China, where we believe we have
compelling opportunities. In 2010, for example, 23% of our
global capital raised was for China-based clients, up from 9% in
2009, and we completed 14 bookrun offerings for China-based
companies, a significant
year-over-year
increase.
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As the capital markets backdrop began to improve in the fourth
quarter, we increased our economic fee share for equities
investment banking, generating increased public offering fees
from bookrun underwriting transactions. A record 63% of our
domestic public offerings fees were generated from bookrun
business.
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Overview of
2010 Compensation
Throughout this proxy statement, we refer to our chief executive
officer, chief financial officer, and each of our three other
most highly compensated executive officers for 2010, as the
named executive officers. Jon W. Salveson, who was
an executive officer of our company during 2010 and would have
been one of our three most highly compensated executive officers
if he had continued to serve as an executive officer at the end
of the year, is also a named executive officer for
purposes of this proxy statement. The most significant actions
taken in 2010 with respect to our named executive officers
compensation are as follows:
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Base Salaries. Base salaries historically have
been a small component of our named executive officers
total compensation, and prior to 2010 we had increased base
salaries only once since our spin-off from U.S. Bancorp in
December 2003. We increased the base salaries in 2010 as a
percentage of total compensation to mitigate the potential for
risk-taking generally associated with a compensation mix more
heavily weighted to annual performance and in recognition of the
importance of key leadership and daily accountabilities of our
senior leaders. As a result, our named executive officers (other
than Mr. OBrien who joined us in March following the
acquisition of Advisory Research, Inc.) received salary
increases in 2010 ranging from 53% to 62%.
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Annual Incentive Compensation. For 2010, our
annual incentive program, based on a measure of pre-tax
operating income, was largely consistent with 2009 although the
overall incentive pool decreased slightly along with our
profitability for the year. We also adjusted the overall
incentive pool downward to account for the shift in the mix of
compensation that accompanied increased base salaries. Regarding
the payouts under our 2010 annual incentive program:
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Ø
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Annual incentives decreased 17.01% for our chief executive
officer, 31.75% for our chief financial officer, and 19.44% for
our president and chief operating officer. These decreases
resulted not only from the shift in compensation mix to base
salary, but also from a
year-over-year
reduction in profitability. (We have not included comparative
information for our general counsel as this is the first year he
has been included in our proxy statement.)
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Ø
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Total compensation (base salary plus annual incentives) for our
chief executive officer and president and chief operating
officer declined by 7.14% and 8.33%, respectively, from 2009 to
2010, as the increase in base salaries was more than offset by
the
year-over-year
reduction in annual incentives. Total compensation for our chief
financial officer was unchanged
year-over-year.
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Ø
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Mr. Salveson transitioned out of the global head of
investment banking role to focusing full time on clients and his
annual incentives and total compensation increased
year-over-year,
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18
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reflecting his significant contributions to the success of our
healthcare investment banking franchise for the year.
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Ø
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This was the first year for Mr. OBriens annual
incentive compensation as he joined us following the acquisition
of Advisory Research, and his annual incentive reflected the
significant pre-tax income contribution of the asset management
business for which he is responsible.
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Compensation
Philosophy and Objectives
Our executive compensation program is designed to drive and
reward corporate performance annually and over the long term, as
measured by increasing shareholder value. Compensation also must
be internally equitable and externally competitive. We
continually review our executive compensation program to ensure
it reflects good governance practices and the best interests of
shareholders, while meeting the following core objectives:
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Pay for performance A large portion of the
total compensation paid is based first on the profitability of
the company, followed by the performance of each business unit.
Each named executive officers performance is also measured
against defined objectives in areas such as strategic
initiatives, business performance, leadership effectiveness and
people development.
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Align risk and reward through a blend of pay
components We are committed to using a mix of
compensation components base salary, annual
incentives and long-term incentives to create an
environment that encourages increased profitability for the
company without undue risk taking.
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Align employees with shareholders We are
committed to using our compensation program to increase
executive stock ownership over time. We believe that equity
ownership directly aligns the interests of our executive
officers with those of our shareholders and helps to focus our
executives on creating long-term shareholder value. Our practice
has been to pay a significant portion of the total compensation
in the form of equity.
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Sustain and strengthen the franchise Our
compensation program is designed to attract and retain talented
people who are committed to the long-term success of the
company. We believe that we will create increasingly attractive
career and compensation opportunities as we progress in our
mission to be the most trusted global investment bank. Continued
progress over the long term will create greater opportunity for
executives, both in increased annual compensation and in the
appreciation of the companys equity.
|
Setting
Compensation
The Committee has responsibility for approving the compensation
paid to our executive officers and ensuring it meets our
objectives. Early each year, the Committee approves the amount
of incentive compensation to be paid to our executive officers
in recognition of prior-year performance, approves their base
salaries for the upcoming year and establishes performance goals
under an annual incentive program. Subject to limits on the
compensation that may be paid under the annual incentive program
(as described below under Compensation Program and
Payouts Annual Incentive Compensation), the
Committee has full discretion to determine the amount of
compensation to be paid to the executive officers.
Involvement of
Executive Officers
The work of the Committee is supported by our Human Resources
department, which works closely with our chief executive
officer, our chief financial officer and our general counsel.
The global head of Human Resources, together with these
executive officers, prepares and presents information and
recommendations for review and consideration by the Committee in
connection with its executive compensation decisions, including
regarding the performance goals to be established under the
annual
19
incentive program, financial information reviewed in connection
with executive compensation decisions, the firms to be included
in the compensation peer group, the performance evaluations and
compensation recommendations for the executive officers, and the
evaluation and compensation process to be followed by the
Committee.
Compensation
Peer Group
Our Human Resources department annually identifies a
compensation peer group of firms with which we compete for
executive talent. In 2010, two of our historical peers were
acquired and asset management became a more significant
component of our business. Due to these changes, we expanded our
peer group to include twelve companies (up from five) based on
the following criteria: public companies in the financial
services industry; operating segments, financial metrics and
market capitalizations similar to ours; and companies with whom
we compete for talent. This peer group currently consists of the
following companies:
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Diamond Hill Investment Group, Inc.
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KBW, Inc.
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Evercore Partners Inc.
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Lazard Ltd
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FBR Capital Markets Corporation
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MCG Capital Corporation
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Gleacher & Company, Inc.
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Oppenheimer Holdings Inc.
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Greenhill & Co., Inc.
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Stifel Financial Corp.
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Jefferies Group, Inc.
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Westwood Holdings Group, Inc.
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We also use data from external market surveys reflecting a broad
number of firms within our industry (including members of our
peer group), and we may review publicly available data for
similar companies that are not direct competitors to address
issues we may encounter obtaining compensation information for
executives holding positions comparable to our executive
officers. The external market surveys that we used for 2010 were
prepared by McLagan Partners, and generally related to our
industry and
sub-sectors
within our industry. We also used the surveys to gather market
data outside of our industry in the corporate support area. This
peer group and market data is an important factor considered by
the Committee when setting compensation, but it is only one of
multiple factors considered by the Committee, and the amount
paid to each executive may be more or less than the composite
market median based on individual performance, the roles and
responsibilities of the executive, experience level of the
individual, internal equity and other factors that the Committee
deems important. As such, the Committee uses peer group and
market survey information to put the total compensation proposed
to be paid to each named executive officer in context of pay
ranges for like positions at similar companies and to confirm
that any variances from market norms are justified in light of
the specific circumstances of our named executive officers.
Compensation
Consultant
In 2010, the Committee engaged an independent compensation
consultant, Towers Watson, to provide ongoing assessments and
advice to the Committee. The independent compensation consultant
participated in five Committee meetings during the year, and
advised the Committee regarding the information presented to the
Committee by our Human Resources department. Towers Watson did
not provide any other services beyond its services for the
Committee, except that our Human Resources department received
benefit plan services from Towers Watson. The benefit plan
services included actuarial services for our non-qualified
retirement plan termination, health and group benefit services
(e.g., medical and dental cost analysis) and retiree medical
actuarial services. These additional services were pre-approved
by the Compensation Committee in early 2010, and the amount we
paid for these services did not exceed $120,000.
20
Compensation
Program and Payments
The key components of our executive compensation program are
base salary and annual incentive compensation, and the equity
portion of our annual incentive compensation serves as our
primary long-term incentive compensation component.
Base
Salary
The purpose of base salary is to provide a set amount of cash
compensation for each executive that is not variable in nature
and is generally competitive with the market. We increased the
base salaries in 2010 as a percentage of total compensation to
mitigate the potential for risk-taking generally associated with
a compensation mix more heavily weighted to annual performance
and in recognition of the importance of key leadership and daily
accountabilities of our senior leaders. Further, prior to 2010,
we had increased base salaries only once following our spin-off
from U.S. Bancorp in December 2003. The Committee increased
base salaries effective March 1, 2010 as follows:
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Mr. Duffs base salary from $400,000 to $650,000;
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Mr. Chosys from $225,000 to $425,000;
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Mr. Salvesons from $225,000 to $425,000;
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Mr. Schnettlers from $300,000 to $550,000; and
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Ms. Schonemans from $225,000 to $425,000.
|
Mr. OBrien joined our company during 2010 upon the
consummation of our acquisition of Advisory Research and he
received a base salary of $425,000 consistent with the other
executives.
For 2011, our named executive officers salaries will be
unchanged, except that Ms. Schonemans base salary
will increase from $425,000 to $500,000 and
Mr. OBriens salary will increase from $425,000
to $550,000, in each case effective January 1, 2011. During
2010, we created a senior level management team, referred to as
the Executive Team, that consists of Messrs. Duff,
OBrien and Schnettler and Ms. Schoneman, and we are
increasing Mr. OBriens and
Ms. Schonemans base salary primarily in recognition
of the important responsibilities that Ms. Schoneman and
Mr. OBrien have for strategic matters and to maintain
an appropriate level of internal pay equity among the members of
our Executive Team.
Annual
Incentive Compensation
The Committee has established an annual incentive program that
provides a significant portion of the total compensation paid to
our named executive officers. The objective of the program is to
provide cash and equity compensation that is variable based on
the achievement of annual performance goals determined each year
by the Committee. Delivering a significant portion of our
compensation through the annual incentive program reflects one
of the core objectives of our compensation program, which is
pay-for-performance.
The program is administered by the Committee under the Piper
Jaffray Companies Amended and Restated 2003 Annual and Long-Term
Incentive Plan and is designed to comply with the requirements
of Section 162(m) of the Internal Revenue Code to ensure
the tax deductibility of incentive compensation paid to our
named executive officers. Under Section 162(m), we cannot
deduct compensation in excess of $1 million that is paid to
a named executive officer in any year unless the compensation
qualifies as performance-based compensation under
Section 162(m). Awards under the annual incentive program
are referred to as qualified performance-based
awards.
2010
Program
At the outset of each year, the Committee grants
performance-based awards subject to the achievement of an annual
performance goal of the company typically a
financial performance goal related to pre-tax operating income.
In February 2010, the Committee granted qualified performance-
21
based awards to twelve senior officers who at that time
constituted our Leadership Team in an amount equal to 7% of our
2010 adjusted pre-tax operating income, subject to an aggregate
limitation of 33% for the group as a whole.
The amount payable under each award depends on the amount of
adjusted pre-tax operating income generated by the company.
Adjusted pre-tax operating income equals our total revenues less
our total expenses before income taxes, adjusted to eliminate
certain compensation and benefits expenses and certain other
expenses, losses, income or gains that are unusual in nature or
infrequent in occurrence. For 2010, adjustments included the
elimination of: amounts expensed during the year under our
annual incentive program (including equity amortization expense)
for executive officers; amortization expense for equity awards
granted in connection with acquisitions; a benefit from the
reversal of amortization expense for the performance-based
equity awards described in more detail below; and certain
restructuring expenses incurred in 2010.
Our adjusted pre-tax operating income for 2010 was
$76.4 million, resulting in a maximum amount payable to
each award recipient of $5.3 million, subject to a maximum
aggregate payout of $25.2 million for the group as a whole.
Consistent with prior years, the Committee paid less than the
maximum amount payable for 2010, paying an aggregate of
$13.2 million, or 17.35% of our adjusted pre-tax operating
income for 2010. The table below sets forth a calculation of our
adjusted pre-tax operating income for 2010 based on our net
income (dollars in thousands):
|
|
|
|
|
Net income
|
|
$
|
24,362
|
|
Income tax expense
|
|
$
|
33,354
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|
Expenses under our annual incentive program
|
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$
|
8,606
|
|
Amortization expense for equity awards granted in connection
with acquisitions, net of benefit from reversal of amortization
expense for the 2008 performance-based equity awards
|
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$
|
2,839
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|
Restructuring expenses
|
|
$
|
7,218
|
|
|
|
|
|
|
Adjusted pre-tax operating income
|
|
$
|
76,379
|
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Compensation
Determinations and Relevant Factors
When determining the amount of incentive compensation to be paid
for 2010, the Committee reviewed and considered the following
information:
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a self-evaluation of the chief executive officer and year-end
assessments from executive officers and other select senior
leaders, as well as feedback from the full Board of Directors,
gathered by the Committee chairperson, regarding the performance
of the chief executive officer for 2010;
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performance evaluations of each other named executive officer
prepared by the chief executive officer and the head of our
Human Resources department;
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the financial performance of the company and each business unit,
comparable public companies and other companies in the
securities industry with which we compete, including the total
relative shareholder return of the company and our competitors;
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compensation market data provided by our Human Resources
department;
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the recommendations of the chief executive officer regarding the
incentive compensation to be paid to each executive officer for
2010, which the Committee discussed with the chief executive
officer; and
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tally sheets specifying each element of compensation paid to the
executive officers for the current and prior year and reflecting
the total proposed compensation for 2010 based on the
recommendations of the chief executive officer, as well as the
potential compensation to be received by the executive officers
under various scenarios, including a
change-in-control
of the company and terminations of employment under a variety of
circumstances.
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22
In determining the payments made to our named executive
officers, the Committee took into account all of the information
described above and the annual incentive program provision
governing the maximum aggregate amount payable under the
qualified performance-based awards. The Committee does not have
any formulas that, if achieved, result in specified payments.
Rather, the Committee considers all of the factors described
above in exercising its discretion to determine the annual
incentive compensation paid to each named executive officer.
The following factors influenced the compensation for each named
executive officer for 2010:
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Andrew S. Duff, chairman and chief executive
officer. Mr. Duffs compensation was
positively influenced by the Companys strong financial
performance in 2010. We achieved our highest annual revenues
since becoming a public company, with a strong performance in
the fourth quarter that reflected not only an improving
macroeconomic environment, but the successful execution of
strategy. Our financial performance for the year compared
favorably with peer firms, as we achieved strong pre-tax margins
and
year-over-year
revenue growth. The strategic acquisition of Advisory Research
and its successful integration into Piper Jaffray also
positively impacted his annual incentive for the year. Net
revenues from asset management increased from 3% to 13% and
contributed pre-tax operating income of 24% as compared to a
small loss in 2009. Lastly, Mr. Duff continued the
implementation of leadership training designed to strengthen our
culture, an important aspect of his role as chief executive
officer.
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Debbra L. Schoneman, chief financial
officer. Ms. Schoneman continued to improve
upon our financial planning and risk management functions during
2010, and successfully executed a three-year, $150 million
syndicated credit facility, forming new credit relationships
with financial institutions in the syndicate.
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James L. Chosy, general counsel and
secretary. During 2010, Mr. Chosy
strengthened our global compliance structure, led a renewed
focus on ethics at our company, and successfully managed legal
expenses.
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Brien M. OBrien, head of asset
management. Mr. OBriens
compensation was influenced by the strong performance of our
asset management business for the year, with net revenues
attributable to this segment increasing to 13% in 2010 from 3%
in 2009 and pre-tax operating margin improving to 28% compared
to a small loss in 2009. His efforts successfully integrating
Advisory Research as well as his overall leadership of our asset
management segment, which we view as a significant part of our
long-term strategy, also positively impacted his 2010
compensation.
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Jon W. Salveson, former global head of investment
banking. As noted in the executive summary,
Mr. Salveson transitioned out of his role as an executive
officer during 2010 and into full-time client-facing role for
our company. In his new role, he contributed significantly to
our healthcare investment banking franchise and its financial
performance, and received increased
year-over-year
compensation for his performance.
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Thomas P. Schnettler, president and chief operating
officer. Mr. Schnettlers compensation
was influenced by the improved performance and growth of our
investment banking and capital markets business. Through his
leadership we achieved market share gains in our Asia-based
operations, higher revenues per transaction, and the
restructuring of our European operations.
|
Based on this information, the Committee evaluated the
performance of the chief executive officer and determined his
annual incentive compensation, assessed relative levels of
responsibility and contribution during the year for each of the
other named executive officers, and approved 2010 annual
incentive compensation.
The table below shows the annual incentive awards that were
earned by each individual in 2010. This supplemental table
differs from the Summary Compensation Table appearing later in
the proxy statement because it shows stock awards earned in 2010
that were granted in 2011. For the year 2010,
23
the Summary Compensation Table (in accordance with SEC rules)
shows stock awards earned in 2009 and granted in 2010, not stock
awards earned in 2010 and granted in 2011. Accordingly, the
year-over-year
changes in compensation reflect changes in amounts earned
between 2010 and 2009. This table is not a substitute for the
information required by SEC rules, specifically the Summary
Compensation Table and the related tables appearing later in
this proxy statement.
Supplemental
Compensation Table
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Annual Incentive
Compensation
|
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Cash
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Yearly
Incentive
|
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Total with
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Year total
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Name
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Base
Salary
|
|
|
Incentive
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Restricted
Stock
|
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Total
Incentive
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|
Change
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Base
Salary
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|
|
change
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Andrew S. Duff
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2010
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$
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608,333
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$
|
995,834
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|
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$
|
995,833
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|
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$
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1,991,667
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|
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(17.01
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)%
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$
|
2,600,000
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|
|
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(7.14
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)%
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2009
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$
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400,000
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$
|
1,200,000
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$
|
1,200,000
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$
|
2,400,000
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$
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2,800,000
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2008
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$
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400,000
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|
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-0-
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|
|
|
-0-
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|
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-0-
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$
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400,000
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Debbra L. Schoneman
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2010
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$
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391,667
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$
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215,000
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$
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143,333
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$
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358,333
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|
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(31.75
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)%
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$
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750,000
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|
|
0.00
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%
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2009
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$
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225,000
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$
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315,000
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$
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210,000
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|
$
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525,000
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|
|
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$
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750,000
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|
|
|
|
|
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2008
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|
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$
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205,417
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|
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-0-
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-0-
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-0-
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$
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205,417
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James L. Chosy
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2010
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$
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391,667
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$
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128,000
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$
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85,333
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$
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213,333
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n/a(1
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)
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$
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605,000
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n/a(1
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)
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Brien M. OBrien
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2010
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$
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354,167
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$
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3,525,398
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-0-
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$
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3,525,398
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n/a(2
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)
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$
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3,879,565
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n/a(2
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Jon W. Salveson
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2010
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$
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391,667
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$
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1,192,916
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$
|
865,417
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$
|
2,058,333
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34.97
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%
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$
|
2,450,000
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40.00
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%
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2009
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$
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225,000
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$
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838,750
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$
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686,250
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$
|
1,525,000
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|
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|
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$
|
1,750,000
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|
|
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2008
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$
|
225,000
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|
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-0-
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|
|
|
-0-
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|
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-0-
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|
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$
|
225,000
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Thomas P. Schnettler
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2010
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$
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508,333
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$
|
930,417
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|
$
|
761,250
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|
$
|
1,691,667
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|
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(19.44
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)%
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$
|
2,200,000
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|
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(8.33
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)%
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2009
|
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$
|
300,000
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$
|
1,155,000
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$
|
945,000
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$
|
2,100,000
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|
|
|
|
|
|
$
|
2,400,000
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|
|
|
|
|
|
|
|
2008
|
|
|
$
|
271,875
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|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
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|
|
|
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$
|
271,875
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|
|
|
|
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|
(1)
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Mr. OBrien
did not become an employee until March 1, 2010, upon the
closing of the transaction with Advisory Research, Inc.
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(2)
|
Mr. Chosy was
not a named executive officer for 2009 or 2008. Accordingly, the
table above only includes his compensation for 2010.
|
Equity
Award
Consistent with our philosophy regarding executive stock
ownership, the annual incentive compensation for the named
executive officers was paid out in a combination of cash and
equity. We view the equity component of the annual incentive
award as a long-term incentive designed to provide compensation
opportunities based on the creation of shareholder value and an
increase in our stock price. The upside potential of these
equity awards will not be realized by the executive officers
unless our performance improves over the vesting period of the
awards. Historically, we granted equity awards through a
combination of restricted stock and stock options. However, in
2009, we began granting equity awards to our executive officers
solely in the form of restricted stock. We believe restricted
stock awards strongly align the executive officers
interests with those of shareholders by ensuring that the same
fluctuations in our stock that affect our shareholders also
directly affect the value of the awards granted to executive
officers. We also believe the restricted stock grants promote
focus on long-term, sustainable growth because short-term
fluctuations in our stock price will not affect whether the
awards have value to the recipients.
Consistent with prior years, the number of shares of restricted
stock granted to each officer was determined by dividing the
total dollar value designated to be paid out to the officer in
restricted stock by the closing price of our common stock on
February 15, 2011. The restricted stock vests in three
equal annual installments, unlike the three-year cliff vesting
schedule for restricted stock granted in prior years. The
vesting schedule change to three-year ratable from three-year
cliff vesting applies to all employees and was designed to
provide our employees with more market-prevalent terms.
As noted in the table above, Mr. OBrien did not
receive equity as a part of his 2010 annual incentive
compensation. He received 422,699 shares (2.16% of our
outstanding common stock as of
24
March 8, 2011) as part of the transaction with
Advisory Research. Given his significant equity ownership in the
company, he was not awarded equity as a part of his 2010 annual
incentive.
Long-Term,
Performance-Based (ROE) Equity Grant
In May 2008, the Committee granted a long-term,
performance-based restricted stock award to our executive
officers at that time. This grant was designed to improve our
executive share ownership to a more meaningful level, further
link executive performance with shareholder value, and act as a
significant retention tool. Prior to the grant, our executive
officers at the time owned approximately 2% of our outstanding
equity while executive ownership at our peer firms ranged from
7% to 17%. The proposed equity grant amount was intended to
approximately double the unvested value of equity held by our
executive officers as a group at the time of the grant.
This performance-based grant will not vest unless the company
meets a return on adjusted common equity target of 11% over a
twelve-month period, at which time it will vest in its entirety.
This performance target represents a significant increase to the
companys historic twelve-month return on adjusted common
equity levels, and the target must be met by April 30, 2013
or the awards will be forfeited. The adjustment to the return on
common equity metric eliminates the remaining goodwill
associated with the 1998 acquisition of our predecessor company
by U.S. Bancorp, which was retained by us at the time of
our spin-off from U.S. Bancorp. We excluded this goodwill
from the definition of return on common equity because we
believe it does not accurately reflect the equity deployed in
our businesses.
The performance-based grant was awarded on May 15, 2008,
which included each named executive officer other than
Ms. Schoneman, our chief financial officer, and
Mr. OBrien, who was not employed with us at that
time. Ms. Schoneman was granted a performance-based award
following her appointment as chief financial officer, and her
award has the same vesting provisions as the other named
executive officers who received a grant. Each recipients
grant was tiered based on the executives role and was made
in accordance with our equity grant timing policy described
below under Compensation Policies
Equity Grant Timing. The total number of shares for these
awards currently outstanding is 307,820. The number of shares
granted to each recipient was determined by dividing the total
dollar amount of the grant awarded by the Committee by the
closing price of our common stock on the date of grant, subject
to a maximum number of shares for each member. The value of
these awards is reflected in the Stock Awards column
in the Summary Compensation Table below for 2008.
Presently, we do not anticipate that we will meet the return on
adjusted common equity target required for these awards to vest
and expect that the awards will be forfeited on April 30,
2013. In the third quarter of 2010, management determined that
it was not probable that the return in equity target would be
achieved given recent financial results and the economic
environment. Accordingly, the third quarter included a
$6.6 million reversal of previously-recognized compensation
expense related to this performance-based award and the award is
no longer being expensed.
Mr. Salveson relinquished his performance-based award in
connection with his transition to a revenue-producing role, and
received an equity award of 54,218 shares with time-based
vesting in exchange. This award was granted on August 15,
2010 and vests in four installments, with 646 shares
vesting on February 15, 2011 and the remainder vesting in
three equal annual installments beginning on May 15, 2011.
Other
Compensation
Executive officers receive limited additional compensation in
the form of reimbursement of dues for club memberships used for
business purposes and certain insurance premiums. In connection
with our acquisition of Advisory Research, we agreed to provide
Mr. OBrien certain perquisites that he previously
received from Advisory Research for one year following the
closing of the acquisition, which include parking expense
reimbursement, reimbursement for automobile lease payments,
reimbursement
25
of certain insurance premiums and reimbursement of club
membership dues. The cost of these perquisites is included in
the All Other Compensation column of the Summary
Compensation Table below. We do not intend to continue these
perquisites to Mr. OBrien beyond March 1, 2011
as agreed upon in connection with the acquisition.
Some of our executive officers also receive payments from time
to time related to historical compensation programs, typically
structured as investments made by the company on behalf of
certain employees. For example, certain named executive officers
receive payments under the U.S. Bancorp Piper Jaffray Inc.
Second Century Growth Deferred Compensation Plan (As Amended and
Restated Effective September 30, 1998) (the Second
Century 1998 Plan) and the U.S. Bancorp Piper Jaffray
Inc. Second Century 2000 Deferred Compensation Plan (the
Second Century 2000 Plan). Certain key employees
were eligible to participate in these plans, under which
participants were granted one or more deferred awards that were
deemed invested in certain measuring investments. Following a
liquidity event for a particular investment, the participant
receives a benefit payment based on the deemed return to the
participant and payment of the portion of the participants
account that was deemed invested. Participants may continue to
receive payments under the plans until a liquidity or bankruptcy
event has occurred with respect to each measuring investment.
Messrs. Salveson and Schnettler were granted deferred
awards under these plans in 1996, 1997, 1998
and/or 2000,
and received payouts as set forth in the Summary Compensation
Table. No new awards have been granted under these plans since
2000, and participation in the plans is frozen.
Termination
and
Change-in-Control
Arrangements
Non-Qualified
Retirement Plan
Following our spin-off from U.S. Bancorp on
December 31, 2003, we assumed liability for the
non-qualified benefits accrued for our employees under the
defined benefit excess plan component of the U.S. Bancorp
Cash Balance Pension Plan. In 2004, we established the Piper
Jaffray Companies Non-Qualified Retirement Plan to maintain and
administer these benefits, which were transferred to us
following the spin-off. Thereafter, participation in the plan
was frozen. The Committee approved the termination of this plan
in November 2009 and balances for all plan participants were
paid out in March 2010.
Other
Termination and
Change-in-Control
Provisions
Certain award agreements and plans under which compensation has
been awarded to our named executive officers include provisions
regarding the payment of the covered compensation in the event
of a termination of employment or a
change-in-control
of our company, as follows:
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|
Under our Incentive Plan, following a termination of employment
(other than as a result of a
change-in-control),
our stock option awards granted during and after 2007 and our
restricted stock awards granted as part of our annual incentive
program will continue to vest so long as the termination was not
for cause and the employee does not violate certain
post-termination restrictions for the remaining vesting term of
their awards.
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|
Executive officers who are terminated during the year (other
than as a result of a
change-in-control)
will receive cash and equity compensation for that year under
our annual incentive program in the discretion of the Committee.
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|
Following a
change-in-control,
all outstanding restricted stock (other than the long-term,
performance-based (ROE) restricted stock awards) will vest and
all restrictions on the restricted stock will lapse.
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|
Our annual performance awards, including the annual qualified
performance-based awards under the annual incentive program,
will be considered to be earned and payable in full upon a
change-in-control,
and the awards will be settled in cash or shares, as determined
by the Committee, as promptly as practicable. Because annual
incentive award payouts are based on
|
26
|
|
|
|
|
adjusted pre-tax operating income, which varies from year to
year, and because the Committee historically has needed to
reduce the size of some awards to comply with the limits on the
aggregate amount of incentive compensation that may be paid
under the annual incentive program, the specific amounts that
would be payable in the event of a
change-in-control
are indeterminable.
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|
|
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|
The long-term, performance-based (ROE) restricted stock awards
will be forfeited following a voluntary termination of
employment, other involuntary termination not for cause, or
involuntary termination for cause, but not in the event of a
company-determined severance event so long as the employee
complies with the terms of the applicable severance agreement.
Upon a
change-in-control,
the award agreement provides that 40% of the award will vest if
a
change-in-control
occurs between April 30, 2010 and April 30, 2011, with
an additional 20% vesting in each subsequent
12-month
period if a
change-in-control
occurs during that period.
|
Compensation
Policies
Executive
Stock Ownership
We have adopted stock ownership guidelines to ensure that our
executives maintain a meaningful equity stake in the company,
which aligns managements interests with those of our
shareholders. The guidelines also help to drive long-term
performance and strengthen retention. Prior to 2010, our
executive stock ownership guidelines were expressed as a
multiple of base salary to be attained over a period of five
years, coupled with a five-year retention guideline of 50% that
applied to shares awarded through our incentive plans, or
acquired upon exercise of stock options, net of taxes and
exercise costs. In 2010, we amended the guidelines to eliminate
the holding requirement expressed as a multiple of base salary
and established a new retention guideline of 75% of the shares
awarded through our incentive plan, or acquired upon exercise of
stock options, net of taxes and exercise costs. The new
guideline applies so long as the individual remains an executive
officer.
Equity Grant
Timing Policy
In 2006, we established a policy pursuant to which equity grants
to employees will be made only once each quarter, on the 15th
calendar day of the month following the public release of
earnings for the preceding quarter (or, if the 15th calendar day
falls on a weekend or holiday, on the first business day
thereafter). This policy covers grants made by the Committee as
well as grants made by our chief executive officer to employees
other than executive officers pursuant to authority delegated to
him by the Committee. We established this policy to provide a
regular, fixed schedule for equity grants that eliminates the
exercise of discretion with respect to the grant date of
employee equity awards.
Policy on
Qualifying Compensation for Deductibility
Section 162(m) of the Internal Revenue Code limits
deductions for non-performance-based annual compensation in
excess of $1 million paid to our named executive officers
who served as executive officers at the end of the preceding
fiscal year. Our policy is to maximize the tax deductibility of
compensation paid to these officers. Accordingly, in 2004, 2006,
and 2008 we sought and obtained shareholder approval for the
Piper Jaffray Companies Amended and Restated 2003 Annual and
Long-Term Incentive Plan, under which our annual incentive
program is administered and annual cash and equity incentives
are paid. The Incentive Plan is designed and administered to
qualify compensation awarded under our annual incentive program
as performance-based to ensure that the tax
deduction is available to the company. From time to time the
Committee may authorize payments to the named executive officers
that may not be fully deductible, if they believe such payments
are in the interests of shareholders.
27
COMPENSATION
COMMITTEE REPORT
The Committee has reviewed and discussed the Compensation
Discussion and Analysis with management and has recommended to
the Board of Directors the inclusion of the Compensation
Discussion and Analysis in the companys year-end
disclosure documents.
Compensation Committee of the Board of Directors of Piper
Jaffray Companies
Michele Volpi, Chairperson
Lisa K. Polsky
Frank L. Sims
Jean M. Taylor
Summary
Compensation Table
The following table contains compensation information for our
chief executive officer, our chief financial officer, and our
three other most highly compensated executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus(1)
|
|
Awards(2)
|
|
Awards(2)(3)
|
|
Compensation(4)
|
|
Total
|
Name &
Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Andrew S. Duff
|
|
|
2010
|
|
|
|
608,333
|
|
|
|
995,834
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
11,691
|
|
|
|
2,815,858
|
|
Chairman and CEO
|
|
|
2009
|
|
|
|
400,000
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
11,691
|
|
|
|
1,611,691
|
|
|
|
|
2008
|
|
|
|
400,000
|
|
|
|
|
|
|
|
4,036,699
|
|
|
|
505,704
|
|
|
|
585,470
|
|
|
|
5,527,873
|
|
Debbra L. Schoneman
|
|
|
2010
|
|
|
|
391,667
|
|
|
|
215,000
|
|
|
|
210,000
|
|
|
|
|
|
|
|
6,768
|
|
|
|
823,435
|
|
Chief Financial Officer
|
|
|
2009
|
|
|
|
225,000
|
|
|
|
315,000
|
|
|
|
|
|
|
|
|
|
|
|
6,963
|
|
|
|
546,963
|
|
|
|
|
2008
|
|
|
|
205,417
|
|
|
|
|
|
|
|
942,381
|
|
|
|
|
|
|
|
11,988
|
|
|
|
1,159,786
|
|
James L. Chosy
|
|
|
2010
|
|
|
|
391,667
|
|
|
|
128,000
|
|
|
|
170,000
|
|
|
|
|
|
|
|
11,253
|
|
|
|
700,920
|
|
General Counsel and
Secretary(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brien OBrien
|
|
|
2010
|
|
|
|
354,167
|
|
|
|
3,525,398
|
|
|
|
|
|
|
|
|
|
|
|
144,082
|
|
|
|
4,023,647
|
|
Head of Asset
Management(5)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jon W. Salveson
|
|
|
2010
|
|
|
|
391,667
|
|
|
|
1,192,916
|
|
|
|
2,204,326
|
|
|
|
|
|
|
|
36,406
|
|
|
|
3,825,315
|
|
Former Global Head of Investment Banking
|
|
|
2009
|
|
|
|
225,000
|
|
|
|
838,750
|
|
|
|
|
|
|
|
|
|
|
|
18,845
|
|
|
|
3,486,088
|
|
|
|
|
2008
|
|
|
|
225,000
|
|
|
|
|
|
|
|
2,842,564
|
|
|
|
380,933
|
|
|
|
37,591
|
|
|
|
|
|
Thomas P. Schnettler
|
|
|
2010
|
|
|
|
508,333
|
|
|
|
930,417
|
|
|
|
945,000
|
|
|
|
|
|
|
|
9,270
|
|
|
|
2,393,020
|
|
President and Chief Operating Officer
|
|
|
2009
|
|
|
|
300,000
|
|
|
|
1,155,000
|
|
|
|
|
|
|
|
|
|
|
|
27,750
|
|
|
|
1,482,750
|
|
|
|
|
2008
|
|
|
|
271,875
|
|
|
|
|
|
|
|
3,427,161
|
|
|
|
435,296
|
|
|
|
77,896
|
|
|
|
4,212,228
|
|
|
|
(1)
|
The amounts in this
column include the cash compensation paid under our annual
incentive program, which is designed to permit the company to
deduct the compensation paid. The program allows the Committee
substantial discretion to determine compensation if the company
achieves adjusted pre-tax operating income, and the Committee
consistently has used this discretion in establishing
compensation following the completion of a fiscal year.
Accordingly, we report amounts paid under this program in the
Bonus column. For 2008, we failed to achieve any
adjusted pre-tax operating income and, based in part on the
recommendation of our chief executive officer, no amounts were
paid under the annual incentive plan.
|
|
|
(2)
|
The entries in the
Stock Awards and Option Awards columns
reflect the aggregate grant date value of the awards granted
during the year computed in accordance with FASB ASC 718.
SEC rules do not permit inclusion in a given year of stock and
options awards attributable to a particular years
performance, as is the case for salary and bonus amounts.
|
|
(3)
|
The fair value of
options granted in 2008 was estimated using the Black-Scholes
option-pricing model, with the following assumptions: risk-free
interest rate of 3.03%, dividend yield of 0.00%, stock
volatility factor of 33.61%, expected life of options (in years)
of 6.00. These assumptions lead to a weighted average fair value
of options granted of $15.73.
|
28
|
|
(4)
|
All other
compensation consists of the following:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of All
Other
|
|
|
|
|
Andrew S.
|
|
|
Debbra L.
|
|
|
James L.
|
|
|
Brien M.
|
|
|
Jon W.
|
|
|
Thomas P.
|
|
Compensation ($)
|
|
Year
|
|
|
Duff
|
|
|
Schoneman
|
|
|
Chosy
|
|
|
OBrien
|
|
|
Salveson
|
|
|
Schnettler
|
|
|
Parking stipend
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,900
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
2,880
|
|
|
|
2,460
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
2,880
|
|
|
|
2,880
|
|
Club membership dues
|
|
|
2010
|
|
|
|
4,494
|
|
|
|
|
|
|
|
4,200
|
|
|
|
20,669
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
4,494
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
4,494
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
401(k) matching contributions
|
|
|
2010
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
|
2009
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
6,408
|
|
|
|
6,408
|
|
|
|
|
2008
|
|
|
|
6,120
|
|
|
|
6,120
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
6,120
|
|
|
|
6,120
|
|
Life and long-term
|
|
|
2010
|
|
|
|
789
|
|
|
|
360
|
|
|
|
645
|
|
|
|
78,994
|
|
|
|
645
|
|
|
|
789
|
|
disability insurance premiums
|
|
|
2009
|
|
|
|
789
|
|
|
|
555
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
555
|
|
|
|
789
|
|
|
|
|
2008
|
|
|
|
1,089
|
|
|
|
837
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
855
|
|
|
|
1,089
|
|
2003 cash awards (replacing
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the lost value of U.S Bancorp equity)
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
570,887
|
|
|
|
2,571
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
10,313
|
|
|
|
30,523
|
|
Automobile lease payments
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,111
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,353
|
|
|
|
2,073
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
11,882
|
|
|
|
20,553
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
17,423
|
|
|
|
37,284
|
|
|
|
|
|
|
The amounts for Mr. OBrien under the categories of
parking stipend, club membership dues, life and long-term
disability insurance premiums (except $658 of this amount), and
automobile lease payments have been paid pursuant to a letter
agreement entered into as part of our acquisition of Advisory
Research, Inc. We are obligated to provide these benefits
through March 1, 2011 (one year from the closing of the
acquisition) at which time we will no longer be obligated to
provide these benefits.
|
|
|
|
The Other amounts identified in the table above
include (i) payments to Messrs. Schnettler and
Salveson under the Second Century 1998 Plan and the Second
Century 2000 Plan, and (ii) payments to Mr. Salveson
of $28,523, $11,882 and $5,175, respectively, representing his
proportionate share of a venture capital fund carried interest
held by the company as part of a compensation program
implemented prior to our spin-off from U.S. Bancorp.
|
|
|
(5)
|
Messrs. Chosy
and OBrien were not named executive officers for 2009 or
2008. Accordingly, the table above includes the respective
compensation of each of Messrs. Chosy and OBrien only
for the year in which they were one of our named executive
officers.
|
29
Grants of
Plan-Based Awards
The following table provides information regarding the grants of
plan-based awards made to the named executive officers during
the year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Possible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
|
|
|
Stock
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
Fair Value
|
|
|
|
|
|
|
Compensation
|
|
|
Plan
|
|
|
Number of
|
|
|
of Stock
|
|
|
|
|
|
|
Committee
|
|
|
Awards
|
|
|
Shares of
|
|
|
and Option
|
|
|
|
|
|
|
Approval
|
|
|
Maximum
|
|
|
Stock
|
|
|
Awards
|
|
Name
|
|
Grant
Date
|
|
|
Date(1)
|
|
|
($)(2)
|
|
|
(#)(3)(4)
|
|
|
($)
|
|
|
Andrew S. Duff
|
|
|
2/16/2010
|
|
|
|
2/3/2010
|
|
|
|
5,346,530
|
|
|
|
26,979
|
|
|
|
1,200,000
|
|
Debbra L. Schoneman
|
|
|
2/16/2010
|
|
|
|
2/3/2010
|
|
|
|
5,346,530
|
|
|
|
4,722
|
|
|
|
210,000
|
|
James L. Chosy
|
|
|
2/16/2010
|
|
|
|
2/3/2010
|
|
|
|
5,346,530
|
|
|
|
3,822
|
|
|
|
170,000
|
|
Brien M. OBrien
|
|
|
|
|
|
|
|
|
|
|
5,346,530
|
|
|
|
|
|
|
|
|
|
Jon W. Salveson
|
|
|
2/16/2010
|
|
|
|
2/3/2010
|
|
|
|
5,346,530
|
|
|
|
15,429
|
|
|
|
686,250
|
|
|
|
|
8/16/2010
|
|
|
|
8/12/2010
|
|
|
|
|
|
|
|
54,218
|
|
|
|
1,518,104
|
|
Thomas P. Schnettler
|
|
|
2/16/2010
|
|
|
|
2/3/2010
|
|
|
|
5,346,530
|
|
|
|
21,246
|
|
|
|
945,000
|
|
|
|
(1)
|
The Compensation
Committee approved a grant of stock awards identified in the
All Other Stock Awards column of this table on
February 3, 2010. In accordance with the terms of this
approval and our equity grant timing policy, the awards were
granted on February 16, 2010.
|
|
|
(2)
|
The amounts in this
column reflect an estimate of the maximum combined value of the
cash and equity that would have been payable to the named
executive officers under qualified performance-based awards
granted to the named executive officers for 2010 performance
under the annual incentive program, calculated using our actual
2010 performance. Because the potential amounts payable under
the qualified performance-based awards are stated in the annual
incentive program as a percentage of adjusted pre-tax operating
income that can only be decreased, and not increased, from that
maximum level, and because actual amounts paid below this
maximum level are within the full discretion of the Committee,
there are no identifiable threshold or target amounts under the
awards, and the maximum amounts actually payable to the named
executive officers pursuant to the awards for 2010 performance
were indeterminable at the time the awards were granted.
|
|
(3)
|
The amount in this
column reflects equity compensation paid to the named executive
officers in 2010 pursuant to annual qualified performance-based
awards granted to these officers in 2009 under our annual
incentive program. The shares of restricted stock were granted
to these officers on February 16, 2010 following the
Compensation Committees certification of the attainment of
2009 annual financial performance goals established by the
Committee under the annual incentive program. All of the
restricted stock was granted under the Incentive Plan and will
vest in full on February 16, 2013, assuming the award
recipient complies with the terms and conditions of the
applicable award agreement, as discussed in the Compensation
Discussion and Analysis under Compensation Program and
Payouts Termination and
Change-in-Control
Arrangements Other Termination and
Change-in-Control
Provisions.
|
|
(4)
|
The restricted stock
awards granted to the named executive officers in 2010 are
subject to forfeiture prior to vesting following certain
terminations of employment or in the event the award recipient
is terminated for cause, misappropriates confidential company
information, participates in or is employed by a talent
competitor of Piper Jaffray, or solicits employees, customers or
clients of Piper Jaffray, all as set forth in more detail in the
applicable award agreement. Recipients have the right to vote
all shares of Piper Jaffray restricted stock they hold and to
receive dividends (if any) on the restricted stock at the same
rate paid to our other shareholders. (We currently do not pay
dividends on our common stock.) The number of shares of
restricted stock awarded to each named executive officer under
our 2010 annual incentive program was determined by dividing
specified dollar amounts representing a percentage of the
individuals total annual incentive compensation for that
year by $44.48, the closing price of our common stock on the
February 16, 2010 grant date.
|
30
Outstanding
Equity Awards at Fiscal Year End
The following table sets forth certain information concerning
equity awards held by the named executive officers that were
outstanding as of December 31, 2010.
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Stock
Awards
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Option
Awards
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Number of
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Number of
Securities
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Number of
Securities
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Shares of
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Market Value
of
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Underlying
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Underlying
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Stock That
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Shares of
Stock
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Unexercised
Options
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Unexercised
Options
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Option
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Option
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Have Not
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That Have Not
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(#)
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(#)
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Exercise Price
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Expiration
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Vested(2)
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Vested(3)
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Name
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Exercisable
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Unexercisable
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($)
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Date(1)
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(#)
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($)
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Andrew S. Duff
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24,940
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47.30
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2/12/2014
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124,438
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4,356,574
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11,719
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39.62
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2/22/2015
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6,098
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47.85
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2/21/2016
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9,641
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70.13
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2/15/2017
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32,149
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41.09
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2/15/2018
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Debbra L. Schoneman
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485
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47.30
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2/12/2014
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31,034
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1,086,500
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290
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39.62
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2/22/2015
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James L. Chosy
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1,695
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47.30
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2/12/2014
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30,600
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1,071,306
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1,042
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39.62
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2/22/2015
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678
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47.85
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2/21/2016
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1,208
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70.13
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2/15/2017
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4,502
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41.09
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2/15/2018
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Brien M. OBrien
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n/a
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n/a
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Jon W. Salveson
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5,729
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47.30
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2/12/2014
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84,068
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2,943,221
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10,639
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39.62
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2/22/2015
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6,868
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70.13
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2/15/2017
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24,217
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41.09
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2/15/2018
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Thomas P. Schnettler
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1,938
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47.30
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2/12/2014
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103,991
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3,640,725
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12,696
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39.62
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2/22/2015
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7,241
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47.85
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2/21/2016
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7,248
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70.13
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2/15/2017
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27,673
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41.09
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2/15/2018
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(1)
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Option awards
expiring on February 15, 2018 vested on February 15,
2011.
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(2)
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The shares of
restricted stock vest on the dates and in the amounts set forth
in the table below, so long as the award recipient complies with
the terms and conditions of the applicable award agreement.
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Number of Shares
Scheduled to Vest That Are Held by Each Named Executive
Officer
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Andrew S.
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Debbra L.
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James L.
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Brien M.
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Jon W.
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Thomas P.
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Vesting
Date
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Duff
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Schoneman
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Chosy
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OBrien
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Salveson
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Schnettler
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February 15, 2011
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19,145
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1,922
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2,681
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15,067
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16,479
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May 15, 2011
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26,786
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May 15, 2012
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13,393
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February 16, 2013
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26,979
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4,722
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3,822
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15,429
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21,246
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May 15, 2013
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13,393
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In addition to the
shares of restricted stock set forth in the table above, the
following number of shares of restricted stock will cliff-vest
if our company meets a return on adjusted common equity target
of 11% over a twelve-month period, assuming the award recipient
remains an employee: Mr. Duff, 78,314 shares;
Ms. Schoneman, 24,390 shares; Mr. Chosy,
24,097 shares; Mr. Schnettler, 66,266 shares.
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31
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The shares of
restricted stock are forfeited, however, if the performance
metric for the company is not met by April 30, 2013. We do
not presently anticipate that we will meet the performance
metric required for these awards to vest and expect that these
shares will be forfeited on April 30, 2013.
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(3)
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The values in this
column are based on the $35.01 closing sale price of our common
stock on the New York Stock Exchange on December 31, 2010.
As noted in the above footnote, the values include shares of
restricted stock for Mr. Duff, Ms. Schoneman,
Mr. Chosy and Mr. Schnettler that will cliff-vest if
our company meets a return on adjusted common equity target of
11% over a twelve-month period. We do not presently anticipate
that we will meet the performance metric required for these
awards to vest, and expect that these shares will be forfeited
on April 30, 2013. Without these shares, the market value
of unvested restricted stock is as follows: Mr. Duff,
$1,614,801; Ms. Schoneman, $232,606, Mr. Chosy,
$227,670, and Mr. Schnettler, $1,320,752.
|
Option Exercises
and Stock Vested
The following table sets forth certain information concerning
stock vested during the year ended December 31, 2010. No
stock options were exercised by any of the named executive
officers in 2010.
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Stock
Awards
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Number
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of Shares
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Value
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Acquired
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Realized on
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on Vesting
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Vesting(1)
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Name
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(#)
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($)
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Andrew S. Duff
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22,257
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986,430
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Debbra L. Schoneman
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549
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24,332
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James L. Chosy
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2,787
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123,520
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Brien M. OBrien
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Jon W. Salveson
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15,853
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702,605
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Thomas P. Schnettler
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16,731
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741,518
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(1)
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The value realized
upon vesting of the stock awards is based on the $44.32 closing
sale price of our common stock on February 12, 2010, the
last trading day before the February 15, 2010 vesting date
of the awards.
|
Non-Qualified
Deferred Compensation Plans
The following table provides information regarding amounts
distributed to the named executive officers under our
Non-Qualified Retirement Plan during 2010. As discussed above in
Compensation Discussion and Analysis, the
Compensation Committee approved the termination of this plan in
November 2009 and all balances were paid to plan participants
based on the aggregate balance at fiscal year-end in March 2010.
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Aggregate
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|
Distributions
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Name
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($)
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Andrew S. Duff
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485,656
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Debbra L. Schoneman
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16,422
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James L. Chosy
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21,652
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Brien OBrien
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Jon W. Salveson
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449,440
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Thomas P. Schnettler
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781,846
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|
Under the Second Century 1998 Plan and the Second Century 2000
Plan described in the Compensation Discussion and Analysis,
certain key employees were granted one or more deferred bonus
awards that were deemed invested in certain measuring
investments. Following a liquidity event for a particular
investment, the participant receives a benefit payment based on
the deemed return to the
32
participant and payment of the portion of the participants
account that was deemed invested. Participants may continue to
receive payments under the plans until a liquidity or bankruptcy
event has occurred with respect to each measuring investment. No
new awards have been granted under these plans since 2000, and
participation in the plans is frozen. The following table
identifies the amounts earned in 2010 and the deferred balances
for each of the named executive officers who received one or
more deferred bonuses under the plans. The amounts earned in
2010 are included in All Other Compensation in the
Summary Compensation Table.
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Aggregate
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Earnings Paid
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Deferred
Balance
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Out in
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(Deemed
Investment) at
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Last Fiscal
Year
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Last Fiscal
Year-End
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Name
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($)
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($)
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Thomas P. Schnettler
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2,074
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39,042
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Jon W. Salveson
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829
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8,425
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Potential
Payments Upon Termination or
Change-in-Control
The following table sets forth quantitative information with
respect to potential payments to be made to each of the named
executive officers or their beneficiaries upon termination in
various circumstances, assuming termination on December 31,
2010. In the following table, unless indicated otherwise, all
equity is listed at its dollar value as of December 31,
2010, based on the closing sale price of our common stock on
that date. Because all stock options held by our named executive
officers as of December 31, 2010 were
out-of-the-money
based on the closing sale price of our common stock on that
date, no value is attributed to the accelerated vesting of stock
options that could have occurred in connection with a
termination of any of our named executive officers as of
December 31, 2010.
33
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Type of
Termination
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Involuntary
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Change-in-
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Termination
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Control Not
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Within 24
Months
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Involuntary
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Other
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Followed by
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Following a
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Termination
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Involuntary
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Involuntary
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|
Employment
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Change-in-
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Voluntary
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Under
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|
Termination
|
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|
Termination
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Name
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Termination
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Control
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Termination
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|
Severance
Plan
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Not for
Cause
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|
for
Cause
|
|
|
Andrew S. Duff
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Severance(1)
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$490,000
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|
Restricted
Stock(2)(3)
|
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|
$2,711,525
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|
|
|
$2,711,525
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|
|
|
$1,614,801
|
|
|
|
$2,711,525
|
|
|
|
$1,614,801
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debbra L. Schoneman
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(1)
|
|
|
|
|
|
|
|
|
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|
$339,767
|
|
|
|
|
|
|
|
|
|
Restricted
Stock(2)(3)
|
|
|
$574,164
|
|
|
|
$574,164
|
|
|
|
$232,606
|
|
|
|
$574,164
|
|
|
|
$232,606
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James L. Chosy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(1)
|
|
|
|
|
|
|
|
|
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|
$247,978
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|
|
|
|
|
|
|
|
|
Restricted
Stock(2)(3)
|
|
|
$565,131
|
|
|
|
$565,131
|
|
|
|
$227,670
|
|
|
|
$565,131
|
|
|
|
$227,670
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brien M. OBrien
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$279,682
|
|
|
|
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jon W. Salveson
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$283,602
|
|
|
|
|
|
|
|
|
|
Restricted
Stock(2)(3)(4)
|
|
|
$1,045,049
|
|
|
|
$2,943,221
|
|
|
|
$1,045,049
|
|
|
|
$2,943,221
|
|
|
|
$1,045,049
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Century Deferred Compensation
Plans(5)
|
|
|
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
|
|
Thomas P. Schnettler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$490,000
|
|
|
|
|
|
|
|
|
|
Restricted
Stock(2)(3)
|
|
|
$2,248,727
|
|
|
|
$2,248,727
|
|
|
|
$1,320,752
|
|
|
|
$2,248,727
|
|
|
|
$1,515,723
|
|
|
|
|
|
Annual Incentive
Award(2)
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Century Deferred Compensation
Plans(5)
|
|
|
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
Indeterminable
|
|
|
|
|
|
|
|
(1)
|
Under our Severance
Plan, employees may be eligible for severance payments in the
event of employment termination by us due to a facility closure,
permanent work-force reduction, organizational change that
eliminates the employees position, or similar event as
determined by the company. The named executive officers
participate in the Severance Plan on the same basis as all other
employees. The amount in the table reflects salary continuation
payments calculated in accordance with the provisions of the
plan, except that salary continuation payments under the plan
are capped at $490,000. Also under this plan, the named
executive officers would be entitled to continue to participate
in our health and welfare benefits programs at employee rates
during the severance period.
|
|
|
(2)
|
Under the Incentive
Plan, in the event of a
change-in-control
of Piper Jaffray, regardless of whether an employees
employment is terminated all outstanding restricted stock (other
than the long-term, performance-based (ROE) equity awards) will
vest and all restrictions on the restricted stock will lapse.
Under the applicable award agreements for the performance-based
restricted stock awards, 40% of the award will vest if a
change-in-control
occurs between April 30, 2010 and April 30, 2011 and
an additional 20% will vest in each subsequent
12-month
period if a
change-in-control
occurs during that period. With respect to annual performance
awards, including the qualified performance-based awards granted
under the annual incentive program, the award will be considered
to be earned and payable in full, and such performance awards
will be settled in cash or shares, as determined by the
Compensation Committee, as promptly as practicable.
|
|
(3)
|
Under the applicable
award agreements, all of the restricted stock awards (other than
the long-term, performance-based (ROE) equity awards) will
continue to vest following a termination of employment so long
as the termination was not for cause and the employee does not
violate certain post-termination restrictions. Also, with the
exception of the performance-based awards, vesting is
accelerated upon a
|
34
|
|
|
|
|
company-determined
severance event. The long-term, performance-based restricted
stock awards will be forfeited following a voluntary termination
of employment, other involuntary termination not for cause, or
involuntary termination for cause, but not in the event of a
company-determined severance event so long as the employee
complies with the terms of the applicable severance agreement.
Upon a severance event, the long-term, performance-based (ROE)
awards will continue to vest as set forth in the award
agreement. The amounts in the table reflect these terms and
conditions and assume compliance with any post-termination
vesting requirements that are within the named executive
officers control.
|
|
|
(4)
|
Under the terms the
award granted to Mr. Salveson on August 15, 2010, if a
change-in-control
occurs and the award is assumed or replaced by the successor
entity, the award will continue to vest on its regular schedule
if Mr. Salveson continues to be employed by the successor
entity. If, however, Mr. Salveson is terminated within one
year following the
change-in-control,
the award will vest in full. Also, if the award is not assumed
or replaced in the
change-in-control
(as determined by the Compensation Committee), the award will
vest in full. More generally, Mr. Salveson must be employed
at the time of vesting, i.e., the award will be forfeited
following a voluntary termination of employment, other
involuntary termination not for cause, or involuntary
termination for cause, and vesting of the award is accelerated
upon a company-determined severance event.
|
|
(5)
|
Under the Second
Century 1998 Plan and the Second Century 2000 Plan, participants
are entitled to receive full benefits following a termination of
employment, so long as the individual does not violate certain
post-termination restrictions and is not terminated for cause
(under the 2000 plan) or as the result of an act of gross
misconduct (under the 1998 plan). If the employee fails to
comply with these provisions, under the 1998 plan the employee
will lose his benefits, and under the 2000 plan the participant
will receive the amount originally deferred with interest at
6.5% per annum. The benefits that would be payable under these
plans in every event other than a termination for cause are
indeterminable because they are based on the value to investors
of liquidity events, the timing and value of which are not
ascertainable in advance. The following is a table of deferred
balance for the 1998 Plan and 2000 Plan as of December 31,
2010.
|
|
|
|
|
|
|
|
Deferred
Balance
|
|
|
|
(Deemed
Investment) at
|
|
|
|
Last Fiscal
Year-End
|
|
Name
|
|
($)
|
|
|
Thomas P. Schnettler
|
|
|
39,042
|
|
Jon W. Salveson
|
|
|
8,425
|
|
Risk Assessment
of Compensation Policies and Practices
In early 2011, our management prepared a company-wide inventory
and review of our compensation policies and practices for both
executive officers and for employees generally, which management
discussed with the Compensation Committee. In connection with
this review and discussion, we determined that our compensation
policies and practices are not reasonably likely to have a
material adverse effect on our company.
Outstanding
Equity Awards
The following table summarizes, as of December 31, 2010,
the number of shares of our common stock to be issued upon
exercise of outstanding options granted under our equity plans
as of
35
December 31, 2010. The table also includes the
weighted-average exercise price of options and the number of
shares remaining available for future issuance under the plans
for all awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
|
|
Number of Shares
to
|
|
|
|
|
|
Remaining
Available
|
|
|
|
be Issued Upon
|
|
|
Weighted-Average
|
|
|
for Future
Issuance
|
|
|
|
Exercise of
|
|
|
Exercise Price
of
|
|
|
Under Equity
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Compensation
Plans
|
|
|
|
Options,
Warrants
|
|
|
Options,
Warrants
|
|
|
(Excluding Shares
in
|
|
Plan
Category
|
|
and
Rights
|
|
|
and
Rights
|
|
|
First
Column)
|
|
|
Equity compensation plans approved by shareholders
|
|
|
515,492
|
|
|
$
|
44.64
|
|
|
|
1,500,590
|
(1)
|
Equity compensation plans not approved by
shareholders(2)
|
|
|
-0-
|
|
|
|
N/A
|
|
|
|
241,199
|
|
|
|
(1)
|
Based on the
7,000,000 shares currently authorized for issuance under
the plan. In addition to the 515,492 shares to be issued
upon the exercise of outstanding options to purchase our common
stock 3,390,130 shares of restricted stock issued under the
plan were outstanding as of December 31, 2010. All of the
shares available for future issuance under the plan as of
December 31, 2010 may be granted in the form of
restricted stock, restricted stock units, options or another
equity-based award authorized under the plan.
|
|
|
(2)
|
In 2010, we
established the Piper Jaffray Companies 2010 Inducement Plan
(Inducement Plan) in conjunction with the
acquisition of Advisory Research, an asset management firm based
in Chicago. The listing requirements of the New York Stock
Exchange (specifically, section 303A.08) permit the
adoption of an equity compensation plan without shareholder
approval if awards under the plan are to be a material
inducement to prospective employees. Accordingly, we adopted the
Inducement Plan to assist in retention and induce prospective
employees of Advisory Research to accept employment with the
company. The aggregate number of shares that may be issued under
the Inducement Plan is 400,000, and we granted 158,801
restricted shares ($7.0 million) upon the closing of the
transaction on March 1, 2010. These shares vest ratably
over five years in equal installments beginning on March 1,
2011, and ending on March 1, 2015. We do not intend to
grant any additional shares under this plan. The Inducement Plan
is administered by the Compensation Committee, which has the
authority, among other things, to designate participants in the
Inducement Plan, determine whether and to what extent any type
of award is to be granted, determine the number of shares to be
covered by each award, determine the terms and conditions of any
award or award agreement, amend the terms and conditions of any
award or award agreement, accelerate the vesting and/or
exercisability of any stock option or waive any restrictions
relating to any award and interpret and administer the
Inducement Plan and any instrument or agreement relating to the
Inducement Plan. The types of awards that may be granted under
the Inducement Plan are stock options, stock appreciation
rights, restricted stock, restricted stock units, performance
awards, dividend equivalents, other stock grants and other
stock-based awards. Awards under the Inducement Plan generally
are not transferable. In the event of a
change-in-control,
any outstanding stock options and stock appreciation rights
under the Inducement Plan which are not then exercisable and
vested will become fully exercisable and vested and the
restrictions applicable to any restricted stock, restricted
stock units or other awards shall lapse and such awards will
become free of all restrictions and become fully vested. The
Board may amend, alter, suspend, discontinue or terminate the
Inducement Plan at any time. If not sooner terminated by the
Board, the Inducement Plan will terminate on January 1,
2020. The foregoing is only a summary of the material terms of
the Inducement Plan and is qualified in its entirety by
reference to the Inducement Plan, a copy of which has been filed
with the SEC.
|
36
SECURITY
OWNERSHIP
Stock Ownership
Guidelines
We believe it is important for our directors and executive
officers to maintain a meaningful equity interest in our
company, to ensure that their interests are aligned with the
interests of our shareholders. Our Board of Directors has
adopted stock ownership guidelines to establish its minimum
expectations for our directors and executive officers with
respect to this equity stake. As discussed above in the
Compensation Discussion and Analysis, our executive officers are
subject to stock ownership guidelines that provide that they
should retain 75% of the shares awarded to them through our
incentive plan, or acquired upon exercise of stock options
awarded to them, net of taxes and exercise costs. This retention
guideline applies so long as the individual remains an executive
officer.
Prior to 2010, our non-employee stock ownership guidelines were
expressed as a multiple of our annual cash retainer to be
attained over a period of five years, coupled with a five-year
retention guideline of 50% that applied to shares awarded for
their service. In 2010, we amended the guidelines to eliminate
the holding requirement expressed as a multiple of base salary
and implemented a new retention guideline of 75% of the shares
awarded to non-employee directors, or acquired upon exercise of
stock options. This retention guideline applies irrespective of
taxes paid for shares awarded and so long as the individual
remains a non-employee director.
Beneficial
Ownership of Directors, Nominees and Executive
Officers
The following table shows how many shares of our common stock
were beneficially owned as of March 8, 2011 (except with
respect to ownership in the Piper Jaffray Companies Retirement
Plan, which is reported as of December 31, 2010) by
each of our directors, director nominees and executive officers
named in the Summary Compensation Table contained in this proxy
statement, and by all of our directors and executive officers as
a group. The table also includes the number of shares of phantom
stock that were deemed owned as of March 8, 2011 by each of
our non-employee directors. Unless otherwise noted, the
shareholders listed in the table have sole voting and investment
power with respect to the shares owned by them.
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
|
|
Piper Jaffray
|
|
|
|
|
Name of
Beneficial Owner
|
|
Common
Stock*
|
|
|
Phantom
Shares**
|
|
|
Andrew S. Duff
|
|
|
297,893
|
(1)
|
|
|
|
|
James L. Chosy
|
|
|
47,147
|
(2)
|
|
|
|
|
Michael R. Francis
|
|
|
14,880
|
(3)
|
|
|
5,477
|
|
Virginia Gambale
|
|
|
|
|
|
|
3,033
|
|
B. Kristine Johnson
|
|
|
18,983
|
(4)
|
|
|
1,743
|
|
Brien OBrien
|
|
|
422,699
|
(5)
|
|
|
|
|
Addison L. Piper
|
|
|
26,211
|
(6)
|
|
|
1,743
|
|
Lisa K. Polsky
|
|
|
7,500
|
(7)
|
|
|
10,905
|
|
Jon W. Salveson
|
|
|
189,285
|
(8)
|
|
|
|
|
Thomas P. Schnettler
|
|
|
224,896
|
(9)
|
|
|
|
|
Debbra L. Schoneman
|
|
|
36,910
|
(10)
|
|
|
|
|
Frank L. Sims
|
|
|
20,380
|
(11)
|
|
|
4,573
|
|
Jean M. Taylor
|
|
|
6,463
|
(12)
|
|
|
6,694
|
|
Michele Volpi
|
|
|
2,713
|
(13)
|
|
|
|
|
All directors, executive officers and other named executive
officers (14 persons)
|
|
|
1,315,959
|
(14)
|
|
|
34,168
|
|
37
|
|
*
|
None of the
individuals identified in this table owns more than 1% of Piper
Jaffray common stock outstanding as of March 8, 2011 with
the exception of Mr. Duff with 1.52%, Mr. OBrien
with 2.16%, and Mr. Schnettler with 1.15% . As a group, our
directors, director nominees and executive officers hold 6.68%
of Piper Jaffray common stock as of March 8, 2011. (These
percentages are calculated using our outstanding shares as of
the record date of 19,459,201 plus 251,913 shares of common
stock covered by options that are currently exercisable for the
group.) The holders of restricted stock identified in the
footnotes below have no investment power with respect to the
restricted stock.
|
|
|
**
|
The directors have
no voting or investment power with respect to the shares of
phantom stock. All shares of phantom stock have been deferred
pursuant to the Deferred Compensation Plan for Non-Employee
Directors, as described above under Compensation Program
for Non-Employee Directors.
|
|
(1)
|
Includes
26,979 shares of restricted stock that vest in full on
February 16, 2013, 23,520 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
78,314 shares of restricted stock that will vest if the
company meets a performance target of return on adjusted common
equity of 11% over a twelve-month period, 82,431 shares of
common stock held directly, 10 shares of common stock held
by his two minor children, 2,092 shares of common stock
held in the Piper Jaffray Companies Retirement Plan, and
84,547 shares of common stock covered by options that are
currently exercisable.
|
|
|
(2)
|
Includes
3,822 shares of restricted stock that vest in full on
February 16, 2013, 2,016 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
24,097 shares of restricted stock that will vest if the
company meets a performance target of return on adjusted common
equity of 11% over a twelve-month period, 5,483 shares of
common stock held indirectly through a family trust,
1,750 shares of common stock held directly, 850 shares
of common stock held in the Piper Jaffray Companies Retirement
Plan, 4 shares held in an individual retirement account,
and 9,125 shares of common stock covered by options that
are currently exercisable.
|
|
(3)
|
Includes
3,000 shares of common stock held directly and
11,880 shares of common stock covered by options that are
currently exercisable.
|
|
(4)
|
Includes
1,573 shares of common stock held directly,
1,200 shares of common stock held in an individual
retirement account, 4,330 shares of common stock held in a
family trust, and 11,880 shares of common stock covered by
options that are currently exercisable.
|
|
(5)
|
Includes
94,823 shares of common stock held directly,
262,780 shares of restricted stock that will vest in three
equal installments on March 1,
2012-14, and
65,096 shares held in a trust in which a third party is
designated as the sole trustee and has control over the
investment decisions of the trust. Of the shares held in trust,
16,274 vested on March 1, 2011, and the remainder will vest
in three equal installments on March 1,
2012-14. All
of Mr. OBriens shares were issued in connection with
the acquisition of Advisory Research, and, of the shares issued
to Mr. OBrien, 201,886 are currently held in escrow
pursuant to the indemnification escrow agreement entered into as
part of the transaction.
|
|
|
(6)
|
Includes
13,370 shares of common stock held directly,
177 shares of common stock held in the Piper Jaffray
Companies Retirement Plan, 1,000 shares of common stock
held in an individual retirement account, and 11,614 shares
of common stock covered by options that are currently
exercisable. The amount for Mr. Piper also includes
50 shares of common stock held by Mr. Pipers
spouse, as to which he disclaims beneficial ownership because he
does not have voting or dispositive power over the shares.
|
|
|
(7)
|
All shares
beneficially owned by Ms. Polsky are held directly.
|
|
(8)
|
Includes
15,429 shares of restricted stock that vest in full on
February 16, 2013, 20,253 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
53,572 shares of restricted stock of which 50% will vest on
May 15, 2011 and the remainder will vest in two equal
installments on May 15,
2012-13,
51,728 shares of common stock held directly,
850 shares of common stock held in the Piper Jaffray
Companies Retirement Plan, and 47,453 shares of common
stock covered by options that are currently exercisable.
|
38
|
|
(9)
|
Includes
21,246 shares of restricted stock that vest in full on
February 16, 2013, 17,980 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
66,266 shares of restricted stock that will vest if the
company meets a performance target of return on adjusted common
equity of 11% over a twelve-month period, 61,758 shares of
common stock held directly, 850 shares of common stock held
in the Piper Jaffray Companies Retirement Plan, and
56,796 shares of common stock covered by options that are
currently exercisable.
|
|
|
(10)
|
Includes
4,722 shares of restricted stock that vest in full on
February 16, 2013, 3,386 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
24,390 shares of restricted stock that will vest if the
company meets a performance target of return on adjusted common
equity of 11% over a twelve-month period, 2,786 shares of
common stock held directly, 1 share of common stock held by
her spouse, 850 shares of common stock held in the Piper
Jaffray Companies Retirement Plan, and 775 shares of common
stock covered by options that are currently exercisable.
|
|
|
(11)
|
Includes
8,500 shares of common stock held directly and
11,880 shares of common stock covered by options that are
currently exercisable.
|
|
|
(12)
|
Includes
500 shares of common stock held directly and
5,963 shares of common stock covered by options that are
currently exercisable.
|
|
(13)
|
All shares
beneficially owned by Mr. Volpi are held directly.
|
|
(14)
|
Includes
72,198 shares of restricted stock that vest in full on
February 16, 2013, 67,155 shares of restricted stock
that will vest in three equal installments on February 15,
2012-14,
193,066 shares of restricted stock that will vest if the
company meets a performance target of return on adjusted common
equity of 11% over a twelve-month period, 53,572 shares of
restricted stock of which 50% will vest on May 15, 2011 and
the remainder will vest in two equal installments on
May 15,
2012-13,
5,669 shares of common stock held in the Piper Jaffray
Companies Retirement Plan, 672,386 shares of common stock
held directly, by family members, by family trusts or by a
retirement or profit-sharing plan or account other than the
Piper Jaffray Companies Retirement Plan, and 251,913 shares
covered by options that are currently exercisable.
|
Beneficial Owners
of More than Five Percent of Our Common Stock
Based on filings made under Section 13(g) of the Securities
Exchange Act of 1934 as of March 8, 2011, the persons known
by us to be beneficial owners of more than 5% of our common
stock were as follows:
|
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
|
|
Piper Jaffray
|
|
|
Name of
Beneficial Owner
|
|
Common
Stock
|
|
Percent of
Class
|
|
BlackRock, Inc.
|
|
|
1,629,298(1
|
)
|
|
|
7.84
|
%
|
40 East 52nd Street
New York, NY 10022
|
|
|
|
|
|
|
|
|
T. Rowe Price Associates, Inc.
|
|
|
1,275,615(2
|
)
|
|
|
6.10
|
%
|
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 8, 2011, by BlackRock, Inc.
BlackRock reported sole voting and dispositive power with
respect to all 1,629,298 shares reported in the table.
|
|
|
(2)
|
This information is
based on a Schedule 13G filed with the Securities and
Exchange Commission on February 12, 2011 by T. Rowe Price
Associates, Inc. T. Rowe Price Associates reported that it has
sole voting power as to 262,550 shares and sole dispositive
power as to 1,275,615 shares. T. Rowe Price Associates
serves as investment advisor to certain individual and
institutional clients holding the shares listed above, and as an
investment advisor may be deemed to have beneficial ownership of
the shares owned by its advisory clients. T. Rowe Price
Associates disclaims beneficial ownership of these shares.
|
39
|
|
|
T. Rowe Price
Associates, Inc. is a wholly owned subsidiary of T. Rowe Price
Group, Inc., which is a publicly traded financial services
holding company.
|
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our executive officers and directors to file initial
reports of ownership of our securities and reports of changes in
ownership with the Securities and Exchange Commission. Based on
our knowledge and on written representations from our executive
officers and directors, we believe that all Section 16(a)
filing and disclosure requirements applicable to our executive
officers and directors for 2010 have been satisfied with the
following two exceptions: (1) one report filed by the
company on behalf of Mr. OBrien inadvertently omitted
shares of the company indirectly held (this report was
subsequently amended) and (2) one report filed by the
company on behalf of David I. Wilson was not filed in a timely
manner following the forfeiture of shares for tax purposes.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee, comprised entirely of independent,
non-employee directors, is responsible for establishing and
administering our policies involving the compensation of our
executive officers. No employee of the company serves on the
Compensation Committee. The Committee members have no
interlocking relationships as defined by the Securities and
Exchange Commission.
Transactions with
Related Persons
From time to time in the ordinary course of business, Piper
Jaffray, through our subsidiaries, engages in transactions with
other corporations or entities whose executive officers or
directors also are directors or executive officers of Piper
Jaffray or have an affiliation with our directors or executive
officers. Such transactions are conducted on an
arms-length basis and may not come to the attention of our
directors or executive officers or those of the other
corporations or entities involved. In addition, from time to
time our executive officers and directors and their affiliates
may engage in transactions in the ordinary course of business
involving goods and services provided by Piper Jaffray, such as
asset management and financial advisory services. With respect
to our executive officers and employee directors, such goods and
services are provided on terms comparable to those extended to
employees of our company generally. With respect to our
non-employee directors and their affiliates, such goods and
services are provided on substantially the same terms as those
prevailing at the time for comparable transactions with
non-employees.
T. Rowe Price Associates, Inc. acts as investment advisor
to client accounts that own greater than 5% of the outstanding
shares of our common stock and client accounts managed by
BlackRock, Inc. and its affiliates own greater than 5% of the
shares of our common stock. We engage in ordinary course
trading, brokerage and similar transactions with both T. Rowe
Price and BlackRock, and these transactions are negotiated on an
arms-length basis and contain customary terms and conditions.
From time to time, certain of our directors, executive officers
and other employees who are accredited investors may invest
their personal funds directly in funds managed by Piper Jaffray,
through our subsidiaries, on substantially the same terms and
with the same conditions as the other investors in these funds.
Review and
Approval of Transactions with Related Persons
To minimize actual and perceived conflicts of interests, our
Board of Directors has adopted a written policy governing our
companys transactions where the aggregate amount involved
is reasonably expected to exceed $120,000 and any of the
following persons has or may have a direct or indirect interest:
(a) our executive officers or directors (including
nominees), (b) shareholders who own more
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than 5% of our common stock, (c) immediate family members
of any executive officer or director, and (d) the primary
business affiliation of any person described in (a), (b) or
(c). Unless exempted from the policy, related person
transactions must be submitted for review by our Nominating and
Governance Committee. The Nominating and Governance Committee
considers the available, relevant facts and circumstances and
will approve or ratify only those related person transactions
that it determines are in, or are not inconsistent with, the
best interests of our company and its shareholders. The
chairperson of the Nominating and Governance Committee may
approve and ratify transactions if it is not practicable to wait
until the next committee meeting, but the chairperson is
required to report to the committee at its next meeting any
approval or ratification pursuant to this delegated authority.
The Board of Directors also may exercise the powers and duties
of the Nominating and Governance Committee under our policy
governing related person transactions. Certain transactions that
would not be required to be disclosed under applicable rules and
regulations of the Securities and Exchange Commission are
exempted from the definition of related person transactions
under our policy.
AUDIT COMMITTEE
REPORT AND PAYMENT OF FEES TO OUR INDEPENDENT AUDITOR
Audit Committee
Report
The primary function of our Audit Committee is oversight of our
financial reporting process, publicly filed financial reports,
internal accounting and financial controls, and the independent
audit of the consolidated financial statements. The consolidated
financial statements of Piper Jaffray Companies for the year
ended December 31, 2010 were audited by Ernst &
Young LLP, independent auditor for the company.
As part of its activities, the Committee has:
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Reviewed and discussed with management and the independent
auditor the companys audited financial statements;
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Discussed with the independent auditor the matters required to
be communicated under Statement on Auditing Standards
No. 61 (Communications with Audit Committees); and
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3.
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Received the written disclosures and letter from the independent
auditor required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent
auditors communications with the Audit Committee
concerning independence, and has discussed with the independent
auditor the independent auditors independence.
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Management is responsible for the companys system of
internal controls and financial reporting process.
Ernst & Young LLP is responsible for performing an
independent audit of the consolidated financial statements in
accordance with the standards of the Public Company Accounting
Oversight Board and for issuing a report thereon. Our
Committees responsibility is to monitor and oversee these
processes. Based on the foregoing review and discussions and a
review of the report of Ernst & Young LLP with respect
to the consolidated financial statements, and relying thereon,
we have recommended to the Board of Directors of Piper Jaffray
Companies the inclusion of the audited consolidated financial
statements in Piper Jaffrays Annual Report on
Form 10-K
for the year ended December 31, 2010, for filing with the
Securities and Exchange Commission.
Audit Committee
of the Board of Directors of Piper Jaffray Companies
Frank L. Sims, Chairperson
Virginia Gambale
Lisa K. Polsky
Auditor
Fees
Ernst & Young LLP served as our independent auditor
for 2010 and 2009. The following table presents fees for
professional audit services for the audit of our annual
consolidated financial statements
41
for 2010 and 2009, as well as fees for the review of our interim
consolidated financial statements for each quarter in 2010 and
2009 and for all other services performed for 2010 and 2009 by
Ernst & Young LLP.
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2010
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2009
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Audit Fees
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$
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941,300
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860,400
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Fees(1)
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70,500
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45,000
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Tax Fees
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0
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All Other
Fees(2)
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2,820
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8,895
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Total
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1,014,620
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914,295
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(1)
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Audit-related
services are assurance and related services that are reasonably
related to the performance of the audit or review of our
financial statements. Specifically, the services provided for
2010 and 2009 included services relating to IRA Keogh
agreed-upon
procedures, employee benefit plan audits, security custody
surprise audit count and the issuance of an independent
auditors report on controls placed in operation and tests
of operating effectiveness.
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(2)
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For all other fees
in 2010 and 2009, services consist of capital markets accounting
consultations.
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Auditor Services
Pre-Approval Policy
The Audit Committee has adopted an auditor services pre-approval
policy applicable to services performed for us by our
independent auditor. In accordance with this policy, the Audit
Committees practice is to approve annually all audit,
audit-related and permissible non-audit services to be provided
by the independent auditor during the year. If a service to be
provided is not pre-approved as part of the annual process or if
it may exceed pre-approved fee levels, the service must receive
a specific and separate pre-approval by the Audit Committee,
which has delegated authority to grant such pre-approvals during
the year to the chairperson of the Audit Committee. Any
pre-approvals granted pursuant to this delegated authority are
reported to the Audit Committee at its next regular meeting.
Our Audit Committee has determined that the provision of the
non-audit services described in the table above was compatible
with maintaining the independence of our independent auditor.
The Audit Committee reviews each non-audit service to be
provided and assesses the impact of the service on the
auditors independence. On February 24, 2010, the Audit
Committee pre-approved certain services to be provided by our
independent auditor relating to engagements occurring on or
after that date.
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The Audit Committee of our Board of Directors has selected
Ernst & Young LLP to serve as our independent auditor
for the year ending December 31, 2011. While it is not
required to do so, our Board of Directors is submitting the
selection of Ernst & Young LLP for ratification in
order to ascertain the views of our shareholders with respect to
the choice of audit firm. If the selection is not ratified, the
Audit Committee will reconsider its selection. Representatives
of Ernst & Young LLP are expected to be present at the
annual meeting, will be available to answer shareholder
questions and will have the opportunity to make a statement if
they desire to do so.
The Board of Directors recommends that you vote FOR
ratification of the selection of Ernst & Young LLP as
the independent auditor of Piper Jaffray Companies and our
subsidiaries for the year ending December 31, 2011. Proxies
will be voted FOR ratification of this selection unless
otherwise specified.
42
ITEM 3
ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
We are asking our shareholders to provide advisory approval of
the compensation of the officers included in this proxy
statement, as we have described it in the Executive
Compensation section. While this vote is advisory, and
not binding on our company, the Compensation Committee of the
Board of Directors will consider the outcome of the vote when
making future compensation decisions for our executive officers.
Following are some of the key points of our 2010 executive
compensation program:
Our compensation practices demonstrate sound corporate
governance. We continually review our executive compensation
program to ensure it reflects good governance practices and the
best interests of shareholders. Our executive compensation
program currently includes:
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No employment agreements
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No stand-alone
change-in-control
agreements
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No tax
gross-ups
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Limited perquisites
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Stock ownership guidelines requiring 75% retention (net of taxes
and exercise costs)
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Meaningful annual equity awards granted in lieu of
not in addition to annual cash incentives
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We have designed our annual incentive and long-term
compensation programs to be
pay-for-performance. Our
annual incentive plan is funded through profitability, and
awards from this plan correspond with our level of profitability
for a given year. For 2010,
year-over-year
net income declined by $6 million and total compensation,
including annual incentives, for our chief executive officer and
president and chief operating officer declined. Total
compensation (as measured internally by the company) declined by
7.14% for our chief executive officer and 8.33% for our
president and chief operating officer, with annual incentives
decreasing by 17.01% and 19.44%, respectively. In 2008, we
failed to achieve profitability during the credit crisis, and no
annual incentive payments were awarded (i.e., executives were
only paid their base salary).
We took steps in 2010 to improve our long-term financial
performance and achieved record revenues. We materially
diversified our business mix with the acquisition of Advisory
Research, Inc., a Chicago-based asset management firm,
increasing the portion of our net revenues attributable to our
asset management business to 13% in 2010 from 3% in 2009. In
addition, we significantly restructured our European operations,
which will improve our financial performance going forward and
allow us to invest more resources to China, where we believe we
have compelling opportunities. We generated revenues of
$530.1 million, up from $486.8 million in 2009 and our
highest level of revenues since becoming a public company.
The Board of Directors recommends that shareholders approve the
following advisory resolution:
RESOLVED, that the compensation paid to the individuals
identified in the Summary Compensation Table, as disclosed in
this proxy statement pursuant to the compensation disclosure
rules of the SEC (which disclosure includes the Compensation
Discussion and Analysis section, the compensation tables and the
accompanying footnotes and narratives within the Executive
Compensation section of this proxy statement), is hereby
approved.
The Board of Directors recommends that you vote FOR the
advisory (non-binding) resolution.
43
ITEM 4
ADVISORY (NON-BINDING) VOTE RECOMMENDING THE FREQUENCY OF
FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
In addition to the advisory approval of our executive
compensation program, we are also seeking a non-binding
indication from our shareholders as to the frequency with which
shareholders would have an opportunity to provide an advisory
vote on executive compensation. We are providing shareholders
the option of selecting a frequency of one, two or three years,
or abstaining. For the reasons described below, we recommend
that our shareholders select a frequency of three years.
Our executive compensation program is designed to support
long-term value creation, and a triennial vote will allow
shareholders to better judge our executive compensation program
in relation to our long-term performance. As described in
the Compensation Discussion and Analysis section above, one of
the core principles of our executive compensation program is to
ensure managements interests are aligned with our
shareholders interests to support long-term value
creation. A triennial vote would allow our executive
compensation program to be evaluated over a three-year time
frame and in relation to our long-term performance, which we
believe is the appropriate time frame for our company.
A triennial vote will provide us with the time to
thoughtfully respond to shareholders views and implement
any necessary changes. We carefully review changes to our
program over the long-term to maintain its consistency and
credibility, which is important in motivating and retaining our
employees. An annual vote has the potential to over-emphasize
short-term performance, which may not accurately reflect
progress towards our long-term strategic goals. Also, because
our annual meeting of shareholders is in May of each year, our
ability to effectively alter a particular compensation program
may be limited or have a negative impact on our ability to
retain executives. We therefore believe that a triennial vote is
an appropriate frequency to provide the Compensation Committee
and management sufficient time to thoughtfully consider
shareholders input and to implement any appropriate
changes.
Accordingly, we request that our shareholders select Three
Years when voting on the frequency of advisory votes on
executive compensation. Although the advisory vote is
non-binding, our Board will review the results of the vote and
take them into account in making a determination concerning the
frequency of advisory votes on executive compensation.
The Board of Directors recommends that you vote for
THREE YEARS as the frequency of future advisory
votes on executive compensation.
SHAREHOLDER
PROPOSALS FOR THE 2012 ANNUAL MEETING
In order for a shareholder proposal, including a director
nomination, to be considered for inclusion in our proxy
statement for the 2012 annual meeting of shareholders, the
written proposal must be received at our principal executive
offices on or before November 17, 2011. The proposal should
be addressed to Piper Jaffray Companies, Attention: James L.
Chosy, Secretary, 800 Nicollet Mall, Suite 800, Mail Stop
J09N05, Minneapolis, Minnesota 55402. The proposal must comply
with Securities and Exchange Commission regulations regarding
the inclusion of shareholder proposals in company-sponsored
proxy materials.
In accordance with our bylaws, in order to be properly brought
before the 2012 annual meeting, a shareholders notice of
the matter the shareholder wishes to present must be delivered
to our principal executive offices in Minneapolis, Minnesota, at
the address identified in the preceding paragraph, not less than
90 nor more than 120 days prior to the first anniversary of
the date of this years annual meeting. As a result, any
notice given by or on behalf of a shareholder pursuant to these
provisions of our bylaws (and not pursuant to
Rule 14a-8
of the Securities and Exchange Commission) must be received no
earlier than January 5, 2012, and no later than
February 4, 2012.
44
HOUSEHOLDING
The Securities and Exchange Commission has adopted rules that
permit companies and intermediaries such as brokers to satisfy
delivery requirements for proxy statements and annual reports
with respect to two or more shareholders sharing the same
address by delivering a single proxy statement or annual report,
as applicable, addressed to those shareholders. This process,
which is commonly referred to as householding,
potentially provides extra convenience for shareholders and cost
savings for companies. We household our proxy materials and
annual reports for shareholders, delivering a single proxy
statement and annual report to multiple shareholders sharing an
address unless contrary instructions have been received from the
affected shareholders.
If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy
statement or annual report, or if you are receiving multiple
copies of either document and wish to receive only one, please
contact us in writing or by telephone at Piper Jaffray
Companies, Attention: Investor Relations, 800 Nicollet Mall,
Suite 800, Mail Stop J09N05, Minneapolis, Minnesota 55402,
(612) 303-6277.
We will deliver promptly upon written or oral request a separate
copy of our annual report
and/or proxy
statement to a shareholder at a shared address to which a single
copy of either document was delivered.
OTHER
MATTERS
We do not know of any other matters that may be presented for
consideration at the annual meeting. If any other business does
properly come before the meeting, the persons named as proxies
above will vote as they deem in the best interests of Piper
Jaffray.
James L. Chosy
Secretary
Dated: March 16, 2011
45
LOCATION
OF PIPER JAFFRAY COMPANIES ANNUAL MEETING OF SHAREHOLDERS
Wednesday,
May 4, 2011, at 2:30 p.m.
The Huber Room in our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
Beneficial owners of common stock held in street name by a
broker, bank, trust or other nominee may need proof of ownership
to be admitted to the meeting. A brokerage statement or letter
from the broker, bank, trust or other nominee are examples of
proof of ownership.
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, May 4, 2011
2:30 p.m. (Central Daylight Time)
Piper Jaffray Companies
The Huber Room in our Minneapolis Headquarters
12th Floor, U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, MN 55402
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.piperjaffray.com/proxymaterials.
M32573-P06889
PIPER JAFFRAY COMPANIES
PROXY FOR THE 2011 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint James L. Chosy and Debbra L. Schoneman, together and separately, as proxies, to vote
all shares of common stock that I have power to vote at the annual meeting of shareholders to be
held on May 4, 2011 in Minneapolis, Minnesota, and at any adjournment or postponement thereof, in
accordance with the instructions on the reverse side of this card and with the same effect as
though I were present in person and voting such shares. The proxies are authorized in their
discretion, to vote upon such other business as may properly come before the meeting and they may
name others to take their place.
This proxy card, when properly executed, will be voted in the manner directed herein by the
undersigned. If no direction is made but the card is signed, this proxy card will be voted FOR the
election of all nominees under Proposal 1, FOR Proposal 2, FOR Proposal 3, FOR three years under
Proposal 4 and in the discretion of the proxies with respect to such other business as may properly
come before the meeting.
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Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
800 NICOLLET MALL, SUITE 800 MAIL STOP J09N05 MINNEAPOLIS, MN 55402 |
VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 p.m. Eastern Time on Tuesday, May 3, 2011. Have your proxy card in hand when you access
the web site and follow the instructions to obtain your records and to create an electronic voting
instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by Piper Jaffray Companies in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future years.
VOTE
BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time
on Tuesday, May 3, 2011. Have your proxy card in hand when you call and then follow the
instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or
return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M32572-P06889
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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PIPER JAFFRAY COMPANIES |
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For
All |
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Withhold
All |
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For All
Except |
The Board of Directors recommends that you vote FOR the following: |
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Election of Directors |
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Nominees: |
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01) Andrew S. Duff |
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05) Lisa K. Polsky |
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02) Michael R. Francis |
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06) Frank L. Sims |
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03) B. Kristine Johnson |
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07) Jean M. Taylor |
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04) Addison L. Piper |
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08) Michele Volpi |
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To withhold authority to vote for any individual
nominee(s), mark For All Except and write the
number(s) of the nominee(s) on the line below. |
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The Board of Directors recommends you vote FOR the following proposals: |
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Abstain |
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Ratification of the selection of Ernst & Young LLP as the independent auditor for the year
ending December 31, 2011. |
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Advisory resolution approving the compensation of the officers disclosed in the proxy statement,
or a say-on-pay vote. |
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The Board of Directors recommends you vote 3 years on the following proposal: |
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2 Years |
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3 Years |
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Abstain |
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Advisory vote recommending the frequency of future say-on-pay votes. |
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NOTE: Such other business as may properly come before the meeting or any adjournment thereof. |
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For address changes
and/or comments, please check this box and write them on the back where indicated. |
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Please indicate if you plan to attend this meeting. |
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Yes |
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No |
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Please sign exactly as your name(s) appear(s) hereon.
When signing as attorney,executor, administrator, or other fiduciary, please
give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or
partnership, please sign in full corporate or partnership name, by
authorized officer. |
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Signature
[PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
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[E-mail notice regarding electronic delivery of proxy materials sent by Broadridge Financial
Solutions to Piper Jaffray Companies employee-shareholders and to non-employee shareholders who
have elected to receive proxy materials by electronic delivery]
PROXYVOTE.COM
You are receiving this e-mail because you are either an employee-shareholder of Piper Jaffray
Companies, with access to company e-mail, or you are a non-employee shareholder who previously
elected to receive your proxy card and other proxy materials by electronic delivery.
You will not receive a proxy card or other proxy materials by mail.
Instead, this e-mail contains instructions on how to access the 2010 Annual Report to Shareholders
and the 2011 Proxy Statement for Piper Jaffray Companies and how to vote shares via the Internet.
Please read the instructions carefully before proceeding.
Important Notice Regarding the Availability of Proxy Materials
This is a NOTIFICATION of the:
Piper Jaffray Companies 2011 Annual Meeting of Shareholders
RECORD DATE: March 8, 2011
MEETING DATE: May 4, 2011
CUSIP NUMBER: _______________
CONTROL NUMBER: ________________
This e-mail represents all shares in the following account(s): ________________________
Please review the Piper Jaffray Companies 2010 Annual Report to Shareholders and 2011 Proxy
Statement before voting. The Proxy Statement discusses the proposals to be voted on, information
about the annual meeting and voting, and other information about the company. You can view the
Piper Jaffray Companies 2010 Annual Report to Shareholders and 2011 Proxy Statement and enter your
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Annual Report ____________
Notice of Proxy Statement ______________
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