SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PIPER JAFFRAY COMPANIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PIPER JAFFRAY COMPANIES INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Items 22(a)(2) of Schedule A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) 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.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
PIPER JAFFRAY COMPANIES INC.
PIPER JAFFRAY TOWER
222 SOUTH NINTH STREET MINNEAPOLIS, MINNESOTA 55402
Dear Fellow Shareholders:
Our 100th year in business was one of the most challenging in our history. We
look forward to our annual meeting because it offers us a chance to speak
directly to our fellow shareholders about the challenges we faced during
1995.
As we enter our second century of service, we hope you will take the
opportunity to hear an update on your investment in our company. You are
cordially invited to attend the Piper Jaffray Companies Inc. Annual Meeting
on Wednesday, January 24, 1996, at 3:00 p.m. at the Lutheran Brotherhood
Auditorium, 625 Fourth Avenue South, Minneapolis, Minnesota.
Whether you own a few or many shares of stock, it is important that your
shares be represented. If you cannot personally attend the meeting, we
encourage you to sign the accompanying proxy and promptly return it in the
enclosed envelope.
Sincerely,
/s/ Addison L. Piper
Addison L. Piper
Chairman and Chief Executive Officer
/s/ William H. Ellis
William H. Ellis
President and Chief Operating Officer
December 21, 1995
PIPER JAFFRAY COMPANIES INC.
PIPER JAFFRAY TOWER
222 SOUTH NINTH STREET MINNEAPOLIS, MINNESOTA 55402
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
JANUARY 24, 1996
The Annual Meeting of Shareholders of Piper Jaffray Companies Inc. will be
held at the Lutheran Brotherhood Auditorium, 625 Fourth Avenue South,
Minneapolis, Minnesota, on Wednesday, January 24, 1996 at 3:00 p.m. (Central
Standard Time) for the following purposes:
(1) To elect seven directors for the ensuing year.
(2) To approve the appointment of Deloitte & Touche LLP as the independent
auditors of the Company for the fiscal year ending September 30, 1996.
(3) To act upon any other business that may properly come before the meeting.
Only holders of common stock of record at the close of business on December
8, 1995 will be entitled to vote at the meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO COME TO THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY IN THE REPLY ENVELOPE PROVIDED. YOUR COOPERATION IN PROMPTLY
SIGNING AND RETURNING YOUR PROXY WILL HELP AVOID FURTHER SOLICITATION
EXPENSE.
By Order of the Board of Directors
/s/ David E. Rosedahl
David E. Rosedahl
Secretary
December 21, 1995
PIPER JAFFRAY COMPANIES INC.
PIPER JAFFRAY TOWER
222 SOUTH NINTH STREET MINNEAPOLIS, MINNESOTA 55402
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 24, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Piper Jaffray Companies Inc. (the "Company") of proxies
for the Annual Meeting of Shareholders to be held on Wednesday, January 24,
1996, and any adjournment thereof. Stock represented by proxies will be
voted. Where specification is made in the proxy the stock will be voted in
accordance therewith. Proxies may be revoked at any time before being voted
by giving written notice of revocation to the Secretary of the Company. This
Proxy Statement and the form of proxy enclosed are being mailed to
shareholders on or about December 21, 1995.
There were outstanding on December 8, 1995, the record date for shareholders
entitled to vote at the meeting, 17,539,395 shares of common stock, each
share being entitled to one vote. So far as is known to the Company, the
following are the only beneficial owners of more than 5% of the outstanding
common stock of the Company as of December 8, 1995.
<TABLE>
<CAPTION>
NUMBER
OF SHARES PERCENT OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED SHARES
<S> <C> <C>
Piper Jaffray Companies ESOP 7,085,416 40.00%
(the "Trust")
Suite 1600
222 South Ninth Street
Minneapolis, Minnesota 55402
Third Avenue Fund Inc. (1) 1,093,601 6.23%
767 Third Avenue, 5th Floor
New York, New York 10017
</TABLE>
(1) Information is based on a Schedule 13D Statement dated August 25, 1994
filed with the Securities and Exchange Commission by Martin J. Whitman on
behalf of the Third Avenue Fund Inc. and certain private investment
partnerships, institutional advisory accounts and institutional investment
funds managed directly or indirectly by Mr. Whitman.
With respect to the shares of common stock of the Company held by the Trust,
the participants in the Trust are authorized to control how votes are cast by
giving instructions. Each participant may control the voting of such shares
in the proportion which the value of that participant's benefit in the ESOP
fund bears to the total value of all benefits therein. Any shares held by the
Trust for which timely instructions are not received from the participants
are voted in the same proportion of yeas and nays on each issue as are cast
with respect to all other shares voted at the meeting (including shares for
which participants' instructions have been received and shares not held by
the Trust).
Expenses in connection with the solicitation of proxies will be paid by the
Company. Solicitation of proxies will be principally by mail. In addition,
several of the officers or employees of the Company may solicit proxies,
either personally or by telephone, or by special letter. The Company will
also make arrangements with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to their principals, and
will reimburse them for their expenses in so doing.
So far as the Board of Directors is aware, no matters other than those
described in this Proxy Statement will be acted upon at the meeting. If,
however, any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the same in
acccordance with their judgment on such other matters.
The affirmative vote of a majority of the outstanding shares of common stock of
the Company present in person or represented by proxy at the meeting and
entitled to vote on a matter to be acted upon at the meeting is required for the
approval of such matter. For this purpose, a shareholder voting through a proxy
who abstains with respect to any matter is considered to be present and entitled
to vote on such matter at the meeting, and such shareholder's shares are in
effect a negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, on any matter
shall not be considered present and entitled to vote on such matter.
ELECTION OF DIRECTORS
At the meeting it will be proposed to elect seven directors to hold office
until the next Annual Meeting of Shareholders and until their successors are
elected and qualified. The Board of Directors has designated the following
individuals as nominees for election. Each nominee is presently a director of
the Company and was elected by the shareholders of the Company at the last
Annual Meeting of Shareholders. Each nominee is also presently a director of
Piper Jaffray Inc. ("Piper Jaffray"), the Company's broker-dealer subsidiary.
All of the nominees have indicated a willingness to serve, but in case any of
the nominees is not a candidate at the meeting, it is the intention of the
persons named in the enclosed proxy to vote in favor of the remainder of the
nominees and to vote for substitute nominees in their discretion. Information
regarding the nominees is set forth below.
<TABLE>
<S> <C> <C> <C>
[PHOTO] ADDISON L. PIPER AGE 49 DIRECTOR SINCE 1977
Chairman of the Board and Chief Executive Officer
Chairman of the Board and Chief Executive Officer of the Company
and of Piper Jaffray for more than five years.
[PHOTO] WILLIAM H. ELLIS AGE 53 DIRECTOR SINCE 1981
President and Chief Operating Officer
President of the Company for more than five years. From March 1983
to December 1995, Mr. Ellis served as the Chief Operating Officer
of the Company and of Piper Jaffray; and from November 1982 to
December 1995, President of Piper Jaffray. Mr. Ellis is also
Chairman of the Board, Chief Executive Officer and President of
Piper Capital Management Incorporated ("Piper Capital"). Mr. Ellis
is also a director of Piper Funds Inc., Piper Global Funds Inc.,
Piper Institutional Funds Inc. (open-end management investment
companies), Piper Trust Company and several closed-end investment
companies for which Piper Capital serves as an investment adviser.
[PHOTO] RALPH W. BURNET AGE 50 DIRECTOR SINCE 1988
Director
Chairman and Chief Executive Officer of Burnet Financial Group
(mortgage banking, insurance, title insurance and real estate
brokerage) since January 1990; from May 1988 to January 1990,
Chairman and Chief Executive Officer of Fairway International
Corporation (real estate development); and from November 1983 to
May 1988, President of Merrill Lynch Realty -- Central and East
Region (residential and commercial real estate brokerage, title
insurance and mortgage banking).
[PHOTO] KATHY HALBREICH AGE 46 DIRECTOR SINCE 1994
Director
Director of the Walker Art Center, Minneapolis, Minnesota, since
March 1991; and from 1988 to 1990, Curator of Contemporary Art for
the Museum of Fine Arts, Boston, Massachusetts.
[PHOTO] JOHN L. MCELROY, JR. AGE 64 DIRECTOR SINCE 1988
Director
Chairman of Wheat, First Securities, Inc. (regional broker-dealer
and investment banking firm) for more than five years; Chairman of
Wheat First Butcher Singer, Inc. (parent of Wheat, First
Securities, Inc.) since June 1991; and from September 1986 to July
1992, Chief Executive Officer of Wheat, First Securities, Inc. and
Vice Chairman and Chief Executive Officer of Wheat First Butcher
Singer, Inc. Mr. McElroy is also a director of Noland Company
(distributor of wholesale plumbing and air-conditioning products).
[PHOTO] ROBERT S. SLIFKA AGE 54 DIRECTOR SINCE 1988
Director
Chief Executive Officer and President of Loan Guarantee Investment
Corporation (lessor of commercial equipment under leases
originated through commercial banks) since October 1992; from
December 1986 to March 1992, Senior Vice President of ITT
Corporation (diversified manufacturer and supplier of
telecommunications equipment and services, financial and insurance
services and industrial and consumer products); and from March
1989 to October 1991, Executive Vice President and Group General
Manager of Commercial Financing Activities of ITT Financial
Corporation.
[PHOTO] DAVID STANLEY AGE 60 DIRECTOR SINCE 1974
Director
Chairman and Chief Executive Officer of Payless Cashways, Inc.
(building materials specialty retailer) for more than five years.
Mr. Stanley is also a director of Digi International Inc.
(computer hardware and software manufacturer) and Best Buy Co.,
Inc. (consumer electronics retailer).
</TABLE>
VOTING REQUIREMENTS
The affirmative vote of a majority of the outstanding shares of common stock
of the Company present in person or represented by proxy at the meeting and
entitled to vote on the election of directors is required for the election of
directors. For this purpose, a shareholder voting through a proxy who
abstains with respect to the election of directors is considered to be
present and entitled to vote on the election of directors at the meeting, and
such shareholder's shares are in effect a negative vote, but a shareholder
(including a broker) who does not give authority to a proxy to vote, or
withholds authority to vote, on the election of directors shall not be
considered present and entitled to vote on the election of directors.
DIRECTOR COMPENSATION
For the fiscal year ended September 30, 1995, each non-employee director of
the Company received a fee of $15,000 for services as a director of the
Company and of Piper Jaffray. Three non-employee directors elected to defer
compensation until January of 1996, at which time they will receive shares of
the Company's common stock in lieu of cash compensation.
The Piper Jaffray Companies Inc. Omnibus Stock Plan (the "Omnibus Stock
Plan") provides for the nondiscretionary grant of a nonstatutory stock option
to purchase 2,000 shares of common stock of the Company to each non-employee
director on the date of each annual meeting of the Company's shareholders as
compensation for services for the ensuing year. Non-employee directors
joining the board between annual meetings are granted an option to purchase a
pro-rata portion of such number of shares. All non-employee director options
have an exercise price equal to the fair market value of a share of common
stock on the date of grant and become fully exercisable one year after the
date of grant.
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
The Board of Directors of the Company has established an Audit Committee. The
current members of the Audit Committee are Ms. Halbreich and Messrs. Burnet,
McElroy (Chairman), Slifka and Stanley. The Audit Committee is responsible
for recommending to the Board of Directors and shareholders a firm of
independent auditors to act as the Company's independent auditors, reviewing
the audit plan of the Company's independent auditors, and reviewing the
auditor's report on the Company's financial statements. During the fiscal
year ended September 30, 1995, the Audit Committee met four times.
The Board of Directors has established an Executive Compensation Committee.
The current members of the Executive Compensation Committee are Ms. Halbreich
and Messrs. Burnet, McElroy, Slifka and Stanley (Chairman). The Executive
Compensation Committee is responsible for reviewing and making
recommendations to the Board of Directors with respect to compensation of
executive officers and directors of the Company. During the fiscal year ended
September 30, 1995, the Executive Compensation Committee met four times.
The Board of Directors has established a Governance Committee. The current
members of the Governance Committee are Ms. Halbreich and Messrs. Burnet
(Chairman), McElroy, Piper, Slifka and Stanley. The Governance Committee is
responsible for selecting nominees to stand for election as directors at the
Company's Annual Meeting of Shareholders. The Governance Committee will
consider nominees recommended by shareholders. Such recommendations should be
submitted to the Secretary of the Company, Piper Jaffray Tower, 222 South
Ninth Street, P.O. Box 28, Minneapolis, Minnesota 55440-0028. During the
fiscal year ended September 30, 1995, the Governance Committee met three
times.
DIRECTOR MEETINGS
During the fiscal year ended September 30, 1995, five meetings of the Board
of Directors were held.
EQUITY SECURITIES BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of common stock of the Company as of December 8, 1995 by each
director, each executive officer named in the Summary Compensation Table on
page 6 of this Proxy Statement, and all directors and executive officers of
the Company as a group. Except as otherwise noted below, the listed
beneficial owner has sole voting and investment power with respect to such
shares.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
OWNED SHARES
BENEFICIAL OWNER (1)(2)(3) (1)(2)(3)
<S> <C> <C>
Addison L. Piper 536,457 3.03
William H. Ellis 303,934 1.72
Ralph W. Burnet 22,000 *
Andrew S. Duff 50,951 *
Kathy Halbreich 2,000 *
Bruce C. Huber 149,272 *
Dan L. Lastavich 163,450 *
John L. McElroy, Jr. 7,000 *
Robert S. Slifka 6,000 *
David Stanley 12,700(4) *
All directors and executive
officers as a group (16 persons) 1,827,051 10.01
</TABLE>
*Less than 1%
(1) Includes shares held for the benefit of such persons by the Trust as
follows: Mr. Piper, 64,493; Mr. Ellis, 25,033; Mr. Duff, 15,091; Mr. Huber,
45,731; Mr. Lastavich, 37,313; and all directors and executive officers of
the Company as a group, 291,944.
(2) Includes shares which the following persons have a right to acquire upon
exercise of stock options pursuant to the Omnibus Stock Plan: Mr. Piper,
122,070; Mr. Ellis, 100,550; Mr. Burnet, 6,000; Mr. Duff, 27,000; Ms.
Halbreich, 2,000; Mr. Huber, 62,000; Mr. Lastavich, 77,600; Mr. McElroy,
6,000; Mr. Slifka, 6,000; Mr. Stanley, 6,000; and all directors and
executive officers of the Company as a group, 659,220.
(3) Includes shares which the following persons have a right to acquire upon
exercise of stock options pursuant to the 1983 Book Value Stock Purchase
Plan (the "Book Value Plan"): Mr. Piper, 14,750; Mr. Ellis, 10,400; Mr.
Duff, 1,700; Mr. Huber, 5,200; Mr. Lastavich, 6,700; and all directors and
executive officers of the Company as a group, 58,400.
(4) Does not include 1,380 shares held by a trust for the benefit of an adult
child of Mr. Stanley, in which shares Mr. Stanley disclaims any beneficial
interest.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer and each of its four
other most highly compensated executive officers for each of the last three
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
OTHER AWARDS
ANNUAL OPTIONS ALL OTHER
FISCAL BONUS COMPENSATION (NUMBER OF COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY (1)(2) (3) SHARES)(4) (5)(6)
<S> <C> <C> <C> <C> <C> <C>
Addison L. Piper 1995 $200,000 $ 500,000 $ 45,842 22,000 13,252
Chairman of the Board and 1994 200,000 450,000 34,458 22,000 20,371
Chief Executive Officer of the 1993 200,000 1,247,000 174,231 84,250 20,912
Company and of Piper Jaffray
William H. Ellis 1995 170,000 480,000 41,603 22,000 13,252
President and Chief Operating 1994 170,000 450,000 31,962 22,000 20,371
Officer of the Company and 1993 170,000 1,244,000 169,796 84,200 20,910
of Piper Jaffray and
Chairman of the Board,
Chief Executive Officer and
President of Piper Capital (7)
Andrew S. Duff 1995 135,000 358,000 28,311 27,000 13,252
Managing Director of the Company 1994 90,000 303,610 16,088 0 20,371
and Director of Fixed Income 1993 90,000 473,951 52,851 900 20,910
of Piper Jaffray (8)
Bruce C. Huber 1995 135,000 611,000 47,660 14,000 13,252
Managing Director of the Company 1994 130,000 595,000 42,363 14,000 20,371
and Director of Equity Capital 1993 130,000 646,500 97,754 55,300 20,910
Markets of Piper Jaffray
Dan L. Lastavich 1995 135,000 460,000 36,741 14,000 13,252
Managing Director of the Company 1994 130,000 505,000 33,243 14,000 20,371
and Director of Retail Sales of 1993 130,000 748,000 84,112 54,000 21,006
Piper Jaffray
</TABLE>
(1) Includes for the years indicated performance bonuses earned pursuant to the
Company's executive compensation program. See "Report of the Executive
Compensation Committee" herein.
(2) 1993 and 1994 bonus for Mr. Duff includes commissions of $403,951 and
$230,610, respectively.
(3) Fiscal 1995 amounts represent payments in-lieu-of contributions to the
Trust. See "Report of the Executive Compensation Committee" herein.
(4) Includes for fiscal 1994 and 1993, respectively, shares subject to options
granted pursuant to the Omnibus Stock Plan which were voluntarily forfeited
in December 1994 as follows: for Mr. Piper, 11,000 and 41,000; Mr. Ellis
11,000 and 41,000; Mr. Huber, 7,000 and 27,000; and Mr. Lastavich, 7,000
and 27,000.
(5) Includes for fiscal 1995 $12,502 to be contributed by the Company to the
Trust for each of the named individuals. See "Report of the Executive
Compensation Committee" herein.
(6) Includes for fiscal 1995 matching contributions of $750 made by the Company
to the Piper Jaffray Companies 401(k) Plan for each of the named
individuals. See "Report of the Executive Compensation Committee" herein.
(7) Effective January 1, 1996, Mr. Ellis will no longer be Chief Operating
Officer of the Company or President and Chief Operating Officer of Piper
Jaffray.
(8) Effective January 1, 1996, Mr. Duff will become President of Piper Jaffray.
STOCK OPTIONS
The following table summarizes option grants made during the fiscal year
ended September 30, 1995 to the executive officers named in the Summary
Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF
STOCK APPRECIATION
FOR
PERCENT OF OPTION TERM (3)
OPTIONS TOTAL
GRANTED OPTIONS GRANTED EXERCISE EXPIRATION
NAME (1) (2) PRICE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Addison L. Piper 22,000 13.5% $10.625 1/25/2005 $380,754 $606,287
William H. Ellis 22,000 13.5% $10.625 1/25/2005 380,754 606,287
Andrew S. Duff 27,000 16.6% $10.625 1/25/2005 467,289 744,080
Bruce C. Huber 14,000 8.6% $10.625 1/25/2005 242,298 385,819
Dan L. Lastavich 14,000 8.6% $10.625 1/25/2005 242,298 385,819
</TABLE>
(1) Options granted pursuant to the Omnibus Stock Plan. Options vest over the
first year of the ten-year option term. The options were granted at the
fair market value of the shares subject to the option on the date of grant.
(2) Reflects the percent of options granted to employees during the fiscal year
ended September 30, 1995 under the Omnibus Stock Plan.
(3) Potential realized values shown above represent the potential gains based
upon annual compound price appreciation of 5% and 10% from the date of
grant through the full option term. The actual value realized, if any, on
stock option exercises will be dependent upon overall market conditions and
the future performance of the Company and its common stock. There is no
assurance that the actual value realized will approximate the amounts
reflected in this table.
The following table summarizes option exercises during the fiscal year ended
September 30, 1995 by the executive officers named in the Summary
Compensation Table, and the value of their unexercised options at September
30, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED ON OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END (2)
EXERCISE VALUE REALIZED UNEXERCISABLE EXERCISABLE
NAME (1) (2) (SHARES)(3) (SHARES)(4) UNEXERCISABLE EXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Addison L. Piper 3,800 $28,436 27,650 109,170 $ 99,852 $494,955
William H. Ellis 0 0 26,200 84,750 95,110 260,586
Andrew S. Duff 0 0 28,700 0 108,598 0
Bruce C. Huber 0 0 17,400 49,800 63,139 100,400
Dan L. Lastavich 1,400 10,477 14,000 70,300 54,250 293,848
</TABLE>
(1) Includes shares acquired upon the exercise of options granted pursuant to
the Book Value Plan as follows: for Mr. Piper, 3,800; and Mr. Lastavich,
1,400.
(2) Value realized and value of unexercised options for options granted
pursuant to the Plan are calculated by determining the difference between
the fair market value of the shares underlying the options at exercise or
at September 30, 1995, as applicable, and the exercise price of the
options. Value realized and value of unexercised options for options
granted pursuant to the Book Value Plan are calculated by determining the
difference between (i) the greater of book value of the shares underlying
the options or the fair market value of the freely transferable shares into
which such shares are exchangeable at exercise or at September 30, 1995, as
applicable, and (ii) the exercise price of the options.
(3) Includes shares subject to options granted pursuant to the Book Value Plan
as follows: for Mr. Piper, 5,650; Mr. Ellis, 4,200; Mr. Duff, 1,700; and
Mr. Huber, 3,400.
(4) Includes shares subject to options granted pursuant to the Book Value Plan
as follows: for Mr. Piper, 9,100; Mr. Ellis, 6,200; Mr. Huber, 1,800; and
Mr. Lastavich, 6,700.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee (the "Committee") of the Board of
Directors is responsible for establishing compensation policies for all
executive officers of the Company, including the five most highly compensated
executive officers of the Company named in the accompanying tables. The
Committee establishes the total compensation for the executive officers in
light of these policies. The Committee is composed entirely of non-employee
directors.
The following report describes the Company's executive compensation program
and discusses the factors considered by the Committee in determining the
compensation of the Company's Chief Executive Officer and other executive
officers for its 1995 fiscal year.
COMPENSATION PHILOSOPHY
The goals for the executive compensation program are to:
* motivate executives to assist the Company in achieving superior levels
of financial and stock performance by closely linking executive
compensation to performance in those areas; and
* attract, retain and motivate top calibre executives by providing
compensation and compensation opportunities that are comparable to
those offered by other leading companies in the financial services
industry.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
The elements of the executive compensation program are designed to meet the
Company's compensation philosophy. Currently, the executive compensation
program is comprised of annual cash compensation and longer-term stock
compensation.
Annual cash compensation consists of base salary and a performance bonus. For
lower-level employees, salaries are set to be competitive for the industry or
marketplace, as appropriate, and bonuses are designed to represent a
relatively small percentage of annual cash compensation. For more senior,
higher-level employees, base salaries are in the low-to-average range for the
financial services industry and bonuses constitute a high percentage of
annual cash compensation. Higher-paid employees may also receive a cash
payment in lieu of an ESOP contribution which may arise when the employee's
share of the Company's calculated ESOP contribution is in excess of IRS
limitations. Such excess ESOP payments, shown under "Other Annual
Compensation" in the Summary Compensation Table, are made in December or
January for the previous fiscal year and are a meaningful percentage of cash
compensation only in a year of exceptional earnings performance by the
Company.
The Company's bonus pools are based either upon the Company's earnings
performance for the year, or upon business unit revenue and earnings
performance. The Company's Chief Executive Officer, Chief Operating Officer
and certain other executive officers whose responsibilities primarily focus
on administrative and operational aspects of the Company are paid bonuses
semi-annually from a maximum bonus pool of 10% (6.2% actual for fiscal 1995)
of the Company's income before taxes after adding back certain litigation
settlement expenses. Such bonuses are paid pursuant to the 1995 Executive
Performance Bonus Plan (the "Executive Performance Bonus Plan"), approved by
shareholders at the 1995 Annual Meeting of Shareholders. Amounts paid
pursuant to the Executive Performance Bonus Plan are intended to qualify as
performance-based compensation within the meaning of Section 162(m) of the
Internal Revenue Code, as amended. All other executive officers are paid
bonuses from bonus pools based upon the operating income of their respective
business units and, where appropriate, on the firmwide revenues supported by
the business unit.
The structure and accrual rates for the corporate and various business unit
bonus pools are reviewed annually by the Committee. Performance bonus awards
for the executive officers are initially determined by the Chief Executive
Officer and Chief Operating Officer and are submitted to the Committee for
discussion and approval. An executive officer's individual share of his or
her respective bonus pool is based upon the officer's duties and
responsibilities, individual performance and future potential. Many of these
assessments are subjective in nature and are made annually on a case-by-case
basis.
Long-term, stock-based compensation has previously consisted of modest grants
of incentive stock options (ISOs) under the Company's 1985 Executive
Incentive Stock Option Plan (the "Stock Option Plan"). In fiscal 1992, the
Committee and management, in consultation with an independent compensation
consultant, concluded that stock-based compensation opportunities to
executive officers were inadequate. To give the Company greater flexibility
in the type and size of stock-based awards, the Company adopted the Omnibus
Stock Plan allowing for grants of ISOs, non-qualified stock options, stock
appreciation rights, and time-lapse and performance restricted stock. The
Omnibus Stock Plan was approved by shareholders at the 1993 Annual Meeting of
Shareholders.
Concurrent with the approval of the revised Omnibus Stock Plan, the Committee
revised its approach to providing stock-based compensation to the Company's
executive officers by adopting in principle a five-year schedule of grants
composed of a large grant in the first year and substantially smaller annual
grants in each of the following four years. If the Company were to achieve
targeted performance during the five-year period beginning fiscal 1993, the
options granted under the schedule would have a targeted value of
approximately 15% of an executive officer's cash compensation during the
period. The Committee believes these grants are more in line with external
competitive opportunities and provide a stronger, more direct motivation to
executive officers to increase shareholder value.
Accordingly, pursuant to the schedule of grants adopted in fiscal 1993, the
Committee awarded stock options totaling 580,000 shares in fiscal 1993 and
150,000 shares in fiscal 1994. All options so awarded vest immediately, have
a ten-year term, an exercise price equal to the fair market value on the date
of grant ($14.50 in fiscal 1993, $16.50 in fiscal 1994) and are first
exercisable after one year.
In December 1994, the Committee approved the grant of stock options totaling
606,850 shares in January 1995 under the Omnibus Stock Plan to 732 Managing
Directors, Senior Vice Presidents and Vice Presidents of the Company and its
subsidiaries. Also in December 1994, each of the Company's executive officers
voluntarily elected to forfeit one-half of the options granted to them in
each of the past two fiscal years under the Omnibus Stock Plan, representing
an aggregate of 306,000 shares, allowing for more meaningful grants to other
officers of the Company without additional dilution to the Company's
shareholders.
Since 1983, the Company has offered its senior officers, including the
Company's executive officers, shares of the Company's common stock and
options to purchase such shares pursuant to the 1983 Book Value Plan. While
there is a relatively modest compensation expense associated with the Book
Value Plan, it was not designed nor has it been used to provide additional
compensation, but rather to provide a convenient and attractive method for
officers to invest their personal investment assets in the common stock of
the Company. Since approximately all of the 3,200,000 shares authorized for
issuance under the Book Value Plan have been issued and are currently
outstanding, no new offerings under this plan have been made since January
1993 nor are contemplated by the Committee at this time.
The Committee additionally approves long-term incentive awards to certain
officers of Piper Capital Management Incorporated, a wholly-owned subsidiary
of the Company ("Piper Capital"). From 1985 through 1994, these awards
consisted of shares in the Piper Capital Management Incorporated 1985 Phantom
Stock Incentive Bonus Plan (the "Piper Capital Phantom Share Plan"), a
deferred compensation plan in which amounts deferred change in value based on
the pre-tax earnings of Piper Capital for any particular year. Beginning in
1995, these awards consist of options granted pursuant to the Piper Capital
Management Incorporated 1995 Phantom Option Incentive Bonus Plan (the "Piper
Capital Phantom Option Plan"), a long-term incentive plan in which the
ultimate payment to participants is based on the increase in the pre-tax
earnings of Piper Capital over the holding period of the options. Both the
Piper Capital Phantom Share Plan and Piper Capital Phantom Option Plan are
meant to attract and retain senior portfolio managers and other key
executives and to reward them consistent with the long-term results of Piper
Capital.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Piper's base salary at the beginning of fiscal 1995 was $200,000. His
salary was not changed during the past three fiscal years. Mr. Piper's base
salary was set by the Committee in accordance with the base salary policy
described above.
Mr. Piper's performance bonus for fiscal 1995 was $500,000, an 11% increase
from fiscal 1994. His performance bonus was based in part on the company's
pre-tax earnings performance as described earlier. Certain litigation
settlement expenses were added back to the pre-tax bonus calculation, with
the total bonus amount subsequently moderated for the continuing Company
exposure related to funds managed by Piper Capital. Additional factors
considered in determining Mr. Piper's performance bonus include satisfactory
performance in the areas of strategic planning, promotion of the Company and
its mission, advocacy of employment diversity, management development,
community participation and other matters affecting the short and long-term
success of the Company.
Due to the nature of Mr. Piper's and Mr. Ellis' duties, the Committee has
authorized similar performance bonus payments to each individual over the
past few years. In fiscal 1995, the performance bonus represented
approximately 67% of Mr. Piper's cash compensation.
Mr. Piper received stock options in January to purchase 22,000 shares of
common stock under the Omnibus Stock Plan in accordance with the stock-based
compensation policy described above.
The Executive Compensation Committee has available to it surveys showing
competitive compensation rates within the financial services industry,
including many of the companies included in the Performance Graph. The
Committee has also met at various times with an independent executive
compensation consultant as it considered the long-term incentive plan design
change and cash and stock awards under the overall program.
THE EXECUTIVE COMPENSATION COMMITTEE
David Stanley, Chairman
Ralph W. Burnet
Kathy Halbreich
John L. McElroy, Jr.
Robert S. Slifka
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
common stock of the Company for the last five fiscal years with the
cumulative total return of the Standard & Poor's 500 Stock Index (the "S&P
500 Index") and the Lipper Analytical Brokerage Firm Composite Stock Price
Index (the "Lipper Composite Index") over the same period (assuming the
investment of $100 in each on September 30, 1990, and the reinvestment of all
dividends). The Lipper Composite Index is comprised of 30 publicly held
regional and national securities firms, including the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
PIPER JAFFRAY COMPANIES, S&P 500 INDEX AND LIPPER COMPOSITE INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FISCAL YEAR ENDING SEPTEMBER
1990 1991 1992 1993 1994 1995
Piper Jaffray Companies Inc. 100.00 239.35 276.98 435.28 272.68 409.78
S&P 500 Index 100.00 131.10 145.57 164.25 170.29 220.88
Lipper Composite Index 100.00 188.84 214.64 377.09 288.76 452.10
</TABLE>
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Certain directors and officers of the Company (and members of the immediate
families of such persons) maintained margin accounts with Piper Jaffray
during the fiscal year ended September 30, 1995, and had margin account
indebtedness during such year. All such indebtedness was incurred in the
ordinary course of business, on substantially the same terms (including
interest rates and collateral) as those prevailing at the time for comparable
transactions with other persons, and did not involve more than the normal
risk of collectibility or present other unfavorable features.
COMPLIANCE WITH REPORTING REQUIREMENTS
As required by Securities and Exchange Commission rules under Section 16(a)
of the Securities Exchange Act of 1934, and based solely upon review of
copies of forms submitted to the Company during and with respect to the 1995
fiscal year, all reports required under Section 16(a) were filed on a timely
basis.
APPOINTMENT OF AUDITORS
At the meeting, a vote will be taken on a proposal to ratify the appointment
of Deloitte & Touche LLP by the Board of Directors to act as independent
auditors of the Company for the fiscal year ending September 30, 1996.
Deloitte & Touche LLP are independent accountants and auditors who have
audited the accounts of Piper Jaffray annually since 1937 and of the Company
since its incorporation in February 1974.
Representatives of Deloitte & Touche LLP will attend the shareholder meeting.
They will have the opportunity to make a statement if they desire to do so,
and will be available to answer appropriate questions that may be asked by
shareholders.
DEADLINE FOR SUBMISSION OF
SHAREHOLDERS PROPOSALS
Proposals of shareholders intended to be presented at the next Annual Meeting
of Shareholders must be received by the Secretary of the Company, Piper
Jaffray Tower, 222 South Ninth Street, P.O. Box 28, Minneapolis, Minnesota
55440-0028, no later than August 21, 1996, for inclusion in the proxy
statement for such annual meeting.
By Order of the Board of Directors
/s/ David E. Rosedahl
David E. Rosedahl
Secretary
PIPER JAFFRAY COMPANIES INC.
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
TIME
WEDNESDAY, JANUARY 24, 1996
AT 3:00 P.M. (CENTRAL STANDARD TIME)
PLACE
LUTHERAN BROTHERHOOD AUDITORIUM
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA
IMPORTANT
PLEASE DATE AND SIGN YOUR
PROXY CARD AND RETURN IT PROMPTLY
USING THE ENCLOSED REPLY ENVELOPE.
PIPER JAFFRAY COMPANIES INC.
PIPER JAFFRAY TOWER
222 SOUTH NINTH STREET
MINNEAPOLIS, MINNESOTA 55402
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints David E. Rosedahl, Pamela J. Schmidt and
Paula H. Phillippe, and each of them, as Proxies, each with the power to
appoint his or her substitute, and hereby authorizes them to represent and to
vote, as designated below, all the shares of capital stock of Piper Jaffray
Companies Inc. held of record by the undersigned on December 8, 1995, at the
Annual Meeting of Shareholders to be held on January 24, 1996, or any
adjournment thereof.
PROXY
1. ELECTION OF DIRECTORS
R. BURNET, W. ELLIS, K. HALBREICH, J. MCELROY, JR., A. PIPER,
R. SLIFKA AND D. STANLEY
[ ] FOR all nominees listed above
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
to vote for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP as the
independent auditors of the Company for the 1996 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2. THE PROXIES ARE AUTHORIZED TO VOTE THIS
PROXY IN THEIR DISCRETION WITH RESPECT TO OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
______________________________________
Signature
______________________________________
Signature if held jointly
Dated: _______________________________
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
