UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date (Date of earliest event reported) June 21, 1996
PIPER JAFFRAY COMPANIES INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-7421 41-1233380
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
Piper Jaffray Tower, 222 South 9th Street, Minneapolis, Minnesota 55402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 342-6000
Exhibit Index located at Page 4.
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Item 5. Other Events.
On June 21, 1996, Piper Jaffray Companies Inc. (the "Company") announced that
the Company and the attorneys representing certain shareholders of several
closed-end funds managed by Piper Capital Management Incorporated (Piper
Capital), a wholly owned subsidiary of the Company, reached an agreement in
principle to settle purported class action litigation brought on behalf of fund
shareholders. The agreement in principle, which affects American Government
Income Fund (AGF), American Government Income Portfolio (AAF), American
Opportunity Income Fund (OIF), American Government Term Trust (AGT), American
Strategic Income Portfolios I, II and III (ASP, BSP, and CSP, respectively) and
American Select Portfolio (SLA), requires approval by the U.S. Federal Court and
the Piper Jaffray Companies Inc. board of directors. The terms of the agreement
call for a payment to fund shareholders by the Company and Piper Capital of
approximately $15.5 million, less attorney's fees; an offer to repurchase up to
25 percent of the outsanding shares of AGF, AAF and OIF from current
shareholders by each of the individual funds at Net Asset Value (NAV); and an
offer to repurchase up to 10 percent of the outstanding shares of ASP, BSP, CSP
and SLA from current shareholders by each of the individual funds at NAV.
The $15.5 million settlement will be paid in a combination of $500,000 cash
payable upon preliminary court approval of the definitive settlement agreement,
$5.0 million cash payable upon the effective date of the settlement after final
court approval and payments of $2.5 million on each anniversary of the effective
date for the next four years. The Company will record the settlement charge in
the third quarter ending June 30, 1996.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 (a) Press release dated June 21, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIPER JAFFRAY COMPANIES INC.
/s/ Deborah K. Roesler
DEBORAH K. ROESLER
Chief Financial Officer and Managing Director
Dated June 26, 1996
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INDEX OF EXHIBITS
Exhibit No. Exhibit Form of Filing
99 (a) Press release dated June 21, 1996. (Electronic
Transmission)
<PAGE>
EXHIBIT 99 (a)
FOR IMMEDIATE RELEASE Contact: Marie Uhrich
612-342-6583
Piper Jaffray Companies Announces $15.5 Million
Settlement Agreement in Closed-End Fund Litigation
MINNEAPOLIS - June 21, 1996 - Piper Jaffray Companies Inc. (NYSE: PJC) and
attorneys representing shareholders of several Piper Capital Management
closed-end funds today announced that they have reached an agreement in
principle to settle purported class action litigation brought on behalf of fund
shareholders. The terms of the settlement call for a combination of $15.5
million and share repurchase offers. The settlement has been approved by the
board of directors of each of the settling funds and requires approval of the
Piper Jaffray Companies, Piper Jaffray Inc. and Piper Capital Management boards
of directors.
The agreement affects American Government Income Fund (AGF), American Government
Income Portfolio (AAF), American Opportunity Income Fund (OIF), American
Government Term Trust (AGT), American Strategic Income Portfolios I, II and III
(ASP, BSP and CSP) and American Select Portfolio (SLA). Investors who acquired
shares in these funds during the purported class periods, which include dates
between May 25, 1988, and May 1, 1995, are eligible to submit claims regardless
of whether they are current shareholders in these funds. AGT was dissolved on
Dec. 21, 1995, after a shareholder vote.
The settlement will result in payment to fund shareholders by Piper Jaffray
Companies and Piper Capital Management of $15.5 million, less attorney's fees.
None of the $15.5 million will be paid by the settling funds. The agreement
requires U.S. federal court approval.
The agreement also stipulates that each of AGF, AAF and OIF will offer to
repurchase up to 25 percent of its outstanding shares from current shareholders
at net asset value. If the discounts between net asset value and market price of
these funds do not decrease to 5 percent or less within approximately two years
after the effective date of the settlement, the fund boards will submit
shareholder proposals to convert these funds to an open-end format unless they
determine at that time that it would not be in fund shareholders' best interests
to do so. The fund boards have stated that they currently cannot foresee any
reason why they would not present such a shareholder proposal if the discount
remains greater than 5 percent.
In addition, the agreement stipulates that each of ASP, BSP, CSP and SLA will
offer to repurchase up to 10 percent of its outstanding shares from current
shareholders at net asset value.
The repurchase offers will occur after the effective date of the settlement
following final court approval. Shareholders may elect not to submit their
shares for repurchase, or may submit only a portion of their shares.
"We believe that this is a timely and reasonable resolution to this issue
that will benefit fund shareholders," said Addison L. Piper, Piper Jaffray
Companies chairman and chief executive officer.
Steve Berman, of Hagens & Berman, counsel for the plaintiffs, said he believes
the outcome was excellent considering the terms, timing and certainty of the
result. "This is a great settlement that nets class members substantial value,"
Berman said.
The settlement payments will be made in a combination of $500,000 cash payable
upon preliminary court approval of the definitive settlement agreement, $5.0
million cash payable upon the effective date of the settlement after final court
approval and payments of $2.5 million on each anniversary of the effective date
for the next four years. The Company will record the settlement charge in its
third fiscal quarter ending June 30, 1996.
"After the settlement charge is taken, our financial condition will remain
strong and there will be no effect on day-to-day operations," Piper said.
Eligible settlement class members will be required to show proof of ownership
during the class period and file a claim of loss. Class members can expect to
learn more about the settlement proposal via mail and/or newspaper advertising
in late 1996 or early 1997 or can contact the plaintiffs' attorney, Steve Ber-
man, at 206-623-7292 for more information.
Piper Jaffray Companies Inc. was founded in 1895 and has built a reputation as
one of the nation's premier full-service investment companies. Piper Jaffray
Companies is the parent company of Piper Jaffray Inc., an investment firm with
78 retail sales offices in 17 Midwest, Mountain, Southwest and Pacific Coast
states and capital markets offices in 15 cities. Other subsidiaries include
Piper Capital Management Incorporated, a money management company with
approximately $9 billion under management; and Piper Trust Company, a provider
of trust services to individuals and institutions. Piper Jaffray Inc. is a
member of SIPC, the New York Stock Exchange and other major stock exchanges. For
more information about Piper Jaffray Companies, visit our home page on the
Internet at http://www.piperjaffray.com.
