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DISCUSSION ON EQUITY CAPITAL MARKETS

Tuesday, December 12th, 2006

Chris Christina Principal (612) 303-8521 Christie.L.Christina@pjc.com

Elissa Kluever Associate (612) 303-6378 Elissa.M.Kluever@pjc.com

PIPER JAFFRAY MANAGEMENT COMMITTEE
Andrew Duff
Chairman & Chief Executive Officer

Tom Schnettler
Vice Chairman & Chief Financial Officer

Todd Firebaugh
Chief Administrative Officer

Jim Chosy
General Counsel

Jon Salveson
Head of Investment Banking

Frank Fairman
Head of Public Finance Services

Bob Peterson
Head of Equities

Capital Markets

Ben May
Head of High -Yield & Structured Products

Institutional Sales & Sales Trading Trading Research
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CORPORATE & INSTITUTIONAL SERVICES Investment Banking and Equities Groups Investment Banking Existing Industries  Consumer  FIG  Health Care  Technology New Industries  Alternative Energy  Business Services  Industrial Growth Equities Capital Markets Equity Capital Markets Convertible Originations Corporate & Venture Services Distribution Institutional Sales & Sales Trading Research Investment Research (Equity & Fixed Income) Trading 3 .

EQUITY CAPITAL MARKETS TEAM Organization Chart Chad Abraham Head of Equity Capital Markets Maura Stoltz Hasan Executive Assistant Origination John Baumgartner Principal Consumer & FIG Execution Chris Christina Principal Consumer & FIG Steve Schmidt Vice President Technology Neil Riley Vice President Health Care & Technology John Crowther Associate Elissa Kluever Associate Greg Klancher Associate Jonathan Jewett Analyst PIPEs / RDs David Stadinski Managing Director Chris Christina Principal Eric Helenek Vice President Chad Huber Analyst 4 .

EQUITY CAPITAL MARKETS Type of Transactions Completed on the Equity Capital Markets (ECM) Desk Types of transactions completed through the Piper Jaffray Equity Capital Markets desk Initial Public Offerings ‡ An initial public offering (IPO) is when a private company sells its stock for the FIRST time in the public markets ‡ 146 IPOs have been completed in 2006. with a high of 373 completed in 2000 and a low of 70 completed in 2002 5 . raising nearly $33 billion in capital ‡ Piper has completed 28 IPOs in 2006. raising over $4 billion in capital ‡ The average number of IPOs completed since 2000 has been 163.

raising nearly $92 billion in capital ‡ Piper has completed 43 follow-ons in 2006. with a high of 520 completed in 2004 and a low of 346 completed in 2002 Additional Types of Offerings ± (Follow-on Offerings) ‡ Underwritten Shelf Takedowns ‡ 144 Block Trades ‡ PIPEs (Private Investment in Public Equity) ‡ Registered Direct Offerings 6 . either primary shares or shares from selling shareholders.EQUITY CAPITAL MARKETS Type of Transactions Completed on the Equity Capital Markets (ECM) Desk Types of transactions completed through the Piper Jaffray Equity Capital Markets desk Follow-on Offerings ‡ A follow-on offering is when an already public company sells its stock. raising over $7 billion in capital ‡ The average number of follow-ons completed since 2000 has been 416. in the public markets ‡ 457 follow-ons have been completed in 2006.

000 $12.500 Initial Public Offering June 25th. 2005 Rule 144 Block Trades August/Sept 2005 Bought Deal June 15th.710.000 $17.338 $57.BROAD DEPTH OF EQUITY OFFERING ALTERNATIVES There is a Growing Continuum of Offering Alternatives for Equity Issuers« Traditional Follow-on Initial Public Offering (IPO) Institutional) Registered Direct (RD) Underwritten Shelf Takedown Bought Deal Private Investment in Public Equity (PIPE) Block Trade (Rule 144 $64.232. 2005 Traditional Follow-on November 8th. 1999 Traditional Follow-on May 25th.932 $95.089.000 Initial Public Offering May 6th.687.000 $120. 2004 Rule 144 Block Trade August 26th.615.960.000 $16. 2004 Initial Public Offering January 28th. 2006 Initial Public Offering May 1st. 2005 Bought Deal June 14th. 2006 7 .000.737.845.000.500 $44.500 $97.740. 2000 PIPE August 9th. 2006 $54.000 $40.

allocating stock. CoLead Manager and Co-Manager depending upon the deal ‡ Sole-Bookrunner: ECM desk functions as the lead manager on the deal and is responsible for coordinating the roadshow. receives junior economics and far right position on cover 8 Deal economics depend upon the status and maturity of the issuer . billing & delivering the stock offered in the issue and stabilization in the immediate aftermarket. however. but split with another manager ‡ Co-Lead Manager: no bookrunning responsibilities. receives differentiated economics on the deal and a better position on the cover ‡ Co-Manager: most junior participating management position with no bookrun responsibilities.EQUITY CAPITAL MARKETS Piper¶s Involvement in Equity Capital Markets Offerings Piper Roles Piper functions as a Bookrunner. offers additional sponsorship to issuer. building indications of interest. pricing the deal. receives senior economic fees on the deal and furthest to the left on the cover ‡ Joint-Bookrunner: same responsibilities as sole-bookrunner.

underwriting and management fees fixed ‡ Bought Deal Spread: bank¶s principal capital put at risk to buy shares from the issuer/selling shareholder at a discount to last trade and in turn sold to institutions at a discount from last trade and a premium to the price paid to the issuer/selling shareholder Deal economics depend upon the status and maturity of the issuer 9 . bookrunner(s) frequently capped. underwriting fees. and the selling concession ‡ Jump-Ball: subset of the selling concession based on who the designated account gives credit for the sale. which is comprised of management fees.EQUITY CAPITAL MARKETS Piper¶s Involvement in Equity Capital Markets Offerings Piper functions as a Bookrunner. CoLead Manager and Co-Manager depending upon the deal Deal Economics ‡ Fixed Economics: set gross spread to the banks on the offering.

PIPER JAFFRAY COVER POSITIONS Piper as Sole-Bookrunner Piper as Joint-Bookrunner Piper as Co-Lead Manager Piper as Co-Manager 10 .

817.000 $44.000 IPO June 2006 Follow-on June 2006 Follow-on June 2006 11 .925.500 $247.032 $16.737.845.PIPER JAFFRAY BOOKRUN OFFERINGS $95.966 Follow-on August 2006 Follow-on August 2006 Registered Direct August 2006 $62.560.338 $20.779.

EQUITY CAPITAL MARKETS Overview of Equity Capital Markets Primary roles of the groups within Equity Capital Markets ± Origination and Execution Origination of Transaction with Investment Banking Origination Execution Discussion of Economics and Number of Managers on Deal Size and Time of Transaction Constant Communication with Management during the Roadshow Marketing the Deal with Sales ± Roadshow Layout Distribution Strategy Allocation Decisions Deal Pricing Opening and Trading Process 12 .

and Industry Conferences Role Update of Equity Capital Markets Conditions/Trends Deal Strategy. Structure & Timing Company Positioning & Piper Jaffray Marketing Valuation Discussion Introduction Process Presentation Coaching Sales Force Education Institutional Sales Feedback Research Analyst Feedback Order Book Updates Market Updates Institutional Account Profiles Recap of Roadshow and Order Book Offering Distribution Overview Aftermarket Trading Intelligence Trading Updates Green Shoe Management Trading Monitoring/Account Intelligence 13 Prior to Roadshow During Roadshow Pricing Aftermarket . Pitches.CORPORATE CLIENT COMMUNICATION The Role of the Equity Capital Markets Team Situation Client Targeting.

EQUITY CAPITAL MARKETS Equity Capital Markets Role in deal offering The role of Equity Capital Markets in the pricing of an offering is to balance the desires of the corporate client and institutional client Equity Capital Markets Desk Corporate Client & Investment Banker  Wants to sell for the highest price  Maximize offering value for the corporate client  Maximize profit for the firm Institutional Client & Sales Force  Wants to buy for the lowest price  Generate increased value for the Institutional client  Increase likelihood of long-term stock appreciation The goal is to find the so-called ³market-clearing´ price that pleases both parties 14 .

Open = $17.G.950. Edwards.000 4.500 3. pay all accrued and unpaid dividends due to preferred shareholders $63. 90 orders of 10% or greater Offer = $14. +33% from offer price Piper Jaffray served as the sole sell-side advisor to Golf Galaxy in their sale to Dick¶s Sporting Goods (11/13/06) at a price of $18.333.GOLF GALAXY CASE STUDY Golf Galaxy priced an upsized.542.00 3.$13.9 million Piper Jaffray William Blair A. 2005 ‡ ‡ ‡ ‡ The Company is headquartered in Eden Prairie.00.05.000 3.000 1. Minnesota and is a leading specialty retailer of golf equipment.500 $148.00.00 . 85% of 1-on-1 meetings converted into orders.000 Piper Jaffray Sole Bookrun Initial Public Offering July 29th. 210 accounts indicating on the deal. $63.$13 filed range Golf Galaxy Inc.6 million initial public offering at $14.595.61. general corporate purposes. one point above its $11 . 14 Cities (Domestic Only).82 (+32% from IPO) Order Book 1 Day Aftermarket Performance Post-IPO/ Aftermarket 15 .542. Close = $18. apparel and accessories ‡ ‡ ‡ ‡ Transaction Highlights ‡ Roadshow 9 Days.000. approximately 175 accounts on the roadshow via 62 institutional 1-on-1 meetings and 6 group functions 16x oversubscribed.00 $11. (NASDAQ: GGXY) ‡ ‡ ‡ ‡ ‡ Initial Public Offering Filing Range Shares Filed Shares Offered Shares Offered with Green Shoe ± Primary ± Secondary Post-Deal Market Capitalization Sole Bookrunner Co-Lead Manager Co-Managers Use of Proceeds 7/29/2005 at $14. Wedbush Morgan Fund new store openings.

00 per share ± above the $11-$13 filing range. Golf Galaxy presented in front of 175 institutional investors via 62 1-on-1 appointments and 6 group functions Week of July 13th Week of July 20th Week of July 27th Pricing on July 29th IPO is priced at $14. Denver. Piper Jaffray receives orders for 16x the number of shares that are being offered in the deal. Golf Galaxy begins its roadshow. The roadshow will take them to institutional investors throughout the United States. The company management travels with the Piper Jaffray investment banker and a member of the institutional sales force. The roadshow begins in Chicago and continues through Kansas City. 16 .Introduction GOLF GALAXY CASE STUDY IPO Execution Timeline Week of May 16th File IPO Deal kick-off. Los Angeles. Minneapolis and Milwaukee. Golf Galaxy travels to the Piper Jaffray office and presents its story to the sales force. 85% of 1-on-1 meeting attendees submit and order to Piper Jaffray. Company continues its roadshow through Boston. Piper Jaffray research analyst gives a ³teach-in´ to the sales force giving them a better understanding of the business and its growth outlook. This is the same presentation that will be used on the IPO roadshow with institutional investors. All-in-all. Roadshow ends on Thursday afternoon. Piper Jaffray¶s Equity Capital Markets team works to allocate all of the shares to the institutional investors. New York. Baltimore and Philadelphia. San Diego. San Francisco.

160 160 150 149 137 124 124 121 119 118 110 80 78 71 66 62 59 54 47 47 37 36 35 35 32 IPOs in 2006 YTD Rank 1 2 3 4 5 5 5 8 9 10 10 12 13 14 14 16 17 18 19 19 19 22 22 24 25 Manager J. UBS Securities Inc.P. KeyBanc Capital Markets Keefe Bruyette & Woods Inc. JMP Securities LLC Pacific Growth Equities Lazard Capital Markets N o. Raymond James RBC Capital Markets William Blair & Co Keefe Bruyette & Woods Inc. Edwards & Sons Inc. Cowen & Co.L. Credit Suisse Lehman Brothers Morgan Stanley Deutsche Bank Securities Inc.. Deutsche Bank Securities Inc. Citigroup Global Markets Inc. A. CIBC World Markets Jefferies & Co Inc. Piper Jaffray & Co Cowen & Co. Inc N o.G.G. Edwards & Sons Inc.C. Citigroup Global Markets Inc. RBC Capital Markets CIBC World Markets A. Goldman Sachs & Co.P. Wachovia Capital Markets LLC Goldman Sachs & Co. LLC Jefferies & Co Inc. Stifel Nicolaus & Co JMP Securities LLC Robert W. Bear Stearns & Co Inc.L. Banc of America Securities Merrill Lynch & Co. Lehman Brothers Wachovia Capital Markets LLC Thomas Weisel Partners L. Morgan Securities Inc. Raymond James Thomas Weisel Partners L. LLC Piper Jaffray & Co Morgan Stanley Bear Stearns & Co Inc.. UBS Securities Inc.C. Baird & Co.EQUITY CAPITAL MARKETS OVERVIEW Piper Jaffray has consistently been a Top Equity Underwriter« IPOs. Follow-ons & Convertibles in 2006 YTD Rank 1 1 3 4 5 6 6 8 9 10 11 12 13 14 15 16 17 18 19 19 21 22 23 23 25 Manager J. 46 40 35 34 32 32 32 31 29 28 28 27 26 24 24 19 17 13 12 12 12 11 11 8 7 . Credit Suisse Banc of America Securities Merrill Lynch & Co. Morgan Securities Inc.

Morgan Securities Inc. Rodman & Renshaw. Morgan Stanley Lehman Brothers Piper Jaffray & Co J. 36 31 25 22 21 21 20 20 20 15 15 12 Piper Jaffray continues to be one of the most active managers across key growth sectors Rank 1 2 2 4 5 5 7 8 8 8 11 12 Manager Wachovia Capital Markets LLC Piper Jaffray & Co J. Thomas Weisel Partners L. Deutsche Bank Securities Inc. Wachovia Capital Markets LLC Banc of America Securities J. Citigroup Global Markets Inc. Morgan Securities Inc. Deutsche Bank Securities Inc.C. Lehman Brothers Goldman Sachs & Co. O'Neill & Partners.. Piper Jaffray & Co N o.C. L. Health Care Rank 1 2 3 3 5 6 6 8 9 9 11 11 Manager Cowen & Co. 28 26 23 22 21 21 21 20 19 17 16 15 18 . Morgan Securities Inc.. Banc of America Securities Merrill Lynch & Co. Sandler. Inc. 17 16 16 15 13 13 12 10 10 10 9 8 Rank 1 2 3 4 5 5 7 7 7 10 10 15 Manager Keefe Bruyette & Woods Inc.P.P.EQUITY CAPITAL MARKETS OVERVIEW Sector Rank ± IPOs & Follow-On Offerings Completed in 2006 Consumer Financial N o.P..L. Merrill Lynch & Co. J. Cowen & Co. Citigroup Global Markets Inc. Thomas Weisel Partners L. Citigroup Global Markets Inc. Cowen & Co.P. N o.P. Bear Stearns & Co Inc.C. Morgan Securities Inc. Credit Suisse UBS Securities Inc.L. Goldman Sachs & Co. 27 25 21 21 20 19 19 17 16 16 15 15 Technology Rank 1 2 3 4 5 5 5 8 9 10 11 12 Manager Credit Suisse Goldman Sachs & Co. LLC Lehman Brothers Credit Suisse Thomas Weisel Partners L. Deutsche Bank Securities Inc. LLC Piper Jaffray & Co UBS Securities Inc. CIBC World Markets Banc of America Securities Morgan Stanley Merrill Lynch & Co. LLC UBS Securities Inc. Banc of America Securities N o.L.

8 $20 $14.6 $40 $37.0 $33.8 $39.5 $44.9 $42.0 $24.4 $71.EQUITY CAPITAL MARKETS OVERVIEW Historical IPO Volume Number of IPOs by Year Number of IPOs Completed 600 500 409 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 80 70 76 252 531 450 373 210 170 146 IPO Capital Raised by Year $80 $69.2 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 19 .1 $35.2 Capital Raised ($B) $60 $46.

2 $111.0 $92.EQUITY CAPITAL MARKETS OVERVIEW Historical Follow-on Volume Number of Follow-ons by Year 700 Number of FOs Completed 600 500 400 300 200 100 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 464 415 398 374 431 346 617 628 520 424 457 Follow-on Capital Raised by Year $150 Capital Raised ($B) $125 $100 $74.6 $81.8 $85.4 $84.2 $69.8 $90.9 $124.3 $68.3 $75.2 $75 $50 $25 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 YTD 20 .

EQUITY CAPITAL MARKETS What is Equity Capital Markets to You? ± Equity Capital Markets is a dedicated resource for equity offering information and analysis. and other equity-linked transactions ± Equity Capital Markets works with our corporate clients. company/underwriter¶s counsel. Investment Banking. follow-on offerings. and Institutional Sales and Sales Trading to manage all aspects of the deal execution process 21 . and broader market information/color ± Equity Capital Markets provides a weekly update of the following: Week in Review Deal Commentary YTD Performance Tables Week Pricings Week Filings Withdrawn/Postponed Industry Calendar YTD Deal Performance Current Backlog League Tables Piper Transactions Equity Capital Markets is a dedicated resource for equity offering information and analysis ± Equity Capital Markets works with Investment Banking to tailor the best advice/approach for IPOs. related trading intelligence.

EQUITY CAPITAL MARKETS Questions? Comments? 22 .