DISCUSSION ON EQUITY CAPITAL MARKETS Tuesday December 12

DISCUSSION ON EQUITY CAPITAL MARKETS Tuesday, December 12 th, 2006 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 Todd Firebaugh Tom Schnettler Vice Chairman & Chief Financial Officer Chief Administrative Officer Jim Chosy Jon Salveson General Counsel Head of Investment Banking Frank Fairman Bob Peterson Head of Public Finance Services Head of Equities Capital Markets Ben May Institutional Sales & Sales Trading Head of High -Yield & Structured Products Trading Research 2

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

EQUITY CAPITAL MARKETS TEAM Organization Chart Chad Abraham Maura Stoltz Hasan Head of Equity Capital Markets Executive Assistant Execution Origination John Baumgartner Steve Schmidt Christina Neil Riley Principal Consumer & FIG Vice President Technology Principal Consumer & FIG Vice President Health Care & Technology John Crowther Elissa Kluever Greg Klancher Associate Jonathan Jewett Analyst PIPEs / RDs David Stadinski Christina Managing Director Principal Eric Helenek Chad Huber Vice President 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, 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, with a high of 373 completed in 2000 and a low of 70 completed in 2002 5

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, either primary shares or shares from selling shareholders, in the public markets • 457 follow-ons have been completed in 2006, raising nearly $92 billion in capital • Piper has completed 43 follow-ons in 2006, raising over $7 billion in capital • The average number of follow-ons completed since 2000 has been 416, 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

BROAD DEPTH OF EQUITY OFFERING ALTERNATIVES There is a Growing Continuum of Offering Alternatives for Equity Issuers… Traditional Follow-on Initial Public Offering (IPO) Registered Direct (RD) Underwritten Shelf Takedown Private Investment in Public Equity (PIPE) Bought Deal Block Trade (Rule 144 Institutional) $64, 687, 500 $97, 232, 500 $44, 845, 338 $57, 960, 000 $12, 000 Initial Public Offering Traditional Follow-on Bought Deal Initial Public Offering PIPE May 6 th, 2005 November 8 th, 2005 June 14 th, 2006 May 1 st, 2000 August 9 th, 2006 $54, 740, 000 $40, 089, 000 $17, 710, 000 $120, 000 $16, 615, 932 $95, 737, 500 Initial Public Offering Traditional Follow-on Rule 144 Block Trade Initial Public Offering Rule 144 Block Trades Bought Deal 25 th, August/Sept 2005 June 15 th, 2006 June 1999 May 2004 August 26 th, 2004 January 7 28 th, 2005

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

EQUITY CAPITAL MARKETS Piper’s Involvement in Equity Capital Markets Offerings Piper functions as a Deal Economics depending upon the deal • Fixed Economics: set gross spread to the banks on the offering, which is comprised of management fees, underwriting fees, and the selling concession Deal economics depend • Jump-Ball: subset of the selling concession based on who the designated account gives credit for the sale, bookrunner(s) frequently capped; underwriting and management fees fixed Bookrunner, Co-Lead Manager and Co-Manager upon the status and maturity of the issuer • 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 9

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

PIPER JAFFRAY BOOKRUN OFFERINGS 11

EQUITY CAPITAL MARKETS Overview of Equity Capital Markets Primary roles of the Origination and Execution Origination Capital Markets – 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 Execution groups within Equity Origination of Transaction with Investment Banking Distribution Strategy Allocation Decisions Deal Pricing Opening and Trading Process 12

CORPORATE CLIENT COMMUNICATION The Role of the Equity Capital Markets Team 13

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

GOLF GALAXY CASE STUDY Golf Galaxy priced an upsized, Golf Galaxy Inc. (NASDAQ: GGXY) $63. 6 million initial public offering • Initial Public Offering 7/29/2005 at $14. 00, one point above its $11 - • Filing Range $11. 00 - $13. 00 • • • Shares Filed Shares Offered with Green Shoe – Primary – Secondary 3, 333, 000 3, 950, 000 4, 542, 500 3, 000 1, 542, 500 $13 filed range The Company is headquartered in Eden Prairie, Minnesota and is a leading specialty retailer of golf equipment, apparel and accessories $63, 595, 000 Piper Jaffray Sole Bookrun Initial Public Offering July 29 th, 2005 • Post-Deal Market Capitalization $148. 9 million • • • Sole Bookrunner Co-Lead Manager Co-Managers Piper Jaffray William Blair A. G. Edwards, Wedbush Morgan • Use of Proceeds Fund new store openings, general corporate purposes, pay all accrued and unpaid dividends due to preferred shareholders Transaction Highlights • Roadshow 9 Days, 14 Cities (Domestic Only); approximately 175 accounts on the roadshow via 62 institutional 1 -on-1 meetings and 6 group functions • Order Book 16 x oversubscribed; 210 accounts indicating on the deal; 85% of 1 -on-1 meetings converted into orders; 90 orders of 10% or greater • 1 Day Aftermarket Performance Offer = $14. 00; Open = $17. 05; Close = $18. 61; +33% from offer price • Post-IPO/ Aftermarket 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. 82 (+32% from IPO) 15

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

EQUITY CAPITAL MARKETS OVERVIEW Piper Jaffray has consistently been a Top Equity Underwriter… IPOs, Follow-ons & Convertibles in 2006 YTD IPOs in 2006 YTD

EQUITY CAPITAL MARKETS OVERVIEW Sector Rank – IPOs & Follow-On Offerings Completed in 2006 Consumer Financial Health Care Technology Piper Jaffray continues to be one of the most active managers across key growth sectors 18

EQUITY CAPITAL MARKETS OVERVIEW Historical IPO Volume Number of IPOs by Year IPO Capital Raised by Year 19

EQUITY CAPITAL MARKETS OVERVIEW Historical Follow-on Volume Number of Follow-ons by Year Follow-on Capital Raised by Year 20

EQUITY CAPITAL MARKETS What is Equity Capital Markets to You? Equity Capital Markets is a dedicated resource for equity offering information and analysis – Equity Capital Markets is a dedicated resource for equity offering information and analysis, related trading intelligence, 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 works with Investment Banking to tailor the best advice/approach for IPOs, follow-on offerings, and other equity-linked transactions – Equity Capital Markets works with our corporate clients, Investment Banking, company/underwriter’s counsel, and Institutional Sales and Sales Trading to manage all aspects of the deal execution process 21

EQUITY CAPITAL MARKETS Questions? Comments? 22