Document:

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                                                                     Exhibit 4.2

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                             PIPER JAFFRAY COMPANIES

                                       and

                                 MELLON INVESTOR

                                  SERVICES LLC

                            Form of Rights Agreement

                            Dated as of [     ], 2003

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                                TABLE OF CONTENTS

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<Caption>
                                                                                              Page
                                                                                             Number
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<S>                                                                                              <C>
Section 1.   Definitions.........................................................................1

Section 2.   Appointment of Rights Agent.........................................................6

Section 3.   Issue of Right Certificates.........................................................7

Section 4.   Form of Right Certificates..........................................................9

Section 5.   Countersignature and Registration...................................................10

Section 6.   Transfer, Split Up, Combination and Exchange of Right Certificates;
             Mutilated, Destroyed, Lost or Stolen Right Certificates.............................11

Section 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights.......................12

Section 8.   Cancellation and Destruction of Right Certificates..................................14

Section 9.   Availability of Preferred Shares....................................................14

Section 10.  Preferred Shares Record Date........................................................15

Section 11.  Adjustment of Purchase Price, Number of Shares or Number of Rights..................16

Section 12.  Certificate of Adjusted Purchase Price or Number of Shares..........................27

Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power................27

Section 14.  Fractional Rights and Fractional Shares.............................................29

Section 15.  Rights of Action....................................................................31

Section 16.  Agreement of Right Holders..........................................................32

Section 17.  Right Certificate Holder Not Deemed a Stockholder...................................33

Section 18.  Concerning the Rights Agent.........................................................33

Section 19.  Merger or Consolidation or Change of Name of Rights Agent...........................35
</Table>

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<Table>
<Caption>
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                                                                                             Number
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Section 20.  Rights and Duties of Rights Agent...................................................36

Section 21.  Change of Rights Agent..............................................................40

Section 22.  Issuance of New Right Certificates..................................................41

Section 23.  Redemption..........................................................................42

Section 24.  Exchange............................................................................43

Section 25.  Notice of Certain Events............................................................45

Section 26.  Notices.............................................................................46

Section 27.  Supplements and Amendments..........................................................47

Section 28.  Successors..........................................................................49

Section 29.  Benefits of this Agreement..........................................................49

Section 30.  Severability........................................................................49

Section 31.  Governing Law.......................................................................49

Section 32.  Counterparts........................................................................50

Section 33.  Descriptive Headings................................................................50

Section 34.  Determination and Actions by the Board of Directors.................................50
</Table>

Exhibit A    -   Form of Certificate of Designations

Exhibit B    -   Form of Right Certificate

Exhibit C    -   Summary of Rights to Purchase Preferred Shares

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          AGREEMENT (this "AGREEMENT"), dated as of [    ], 2003 between Piper
Jaffray Companies, a Delaware corporation (the "COMPANY"), and Mellon Investor
Services LLC, a New Jersey limited liability company, as rights agent (the
"RIGHTS AGENT").

          The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Company outstanding on ________, 2003 (the
"RECORD DATE"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).

          Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:

          Section 1.    DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:

          (a)    "ACQUIRING PERSON" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the Common Shares of the Company then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as
hereinafter defined) of the Company, (iii) any employee benefit plan of the
Company or any Subsidiary of the Company, (iv) any entity holding Common Shares
for or pursuant to the terms of any such plan, or (v) until the first date on
which it ceases to beneficially

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own Common Shares representing at least 15% of the Common Shares of the Company
then outstanding, U.S. Bancorp, a Delaware corporation. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
Common Shares of the Company outstanding, increases the proportionate number of
Common Shares of the Company beneficially owned by such Person to 15% or more of
the Common Shares of the Company then outstanding; PROVIDED, HOWEVER, that, if a
Person shall become the Beneficial Owner of 15% or more of the Common Shares of
the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.

          (b)    "AFFILIATE" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.

          (c)    "ASSOCIATE" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.

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          (d)    A Person shall be deemed the "BENEFICIAL OWNER" of and shall be
deemed to "BENEFICIALLY OWN" any securities:

          (i)    which such Person or any of such Person's Affiliates or
     Associates beneficially owns, directly or indirectly;

          (ii)   which such Person or any of such Person's Affiliates or
     Associates has (A) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time) pursuant to any agreement,
     arrangement or understanding (other than customary agreements with and
     between underwriters and selling group members with respect to a BONA FIDE
     public offering of securities), or upon the exercise of conversion rights,
     exchange rights, rights (other than these Rights), warrants or options, or
     otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
     Beneficial Owner of, or to beneficially own, securities tendered pursuant
     to a tender or exchange offer made by or on behalf of such Person or any of
     such Person's Affiliates or Associates until such tendered securities are
     accepted for purchase or exchange; or (B) the right to vote pursuant to any
     agreement, arrangement or understanding; PROVIDED, HOWEVER, that a Person
     shall not be deemed the Beneficial Owner of, or to beneficially own, any
     security if the agreement, arrangement or understanding to vote such
     security (1) arises solely from a revocable proxy or consent given to such
     Person in response to a public proxy or consent solicitation made pursuant
     to, and in accordance with, the applicable rules and regulations
     promulgated under the Exchange Act and (2) is not also then reportable on
     Schedule 13D under the Exchange Act (or any comparable or successor
     report); or

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          (iii)  which are beneficially owned, directly or indirectly, by any
     other Person with which such Person or any of such Person's Affiliates or
     Associates has any agreement, arrangement or understanding (other than
     customary agreements with and between underwriters and selling group
     members with respect to a bona fide public offering of securities) for the
     purpose of acquiring, holding, voting (except to the extent contemplated by
     the proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities
     of the Company.

          Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.

          (e)    "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York,
Illinois and New Jersey are authorized or obligated by law or executive order to
close.

          (f)    "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, HOWEVER, that, if such date is not a
Business Day, it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.

          (g)    "COMMON SHARES" when used with reference to the Company shall
mean the shares of common stock, par value $.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a

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Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.

          (h)    "DISTRIBUTION DATE" shall have the meaning set forth in Section
3(a) hereof.

          (i)    "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.

          (j)    "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

          (k)    "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.

          (l)    "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.

          (m)    "PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust or other entity, and shall include any
successor (by merger or otherwise) thereof or thereto.

          (n)    "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.

          (o)    "PURCHASE PRICE" shall have the meaning set forth in Section 4
hereof.

          (p)    "RECORD DATE" shall have the meaning set forth in the second
paragraph hereof.

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          (q)    "REDEMPTION DATE" shall have the meaning set forth in Section
7(a) hereof.

          (r)    "REDEMPTION PRICE" shall have the meaning set forth in Section
23(a) hereof.

          (s)    "RIGHT" shall have the meaning set forth in the second
paragraph hereof.

          (t)    "RIGHT CERTIFICATE" shall have the meaning set forth in Section
3(a) hereof.

          (u)    "SHARES ACQUISITION DATE" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.

          (v)    "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.

          (w)    "SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b) hereof.

          (x)    "TRADING DAY" shall have the meaning set forth in Section 11(d)
hereof.

          Section 2.    APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as rights agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable. The Rights Agent

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shall have no duty to supervise, and in no event shall be liable for, the acts
or omissions of any such co-Rights Agents.

          Section 3.    ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of
(i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of Directors
of the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares of the Company for
or pursuant to the terms of any such plan) of a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner
of Common Shares of the Company aggregating 15% or more of the then outstanding
Common Shares of the Company (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "DISTRIBUTION DATE"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares of the Company registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested and provided with all necessary information, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B

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hereto (a "RIGHT CERTIFICATE"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.

          The Company shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally,
the Company shall confirm same in writing on or prior to the Business Day next
following. Until such notice is received by the Rights Agent, the Rights Agent
may presume conclusively for all purposes that the Distribution Date has not
occurred.

          (b)    On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "SUMMARY OF RIGHTS"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares of
the Company outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares of the Company outstanding on the Record Date, with or without a copy of
the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares of the Company represented thereby.

          (c)    Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date

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or the Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:

     This certificate also evidences and entitles the holder hereof to certain
     rights as set forth in an Agreement between Piper Jaffray Companies and
     Mellon Investor Services LLC, dated as of [    ], 2003, as it may be
     amended from time to time (the "Agreement"), the terms of which are hereby
     incorporated herein by reference and a copy of which is on file at the
     principal executive offices of Piper Jaffray Companies. Under certain
     circumstances, as set forth in the Agreement, such Rights (as defined in
     the Agreement) will be evidenced by separate certificates and will no
     longer be evidenced by this certificate. Piper Jaffray Companies will mail
     to the holder of this certificate a copy of the Agreement without charge
     after receipt of a written request therefor. As set forth in the Agreement,
     Rights beneficially owned by any Person (as defined in the Agreement) who
     becomes an Acquiring Person (as defined in the Agreement) become null and
     void.

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares of the Company
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares of the Company
represented thereby. In the event that the Company purchases or acquires any
Common Shares of the Company after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares of the Company shall be
deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares of the Company which are
no longer outstanding.

          Section 4.    FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto, and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties or responsibilities of
the Rights Agent) and as are not inconsistent with the provisions of this
Agreement, or as may be required

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to comply with any applicable law or with any applicable rule or regulation made
pursuant thereto or with any applicable rule or regulation of any stock exchange
or the National Association of Securities Dealers, Inc., or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "PURCHASE PRICE"), but the number of
such one one-hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.

          Section 5.    COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents or
its Treasurer, either manually or by facsimile signature, and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the individual who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any individual who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
individual was not such an officer.

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          Following the Distribution Date, receipt by the Rights Agent of notice
to that effect and all other relevant information referred to in Section 3(a),
the Rights Agent will keep or cause to be kept, at its office designated for
such purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date of each of the Right
Certificates.

          Section 6.    TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become null and void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment from a Rights holder of a sum sufficient to cover

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any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

          The Rights Agent shall have no duty or obligation under this Section 6
to deliver to such Person such Right Certificates unless and until it is
satisfied that all such taxes and governmental charges have been received by the
Company.

          Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's or the Rights Agent's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

          Section 7.    EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the Close of Business on [    ], 2013 (the "FINAL
EXPIRATION DATE"), (ii) the time at which the Rights are redeemed as

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provided in Section 23 hereof (the "REDEMPTION DATE"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.

          (b)    The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be $[  ],
and shall be subject to adjustment from time to time as provided in Section 11
or 13 hereof, and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.

          (c)    Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax and or governmental charge required to be paid by
the holder of such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes any such
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent of the Preferred Shares with such depositary
agent) and the Company hereby directs such depositary agent to comply with such
request; (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof; (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder; and

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(iv) when appropriate, after receipt, promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate.

          (d)    In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section 14
hereof.

          Section 8.    CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and, in such case, shall
deliver a certificate of destruction thereof to the Company.

          Section 9.    AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with

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Section 7 hereof. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.

          The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax or governmental charge which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for the Preferred Shares in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax or governmental charge shall have been
paid (any such tax or governmental charge being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax or governmental charge is
due.

          Section 10.   PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes and
governmental charges) was duly made; PROVIDED, HOWEVER, that, if the date of
such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed,

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such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the Preferred Shares transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

          Section 11.   ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.

          (a)    (i)    In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books

                                       16
<Page>

of the Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one Right.

          (ii)   Subject to Section 24 hereof, in the event any Person becomes
an Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and dividing that product by (B) 50% of the
then current per share market price of the Common Shares of the Company
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.

          From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be null and void, and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence or
any Associate or

                                       17
<Page>

Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be null and
void pursuant to the preceding sentence or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence shall be
cancelled. The Company shall give the Rights Agent written notice of the
identity of any such Acquiring Person, Associate or Affiliate, or the nominee of
any of the foregoing, and the Rights Agent may rely on such notice in carrying
out its duties under this Agreement and shall be deemed not to have any
knowledge of the identity of any such Acquiring Person, Associate or Affiliate,
or the nominee of any of the foregoing unless and until it shall have received
such notice.

          (iii)  In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with subparagraph (ii) above, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exercise of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.

          (b)    In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within

                                       18
<Page>

45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights, privileges and preferences as the
Preferred Shares ("EQUIVALENT PREFERRED SHARES")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price and the denominator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such

                                       19
<Page>

computation. Such adjustment shall be made successively whenever such a record
date is fixed; and, in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

          (c)    In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including without
limitation any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then-current per share market
price of the Preferred Shares on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such then-current per share market price of the
Preferred Shares on such record date; PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and, in the event

                                       20
<Page>

that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

          (d)    (i)    For the purpose of any computation hereunder, the
"current per share market price" of any security (a "SECURITY" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER,
that, in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares of
such Security or Securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or,
in case no such sale takes place on such day, the average of the bid and asked
prices, regular way, reported as of 4:00 P.M. Eastern time, in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price reported at or prior to 4:00 P.M. Eastern time or, if not so
quoted, the average of the

                                       21
<Page>

high bid and low asked prices in the over-the-counter market, as reported as of
4:00 P.M. Eastern time by NASDAQ or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected in good faith by the Board of Directors
of the Company. The term "TRADING DAY" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business, or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.

          (ii)   For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Preferred Shares are not
publicly traded, the "current per share market price" of the Preferred Shares
shall be conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.

          (e)    No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of a

                                       22
<Page>

Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.

          (f)    If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.

          (g)    All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

          (h)    Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number
of one

                                       23
<Page>

one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.

          (i)    The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and

                                       24
<Page>

replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein, and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.

          (j)    Irrespective of any adjustment or change in the Purchase Price
or in the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.

          (k)    Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.

          (l)    In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuing to
the holder of any Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any,

                                       25
<Page>

issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.

          (m)    Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to in Section 11(b) hereof, hereafter made by the Company to
holders of the Preferred Shares shall not be taxable to such stockholders.

          (n)    In the event that, at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares, or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then, in any such case, (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after such

                                       26
<Page>

event, and (B) each Common Share outstanding immediately after such event shall
have issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.

          Section 12.   CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief, reasonably detailed statement of the facts, computations
and methodology accounting for such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Shares or the Preferred Shares and
the Securities and Exchange Commission a copy of such certificate and (c) if
such adjustment occurs at any time after the Distribution Date, mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement therein contained and shall have
no duty or liability with respect to, and shall not be deemed to have knowledge
of, any adjustment unless and until it shall have received such a certificate.

          Section 13.   CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER. In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (a) the Company shall consolidate with,
or merge with and into, any other Person, (b) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the

                                       27
<Page>

Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than
the Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (B) 50% of
the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares of the Company thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such consolidation, merger, sale or
transfer

                                       28
<Page>

unless, prior thereto, the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.

          Section 14.   FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case, as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the

                                       29
<Page>

over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.

          (b)    The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; PROVIDED that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.

                                       30
<Page>

          (c)    The holder of a Right, by the acceptance of the Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).

          (d)    Whenever a payment for fractional Rights or fractional shares
is to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payment and the prices and/or formulas utilized in
calculating such payment, and (ii) provide sufficient monies to the Rights Agent
in the form of fully collected funds to make such payments. The Rights Agent
shall be fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any payment
for fractional Rights or fractional shares under any Section of this Agreement
relating to the payment of fractional Rights or fractional shares unless and
until the Rights Agent shall have received such a certificate and sufficient
monies.

          Section 15.   RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
hereunder, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without

                                       31
<Page>

limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement, and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.

          Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, judgment, decree or ruling (whether interlocutory or
final) issued by a court or by a governmental, regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation.

          Section 16.   AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

          (a)    prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;

          (b)    after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and

                                       32
<Page>

          (c)    the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.

          Section 17.   RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

          Section 18.   CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
delivery, amendment, administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also

                                       33
<Page>

agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damages, judgment, fine, penalty, claim, demand, settlement,
cost or expense (including, without limitation, the reasonable fees and expenses
of legal counsel), incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (as each is determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance, administration, exercise and performance of its
duties under this Agreement. The costs and expenses incurred in enforcing this
right of indemnification by the Rights Agent shall be paid by the Company to the
extent that the Rights Agent is entitled to indemnification under this Section
18. The provisions of this Section 18 and Section 20 below shall survive the
termination of this Agreement, the exercise or expiration of the Rights and the
resignation, replacement or removal of the Rights Agent.

          The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its acceptance and administration of this Agreement and the
exercise and performance of its duties hereunder, in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall

                                       34
<Page>

be fully protected and shall incur no liability for failing to take any action
in connection therewith unless and until it has received such notice in writing.

          Section 19.   MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any Person into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; PROVIDED that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and, in
all such cases, such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.

          In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name

                                       35
<Page>

or in its changed name; and, in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.

          Section 20.   RIGHTS AND DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes to perform only the duties and obligations expressly imposed by this
Agreement (and no implied duties) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:

          (a)    The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company or absent bad faith an employee of the Rights
Agent), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted by
it and in accordance with such advice or opinion.

          (b)    Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including without limitation, the identity of an Acquiring Person and the
determination of the current per share market price of any security) be proved
or established by the Company prior to taking, suffering or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such absent bad
faith by the Rights Agent certificate shall be full and complete authorization
and protection to the Rights Agent and the Rights Agent shall

                                       36
<Page>

incur no liability for or in respect of any action taken, suffered or omitted by
it under the provisions of this Agreement in reliance upon such certificate.

          (c)    The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct (as each determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction). Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the product of four
(4) times the amount of the annual fees paid by the Company to the Rights Agent.

          (d)    The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

          (e)    The Rights Agent shall not have any liability or be under any
responsibility in respect of the legality or validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the legality or validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section

                                       37
<Page>

11(a)(ii) hereof) or any change or adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24 hereof, or the asceratining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof, upon which the Rights Agent may
rely); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any Preferred Shares to
be issued pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.

          (f)    The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

          (g)    The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and,
absent bad faith by the Rights Agent, such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall not
be liable for or in respect of any action taken, suffered or omitted by it in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. The Rights Agent shall be fully authorized
and protected in relying upon the most recent instructions received by any such
officer.

                                       38
<Page>

          (h)    If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or form of election to purchase set forth on the reverse thereof, as
the case may be, has not been completed, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first
consulting with the Company.

          (i)    The Rights Agent and any stockholder, Affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though the Rights
Agent were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent or any such stockholder, Affiliate, director, officer or
employee from acting in any other capacity for the Company or for any other
Person.

          (j)    The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself (through
its directors, officers and employees) or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company or any other Person resulting from any such act, default, neglect
or misconduct, absent gross negligence, bad faith or willful misconduct in the
selection and continued employment thereof (as each is determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).

          (k)    No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its

                                       39
<Page>

duties hereunder or in the exercise of its rights if it reasonably believes that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it; PROVIDED, HOWEVER, that the Rights
Agent promptly notifies the Company in writing of such belief. The Company shall
have the right to provide to the Rights Agent evidence that indemnification
against such risk or liability is reasonably assured, and the Rights Agent shall
have the obligation to re-assess its belief in good faith in the context of the
evidence provided.

          Section 21.   CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares known to the Rights
Agent by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates in accordance with the applicable
provisions of Section 26 hereof. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(which holder shall, with such notice, submit such holder's Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a Person

                                       40
<Page>

organized and doing business under the laws of the United States or of any state
of the United States, in good standing, which is authorized under such laws to
exercise stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million or (b) a
wholly owned subsidiary of a Person which subsidiary is organized and doing
business under the laws of the United States or of any state of the United
States, is in good standing, is authorized under such laws to exercise stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

          Section 22.   ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board of

                                       41
<Page>

Directors of the Company to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.

          Section 23.   REDEMPTION. (a) The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "REDEMPTION
PRICE"). The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company, in its sole discretion, may establish.

          (b)    Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption (with prompt written notice thereof to
the Rights Agent); PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice shall not affect the legality or validity of such
redemption. Within 10 days after such action of the Board of Directors of the
Company ordering the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the

                                       42
<Page>

holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.

          Section 24.   EXCHANGE. (a) The Board of Directors of the Company may,
at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become null and void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any adjustment in the number
of Rights pursuant to Section 11(i) (such exchange ratio being hereinafter
referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing, the Board
of Directors of the Company shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.

          (b)    Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange (with prompt
written

                                       43
<Page>

notice thereof to the Rights Agent); PROVIDED, HOWEVER, that the failure to
give, or any defect in, such notice shall not affect the legality or validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected, and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected PRO RATA based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.

          (c)    In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.

          (d)    The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with

                                       44
<Page>

regard to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
Common Share. For the purposes of this paragraph (d), the current market value
of a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.

          Section 25.   NOTICE OF CERTAIN EVENTS. (a) In case the Company shall,
at any time after the Distribution Date, propose (i) to pay any dividend payable
in stock of any class to the holders of the Preferred Shares or to make any
other distribution to the holders of the Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of the Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock

                                       45
<Page>

dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action,
and, in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.

          (b)    In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall, as soon as practicable thereafter, give to the
Rights Agent and to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.

          Section 26.   NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:

          Piper Jaffray Companies
          800 Nicollet Mall, Suite 800
          Minneapolis, Minnesota 55402
          Attention: Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or

                                       46
<Page>

on the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:

          Mellon Investor Services LLC
          150 N. Wacker Drive
          Suite 2120
          Chicago, Illinois 60606
          Attention: Mr. Thomas Blatchford

          with a copy to:

          Mellon Investor Services LLC
          85 Challenger Road
          Ridgefield Park, New Jersey 07660-2108
          Attention: General Counsel

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if published by press release, which promptly
thereafter shall be filed with the United States Securities and Exchange
Commission on a Form 8-K under the Exchange Act, or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

          Section 27.   SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; PROVIDED, HOWEVER, that, from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely

                                       47
<Page>

affect the interests of the holders of Rights. Without limiting the foregoing,
the Company may at any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the thresholds set forth in
Section 1(a) and 3(a) hereof to not less than 10% (the "Reduced Threshold");
PROVIDED, HOWEVER, that no Person who beneficially owns a number of Common
Shares equal to or greater than the Reduced Threshold shall become an Acquiring
Person unless such Person shall, after the public announcement of the Reduced
Threshold, increase its beneficial ownership of the then outstanding Common
Shares (other than as a result of an acquisition of Common Shares by the
Company) to an amount equal to or greater than the greater of (x) the Reduced
Threshold or (y) the sum of (i) the lowest beneficial ownership of such Person
as a percentage of the outstanding Common Shares as of any date on or after the
date of the public announcement of such Reduced Threshold plus (ii) .001%. Upon
delivery of a certificate from an appropriate officer of the Company and if,
requested by the Rights Agent, an opinion of counsel, that states that the
proposed supplement or amendment complies with this Section 27, the Rights Agent
shall execute such supplement or amendment, unless the Rights Agent shall have
determined in good faith that such supplement or amendment would affect the
Rights Agent's duties, liabilities, obligations, rights or immunities under this
Agreement; provided, that any supplement or amendment to this Agreement made in
accordance with this Section 27 solely to change the Persons or types of Persons
who are included within the definition of Acquiring Person (including by
lowering the threshold set forth in Section 1(a) hereof), shall not be deemed to
affect the Rights Agent's duties, liabilities or obligations, rights or
immunities under this Agreement. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.

                                       48
<Page>

          Section 28.   SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

          Section 29.   BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).

          Section 30.   SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, null, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

          Section 31.   GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state; PROVIDED, HOWEVER, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such state.

                                       49
<Page>

          Section 32.   COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

          Section 33.   DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.

          Section 34.   DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. The
Board of Directors (or its designees) shall have the sole power and authority to
administer this Agreement and to exercise the rights and powers granted to the
Board of Directors or to the Company hereunder. All such actions, calculations,
interpretations and determinations that are done or made by the Board of
Directors (or its designees) shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all other
applicable Persons. The Rights Agent is entitled always to assume the Company's
Board of Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.

                                       50
<Page>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.

Attest:                                    PIPER JAFFRAY COMPANIES

By                                         By
   -------------------------------            --------------------------------
   Name:                                   Name:
   Title:                                  Title:

Attest:                                    MELLON INVESTOR SERVICES LLC, as
                                           Rights Agent

By                                         By .
   -------------------------------            --------------------------------
   Name:                                   Name:
   Title:                                  Title:

<Page>

                                                                       EXHIBIT A

                                      FORM

                                       of

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                             PIPER JAFFRAY COMPANIES

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

     Piper Jaffray Companies, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that, as required by Section 151 of the General
Corporation Law, the following resolution was adopted on [    ], 2003, by the
Board of Directors of the Corporation by unanimous written consent in lieu of a
meeting pursuant to Section 141(f) of the General Corporation Law and Section 9
of Article III of the By-laws of the Corporation:

          RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share, of the Corporation (the "Preferred Stock"), and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:

          Series A Junior Participating Preferred Stock:

          Section 1.    DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be [    ]. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

                                       51
<Page>

          Section 2.    DIVIDENDS AND DISTRIBUTIONS.

          (A)    Subject to the rights of the holders of any shares of any
     series of Preferred Stock (or any similar stock) ranking prior and superior
     to the Series A Preferred Stock with respect to dividends, the holders of
     shares of Series A Preferred Stock, in preference to the holders of Common
     Stock, par value $.01 per share (the "Common Stock"), of the Corporation,
     and of any other junior stock, shall be entitled to receive, when, as and
     if declared by the Board of Directors out of funds legally available for
     the purpose, quarterly dividends payable in cash on the first day of March,
     June, September and December in each year (each such date being referred to
     herein as a "Quarterly Dividend Payment Date"), commencing on the first
     Quarterly Dividend Payment Date after the first issuance of a share or
     fraction of a share of Series A Preferred Stock, in an amount per share
     (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject
     to the provision for adjustment hereinafter set forth, 100 times the
     aggregate per share amount of all cash dividends, and 100 times the
     aggregate per share amount (payable in kind) of all non-cash dividends or
     other distributions, other than a dividend payable in shares of Common
     Stock or a subdivision of the outstanding shares of Common Stock (by
     reclassification or otherwise), declared on the Common Stock since the
     immediately preceding Quarterly Dividend Payment Date or, with respect to
     the first Quarterly Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred Stock. In the event the
     Corporation shall at any time declare or pay any dividend on the Common
     Stock payable in shares of Common Stock, or effect a subdivision or
     combination or consolidation of the outstanding shares of Common Stock (by
     reclassification or otherwise than by payment of a dividend in shares of
     Common Stock) into a greater or lesser number of shares of Common Stock,
     then in each such case the amount to which holders of shares of Series A
     Preferred Stock were entitled immediately prior to such event under clause
     (b) of the preceding sentence shall be adjusted by multiplying such amount
     by a fraction, the numerator of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were outstanding immediately
     prior to such event.

          (B)    The Corporation shall declare a dividend or distribution on the
     Series A Preferred Stock as provided in paragraph (A) of this Section
     immediately after it declares a dividend or distribution on the Common
     Stock (other than a dividend payable in shares of Common Stock); provided
     that, in the event no dividend or distribution shall have been declared on
     the Common Stock during the period between any Quarterly Dividend Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1 per share on the Series A Preferred Stock shall nevertheless be payable
     on such subsequent Quarterly Dividend Payment Date.

          (C)    Dividends shall begin to accrue and be cumulative on
     outstanding shares of Series A Preferred Stock from the Quarterly Dividend
     Payment Date next preceding the date of issue of such shares, unless the
     date of issue of such shares is prior to the record date for the first
     Quarterly Dividend Payment Date, in which case dividends on such shares
     shall begin to accrue from the date of issue of such shares, or unless the
     date of issue is a Quarterly Dividend Payment Date or is a date after the
     record date for the

                                       52
<Page>

     determination of holders of shares of Series A Preferred Stock entitled to
     receive a quarterly dividend and before such Quarterly Dividend Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series A
     Preferred Stock in an amount less than the total amount of such dividends
     at the time accrued and payable on such shares shall be allocated pro rata
     on a share-by-share basis among all such shares at the time outstanding.
     The Board of Directors may fix a record date for the determination of
     holders of shares of Series A Preferred Stock entitled to receive payment
     of a dividend or distribution declared thereon, which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

          Section 3.    VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:

          (A)    Subject to the provision for adjustment hereinafter set forth,
     each share of Series A Preferred Stock shall entitle the holder thereof to
     100 votes on all matters submitted to a vote of the stockholders of the
     Corporation. In the event the Corporation shall at any time declare or pay
     any dividend on the Common Stock payable in shares of Common Stock, or
     effect a subdivision or combination or consolidation of the outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common Stock) into a greater or lesser number of
     shares of Common Stock, then in each such case the number of votes per
     share to which holders of shares of Series A Preferred Stock were entitled
     immediately prior to such event shall be adjusted by multiplying such
     number by a fraction, the numerator of which is the number of shares of
     Common Stock outstanding immediately after such event and the denominator
     of which is the number of shares of Common Stock that were outstanding
     immediately prior to such event.

          (B)    Except as otherwise provided herein, in any other Certificate
     of Designations creating a series of Preferred Stock or any similar stock,
     or by law, the holders of shares of Series A Preferred Stock and the
     holders of shares of Common Stock and any other capital stock of the
     Corporation having general voting rights shall vote together as one class
     on all matters submitted to a vote of stockholders of the Corporation.

          (C)    Except as set forth herein, or as otherwise provided by law,
     holders of Series A Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with holders of Common Stock as set forth herein) for taking any
     corporate action.

          Section 4.    CERTAIN RESTRICTIONS.

          (A)    Whenever quarterly dividends or other dividends or
     distributions payable on the Series A Preferred Stock as provided in
     Section 2 are in arrears, thereafter and until all accrued and unpaid
     dividends and distributions, whether or not declared, on

                                       53
<Page>

     shares of Series A Preferred Stock outstanding shall have been paid in
     full, the Corporation shall not:

                 (i)    declare or pay dividends, or make any other
          distributions, on any shares of stock ranking junior (either as to
          dividends or upon liquidation, dissolution or winding up) to the
          Series A Preferred Stock;

                 (ii)   declare or pay dividends, or make any other
          distributions, on any shares of stock ranking on a parity (either as
          to dividends or upon liquidation, dissolution or winding up) with the
          Series A Preferred Stock, except dividends paid ratably on the Series
          A Preferred Stock and all such parity stock on which dividends are
          payable or in arrears in proportion to the total amounts to which the
          holders of all such shares are then entitled;

                 (iii)  redeem or purchase or otherwise acquire for
          consideration shares of any stock ranking junior (either as to
          dividends or upon liquidation, dissolution or winding up) to the
          Series A Preferred Stock, provided that the Corporation may at any
          time redeem, purchase or otherwise acquire shares of any such junior
          stock in exchange for shares of any stock of the Corporation ranking
          junior (either as to dividends or upon dissolution, liquidation or
          winding up) to the Series A Preferred Stock; or

                 (iv)   redeem or purchase or otherwise acquire for
          consideration any shares of Series A Preferred Stock, or any shares of
          stock ranking on a parity with the Series A Preferred Stock, except in
          accordance with a purchase offer made in writing or by publication (as
          determined by the Board of Directors) to all holders of such shares
          upon such terms as the Board of Directors, after consideration of the
          respective annual dividend rates and other relative rights and
          preferences of the respective series and classes, shall determine in
          good faith will result in fair and equitable treatment among the
          respective series or classes.

          (B)    The Corporation shall not permit any subsidiary of the
     Corporation to purchase or otherwise acquire for consideration any shares
     of stock of the Corporation unless the Corporation could, under paragraph
     (A) of this Section 4, purchase or otherwise acquire such shares at such
     time and in such manner.

          Section 5.    REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

          Section 6.    LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding

                                       54
<Page>

up) to the Series A Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

          Section 7.    CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

          Section 8.    NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.

          Section 9.    RANK. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

                                       55
<Page>

          Section 10.   AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.

          IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this [  ] day of [           ], 2003.

                                             -------------------------------
                                                  Chairman of the Board

Attest:

---------------------
Secretary

                                       56
<Page>

                                                                       EXHIBIT B

                            Form of Right Certificate

Certificate No. R-                                               ___Rights

          NOT EXERCISABLE AFTER [    ], 2013 OR EARLIER IF REDEMPTION OR
          EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
          $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
          RIGHTS AGREEMENT.

                             Right Certificate

                          PIPER JAFFRAY COMPANIES

          This certifies that _____________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of [    ], 2003 (the "Agreement"), between Piper Jaffray
Companies, a Delaware corporation (the "Company"), and Mellon Investor Services
LLC, a New Jersey limited liability company, as rights agent (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Agreement) and prior to 5:00 P.M., New York City
time, on [     ], 2013 at the office of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one one-hundredth of
a fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share, of the Company (the "Preferred Shares"), at a
purchase price of $[ ] per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of [       ], 2003,
based on the Preferred Shares as constituted at such date. As provided in the
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.

          This Right Certificate is subject to all of the terms, provisions and
conditions of the Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates. Copies of the Agreement are
on file at the principal executive offices of the Company and the offices of the
Rights Agent.

          This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to

                                       57
<Page>

purchase a like aggregate number of Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.

          Subject to the provisions of the Agreement, the Rights evidenced by
this Right Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $.01 per share.

          No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but, in lieu thereof, a
cash payment will be made, as provided in the Agreement.

          No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Agreement.

          This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.

          WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____, ____.

ATTEST:                                      PIPER JAFFRAY COMPANIES

                                             By
------------------------                        -------------------------
Name:                                           Name:
Title:                                          Title:
Countersigned:

MELLON INVESTOR SERVICES LLC

By
   ---------------------------------
   Name:
   Title:

<Page>

                                                                       EXHIBIT B

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificate.)

          FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
                  (Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.

Dated:
       -----------------

                                                   ------------------------
                                                   Signature

Signature Guaranteed:

          All Guarantees must be made by a financial institution (such as a bank
or broker) which is a participant in the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange, Inc. Medallion Signature Program
("MSP"), or the Stock Exchanges Medallion Program ("SEMP") and must not be
dated. Guarantees by a notary public are not acceptable.

          The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement).

                                                   ------------------------
                                                   Signature

              Form of Reverse Side of Right Certificate - continued

<Page>

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise
                  Rights represented by the Right Certificate.)

To:  PIPER JAFFRAY COMPANIES

          The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

Dated:
       ----------

                                                   -------------------
                                                   Signature

Signature Guaranteed:

          All Guarantees must be made by a financial institution (such as a bank
or broker) which is a participant in the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange, Inc. Medallion Signature Program
("MSP"), or the Stock Exchanges

<Page>

Medallion Program ("SEMP") and must not be dated. Guarantees by a notary public
are not acceptable.

          The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement).

                                          ---------------------
                                          Signature

                                     NOTICE

          The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.

          In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement) and such Assignment
or Election to Purchase will not be honored.

<Page>

                                                                      EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

INTRODUCTION

          On [    ], 2003, the Board of Directors of our Company, Piper Jaffray
Companies, a Delaware corporation, declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.01 per share. The dividend is payable on [    ], 2003 to the stockholders of
record on [     ], 2003.

          Our Board has adopted this Rights Agreement to protect stockholders
from coercive or otherwise unfair takeover tactics. In general terms, it works
by imposing a significant penalty upon any person or group which acquires 15% or
more of our outstanding common stock without the approval of our Board. The
Rights Agreement should not interfere with any merger or other business
combination approved by our Board.

          For those interested in the specific terms of the Rights Agreement as
made between our Company and Mellon Investor Services LLC, as the Rights Agent,
on [    ], 2003, we provide the following summary description. Please note,
however, that this description is only a summary, and is not complete, and
should be read together with the entire Rights Agreement, which has been filed
with the Securities and Exchange Commission as an exhibit to the Registration
Statement on Form 10 of our Company. A copy of the agreement is available free
of charge from our Company.

THE RIGHTS. Our Board authorized the issuance of a Right with respect to each
outstanding share of common stock on [    ], 2003. The Rights will initially
trade with, and will be inseparable from, the common stock. The Rights are
evidenced only by certificates that represent shares of common stock. New Rights
will accompany any new shares of common stock we issue after [    ], 2003 until
the Distribution Date described below.

EXERCISE PRICE. Each Right will allow its holder to purchase from our Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock
("Preferred Share") for $[     ], once the Rights become exercisable. This
portion of a Preferred Share will give the stockholder approximately the same
dividend, voting, and liquidation rights as would one share of common stock.
Prior to exercise, the Right does not give its holder any dividend, voting, or
liquidation rights.

EXERCISABILITY.  The Rights will not be exercisable until

-    10 days after the public announcement that a person or group has become an
     "Acquiring Person" by obtaining beneficial ownership of 15% or more of our
     outstanding common stock, or, if earlier,

-    10 business days (or a later date determined by our Board before any person
     or group becomes an Acquiring Person) after a person or group begins a
     tender or exchange offer which, if completed, would result in that person
     or group becoming an Acquiring Person.

<Page>

          We refer to the date when the Rights become exercisable as the
"Distribution Date." Until that date, the common stock certificates will also
evidence the Rights, and any transfer of shares of common stock will constitute
a transfer of Rights. After that date, the Rights will separate from the common
stock and be evidenced by book-entry credits or by Rights certificates that we
will mail to all eligible holders of common stock. Any Rights held by an
Acquiring Person are null and void and may not be exercised.

          Our Board may reduce the threshold at which a person or group becomes
an Acquiring Person from 15% to not less than 10% of the outstanding common
stock.

CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON.

-    FLIP IN. If a person or group becomes an Acquiring Person, all holders of
     Rights except the Acquiring Person may, for $[ ], purchase shares of our
     common stock with a market value of $[ ], based on the market price of the
     common stock prior to such acquisition.

-    FLIP OVER. If our Company is later acquired in a merger or similar
     transaction after the Distribution Date, all holders of Rights except the
     Acquiring Person may, for $[ ], purchase shares of the acquiring
     corporation with a market value of $[ ] based on the market price of the
     acquiring corporation's stock, prior to such merger.

PREFERRED SHARE PROVISIONS.

Each one one-hundredth of a Preferred Share, if issued:

-    will not be redeemable.

-    will entitle holders to quarterly dividend payments of $.01 per share, or
     an amount equal to the dividend paid on one share of common stock,
     whichever is greater.

-    will entitle holders upon liquidation either to receive $1 per share or an
     amount equal to the payment made on one share of common stock, whichever is
     greater.

-    will have the same voting power as one share of common stock.

-    if shares of our common stock are exchanged via merger, consolidation, or a
     similar transaction, will entitle holders to a per share payment equal to
     the payment made on one share of common stock.

The value of one one-hundredth interest in a Preferred Share should approximate
the value of one share of common stock.

EXPIRATION.  The Rights will expire on [     ], 2013.

REDEMPTION. Our Board may redeem the Rights for $.01 per Right at any time
before any person or group becomes an Acquiring Person. If our Board redeems any
Rights, it must redeem all of

<Page>

the Rights. Once the Rights are redeemed, the only right of the holders of
Rights will be to receive the redemption price of $.01 per Right. The redemption
price will be adjusted if we have a stock split or stock dividends of our common
stock.

EXCHANGE. After a person or group becomes an Acquiring Person, but before an
Acquiring Person owns 50% or more of our outstanding common stock, our Board may
extinguish the Rights by exchanging one share of common stock or an equivalent
security for each Right, other than Rights held by the Acquiring Person.

ANTI-DILUTION PROVISIONS. Our Board may adjust the purchase price of the
Preferred Shares, the number of Preferred Shares issuable and the number of
outstanding Rights to prevent dilution that may occur from a stock dividend, a
stock split, a reclassification of the Preferred Shares or common stock. No
adjustments to the Exercise Price of less than 1% will be made.

AMENDMENTS. The terms of the Rights Agreement may be amended by our Board
without the consent of the holders of the Rights. However, our Board may not
amend the Rights Agreement to lower the threshold at which a person or group
becomes an Acquiring Person to below 10% of our outstanding common stock. In
addition, the Board may not cause a person or group to become an Acquiring
Person by lowering this threshold below the percentage interest that such person
or group already owns. After a person or group becomes an Acquiring Person, our
Board may not amend the agreement in a way that adversely affects holders of the
Rights.<Page>

                                                                    Exhibit 10.1

                       FORM OF EMPLOYEE BENEFITS AGREEMENT

                                 BY AND BETWEEN

                                  U.S. BANCORP

                                       AND

                          PIPER JAFFRAY COMPANIES INC.

                                   DATED AS OF
                                 [      ], 2003

<Page>

                                TABLE OF CONTENTS

<Table>
<S>                 <C>                                                                                          <C>
ARTICLE I           DEFINITIONS...................................................................................1
         1.1        Affiliate.....................................................................................1
         1.2        Agreement.....................................................................................1
         1.3        Ancillary Agreements..........................................................................1
         1.4        Approved Leave of Absence.....................................................................1
         1.5        Auditing Party................................................................................1
         1.6        Award.........................................................................................2
         1.7        Benefit Plan..................................................................................2
         1.8        Close of the Distribution Date................................................................2
         1.9        COBRA.........................................................................................2
         1.10       Code..........................................................................................2
         1.11       Committee.....................................................................................2
         1.12       Convertible Parent Option.....................................................................2
         1.13       Convertible Restricted Stock..................................................................2
         1.14       Covered Employees.............................................................................2
         1.15       Distribution..................................................................................3
         1.16       Distribution Date.............................................................................3
         1.17       Distribution Year.............................................................................3
         1.18       ERISA.........................................................................................3
         1.19       Former Parent Employee........................................................................3
         1.20       Former Piper Jaffray Employee.................................................................3
         1.21       Health and Welfare Plans......................................................................3
         1.22       High Performance Option.......................................................................3
         1.23       HIPAA.........................................................................................3
         1.24       Immediately after the Distribution Date.......................................................3
         1.25       Independent Third Party.......................................................................3
         1.26       Liabilities...................................................................................3
         1.27       Match Date....................................................................................3
         1.28       Non-Convertible High Performance Option.......................................................4
         1.29       Non-Convertible Parent Option.................................................................4
         1.30       Non-parties...................................................................................4
         1.31       NYSE..........................................................................................4
         1.32       Option........................................................................................4
         1.33       Parent........................................................................................4
         1.34       Parent Common Stock...........................................................................4
         1.35       Parent Employee...............................................................................4
         1.36       Parent Entities...............................................................................4
         1.37       Parent Executive Benefit Plans................................................................4
         1.38       Parent Flexible Benefit Plans.................................................................4
         1.39       Parent Long-Term Incentive Plans..............................................................4
         1.40       Parent Non-Qualified Retirement Plan..........................................................5
         1.41       Parent Non-Qualified Retirement Plan Participant..............................................5
         1.42       Parent Opening Stock Value....................................................................5
         1.43       Parent Pension Plan...........................................................................5

<Page>

         1.44       Parent Post-Retirement Welfare Benefits Plan..................................................5
         1.45       Parent Savings Plan...........................................................................5
         1.46       Parent Severance Pay Program..................................................................5
         1.47       Parent Stock Value............................................................................5
         1.48       Participating Company.........................................................................5
         1.49       Person........................................................................................5
         1.50       Piper Jaffray.................................................................................6
         1.51       Piper Jaffray Business........................................................................6
         1.52       Piper Jaffray Common Stock....................................................................6
         1.53       Piper Jaffray Common Stock Value..............................................................6
         1.54       Piper Jaffray Employee........................................................................6
         1.55       Piper Jaffray Entities........................................................................6
         1.56       Piper Jaffray Executive Benefit Plans.........................................................6
         1.57       Piper Jaffray Flexible Benefit Plan...........................................................6
         1.58       Piper Jaffray Long-Term Incentive Plan........................................................6
         1.59       Piper Jaffray Non-Qualified Retirement Plan...................................................6
         1.60       Piper Jaffray Savings Plan....................................................................6
         1.61       Piper Jaffray Savings Plan Trust..............................................................7
         1.62       Restricted Stock..............................................................................7
         1.63       Restricted Stock Unit.........................................................................7
         1.64       Separation....................................................................................7
         1.65       Separation and Distribution Agreement.........................................................7
         1.67       Special Convertible High Prformance Option....................................................7
         1.68       Special Convertible Parent Option.............................................................7
         1.69       Subsidiaries..................................................................................7
         1.70       Tax Sharing Agreement.........................................................................7
         1.71       Transferred Account Balances..................................................................7
         1.72       Transition Date...............................................................................7
         1.73       U.S...........................................................................................7

ARTICLE II          GENERAL PRINCIPLES............................................................................8
         2.1        Employment of Piper Jaffray Employees.........................................................8
         2.2        Assumption and Retention of Liabilities; Related Assets.......................................8
         2.3        Piper Jaffray Participation in Parent Benefit Plans...........................................8
         2.4        Service Recognition...........................................................................8
         2.5        Approval by Parent as Sole Stockholder........................................................9

ARTICLE III         DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS................................................9
         3.1        Savings Plan..................................................................................9
         3.2        Company Match.................................................................................9
         3.3        Parent Pension Plan..........................................................................10
                    (a)    Retention of Parent Pension Plan......................................................10
                    (b)    Commencement of Pension...............................................................10
                    (c)    Vesting...............................................................................10

                                      -ii-
<Page>

ARTICLE IV          HEALTH AND WELFARE PLANS.....................................................................10
         4.1        General......................................................................................10
                    (a)    Establishment of Piper Jaffray Health and Welfare Plans...............................10
                    (b)    Retention of Sponsorship and Liabilities..............................................11
                    (c)    Certain Specific Claims...............................................................11
         4.2        Flexible Benefit Plan........................................................................12
         4.3        Workers' Compensation Liabilities............................................................12
         4.4        Payroll Taxes and Reporting of Compensation..................................................12
         4.5        Parent Post-Retirement Welfare Benefits Plan.................................................12
                    (a)    Retention of Parent Post-Retirement Welfare Benefits Plan.............................12
                    (b)    Assumption of Piper Jaffray Post-Retirement Welfare Benefits Plans....................13
         4.6        COBRA and HIPAA Compliance...................................................................13

ARTICLE V           EXECUTIVE BENEFITS AND OTHER BENEFITS........................................................13
         5.1        Assumption of Obligations....................................................................13
         5.2        Parent Executive Incentive Plan [and the Annual Incentive Plan]..............................13
                    (a)    Piper Jaffray Bonus Awards............................................................13
                    (b)    Parent Bonus Awards...................................................................14
         5.3        Parent Long-Term Incentive Plans.............................................................14
                    (a)    Non-Convertible Parent Options........................................................14
                    (b)    Special Convertible Parent Option.....................................................14
                    (c)    Convertible Parent Options............................................................14
                    (d)    Incentive Stock Options; Foreign Grants/Awards........................................15
                    (e)    Other Awards..........................................................................15
                           (i)   Convertible Parent Restricted Stock.............................................15
                           (ii)  Non-Convertible Parent Restricted Stock.........................................15
                           (iii) Restricted Stock Units..........................................................16
                    (f)    Aggregate Limit ......................................................................16
                    (g)    Miscellaneous Option and Other Award Terms............................................16
                    (h)    Waiting Period for Exercisability of Options..........................................17
                    (i)    Restrictive Covenants.................................................................18
         5.4        Savings Clause...............................................................................18
         5.5        Registration Requirements....................................................................18
         5.6        Parent Non-Qualified Retirement Plans........................................................18
         5.7        Severance Plans..............................................................................19

ARTICLE VI          GENERAL AND ADMINISTRATIVE...................................................................19
         6.1        Sharing of Participant Information...........................................................19
         6.2        Reasonable Efforts/Cooperation...............................................................19
         6.3        No Third-Party Beneficiaries.................................................................20
         6.4        Audit Rights With Respect to Information Provided............................................20
         6.5        Fiduciary Matters............................................................................20
         6.6        Consent of Third Parties.....................................................................21

ARTICLE VII         MISCELLANEOUS................................................................................21
         7.1        Effect If Distribution Does Not Occur........................................................21

                                      -iii-
<Page>

         7.2        Relationship of Parties......................................................................21
         7.3        Affiliates...................................................................................21
         7.4        Notices......................................................................................21
         7.5        Incorporation of Separation and Distribution Agreement Provisions............................22
</Table>

SIGNATURES OF THE PARTIES

                                      -iv-
<Page>

                           EMPLOYEE BENEFITS AGREEMENT

         This EMPLOYEE BENEFITS AGREEMENT, dated as of [ ], 2003 is by and
between U.S. Bancorp, a Delaware corporation ("PARENT"), and Piper Jaffray
Companies, a Delaware corporation ("PIPER JAFFRAY"). Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
them in Article I hereof or assigned to them in the Separation and Distribution
Agreement (as defined below), as applicable.

         WHEREAS, the Board of Directors of Parent has determined that it is in
the best interests of Parent and its stockholders to separate Parent's existing
businesses into two independent companies;

         WHEREAS, in furtherance of the foregoing, Parent and Piper Jaffray have
entered into a Separation and Distribution Agreement, dated as of the date
hereof (the "SEPARATION AND DISTRIBUTION AGREEMENT"), and other ancillary
agreements that will govern certain matters relating to the Separation and the
relationship of Parent, Piper Jaffray and their respective Subsidiaries
following the Distribution Date; and

         WHEREAS, pursuant to the Separation and Distribution Agreement, Parent
and Piper Jaffray have agreed to enter into this Agreement for the purpose of
allocating assets, Liabilities and responsibilities with respect to certain
employee compensation and benefit plans and programs between and among them.

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         For purposes of this Agreement, the following terms shall have the
following meanings:

     1.1  "AFFILIATE"  has the  meaning  given that term in the  Separation  and
Distribution Agreement.

     1.2 "AGREEMENT" means this Employee Benefits  Agreement,  including all the
Schedules hereto.

     1.3  "ANCILLARY  AGREEMENTS"  has  the  meaning  given  that  term  in  the
Separation and Distribution Agreement.

     1.4 "APPROVED LEAVE OF ABSENCE" means an absence from active service (i)
due to an individual's inability to perform his or her regular job duties by
reason of illness or injury and resulting in eligibility to receive benefits
pursuant to the terms of the Parent Short-Term Disability Program or the Parent
Long-Term Disability Program, or (ii) pursuant to an approved leave policy with
a guaranteed right of reinstatement.

     1.5 "AUDITING PARTY" has the meaning set forth in Section 6.4(a).

<Page>

     1.6 "AWARD," when immediately preceded by "Parent," means Parent Restricted
Stock and Parent Restricted Stock Units and, when immediately preceded by "Piper
Jaffray," means Piper Jaffray Restricted Stock and Restricted Stock Units.

     1.7 "BENEFIT PLAN" shall mean, with respect to an entity or any of its
Subsidiaries, (a) each "employee welfare benefit plan" (as defined in Section
3(1) of ERISA) and all other employee benefits arrangements, policies or payroll
practices (including, without limitation, severance pay, sick leave, vacation
pay, salary continuation, disability, retirement, deferred compensation, bonus,
stock option or other equity-based compensation, hospitalization, medical
insurance or life insurance) sponsored or maintained by such entity or by any of
its Subsidiaries (or to which such entity or any of its Subsidiaries contributes
or is required to contribute) and (b) all "employee pension benefit plans" (as
defined in Section 3(2) of ERISA), occupational pension plan or arrangement or
other pension arrangements sponsored, maintained or contributed to by such
entity or any of its Subsidiaries (or to which such entity or any of its
Subsidiaries contributes or is required to contribute). When immediately
preceded by "Parent," Benefit Plan means any Benefit Plan sponsored, maintained
or contributed to by Parent or a Parent Entity. When immediately preceded by
"Piper Jaffray," Benefit Plan means any Benefit Plan sponsored, maintained or
contributed to by Piper Jaffray or any Piper Jaffray Entity. The Piper Jaffray
Benefit Plans in effect prior to the Distribution are listed in Schedule 1.7
hereto.

     1.8 "CLOSE OF THE DISTRIBUTION DATE" means 11:59:59 P.M., Eastern Standard
Time or Eastern Daylight Time (whichever shall then be in effect), on the
Distribution Date.

     1.9 "COBRA" means the continuation coverage requirements for "group health
plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Code ss. 4980B and ERISA ss.ss. 601 through
608.

     1.10 "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary or final regulation in force under that
provision.

     1.11 "COMMITTEE" has the meaning set forth in Section 5.3(a).

     1.12 "CONVERTIBLE PARENT OPTION" means a Parent Option, other than a High
Performance Option, that, as of the Distribution Date, (i) (A) is outstanding
under any Parent Long-Term Incentive Plan, (B) is vested, (C) is held by a
person who is a Piper Jaffray Employee, and (D) would by its terms continue to
vest following such employee's termination of employment (1) by Parent other
than for "cause" or "misconduct" or (2) by the optionee, and would remain
exercisable for the remainder of its term or (ii) (A) is outstanding under any
Parent Long-Term Incentive Plan, (B) is vested, (C) is held by a person who is a
Piper Jaffray Employee, and (D) is an Option that would otherwise be a Special
Convertible Parent Option but for the fact that the optionee is
retirement-eligible as of the Distribution Date.

     1.13 "CONVERTIBLE RESTRICTED STOCK" has the meaning set forth in Section
5.3(e)(i).

     1.14 "COVERED EMPLOYEES" has the meaning set forth in Section 4.2(i).

                                      -2-

<Page>

     1.15 "DISTRIBUTION" has the meaning given that term in the Separation and
Distribution Agreement.

     1.16 "DISTRIBUTION DATE" has the meaning given that term in the Separation
and Distribution Agreement.

     1.17 "DISTRIBUTION YEAR" means the calendar year during which the
Distribution Date occurs.

     1.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific provision of ERISA also includes any proposed,
temporary or final regulation in force under that provision.

     1.19 "FORMER PARENT EMPLOYEE" means any individual who is a former employee
of Parent or a Parent Entity as of the Distribution Date.

     1.20 "FORMER PIPER JAFFRAY EMPLOYEE" means any individual who is a former
employee of Piper Jaffray or a Piper Jaffray Entity as of the Distribution Date.

     1.21 "HEALTH AND WELFARE PLANS" shall mean any plan, fund or program which
was established or is maintained for the purpose of providing for its
participants or their beneficiaries, through the purchase of insurance or
otherwise, medical, dental, surgical or hospital care or benefits, or benefits
in the event of sickness, accident, disability, death or unemployment, or
vacation benefits, apprenticeship or other training programs or day care
centers, scholarship funds, or prepaid legal services, including any such plan,
fund or program as defined in Section 3(1) of ERISA. When immediately preceded
by "Parent," Health and Welfare Plans means each Health and Welfare Plan that is
a Parent Benefit Plan. When immediately preceded by "Piper Jaffray," Health and
Welfare Plans means each Health and Welfare Plan that is a Piper Jaffray Benefit
Plan.

     1.22 "HIGH PERFORMANCE OPTION" means a Parent Option that, as of the
Distribution Date, is (i) outstanding under any Parent Long-Term Incentive Plan,
(ii) is held by a person who is a Piper Jaffray Employee and (iii) was granted
on the following dates [ ].

     1.23 "HIPAA" means the health insurance portability and accountability
requirements for "group health plans" under the Health Insurance Portability and
Accountability Act of 1996, as amended.

     1.24 "IMMEDIATELY AFTER THE DISTRIBUTION DATE" means on the first moment of
the day after the Distribution Date.

     1.25 "INDEPENDENT THIRD PARTY" has the meaning set forth in Section
5.3(g)(vi) of this Agreement.

     1.26 "LIABILITIES" has the meaning given that term in the Separation and
Distribution Agreement.

     1.27 "MATCH DATE" has the meaning set forth in Section 3.2.

                                      -3-
<Page>

     1.28 "NON-CONVERTIBLE HIGH PERFORMANCE OPTION" means fifty percent, on a
grant by grant basis, of the shares of Parent Common Stock subject to a High
Performance Option.

     1.29 "NON-CONVERTIBLE PARENT OPTION" means (i) a Parent Option outstanding
under any Parent Long-Term Incentive Plan as of the Distribution Date other than
a Convertible Parent Option or a Special Convertible Parent Option and (ii) a
Parent Option that, as of the Distribution Date, is a Non-Convertible High
Performance Option.

     1.30 "NON-PARTIES" has the meaning set forth in Section 6.4(b).

     1.31 "NYSE" means the New York Stock Exchange, Inc.

     1.32 "OPTION," when immediately preceded by "Parent," means an option
(either nonqualified or incentive) to purchase shares of Parent Common Stock
pursuant to a Parent Long-Term Incentive Plan. When immediately preceded by
"Piper Jaffray," Option means an option (either nonqualified or incentive) to
purchase shares of Piper Jaffray Common Stock pursuant to the Piper Jaffray
Long-Term Incentive Plan.

     1.33 "PARENT" is defined in the preamble to this Agreement.

     1.34 "PARENT COMMON STOCK" has the meaning set forth in the Separation and
Distribution Agreement.

     1.35 "PARENT EMPLOYEE" means any individual who, immediately prior to the
Close of the Distribution Date, is either actively employed by, or then on
Approved Leave of Absence from, any Parent Entity.

     1.36 "PARENT ENTITIES" means the members of the Parent Group, as defined in
the Separation and Distribution Agreement, and their respective Subsidiaries and
Affiliates, excluding any business or operations (whether current or historical,
regardless of whether discontinued or sold) that are included in the Piper
Jaffray Business.

     1.37 "PARENT EXECUTIVE BENEFIT PLANS" means the executive benefit and
nonqualified plans, programs, and arrangements established, sponsored,
maintained, or agreed upon, by any Parent Entity for the benefit of employees
and former employees of any Parent Entity before the Close of the Distribution
Date.

     1.38 "PARENT FLEXIBLE BENEFIT PLANS" means the Parent Flexible Benefit
Plan, as in effect as of the time relevant to the applicable provision of this
Agreement.

     1.39 "PARENT LONG-TERM INCENTIVE PLANS" means any of the U.S. Bancorp 2001
Stock Incentive Plan, the U.S. Bancorp 2001 Employee Stock Incentive Plan, the
U.S. Bancorp 1999 Stock Incentive Plan, the Firstar Corporation 1999 Employee
Stock Incentive Plan, the Firstar Corporation 1998 Employee Stock Incentive
Plan, the U.S. Bancorp 1998 Executive Stock Incentive Plan, the U.S. Bancorp
1997 Stock Incentive Plan, the Star Banc Corporation 1996 Starshare Stock
Incentive Plan for Employees, the 1991 Performance and Equity Incentive Plan of
the former U.S. Bancorp, the Piper Jaffray 1993 Omnibus Stock Plan, the U.S.
Bancorp 1991

                                      -4-
<Page>

Executive Stock Incentive Plan and any other stock incentive plan of Parent, all
as in effect as of the time relevant to the applicable provisions of this
Agreement.

     1.40 "PARENT NON-QUALIFIED RETIREMENT PLAN" means the U.S. Bancorp
Non-Qualified Retirement Plan in effect as of the time relevant to the
applicable provision of this Agreement.

     1.41 "PARENT NON-QUALIFIED RETIREMENT PLAN PARTICIPANT" means any
individual who has an accrued balance in the Parent Non-Qualified Retirement
Plan as of the Distribution Date.

     1.42 "PARENT OPENING STOCK VALUE" means the opening per-share price of
Parent Common Stock as listed on the NYSE as of the opening of trading on the
first trading day following the Distribution Date; PROVIDED, HOWEVER, that if
the Distribution occurs at a time when the NYSE is open for trading, Parent
Opening Stock Value shall mean the price at which Parent Common Stock trades as
of the moment immediately after the Distribution; and PROVIDED, FURTHER, that if
the Distribution occurs prior to opening of trading on the NYSE on the
Distribution Date, the Parent Opening Stock Value shall mean the price at which
Parent Common Stock first trades on the Distribution Date.

     1.43 "PARENT PENSION PLAN" means the U.S. Bancorp Pension Plan in effect as
of the time relevant to the applicable provision of this Agreement.

     1.44 "PARENT POST-RETIREMENT WELFARE BENEFITS PLAN" means the Health and
Welfare Plan of Parent providing medical, dental or death benefits for retirees.

     1.45 "PARENT SAVINGS PLAN" means the U.S. Bancorp 401(k) Savings Plan as in
effect as of the time relevant to the applicable provision of this Agreement.

     1.46 "PARENT SEVERANCE PAY PROGRAM" means the U.S. Bancorp Severance Pay
Program and the Parent Severance Pay Excess Plan, including any severance
benefits payable under the U.S. Bancorp Comprehensive Welfare Benefit Plan or
any component Benefit Plans thereof such as the U.S. Bancorp Comprehensive
Welfare Benefit Middle Management Change in Control Excess Plan, each as in
effect as of the time relevant to the applicable provision of this Agreement.

     1.47 "PARENT STOCK VALUE" means the closing per-share price of the Parent
Common Stock trading "regular way with due bills" as listed on the NYSE as of
4:00 P.M., Eastern Standard Time or Eastern Daylight Time (whichever shall then
be in effect) on the trading day immediately preceding the Distribution Date.

     1.48 "PARTICIPATING COMPANY" means (a) Parent, (b) any Person (other than
an individual) that Parent has approved for participation in, and which is
participating in, a plan sponsored by any Parent Entity, and (c) any Person
(other than an individual) which, by the terms of such a plan, participates in
such plan or any employees of which, by the terms of such plan, participate in
or are covered by such plan.

     1.49 "PERSON" has the meaning given that term in the Separation and
Distribution Agreement.

                                      -5-
<Page>

     1.50 "PIPER JAFFRAY" is defined in the preamble to this Agreement.

     1.51 "PIPER JAFFRAY BUSINESS" has the meaning given to that term in the
Separation and Distribution Agreement.

     1.52 "PIPER JAFFRAY COMMON STOCK" means the Piper Jaffray Common Stock as
defined in the Separation and Distribution Agreement.

     1.53 "PIPER JAFFRAY COMMON STOCK VALUE" means the excess of the Parent
Stock Value over the Parent Ex-Dividend Closing Stock Value. For purposes of
this Section 1.46, the "Parent Ex-Dividend Closing Stock Value" means the
closing per-share price of the Parent Common Stock trading "ex-dividend" as
listed on the NYSE as of 4:00 P.M., Eastern Standard Time or Eastern Daylight
Time (whichever shall then be in effect) on the Dividend Date; PROVIDED,
HOWEVER, that if the Dividend occurs at a time when the NYSE is open for
trading, Parent Ex-Dividend Closing Stock Value shall mean the price at which
Parent Common Stock trading "ex-dividend last trades immediately before the
Dividend; PROVIDED, FURTHER, that if the Dividend occurs prior to the first
trade on the Dividend Date, the Parent Ex-Dividend Closing Stock Value shall
mean the price at which Parent Common Stock trading "ex-distribution" or "when
issued (to give effect to the Dividend)" last trades on the trading day
immediately preceding the Distribution Date.

     1.54 "PIPER JAFFRAY EMPLOYEE" means any individual who, immediately prior
to the Distribution, is either actively employed by, or then on Approved Leave
of Absence from, a Piper Jaffray Entity.

     1.55 "PIPER JAFFRAY ENTITIES" means the Piper Jaffray Group as defined in
the Separation and Distribution Agreement and any business or operations
(whether current or historical regardless of whether discontinued or sold)
included in the Piper Jaffray Business.

     1.56 "PIPER JAFFRAY EXECUTIVE BENEFIT PLANS" means the executive benefit
and nonqualified plans, programs, and arrangements established, sponsored,
maintained, or agreed upon, by any Piper Jaffray Entity for the benefit of
employees and former employees of any Piper Jaffray Entity before the Close of
the Distribution Date.

     1.57 "PIPER JAFFRAY FLEXIBLE BENEFIT PLAN" means the flexible benefit plan
to be established by Piper Jaffray pursuant to Section 4.2 of this Agreement as
in effect as of the time relevant to the applicable provision of this agreement.

     1.58 "PIPER JAFFRAY LONG-TERM INCENTIVE PLAN" means the long-term incentive
plan or program to be established by Piper Jaffray, effective immediately prior
to the Distribution Date, in connection with the treatment of Awards as
described in Article V.

     1.59 . "PIPER JAFFRAY NON-QUALIFIED RETIREMENT PLAN" has the meaning set
forth in Section 5.6.

     1.60 "PIPER JAFFRAY SAVINGS PLAN" means the 401(k) and profit sharing plan
to be established by Piper Jaffray pursuant to Section 3.1 of this Agreement, as
in effect as of the time relevant to the applicable provision of this agreement.

                                      -6-
<Page>

     1.61 "PIPER JAFFRAY SAVINGS PLAN TRUST" means a trust relating to the Piper
Jaffray Savings Plan intended to qualify under Section 401(a) and be exempt
under Section 501(a) of the Code.

     1.62 "RESTRICTED STOCK," when immediately preceded by "Parent," means
shares of Parent Common Stock issued under a Parent Long-Term Incentive Plan
subject to forfeiture in the event that certain terms and conditions are not
satisfied and, when immediately preceded by "Piper Jaffray," means shares of
Piper Jaffray Common Stock issued under the Piper Jaffray Long-Term Incentive
Plan subject to forfeiture in the event that certain terms and conditions are
not satisfied.

     1.63 "RESTRICTED STOCK UNIT" when immediately preceded by "Parent," means
units representing hypothetical shares of Parent Common Stock issued under a
Parent Benefit Plan and, when immediately preceded by "Piper Jaffray," means
units representing hypothetical shares of Piper Jaffray Common Stock issued
under the Piper Jaffray Long-Term Incentive Plan.

     1.64 "SEPARATION" has the meaning given that term in the Separation and
Distribution Agreement.

     1.65 "SEPARATION AND DISTRIBUTION AGREEMENT" is defined in the preamble to
this Agreement.

     1.66 "SPECIAL CONVERTIBLE HIGH PERFORMANCE OPTION" means each portion of a
High Performance Option, on a grant by grant basis, which is not a
Non-Convertible High Performance Option.

     1.67 "SPECIAL CONVERTIBLE PARENT OPTION" means (i) a Parent Option that, as
of the Distribution Date, (A) is outstanding under any Parent Long-Term
Incentive Plan, (B) is held by a person who is a Piper Jaffray Employee and (C)
is an Option that would terminate within 90 days following a termination of the
optionee's employment other than for "gross and willful misconduct" and (ii) a
Parent Option that, as of the Distribution Date, is a Special Convertible High
Performance Option.

     1.68 "SUBSIDIARIES" has the meaning given that term in the Separation and
Distribution Agreement.

     1.69 "TAX SHARING AGREEMENT" means the Tax Sharing Agreement entered into
as of the date hereof between Parent and Piper Jaffray.

     1.70 "TRANSFERRED ACCOUNT BALANCES" has the meaning set forth in Section
4.2(i).

     1.71 "TRANSITION DATE" has the meaning set forth in Section 4.1(a).

     1.72 "U.S." means the 50 United States of America and the District of
Columbia.

                                      -7-

<Page>

                                   ARTICLE II
                               GENERAL PRINCIPLES

     2.1 EMPLOYMENT OF PIPER JAFFRAY EMPLOYEES. All Piper Jaffray Employees
shall continue to be employees of Piper Jaffray or another Piper Jaffray Entity,
as the case may be, immediately after the Distribution.

     2.2 ASSUMPTION AND RETENTION OF LIABILITIES; RELATED ASSETS.

          (a) As of the Distribution Date, except as expressly provided in this
Agreement, the Parent Entities shall assume or retain and Parent hereby agrees
to pay, perform, fulfill and discharge, in due course in full (i) all
Liabilities under all Parent Benefit Plans, (ii) all Liabilities with respect to
the employment or termination of employment of all Parent Employees, Former
Parent Employees and their dependents and beneficiaries, and other service
providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or nonpayroll
worker of any Parent Entity or in any other employment, non-employment, or
retainer arrangement, or relationship with any Parent Entity), in each case to
the extent arising in connection with or as a result of employment with or the
performance of services to any Parent Entity, and (iii) any other Liabilities
expressly assigned to Parent under this Agreement. All assets held in trust to
fund the Parent Benefit Plans and all insurance policies funding the Parent
Benefit Plans shall be Parent Assets (as defined in the Separation and
Distribution Agreement), except to the extent specifically provided otherwise in
this Agreement.

          (b) From and after the Distribution Date, except as expressly provided
in this Agreement, Piper Jaffray and the Piper Jaffray Entities shall assume or
retain, as applicable, and Piper Jaffray hereby agrees to pay, perform, fulfill
and discharge, (i) all Liabilities under all Piper Jaffray Benefit Plans, (ii)
all Liabilities with respect to the employment or termination of employment of
all Piper Jaffray Employees and other service providers (including any
individual who is, or was, an independent contractor, temporary employee,
temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker, or nonpayroll worker of Piper
Jaffray or a Piper Jaffray Entity or in any other employment, non-employment, or
retainer arrangement, or relationship with Piper Jaffray or a Piper Jaffray
Entity), and their dependents and beneficiaries, and (iii) all Liabilities that
are expressly assigned to Piper Jaffray or any Piper Jaffray Entity under this
Agreement.

     2.3 PIPER JAFFRAY PARTICIPATION IN PARENT BENEFIT PLANS. Except as
expressly provided in this Agreement, effective as of the Close of the
Distribution Date, Piper Jaffray and each other Piper Jaffray Entity shall cease
to be a Participating Company in any Parent Benefit Plan, and Parent and Piper
Jaffray shall take all necessary action before the Distribution Date to
effectuate such cessation as a Participating Company.

     2.4 SERVICE RECOGNITION. Piper Jaffray shall cause the Piper Jaffray
Benefit Plans with respect to which service is a relevant factor to credit Piper
Jaffray Employees who are employed by Piper Jaffray immediately following the
Distribution with service before the Distribution Date recognized by Parent
under the terms of Parent Benefit Plans with respect to

                                      -8-
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which service is a relevant factor, except (a) to the extent duplication of
benefits would result and (b) for purposes of benefit accruals under any defined
benefit pension plan.

     2.5 APPROVAL BY PARENT AS SOLE STOCKHOLDER. Prior to the Distribution,
Parent shall cause Piper Jaffray to adopt the Piper Jaffray 2003 Long-Term
Incentive Plan substantially in the form attached hereto as EXHIBIT A.

                                  ARTICLE III
                 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS

     3.1 SAVINGS PLAN. As soon as practicable (and in no event later than 30
days) after the Distribution Date, Piper Jaffray shall establish the Piper
Jaffray Savings Plan and the Piper Jaffray Savings Trust. As soon as practical
following the establishment of the Piper Jaffray Savings Plan and the Piper
Jaffray Savings Trust, Parent shall cause the accounts (including any
outstanding loan balances) of the Piper Jaffray Employees who elect a transfer
under the Parent Savings Plan to be transferred to the Piper Jaffray Savings
Plan and the Piper Jaffray Savings Trust in cash or such other assets as
mutually agreed by Parent and Piper Jaffray, and Piper Jaffray shall cause the
Piper Jaffray Savings Plan to assume and be solely responsible for all
Liabilities under the Piper Jaffray Savings Plan to or relating to Piper Jaffray
Employees who elect a transfer of their accounts (to the extent assets related
to those accounts are transferred from the Parent Savings Plan). Piper Jaffray
will cause the Piper Jaffray Savings Plan to accept direct and indirect
rollovers from the Parent Savings Plan of any account balances of such Piper
Jaffray Employees in accordance with the applicable provisions of the Code.
Notwithstanding the foregoing, the Piper Jaffray Savings Plan shall not be
required to accept a rollover of any Parent Common Stock that is held in the
accounts of Piper Jaffray Employees. Any outstanding participant loans to Piper
Jaffray Employees who elect a transfer under the Parent Savings Plan of their
account to the Piper Jaffray Savings Plan shall be transferred to the Piper
Jaffray Savings Plan in kind. Parent and Piper Jaffray agree to cooperate in
making all appropriate filings and taking all reasonable actions required to
implement the provisions of this Section 3.1; PROVIDED that Piper Jaffray
acknowledges that it will be responsible for complying with any requirements and
applying for any determination letters with respect to the Piper Jaffray Savings
Plan.

     3.2 COMPANY MATCH. Prior to the Distribution, Parent shall amend the Parent
Savings Plan to provide for the making of matching contributions under the
Parent Savings Plan to Piper Jaffray Employees for contributions made to the
Parent Savings Plan by such Piper Jaffray Employees on or prior to the
Distribution Date. As soon as possible following the Distribution Date (the
"MATCH DATE"), Parent shall, to the extent (a) permissible under Treasury
regulations and (b) such contributions are deemed to be qualified contributions,
pursuant to compliance testing of the Parent Savings Plan, contribute to
accounts of Piper Jaffray Employees under the Parent Savings Plan all matching
contributions, if any, due to the Piper Jaffray Employees who participate in the
Parent Savings Plan through the Distribution Date pursuant to the terms and
conditions of the Parent Savings Plan. As soon as practicable following the end
of the year in which the Distribution Date occurs, Piper Jaffray shall, to the
extent (a) permissible under Treasury regulations and (b) such contributions are
deemed to be qualified contributions, pursuant to compliance testing of the
Piper Jaffray Savings Plan, contribute to the Piper Jaffray Savings Plan all
matching contributions, if any, due under the terms and conditions of the Piper

                                      -9-
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Jaffray Savings Plan to the Piper Jaffray Employees who participate in
the Piper Jaffray Savings Plan from the Distribution Date through the end of
the year in which the Distribution Date occurs.

     3.3 PARENT PENSION PLAN.

          (a) RETENTION OF PARENT PENSION PLAN. Effective as of the Close of the
Distribution Date, Parent shall retain:

               (i) sponsorship of the Parent Pension Plan and its related trust
and any other trust or other funding arrangement established or maintained with
respect to such plan, or any assets held as of the Distribution Date with
respect to such plan; and

               (ii) all Liabilities relating to, arising out of or resulting
from claims incurred by or on behalf of any individuals with respect to benefits
under the Parent Pension Plan.

          (b) COMMENCEMENT OF PENSION. Effective as of the Close of the
Distribution Date, each Piper Jaffray Employee who is a participant in the
Parent Pension Plan shall be deemed to have terminated employment with Parent
and, to the extent vested in his or her benefit under the plan, shall be
eligible to request distribution of his or her pension in accordance with the
terms of such plan.

          (c) VESTING. Following the Close of the Distribution Date, each Piper
Jaffray Employee who is a participant in the Parent Pension Plan as of
immediately prior to the Distribution Date and not vested in his or her benefit
under the Parent Pension Plan as of the Distribution Date shall continue to vest
in his or her benefit under the Parent Pension Plan for so long as such Piper
Jaffray Employee remains employed with Piper Jaffray or a Piper Jaffray Entity,
but upon termination of such employment such Piper Jaffray Employee's benefit
shall no longer continue to vest. Piper Jaffray shall notify Parent on a
quarterly basis at the end of each quarter following the Distribution Date of
any participant in the Parent Pension Plan who is not vested in his or her
benefit under the Parent Pension Plan who has terminated employment with Piper
Jaffray and the Piper Jaffray Entities.

                                   ARTICLE IV
                            HEALTH AND WELFARE PLANS

     4.1 GENERAL.

          (a) ESTABLISHMENT OF PIPER JAFFRAY HEALTH AND WELFARE PLANS. Effective
as of January 1, 2004 (the "TRANSITION DATE"), Piper Jaffray shall adopt Health
and Welfare Plans for the benefit of Piper Jaffray Employees, and Piper Jaffray
shall be responsible for all Liabilities relating to, arising out of or
resulting from health and welfare coverage or claims incurred by or on behalf of
Piper Jaffray Employees or their covered dependents under the Piper Jaffray
Health and Welfare Plans on or after the Transition Date.

                                      -10-
<Page>

          (b) RETENTION OF SPONSORSHIP AND LIABILITIES. As of immediately prior
to the Transition Date, Parent shall retain:

               (i) sponsorship of all Parent Health and Welfare Plans and any
trust or other funding arrangement established or maintained with respect to
such plans, including any "voluntary employee's beneficiary association", or any
assets held as of the Transition Date with respect to such plans;

               (ii) all Liabilities relating to, arising out of, or resulting
from health and welfare coverage or claims incurred by or on behalf of Parent
Employees, Former Parent Employees, Piper Jaffray Employees and Former Piper
Jaffray Employees, or their covered dependents under the Parent Health and
Welfare Plans on or before the Transition Date; and

               (iii) except as provided in Section 4.1(c), all Liabilities
relating to health and welfare coverage or claims incurred by or on behalf of
Parent Employees, Former Parent Employees and Former Piper Jaffray Employees or
their covered dependents on or after the Transition Date under the Parent Health
and Welfare Plans.

Except as provided in Section 4.1(c), Parent shall not assume any Liability
relating to health and welfare claims incurred by or on behalf of Piper Jaffray
Employees or their covered dependents on or after the Transition Date, and such
claims shall be satisfied pursuant to Section 4.1(a). Except as provided in
Section 4.1(c), a claim or Liability (1) for medical, dental, vision and/or
prescription drug benefits shall be deemed to be incurred upon the rendering of
health services giving rise to the obligation to pay such benefits; (2) for life
insurance and accidental death and dismemberment and business travel accident
insurance benefits and workers' compensation benefits shall be deemed to be
incurred upon the occurrence of the event giving rise to the entitlement to such
benefits; (3) for salary continuation or other disability benefits shall be
deemed to be incurred upon the effective date of an individual's disability
giving rise to the entitlement to such benefits; and (4) for a period of
continuous hospitalization shall be deemed to be incurred on the date of
admission to the hospital.

          (c) CERTAIN SPECIFIC CLAIMS. Parent shall be responsible for all
Liabilities under the applicable Parent Health and Welfare Plan that relate to,
arise out of or result from any period of continuous hospitalization of a Piper
Jaffray Employee or Former Piper Jaffray Employee or his or her covered
dependent that begins before the Transition Date under a Parent Health and
Welfare Plan and continues after the Transition Date; PROVIDED, HOWEVER, that
Parent shall not be responsible for Liabilities in excess of the benefits
otherwise provided by the terms of the respective plans. Parent also shall be
responsible for all Liabilities under the applicable Parent Health and Welfare
Plan that relate to, arise out of or result from any denture work, bridge work,
crown installation or root canal therapy for a Piper Jaffray Employee, Former
Piper Jaffray Employee or his or her covered dependent for which preparatory
dental services have been rendered under a Parent Health and Welfare Plan on or
before the Transition Date and such dental treatment continues after the
Transition Date, PROVIDED that such dental treatment is concluded within
allowable time limitations under the applicable Parent Health and Welfare Plan.
Coverage for any such hospitalization or dental services shall be provided after
the Transition Date without interruption under the appropriate Parent Health and
Welfare Plan until

                                      -11-
<Page>

such hospitalization or treatment for such condition is concluded or
discontinued subject to applicable plan rules and limitations.

     4.2 FLEXIBLE BENEFIT PLAN. Parent shall be responsible for all Liabilities
of the Piper Jaffray Employees who are participants in the Parent Flexible
Benefit Plan (the "COVERED EMPLOYEES") under the health care reimbursement
program, the transit and parking reimbursement program and the dependent care
reimbursement program of the Parent Flexible Benefit Plan for claims incurred at
any time during the 2003 plan year of the Parent Flexible Benefit Plan and
submitted to the Parent in accordance with the terms and conditions of the
Parent Flexible Benefit Plan.

     4.3 WORKERS' COMPENSATION LIABILITIES. Except as provided below, all
workers' compensation Liabilities relating to, arising out of, or resulting from
any claim by a Parent Employee, Former Parent Employee, Piper Jaffray Employee
and Former Piper Jaffray Employee that results from an accident occurring, or
from an occupational disease which becomes manifest, before the Close of the
Distribution Date shall be retained by Parent; provided, however, that all
amounts payable by Parent relating to, arising out of or resulting from any such
claim by a Piper Jaffray Employee shall be deemed to be a Piper Jaffray
Liability for purposes of the Insurance Matters Agreement and shall be paid by
Parent or Piper Jaffray as set forth in the Insurance Matters Agreement. All
workers' compensation Liabilities relating to, arising out of, or resulting from
any claim by a Parent Employee, Former Parent Employee or Former Piper Jaffray
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by Parent. All workers' compensation Liabilities relating to, arising
out of, or resulting from any claim by a Piper Jaffray Employee that results
from an accident occurring, or from an occupational disease which becomes
manifest, on or after the Distribution Date shall be retained by Piper Jaffray.
For purposes of this Agreement, a compensable injury shall be deemed to be
sustained upon the occurrence of the event giving rise to eligibility for
workers' compensation benefits or an occupational disease becomes manifest, as
the case may be. Parent, Piper Jaffray and the other Piper Jaffray Entities
shall cooperate with respect to any notification to appropriate governmental
agencies of the Distribution and the issuance of new, or the transfer of
existing, workers' compensation insurance policies and claims handling
contracts.

     4.4 PAYROLL TAXES AND REPORTING OF COMPENSATION. Parent and Piper Jaffray
shall, and shall cause the other Parent Entities and the other Piper Jaffray
Entities to, respectively, take such action as may be reasonably necessary or
appropriate in order to minimize Liabilities related to payroll taxes after the
Distribution Date. Parent and Piper Jaffray shall, and shall cause the other
Parent Entities and the other Piper Jaffray Entities to, respectively, each bear
its responsibility for payroll tax obligations and for the proper reporting to
the appropriate governmental authorities of compensation earned by their
respective employees after the Close of the Distribution Date, including
compensation related to the exercise of Options.

     4.5 PARENT POST-RETIREMENT WELFARE BENEFITS PLAN.

          (a) RETENTION OF PARENT POST-RETIREMENT WELFARE BENEFITS PLAN. As of
the Distribution Date, Parent shall retain (i) sponsorship of all Parent
Post-Retirement Welfare Benefits Plans and any trust or other funding
arrangement established or maintained with respect

                                      -12-

<Page>

to such plans, or any assets held as of the Distribution Date with respect to
such plans and (ii) all Liabilities relating to, arising out of, or resulting
from retiree health and welfare coverage or claims incurred by or on behalf
of Parent Employees, Former Parent Employees, Former Piper Jaffray Employees
or their covered dependents under the Parent Post-Retirement Welfare Benefits
Plans. Parent shall not assume any Liability relating to post-retirement
welfare claims incurred by or on behalf of Piper Jaffray Employees or their
covered dependents after the Distribution Date, and such claims shall be
satisfied by Piper Jaffray pursuant to Section 4.5(b)

          (b) ASSUMPTION OF PIPER JAFFRAY POST-RETIREMENT WELFARE BENEFITS
PLANS. Effective as of the Distribution Date, (i) Piper Jaffray may, in its sole
discretion, adopt Post-Retirement Welfare Benefits Plans for the benefit of
Piper Jaffray Employees, and (ii) Piper Jaffray shall be responsible for all
Liabilities relating to, arising out of or resulting from health and welfare
coverage or claims incurred by or on behalf of Piper Jaffray Employees or their
covered dependents under the Piper Jaffray Post-Retirement Welfare Benefits
Plans.

     4.6 COBRA AND HIPAA COMPLIANCE. Parent shall be responsible for
administering compliance with the health care continuation requirements of
COBRA, the certificate of creditable coverage requirements of HIPAA, and the
corresponding provisions of the Parent Health and Welfare Plans with respect to
Piper Jaffray Employees and their covered dependents who incur a COBRA
qualifying event or loss of coverage under the Parent Health and Welfare Plans
at any time on or before December 31, 2003. Effective on the Transition Date,
Piper Jaffray or another Piper Jaffray Entity shall be responsible for
administering compliance with the health care continuation requirements of
COBRA, the certificate of creditable coverage requirements of HIPAA, and the
corresponding provisions of the Piper Jaffray Health and Welfare Plans with
respect to Piper Jaffray Employees and their covered dependents who incur a
COBRA qualifying event or loss of coverage under the Piper Jaffray Health and
Welfare Plans at any time after December 31, 2003. The parties hereto agree that
the consummation of the transactions contemplated by this Agreement and the
Separation Agreement shall not constitute a COBRA qualifying event for any
purpose of COBRA.

                                   ARTICLE V
                      EXECUTIVE BENEFITS AND OTHER BENEFITS

     5.1 ASSUMPTION OF OBLIGATIONS. Except as provided in this Agreement,
effective as of the Distribution Time, Piper Jaffray shall assume and be solely
responsible for all Liabilities to or relating to Piper Jaffray Employees under
all Parent Executive Benefit Plans and Piper Jaffray Executive Benefit Plans.
None of the transactions contemplated by the Separation and Distribution
Agreement or any of the Ancillary Agreements, including, without limitation,
this Agreement, constitutes a change in control for purposes of any Employee
Benefit Plan.

     5.2 PARENT EXECUTIVE INCENTIVE PLAN AND THE ANNUAL INCENTIVE PLAN.

          (a) PIPER JAFFRAY BONUS AWARDS. Piper Jaffray shall be responsible for
determining all bonus awards that would otherwise be payable under the U.S.
Bancorp Executive Incentive Plan and the U.S. Bancorp Annual Incentive Plan to
Piper Jaffray Employees for the Distribution Year. Piper Jaffray shall also
determine for Piper Jaffray Employees (i) the extent

                                      -13-
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to which established performance criteria (as interpreted by Piper Jaffray, in
its sole discretion) have been met, and (ii) the payment level for each Piper
Jaffray Employee. Piper Jaffray shall assume all Liabilities with respect to any
such bonus awards payable to Piper Jaffray Employees for the Distribution Year
and thereafter.

          (b) PARENT BONUS AWARDS. Parent shall be responsible for determining
all bonus awards that would otherwise be payable under the U.S. Bancorp
Executive Incentive Plan and the U.S. Bancorp Annual Incentive Plan to Parent
Employees for the Distribution Year. Parent shall also determine for Parent
Employees (i) the extent to which established performance criteria have been
met, and (ii) the payment level for each such Parent Employee. Parent shall
retain all Liabilities with respect to any such bonus awards payable to Parent
Employees for the Distribution Year and thereafter.

     5.3 PARENT LONG-TERM INCENTIVE PLANS. Parent and Piper Jaffray shall use
their reasonable best efforts to take all actions necessary or appropriate so
that each outstanding Option and Award granted under any Parent Long-Term
Incentive Plan held by any individual shall be adjusted as set forth in this
Article V.

          (a) NON-CONVERTIBLE PARENT OPTIONS. As determined by the Compensation
Committee of the Parent Board of Directors (the "COMMITTEE") in its sole
discretion pursuant to its authority under any of the Parent Long-Term Incentive
Plans, each Non-Convertible Parent Option shall be subject to the same terms and
conditions after the Distribution as the terms and conditions applicable to such
Non-Convertible Parent Option immediately prior to the Distribution; PROVIDED,
HOWEVER, that from and after the Close of the Distribution (i) the number of
shares of Parent Common Stock subject to such Non-Convertible Parent Option,
rounded to the nearest whole share, shall be equal to the product of (x) the
number of shares of Parent Common Stock subject to such Non-Convertible Parent
Option immediately prior to the Distribution Date and (y) the quotient obtained
by dividing the Parent Stock Value by the Parent Opening Stock Value and (ii)
the exercise price of such Non-Convertible Parent Option, rounded to the nearest
whole cent, shall be equal to the quotient obtained by dividing (x) the exercise
price of such Non-Convertible Parent Option immediately prior to the
Distribution by (y) the quotient obtained by dividing the Parent Stock Value by
the Parent Opening Stock Value.

          (b) SPECIAL CONVERTIBLE PARENT OPTION. As determined by the Committee
in its sole discretion pursuant to its authority under any of the Parent
Long-Term Incentive Plans, each Special Convertible Parent Option shall be
converted at the time of the Distribution into a Piper Jaffray Option, which
shall be granted pursuant to the Piper Jaffray Long-Term Incentive Plan and
shall have an aggregate fair value equal to the Black-Scholes value of the
Special Convertible Parent Option as of the last trading date prior to the
Distribution Date (as such values are determined in the sole discretion of the
Committee, whose determination, notwithstanding anything herein to the contrary,
shall be final, binding and conclusive for all purposes under the applicable
Parent Long-Term Incentive Plan), assuming for this purpose that the remaining
life of the Convertible Parent Option is the remaining contractual life of such
option and subject to such other terms and conditions as the Committee may
specify.

          (c) CONVERTIBLE PARENT OPTIONS. As determined by the Committee in its
sole discretion pursuant to its authority under any of the Parent Long-Term
Incentive Plans, each

                                      -14-
<Page>

Convertible Parent Option shall be converted at the time of the Distribution
into a Piper Jaffray Option, which shall be granted pursuant to the Piper
Jaffray Long-Term Incentive Plan and shall have a Black-Scholes value equal to
the Black-Scholes value of the Convertible Parent Option as of the last trading
date prior to the Distribution Date (as such values are determined in the sole
discretion of the Committee, whose determination, notwithstanding anything
herein to the contrary, shall be final, binding and conclusive for all purposes
under the applicable Parent Long-Term Incentive Plan), assuming for this purpose
that the remaining life of the Convertible Parent Option is the remaining
contractual life of such option and subject to such other terms and conditions
as the Committee may specify.

          (d) INCENTIVE STOCK OPTIONS; FOREIGN GRANTS/AWARDS. To the extent that
any of the Parent Options described in Section 5.3(a), 5.3(b) or 5.3(c) are
"incentive stock options," Parent and Piper Jaffray shall use their commercially
reasonable efforts to preserve, at and after the Distribution, the value and tax
treatment accorded to such incentive stock options, and, to the extent that the
Parent Awards described in Section 5.3(e) below or any of the Parent Options
described in Section 5.3(a), 5.3(b) or 5.3(c) are granted to non-U.S. employees
under any domestic or foreign equity-based incentive program sponsored by a
Parent Entity, Parent and Piper Jaffray shall use their commercially reasonable
efforts to preserve, at and after the Distribution, the value and tax treatment
accorded to such Parent Options and such Parent Awards granted to non-U.S.
employees under any domestic or foreign equity-based incentive program sponsored
by a Parent Entity. The parties hereby delegate to the Parent Executive Vice
President-Human Resources, for periods before the Distribution Date, the
authority to determine an appropriate methodology for adjusting such grants or
awards in a manner that is, to the extent possible, consistent with the
treatment of such awards and grants for U.S. employees.

          (e) OTHER AWARDS.

               (i) CONVERTIBLE PARENT RESTRICTED STOCK. As determined by the
Committee in its sole discretion pursuant to its authority under any of the
Parent Long-Term Incentive Plans, each share of Parent Restricted Stock held by
a Piper Jaffray Employee ("CONVERTIBLE RESTRICTED STOCK") shall be converted at
the Distribution into a number of shares of Piper Jaffray Restricted Stock,
rounded to the nearest whole share, required to be granted to the holder of such
Parent Restricted Stock in order that the fair value of such Piper Jaffray
Restricted Stock (as determined by the Committee in its sole discretion
following methods and assumptions consistent with SFAS 123) as of immediately
following the Distribution Date shall equal the fair value of the Parent
Restricted Stock immediately prior to the Distribution Date.

               (ii) NON-CONVERTIBLE PARENT RESTRICTED STOCK. As determined by
the Committee in its sole discretion pursuant to its authority under any of the
Parent Long-Term Incentive Plans, each share of Parent Restricted Stock that is
not Convertible Restricted Stock shall be subject to the same terms and
conditions after the Distribution as the terms and conditions applicable to such
Parent Restricted Stock immediately prior to the Distribution; PROVIDED,
HOWEVER, that on the Close of the Distribution, the holder of the Parent
Restricted Stock shall receive a number of shares of Piper Jaffray Common Stock
determined in the manner set forth in Section 3.1 of the Separation and
Distribution Agreement. Notwithstanding anything in any award agreement
evidencing the grant of such Parent Restricted Stock to the contrary, in

                                      -15-
<Page>

no event shall the Piper Jaffray Common Stock received with respect to such
Parent Restricted Stock be subject to any restriction.

               (iii) RESTRICTED STOCK UNITS. As determined by the Committee in
its sole discretion pursuant to its authority under any of the Parent Long-Term
Incentive Plans, each Parent Restricted Stock Unit shall be subject to the same
terms and conditions after the Distribution as the terms and conditions
applicable to such Parent Restricted Stock Unit immediately prior to the
Distribution; PROVIDED, HOWEVER, that from and after the Close of the
Distribution the number of shares of Parent Common Stock subject to such Parent
Restricted Stock Unit, rounded to the nearest whole share, shall be equal to the
product of (x) the number of shares of Parent Common Stock subject to such
Parent Restricted Stock Unit immediately prior to the Distribution Date and (y)
the quotient obtained by dividing the Parent Stock Value by the Parent Opening
Stock Value.

          (f) AGGREGATE LIMIT. Notwithstanding any provision of this Section 5.3
to the contrary, if the aggregate number of shares of Piper Jaffray Common Stock
subject to Piper Jaffray Options and the number of shares of Piper Jaffray
Restricted Stock issuable pursuant to Sections 5.3(b), 5.3(c) and 5.3(e)(i)
would exceed 8,000,000 in the aggregate, then the number of shares of Piper
Jaffray Common Stock subject to Piper Jaffray Options and shares of Piper
Jaffray Restricted Stock issuable under Sections 5.3(b), 5.3(c) and 5.3(e)(i)
shall be reduced on an individual pro rata grant-by-grant basis such that
8,000,000 shares of Piper Jaffray Common Stock shall be subject to Piper Jaffray
Options and Piper Jaffray Awards issuable pursuant to Sections 5.3(b), 5.3(c)
and 5.3(e)(i).

          (g) MISCELLANEOUS OPTION AND OTHER AWARD TERMS.

               (i) Parent and Piper Jaffray acknowledge that, in the context of
the Separation, the adjustment to Parent Options and the Parent Awards as set
forth in this Section 5.3 will be implemented, in part, by the issuance of Piper
Jaffray Options and Piper Jaffray Awards under the terms of the Piper Jaffray
Long-Term Incentive Plan. Accordingly, it is intended that, to the extent of the
issuance of such Piper Jaffray Options and Piper Jaffray Awards in connection
with the adjustments set forth in this Section 5.3, the Piper Jaffray Long-Term
Incentive Plan shall be considered a successor to the Parent Long-Term Incentive
Plan and to have assumed the obligation of the Parent Long-Term Incentive Plan
to make the adjustment of Parent Options and Parent Awards as set forth in this
Section 5.3.

               (ii) After the Distribution Date, Parent Options and Parent
Awards adjusted pursuant to Section 5.3, regardless of by whom held, shall be
settled by Parent pursuant to the terms of the Parent Long-Term Incentive Plan,
and Piper Jaffray Options and Piper Jaffray Awards, regardless of by whom held,
shall be settled by Piper Jaffray pursuant to the terms of the Piper Jaffray
Long-Term Incentive Plan.

               (iii) Parent or a Parent Entity shall claim the benefit of
federal, state, and local tax deductions related to the exercise of all adjusted
Parent Options and the vesting or settlement, as applicable, of Parent Awards
after the Distribution Date and none of Piper Jaffray or any Piper Jaffray
Entity shall claim any such tax deductions. After the Distribution Date, Parent
and the Parent Entities shall be responsible for the proper payroll tax
treatment and the

                                      -16-
<Page>

proper reporting to the appropriate governmental authorities of compensation
relating to all option exercises of Parent Options and vesting or settlement, as
applicable, of Parent Awards.

               (iv) Piper Jaffray or a Piper Jaffray Entity shall claim the
benefit of federal, state and local tax deductions related to the exercise of
Piper Jaffray Options and the vesting or settlement, as applicable, of Piper
Jaffray Awards after the Distribution Date and neither Parent nor any Parent
Entity shall claim any such tax deductions. After the Distribution Date, Piper
Jaffray and the Piper Jaffray Entities shall be responsible for the proper
payroll tax treatment and the proper reporting to the appropriate governmental
authorities of compensation relating to all option exercises of Piper Jaffray
Options and vesting or settlement, as applicable, of Piper Jaffray Awards.

               (v) Parent and Piper Jaffray agree to act (or to take such
action) with respect to such federal, state, or local tax deductions, and with
respect to fulfilling the payroll tax and reporting obligations on compensation
as are reasonably necessary or appropriate to achieve, maintain and/or preserve
such tax results.

               (vi) If (A) as a result of a determination (as defined in Section
1313 of the Code) or (B) in the opinion of nationally recognized tax counsel to
Parent or Piper Jaffray, which opinion and tax counsel are reasonably acceptable
to the other party hereto, as a result of final or pending Treasury Regulations,
Internal Revenue Service announcement or otherwise, in each case, there is a
substantial likelihood that the tax deductions related to the exercise of
Options or Awards under this Agreement and/or the payroll tax and reporting
obligations related to the exercise of Options or vesting or settlement of
Awards, will be inconsistent with all or any part of Section 5.3 above, the
parties shall negotiate in good faith to restructure the arrangements set forth
herein so that (I) if, pursuant to the determination or opinion, a party gets a
tax deduction it was not entitled to claim under the terms of this Agreement,
that party shall pay over to the party entitled to claim the deduction under the
terms of this Agreement, as if and for the tax year(s) recognized through a
reduction in taxes due and/or the receipt of a refund in an amount equal to the
lesser of (X) its tax benefit and (Y) the benefit otherwise available to the
party entitled to such deduction under the terms of this Agreement, as if and
for the tax year(s) when such deduction would have resulted in a reduction in
taxes due and/or the receipt of a refund and (II) the reporting and financial
burden of the payroll taxes are, to the extent practicable, as described above.
Any such amounts shall be payable within 30 days of the filing of the return in
which the benefit described in (X) or (Y) of the preceding sentence, whichever
is later, is reflected. If the parties are unable to reach an agreement on how
to restructure the arrangements set forth herein within 90 days of such
determination or the receipt of the opinion of counsel described in the first
sentence of this subparagraph (vi) such disagreement shall be resolved by a
nationally recognized law firm or accounting firm ("INDEPENDENT THIRD PARTY"),
selected in a manner similar to the procedure set forth in Section 3(b)(iii) of
the Tax Sharing Agreement, whose judgment shall be conclusive and binding upon
the parties. The cost of any Independent Third Party shall be shared equally
between the parties.

          (h) WAITING PERIOD FOR EXERCISABILITY OF OPTIONS. The Parent Options
and Piper Jaffray Options shall not be exercisable during a period beginning on
a date prior to the Distribution Date determined by Parent in its sole
discretion, and continuing until the Parent Opening Stock Value and the Piper
Jaffray Common Stock Value are determined immediately

                                      -17-
<Page>

after the Distribution, or such longer period as Parent determines necessary to
implement the provisions of this Section 5.3.

          (i) RESTRICTIVE COVENANTS. Following the Distribution Date, Piper
Jaffray shall use its reasonable best efforts to monitor the Piper Jaffray
Employees and Former Piper Jaffray Employees to determine whether any such Piper
Jaffray Employees or Former Piper Jaffray Employees have breached any of the
restrictive covenants in the agreements evidencing the terms of their Parent
Options and Parent Awards. As soon as practicable following Piper Jaffray's
reasonable belief that a Piper Jaffray Employee or Former Piper Jaffray Employee
has breached any such covenant, Piper Jaffray shall provide Parent in writing
with the name and address of such employee or former employee and the name and
address of the enterprise in which such employee or former employee is believed
to have been engaged. Notwithstanding the foregoing or anything in any agreement
evidencing the terms of any Parent Options and Parent Awards to the contrary, it
shall not be a violation of any non-competition or non-solicitation of clients
or customers covenant for a holder of a Parent Option or Parent Award to engage
in acts on behalf of Piper Jaffray or a Piper Jaffray Entity that are otherwise
prohibited by the terms of such non-competition or non-solicitation of clients
or customers covenants.

     5.4 SAVINGS CLAUSE. Notwithstanding any other provision of Section 5.3, if
and to the extent either Parent or Piper Jaffray shall determine in its
reasonable judgment, after consultation with its legal counsel or financial
accountants, as appropriate, that any action required to be taken by it under
Section 5.3 does not comply with applicable laws or does not properly satisfy
all relevant financial accounting pronouncements, then Parent and Piper Jaffray
shall take such other action as they mutually agree is necessary or appropriate
in order to address such laws or such financial accounting concerns.

     5.5 REGISTRATION REQUIREMENTS. As soon as possible following the time as of
which the Registration Statement (as defined in the Separation and Distribution
Agreement) is declared effective by the Securities and Exchange Commission but
in any case before the Distribution Date and before the date of issuance or
grant of any Piper Jaffray Option and/or shares of Piper Jaffray Common Stock
pursuant to this Article V, Piper Jaffray agrees that it shall file a Form S-8
Registration Statement with respect to and cause to be registered pursuant to
the Securities Act of 1933, as amended, the shares of Piper Jaffray Common Stock
authorized for issuance under the Piper Jaffray Long-Term Incentive Plan as
required pursuant to such Act and any applicable rules or regulations
thereunder, with such registration to be effective prior to the Distribution
Date.

     5.6 PARENT NON-QUALIFIED RETIREMENT PLANS. Effective as of the Distribution
Date, Piper Jaffray shall establish a non-qualified pension plan (the "PIPER
JAFFRAY NON-QUALIFIED RETIREMENT PLAN") that is substantially identical to the
Parent Non-Qualified Retirement Plan to provide benefits to Piper Jaffray
Employees and Former Piper Jaffray Employees from and after the Distribution
Date who were participants in the Parent Non-Qualified Retirement Plan as of
immediately prior to the Distribution Date. Effective as of the Distribution
Date, Piper Jaffray shall assume and be solely responsible for all Liabilities
of Parent for, or relating to, benefits accrued through the Distribution Date by
or with respect to Piper Jaffray Employees and Former Piper Jaffray Employees
under the Parent Non-Qualified Retirement Plan and the Piper Jaffray
Non-Qualified Retirement Plan.

                                      -18-
<Page>

     5.7 SEVERANCE PLANS. The Parent Severance Pay Program provides for the
payment of certain compensation and benefits in the event of the termination of
employment of the individual covered by the terms of such plans. As of the Close
of the Distribution Date, Parent shall retain all Liabilities relating to the
Parent Severance Pay Program and all Liabilities relating to, arising out of, or
resulting from claims incurred by or on behalf of any individual under such
plans. A Piper Jaffray Employee shall not be deemed to have terminated
employment for purposes of determining eligibility for benefits under the
Severance Pay Plan or other similar plans and programs in connection with or in
anticipation of the consummation of the transactions contemplated by the
Separation and Distribution Agreement, and shall cease to be covered thereby as
of the Close of the Distribution Date. Piper Jaffray shall be solely responsible
for all Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any Piper Jaffray
Employee's employment that occurs as a result of or in connection with or
following the consummation of the transactions contemplated by the Separation
and Distribution Agreement, including any amounts required to be paid (including
any payroll or other taxes), and the costs of providing benefits, under any
applicable severance, separation, redundancy, termination or similar plan,
program, practice, contract, agreement, law or regulation (such benefits to
include any medical or other welfare benefits, outplacement benefits, accrued
vacation, and taxes). The Parent shall retain all Liabilities with respect to
the termination of any Piper Jaffray Employee or Former Piper Jaffray employee
prior to the Distribution Date.

                                   ARTICLE VI
                           GENERAL AND ADMINISTRATIVE

     6.1 SHARING OF PARTICIPANT INFORMATION. Parent and Piper Jaffray shall
share, and Parent shall cause each other Parent Entity to share, and Piper
Jaffray shall cause each other Piper Jaffray Entity to share with each other and
their respective agents and vendors (without obtaining releases) all participant
information necessary for the efficient and accurate administration of each of
the Piper Jaffray Benefit Plans and the Parent Benefit Plans. Parent and Piper
Jaffray and their respective authorized agents shall, subject to applicable
laws, be given reasonable and timely access to, and may make copies of, all
information relating to the subjects of this Agreement in the custody of the
other party, to the extent necessary for such administration. Until the Close of
the Distribution Date, all participant information shall be provided in the
manner and medium applicable to Participating Companies in Benefit Plans of
Parent generally, and thereafter until December 31, 2003, all participant
information shall be provided in a manner and medium as may be mutually agreed
to by Parent and Piper Jaffray.

     6.2 REASONABLE EFFORTS/COOPERATION. Each of the parties hereto will use its
commercially reasonable efforts to promptly take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Each of the parties hereto shall cooperate fully
on any issue relating to the transactions contemplated by this Agreement for
which the other party seeks a determination letter or private letter ruling from
the Internal Revenue Service, an advisory opinion from the Department of Labor
or any other filing, consent or approval with respect to or by a governmental
agency.

                                      -19-
<Page>

     6.3 NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit
of the Parties and is not intended to confer upon any other Persons any rights
or remedies hereunder. Except as expressly provided in this Agreement, nothing
in this Agreement shall preclude Parent or any other Parent Entity, at any time
after the Close of the Distribution Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Parent Benefit Plan, any benefit under any Benefit Plan or any trust, insurance
policy or funding vehicle related to any Parent Benefit Plan. Except as
expressly provided in this Agreement, nothing in this Agreement shall preclude
Piper Jaffray or any other Piper Jaffray Entity, at any time after the Close of
the Distribution Date, from amending, merging, modifying, terminating,
eliminating, reducing, or otherwise altering in any respect any Piper Jaffray
Benefit Plan, any benefit under any Benefit Plan or any trust, insurance policy
or funding vehicle related to any Piper Jaffray Benefit Plan.

     6.4 AUDIT RIGHTS WITH RESPECT TO INFORMATION PROVIDED.

          (a) Each of Parent and Piper Jaffray, and their duly authorized
representatives, shall have the right to conduct reasonable audits with respect
to all information required to be provided to it by the other party under this
Agreement. The party conducting the audit (the "AUDITING PARTY") may adopt
reasonable procedures and guidelines for conducting audits and the selection of
audit representatives under this Section 6.4. The Auditing Party shall have the
right to make copies of any records at its expense, subject to any restrictions
imposed by applicable laws and to any confidentiality provisions set forth in
the Separation and Distribution Agreement, which are incorporated by reference
herein. The party being audited shall provide the Auditing Party's
representatives with reasonable access during normal business hours to its
operations, computer systems and paper and electronic files, and provide
workspace to its representatives. After any audit is completed, the party being
audited shall have the right to review a draft of the audit findings and to
comment on those findings in writing within ten business days after receiving
such draft.

          (b) The Auditing Party's audit rights under this Section 6.4 shall
include the right to audit, or participate in an audit facilitated by the party
being audited, of any Subsidiaries and Affiliates of the party being audited and
to require the other party to request any benefit providers and third parties
with whom the party being audited has a relationship, or agents of such party,
to agree to such an audit to the extent any such persons are affected by or
addressed in this Agreement (collectively, the "NON-PARTIES"). The party being
audited shall, upon written request from the Auditing Party, provide an
individual (at the Auditing Party's expense) to supervise any audit of a
Non-party. The Auditing Party shall be responsible for supplying, at the
Auditing Party's expense, additional personnel sufficient to complete the audit
in a reasonably timely manner. The responsibility of the party being audited
shall be limited to providing, at the Auditing Party's expense, a single
individual at each audited site for purposes of facilitating the audit.

     6.5 FIDUCIARY MATTERS. It is acknowledged that actions required to be taken
pursuant to this Agreement may be subject to fiduciary duties or standards of
conduct under ERISA or other applicable law, and no party shall be deemed to be
in violation of this Agreement if it fails to comply with any provisions hereof
based upon its good faith determination that to do so would violate such a
fiduciary duty or standard. Each party shall be responsible for taking such
actions

                                      -20-
<Page>

as are deemed necessary and appropriate to comply with its own fiduciary
responsibilities and shall fully release and indemnify the other party for any
Liabilities caused by the failure to satisfy any such responsibility.

     6.6 CONSENT OF THIRD PARTIES. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, the parties hereto shall use their reasonable best efforts to
implement the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement cannot be implemented due to the
failure of such third party to consent, the parties hereto shall negotiate in
good faith to implement the provision in a mutually satisfactory manner. The
phrase "reasonable best efforts" as used herein shall not be construed to
require any party to incur any non-routine or unreasonable expense or Liability
or to waive any right.

                                  ARTICLE VII
                                  MISCELLANEOUS

     7.1 EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the Separation and
Distribution Agreement is terminated prior to the Distribution Date, then all
actions and events that are, under this Agreement, to be taken or occur
effective immediately prior to or as of the Close of the Distribution Date, or
Immediately after the Distribution Date, or otherwise in connection with the
Separation Transactions shall not be taken or occur except to the extent
specifically agreed by Parent and Piper Jaffray.

     7.2 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed or
construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.

     7.3 AFFILIATES. Each of Parent and Piper Jaffray shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by another Parent Entity
or a Piper Jaffray Entity, respectively.

     7.4 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given to a
party when (a) delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) sent by facsimile with
confirmation of transmission by the transmitting equipment; or (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested,
in each case to the following addresses and facsimile numbers and marked to the
attention of the person (by name or title) designated below (or to such other
address, facsimile number or person as a party may designate by notice to the
other parties):

                (a)          if to Parent:

                             U.S. Bancorp
                             800 Nicollet Mall

                                      -21-
<Page>
                             Minneapolis, Minnesota  55402
                             Attention:  General Counsel
                             Fax:  (612) 303-0898

         with copies to:

                             Wachtell, Lipton, Rosen & Katz
                             51 West 52nd Street
                             New York, NY  10019
                             Attention:  Adam D. Chinn
                             Facsimile No.:  (212) 403-2209

                (b)          if to Piper Jaffray:

                             Piper Jaffray Companies
                             800 Nicollet Mall
                             Minneapolis, Minnesota  55402
                             Attention:  General Counsel
                             Fax:  (612) 303-1772

     7.5 INCORPORATION OF SEPARATION AND DISTRIBUTION AGREEMENT PROVISIONS. The
following provisions of the Separation and Distribution Agreement are hereby
incorporated herein by reference, and unless otherwise expressly specified
herein, such provisions shall apply as if fully set forth herein (references in
this Section 7.5 to an "Article" or "Section" shall mean Articles or Sections of
the Separation and Distribution Agreement, and references in the material
incorporated herein by reference shall be references to the Separation and
Distribution Agreement): Article IV (relating to Survival and Indemnification);
Article V (relating to Certain Additional Covenants); Article VI (relating to
Access to Information); Article VII (relating to No Representations or
Warranties); Article VIII (relating to Terminations); Article IX (relating to
Miscellaneous).

                                      -22-
<Page>

     IN WITNESS WHEREOF, the parties have caused this Employee Benefits
Agreement to be duly executed as of the day and year first above written.

                                   U.S. BANCORP

                                   By:
                                      -------------------------------------
                                   Name:
                                   Title:

                                   PIPER JAFFRAY COMPANIES

                                   By:
                                      --------------------------------------
                                   Name:
                                   Title:

                                      -23-

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