As filed with the Securities and Exchange Commission on December 19, 2003

File No. 001-31720

(612) 303-6000
(Registrant's telephone number, including area code)

Securities to be registered
pursuant to Section 12(b) of the Act:

Securities to be registered
pursuant to Section 12(g) of the Act:

None

INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND
ITEMS OF FORM 10

Item 1.    Business

        The information required by this item is contained under the sections "Summary," "Risk Factors," "Our Business," "Relationship with U.S. Bancorp," "Where You Can Find More Information" and "Financial Information" of this information statement. Those sections are incorporated herein by reference.

Item 2.    Financial Information

        The information required by this item is contained under the sections "Summary," "Capitalization," "Selected Combined Financial Data," "Unaudited Pro Forma Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this information statement. Those sections are incorporated herein by reference.

Item 3.    Properties

        The information required by this item is contained under the section "Our Business—Properties" of this information statement. That section is incorporated herein by reference.

Item 4.    Security Ownership of Certain Beneficial Owners and Management

        The information required by this item is contained under the sections "Management—Stock Ownership of Directors and Executive Officers" and "Principal Stockholders" of this information statement. Those sections are incorporated herein by reference.

Item 5.    Directors and Executive Officers

        The information required by this item is contained under the section "Management" of this information statement. That section is incorporated herein by reference.

Item 6.    Executive Compensation

        The information required by this item is contained under the section "Management" of this information statement. That section is incorporated herein by reference.

Item 7.    Certain Relationships and Related Transactions

        The information required by this item is contained under the sections "Management" and "Relationship with U.S. Bancorp" of this information statement. Those sections are incorporated herein by reference.

Item 8.    Legal Proceedings

        The information required by this item is contained under the section "Our Business—Legal Proceedings" of this information statement. That section is incorporated herein by reference.

Item 9.    Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters

        The information required by this item is contained under the sections "Risk Factors," "The Distribution," "Dividend Policy," "Our Business—Regulation," "Management" and "Description of Capital Stock" of this information statement. Those sections are incorporated herein by reference.

Item 10.    Recent Sales of Unregistered Securities

        On April 28, 2003, in connection with its formation, Piper Jaffray Companies issued 100 shares of its common stock to U.S. Bancorp Piper Jaffray Companies Inc., a wholly owned subsidiary of U.S. Bancorp, for a consideration of $1,000. In the opinion of Piper Jaffray Companies, this transaction was exempt from registration under the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof in that such transaction did not involve any public offering.

Item 11.    Description of Registrant's Securities to Be Registered

        The information required by this item is contained under the sections "Management" and "Description of Capital Stock" of this information statement. Those sections are incorporated herein by reference.

Item 12.    Indemnification of Directors and Officers

        The information required by this item is contained under the section "Indemnification of Directors and Officers" of this information statement. That section is incorporated herein by reference.

Item 13.    Financial Statements and Supplementary Data

        The information required by this item is contained under the sections "Capitalization," "Selected Combined Financial Data," "Unaudited Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Financial Information" of this information statement. Those sections are incorporated herein by reference.

Item 14.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        The information required by this item is contained under the section "Change in Accountants" of this information statement. That section is incorporated herein by reference.

Item 15.    Financial Statements and Exhibits

        (a)     Financial Statements     

        The information required by this item is contained under the section "Financial Information" beginning on page F-1 of this information statement. That section is incorporated herein by reference.

        (b)     Exhibits     

        The following documents are filed as exhibits hereto:

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SIGNATURES

        Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 6 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: December 19, 2003

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December       , 2003

Dear Fellow U.S. Bancorp Stockholder:

        On December 15, 2003, our board of directors approved the pro rata distribution to U.S. Bancorp stockholders of all of the shares of common stock of Piper Jaffray Companies, referred to in this letter as Piper Jaffray, owned by U.S. Bancorp. We believe that the distribution of our shares of Piper Jaffray is in the best interests of U.S. Bancorp, its stockholders and the Piper Jaffray business. With this distribution we are providing you, as a stockholder in U.S. Bancorp, with another avenue to benefit from your investment in our company.

        We believe it is important to resolve the strategic business and other management issues arising from the continued operation of the Piper Jaffray business with the other U.S. Bancorp operations and permit our management to focus its full efforts on and attention to our remaining businesses. Since the completion of the merger of our company and Firstar Corporation in 2001, we have focused on developing our retail and commercial banking operations and on minimizing our risk profile and the related volatility of our results of operation. Among other things, we have a desire to reduce our involvement in investment banking activities. Consequently, this has resulted in a divergence in business strategies between the Piper Jaffray business and the rest of U.S. Bancorp, and a desire on our part to separate the Piper Jaffray business from the rest of our operations.

        In the distribution, we will distribute             shares of Piper Jaffray common stock, which will be all of the issued and outstanding shares of Piper Jaffray common stock at the time of the distribution. In the distribution, you will receive one one-hundredth of a share of Piper Jaffray common stock for each share of U.S. Bancorp common stock that you held of record at the close of business on December 22, 2003. Your current shares of U.S. Bancorp common stock will continue to represent your ownership position in U.S. Bancorp.

        Piper Jaffray has been authorized for listing by the New York Stock Exchange, Inc. under the ticker symbol "PJC."

        The enclosed information statement is being sent to you to explain the distribution in detail and provide important information regarding Piper Jaffray. We urge you to read it carefully. Please note that stockholder approval is not required for the distribution and holders of U.S. Bancorp common stock are not required to take any action to participate in the distribution. Thus, we are not asking you for a proxy and you do not need to surrender or exchange your shares of U.S. Bancorp common stock in order to receive shares of Piper Jaffray common stock.

December       , 2003

Dear Fellow Piper Jaffray Companies Stockholder:

        On behalf of the entire team at Piper Jaffray Companies, I wish to welcome you as a stockholder in our company.

        The enclosed information statement includes detailed information about Piper Jaffray Companies, in which you will soon become a stockholder. As you know, on December 15, 2003, the board of directors of U.S. Bancorp approved the distribution of all the outstanding shares of common stock of Piper Jaffray that it holds to U.S. Bancorp's stockholders. Upon consummation of the distribution, Piper Jaffray will be an independent public company and will own and operate the capital markets and private client operations now owned and operated by U.S. Bancorp Piper Jaffray Companies Inc.

        We would like to take this opportunity to introduce you to our company. We are a client-focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within targeted sectors of the financial services marketplace. For over 100 years, we have leveraged our employees' experience and financial expertise to provide strategic advisory services to our institutional clients and tailored investment advice to our private individual clients. Our goal is to be a leading financial advisor within each of our targeted business areas.

        As a separate company focused solely on our business, we believe that we will have enhanced strategic and operational flexibility and, as a result, will be better positioned to serve our clients and grow our business. The distribution also will offer a more focused investment opportunity in Piper Jaffray for investors whose objectives align more closely with our business. Finally, our incentive compensation will be more closely tied to our performance, since stock-based awards will be based on our common stock rather than U.S. Bancorp common stock, and this more direct link with our performance should enhance the value of these incentives to both our employees and our stockholders.

        We are very excited about our prospects as an independent public company. Since our founding in 1895, we have worked to maintain a strong commitment to our clients, our employees and the communities in which we do business. We believe our company possesses a strong and highly motivated leadership team, outstanding employees, a well-deserved reputation for client service and a solid track record of financial performance.

        We are committed to building value for you, our new stockholder.

        Welcome, again, to our company.

Preliminary Information Statement
(Subject to Completion, Dated December 19, 2003)

PIPER JAFFRAY COMPANIES

COMMON STOCK
Par Value $0.01 Per Share

        U.S. Bancorp is furnishing this information statement to its stockholders in connection with the distribution by U.S. Bancorp to its stockholders of all of its shares of common stock of our company, Piper Jaffray Companies. As of the date of this information statement, U.S. Bancorp, through a wholly owned subsidiary, owns all of our outstanding common stock.

        In this distribution, U.S. Bancorp will distribute all of its shares of our common stock on a pro rata basis to the holders of U.S. Bancorp common stock. Each of you, as a holder of U.S. Bancorp common stock, will receive one one-hundredth of a share of our common stock for each share of U.S. Bancorp common stock that you held at the close of business on December 22, 2003, the record date. As discussed more fully in "The Distribution" section of this information statement, if you sell shares of U.S. Bancorp common stock in the "regular way" market between the record date and December 31, 2003, the distribution date, you will be selling your right to receive those shares of our common stock in the distribution. Immediately after the distribution is completed, we will be an independent public company. Our company will have 2 million shares available for granting stock awards to officers, directors and employees which are expected to be granted under our long-term incentive plan over the next 12 to 15 months, with the first grant expected in connection with our annual grant of awards in February 2004. Assuming that awards were granted on the distribution date for all of these shares, that the awards were immediately exercisable and exercised and that no shares were used to fund the purchase of our common stock, our officers, directors and employees would own, in the aggregate, approximately 9 percent of our outstanding common stock, based on our estimates as of, and assuming the distribution was completed on, November 30, 2003. In addition, we expect to grant employee cash awards to a broad-based group of our employees, including all of our executive officers, in connection with the distribution in an aggregate amount of $47 million.

        No general vote of U.S. Bancorp stockholders is required for the distribution to occur. No stockholder action is necessary for you to receive the shares of our common stock to which you are entitled in the distribution. This means that:

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you do not need to pay any consideration to U.S. Bancorp or to Piper Jaffray Companies for the shares of our common stock distributed to you, and



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you do not need to surrender or exchange any shares of U.S. Bancorp common stock to receive your shares of our common stock.

        Before December     , 2003, there was no trading market for our common stock. On that date, trading of shares of our common stock began on a "when issued" basis. We have been authorized for listing by the New York Stock Exchange, Inc. under the ticker symbol "PJC."

        As you review this information statement, you should carefully consider the matters described in the "Risk Factors," included elsewhere in this information statement.

         We are not asking you for a proxy and you are requested not to send us a proxy.

         The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities, or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

         This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is December     , 2003.

TABLE OF CONTENTS

        The Piper Jaffray logo and the other trademarks, tradenames and service marks of Piper Jaffray mentioned in this information statement, including Piper Jaffray®, are currently the property of, and are used with the permission of, U.S. Bancorp Licensing, Inc., a wholly owned subsidiary of U.S. Bancorp. In connection with the separation, this logo and these other trademarks, tradenames and service marks of Piper Jaffray, other than those including the name U.S. Bancorp, will be transferred to, and become the property of, Piper Jaffray. U.S. Bancorp® is a registered trademark of U.S. Bancorp Licensing, Inc.

SUMMARY

        This summary highlights selected information from this information statement relating to our company and the distribution of our common stock pursuant to the separation and distribution agreement. More detailed discussions of this information are contained elsewhere in this information statement. In some places in this information statement, we have presented pro forma information, adjusted to reflect the terms of our distribution from U.S. Bancorp and certain changes in our operations as a result of our separation from U.S. Bancorp in connection with the distribution. You should read the entire information statement, including the risk factors and our combined historical and pro forma financial statements and notes to those statements, appearing elsewhere in this information statement.

        Prior to the distribution, U.S. Bancorp will contribute or otherwise transfer generally all of the assets, and we will assume generally all of the liabilities, comprising the Piper Jaffray business, on the terms and subject to the conditions described in this information statement. The only significant component of U.S. Bancorp's capital markets segment that is not included in the Piper Jaffray business is a unit that provides cash management services to certain U.S. Bancorp corporate and commercial banking clients. Although this unit provides services similar to those provided by a unit within Piper Jaffray's fixed income business, it is focused on existing U.S. Bancorp customers and therefore will remain with U.S. Bancorp. U.S. Bancorp will retain and continue to operate the remainder of its business, including its consumer banking, payment services, private client, trust and asset management and wholesale banking business segments. The private client, trust and asset management business that U.S. Bancorp will retain includes the asset management business that U.S. Bancorp acquired in the acquisition of our predecessor company in 1998. Our company includes substantially the same businesses as those operated by our predecessor company when U.S. Bancorp acquired it in 1998 other than our predecessor company's asset management business, which U.S. Bancorp will retain after the distribution.

        The information included in this information statement, including our combined financial statements, assumes the completion of all of these contributions, transfers and assumptions, which transactions are referred to in this information statement as the separation. Use in this information statement of the terms:

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"Our broker dealer subsidiary" refers to U.S. Bancorp Piper Jaffray Inc., a broker dealer and investment banking subsidiary of U.S. Bancorp that will be transferred to us and renamed Piper Jaffray & Co. in connection with the separation.



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"Piper Jaffray," "we," "us" and "our" refer to Piper Jaffray Companies and the subsidiaries and other assets of U.S. Bancorp that will be transferred to Piper Jaffray Companies pursuant to the separation and distribution agreement.



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"Piper Jaffray business" and "our business" refer to the business and operations of the capital markets businesses of U.S. Bancorp Piper Jaffray Companies Inc. and its subsidiaries that will be transferred to us pursuant to the separation and distribution agreement.



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"U.S. Bancorp" refers to U.S. Bancorp, a Delaware corporation, and its consolidated subsidiaries.



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"U.S. Bancorp Piper Jaffray Companies Inc." and "U.S. Bancorp Investments, Inc." refer to U.S. Bancorp Piper Jaffray Companies Inc., a subsidiary of U.S. Bancorp that is the current holding company of the Piper Jaffray business, and U.S. Bancorp Investments, Inc., a subsidiary of U.S. Bancorp that provides retail brokerage and investment services to private individuals and is a part of U.S. Bancorp's consumer banking segment. These two U.S. Bancorp subsidiaries will be merged and renamed U.S. Bancorp Investments, Inc. in connection with the distribution and will remain with U.S. Bancorp.

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        After the distribution, we will compete in two primary areas with U.S. Bancorp. Our Private Client Services business segment will compete to a limited extent with U.S. Bancorp brokers in U.S. Bancorp's consumer banking segment to provide retail brokerage and investment services to private individuals. Second, our fixed income unit of our Capital Markets business segment will compete with U.S. Bancorp's wholesale banking segment to provide cash management services to corporate clients.

Conflicts of Interest Involved in the Separation of Our Business from U.S. Bancorp

        In connection with the distribution, we will enter into a separation and distribution agreement and several other key agreements with U.S. Bancorp in order to effect the separation and distribution and provide a framework for our ongoing relationship with U.S. Bancorp after the separation. Our officers negotiated these agreements while we were a wholly owned subsidiary of U.S. Bancorp. Accordingly, during this time our officers were employees of, and our future Chairman and Chief Executive Officer, Andrew S. Duff, was a Vice Chairman of, U.S. Bancorp, and as such had an obligation to serve the interests of U.S. Bancorp. In addition, U.S. Bancorp selected Mr. Duff to serve as our Chairman and Chief Executive Officer, and Mr. Duff, in consultation with U.S. Bancorp, selected our other executive officers. Moreover, our officers, including Mr. Duff, negotiated the amount and terms of our employee cash awards while serving as officers and employees of U.S. Bancorp. Since we were negotiating the separation of our two businesses, our interests differed from and were in conflict with the interests of U.S. Bancorp on issues such as the allocation of liabilities and indemnification. We believe our officers and officers of U.S. Bancorp negotiated these arrangements in good faith, taking into account the interests of their respective companies in the separation.

        In addition, the allocation of our employee cash awards in connection with the distribution involves, and the grants of awards under our long-term incentive plan after the distribution will involve, conflicts of interest. Our management determined the allocation of our employee awards among our officers and employees, including any employee cash awards granted to themselves, with such allocations subject to the approval of our compensation committee after the distribution. Our management, including Mr. Duff, will also determine the allocation of any stock-based awards granted under our long-term incentive plan after the distribution, including any awards granted to executive officers other than Mr. Duff, whose compensation will be determined by the compensation committee of our board of directors. As is the case with our employee cash awards, grants of our stock-based awards will be subject to the approval of the compensation committee of our board of directors to be formed after the distribution. Our compensation committee will consist of three of our director nominees who will be elected by our board of directors to that committee after the distribution. While the members of our compensation committee will satisfy applicable independence rules promulgated by the New York Stock Exchange and under the federal securities laws, Mr. Duff and Addison L. Piper, who will be our Vice Chairman, selected our director nominees with the assistance of an external director search firm and in consultation with U.S. Bancorp, and these director nominees will be elected at the time of the distribution to their positions as directors by our company's sole stockholder, a wholly owned subsidiary of U.S. Bancorp called U.S. Bancorp Piper Jaffray Companies Inc. that will remain with U.S. Bancorp after the distribution. U.S. Bancorp Piper Jaffray Companies Inc.'s management is currently composed of our executive officers, and its sole board member is Steven M. Short, who is the chief executive officer of U.S. Bancorp Investments, Inc. and is an officer of various other U.S. Bancorp subsidiaries that will not be contributed to our company in the separation and who is not involved in the Piper Jaffray business other than in his capacity as a director of U.S. Bancorp Piper Jaffray Companies Inc.

Our Company

        Headquartered in Minneapolis, Minnesota, we are a client-focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected

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sectors of the financial services marketplace. We were originally founded in 1895 and operated as an independent company until U.S. Bancorp acquired us in 1998. Our business is currently operated at U.S. Bancorp through U.S. Bancorp Piper Jaffray Companies Inc. and is the primary component of U.S. Bancorp's capital markets business segment. Only the business currently operated by Piper Jaffray business will be transferred to us in our separation from U.S. Bancorp.

        We focus on building long-term relationships with our clients by drawing on our employees' expertise. We serve corporations, government and non-profit entities, and institutional investors on a national basis and serve the financial advisory and investment product needs of private individuals predominantly across the western half of the United States. Our goals are to be a primary financial advisor to our investment banking and individual investor clients and to be a leading provider of advice, research and trading execution capabilities to our institutional clients. We also believe in engaging with and giving back to our community, and in that regard we expect to join the Minnesota Keystone Program, pursuant to which we will donate up to 5 percent of our pre-tax earnings to charitable causes.

        Our Capital Markets business offers public and private corporations, public entities, non-profit clients and institutional investors equity and fixed income financial advisory, capital raising and trading execution services. We raise capital for our corporate clients through equity and debt offerings in four focus industries, namely the consumer, financial institutions, health care and technology industries. We also provide financial advisory services with regard to mergers and acquisitions to clients in these focus industries as well as in other industries. For our government and non-profit clients, we offer financial advisory and risk management services and underwrite debt issuances. An integral part of our Capital Markets business is our equity sales and trading relationships with United States and European institutional investors who invest in companies within our focus industries. Our fixed income sales and trading professionals, who cover a range of institutional investors, have expertise in corporate, mortgage, agency and municipal securities. For the twelve months ended December 31, 2002, our Capital Markets business contributed approximately 52 percent, or $376.1 million, of our total net revenue. In 2002, the majority of our Capital Markets revenue was attributable to corporate and institutional entities.

        Our Private Client Services business comprises 96 branch offices in 18 midwestern, mountain and western states and employs approximately 840 registered financial advisors. Through our Private Client Services business, we provide financial advice and investment products and services primarily to individual investors. Our financial advisors seek to work closely with our private clients and help them identify their long-term financial goals in areas such as wealth management, retirement planning, education funding, tax-advantaged investing and estate planning. To assist our private clients in meeting these goals, our financial advisors have access to an array of financial planning, portfolio performance reporting and fixed income management software tools, as well as a team of specialists in these tools. For the twelve months ended December 31, 2002, Private Client Services contributed approximately 49 percent, or $357.2 million, of our total net revenue. In 2002, the majority of our Private Client Services revenue was attributable to individual clients.

        Our Investment Research group, which consists of equity and fixed income analysts, provides research on over 450 companies as well as broad industry economic trends. The analysts in our Investment Research group provide investment ideas and analyses for our clients, through our Capital Markets professionals and Private Client Services investment advisors.

        We were incorporated in Delaware on April 28, 2003. Since our predecessor company's acquisition by U.S. Bancorp in 1998, our business has been operated through various subsidiaries and divisions of U.S. Bancorp. Prior to that time, we were an independent public company. Our principal executive offices are located at 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402 and our general telephone number is (612) 303-6000. We maintain an Internet site at http://www.piperjaffray.com. Our website and the information contained on that site, or connected to that site, are not incorporated into this information statement.

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Summary Combined Financial Data

        The following table presents our summary historical combined financial data for the periods and dates indicated. The information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical combined financial statements and notes to those statements included elsewhere in this information statement. The summary combined statements of operations for the years ended December 31, 2002, 2001 and 2000, and the other financial data as of December 31, 2002 and 2001, are derived from our audited combined financial statements, included elsewhere in this information statement. The summary combined statements of operations for the nine months ended September 30, 2003 and 2002, and the other financial data as of September 30, 2003, are derived from our unaudited combined financial statements included elsewhere in this information statement and are prepared on the same basis as the audited combined financial statements including all material adjustments that we believe are necessary to present fairly in all material respects our combined results of operations for the interim periods presented. The summary combined statements of operations for the years ended December 31, 1999 and 1998, and the other financial data as of September 30, 2002, December 31, 2000, 1999 and 1998, are derived from our unaudited combined financial statements that are not included in this information statement and are prepared on the same basis as the audited combined financial statements. U.S. Bancorp has operated the businesses it will transfer to us in the separation as internal units of U.S. Bancorp through various subsidiaries and divisions that generally have been operating substantially independent from U.S. Bancorp's other subsidiaries and divisions. Our combined financial statements have been carved out from the consolidated financial statements of U.S. Bancorp by taking the historical results of operations and historical basis of the assets and liabilities of these transferred subsidiaries and divisions. Substantially all of the revenue and expenses included in our combined financial statements represent revenue generated and expenses incurred directly by these subsidiaries and divisions being transferred to us.

        Our historical combined financial information does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, including many significant changes that will occur in the operations and funding of our company as a result of our separation and distribution from U.S. Bancorp, including changes in insurance coverage, changes in tax structure, potential increased costs associated with reduced economies of scale and other increased costs associated with being a publicly traded, stand-alone entity. For further discussion of the reasons for this, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Basis of Presentation." The historical combined statement of financial condition data set forth below reflects the assets and liabilities that were or are expected to be transferred to our company in accordance with the separation and distribution agreement.

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RISK FACTORS

        You should carefully consider each of the following risks and all of the other information set forth in this information statement. Some of the following risks relate to establishing our company as separate and independent from U.S. Bancorp. Other risks relate to our business. Finally, we describe risks relating to the securities markets and ownership of our common stock. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting our company in each of these categories of risk. However, the risks and uncertainties our company faces are not limited to those described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

        If any of the following risks and uncertainties develop into actual events, these events could have a material adverse effect on our business, financial condition or results of operations. In such case, the trading price of our common stock could decline.

Risk Factors Relating to Establishing Our Company as Independent from U.S. Bancorp

Our historical and pro forma financial results as a part of U.S. Bancorp may not reflect what our results would have been as a separate, stand-alone entity.

        The historical and pro forma financial information we have included in this information statement may not reflect what our results of operations, financial position and cash flows would have been had we been an independent company during the periods presented. This is primarily a result of the following two factors:

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since we did not operate, and U.S. Bancorp did not account for us, as a separate, stand-alone entity for the historical periods presented, we made adjustments and allocations in preparing our financial statements, including in respect of the costs and expenses of various general and administrative services provided by U.S. Bancorp to our business, and the assumptions underlying those adjustments and allocations may not prove to be accurate, and



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our financial information does not reflect certain changes and increased costs that will occur in our cost structure, funding and operations due to our separation from U.S. Bancorp, including changes in technology support, changes in tax structure, potential increased costs associated with reduced economies of scale and increased costs associated with being a publicly traded, stand-alone entity.

        Accordingly, to the extent that our historical and pro forma financial information is not reflective of what our results of operations, financial position and cash flows would have been had we been an independent company during the periods presented, that historical and pro forma financial information will not be a reliable indicator of what our company's results of operations, financial condition and cash flows will be in the future.

After the separation, we may experience increased costs resulting from decreased purchasing power and size compared to that currently provided by our association with U.S. Bancorp.

        Being a part of U.S. Bancorp, with its size and purchasing power, has benefited our business in connection with the procurement of insurance, employee benefits and other services for our business. We do not expect to be able to obtain insurance coverage with such favorable terms as those we currently have. Following the distribution, we will be a smaller and more focused company, and there is no guarantee that we will have access to technological, administrative, financial, insurance and other resources that are comparable to, or on as favorable terms and prices as, those available to us as a part of U.S. Bancorp prior to the distribution. For example, U.S. Bancorp's insurance policies provide our business with insurance coverage on favorable terms, due to the size and consolidated purchasing

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power of U.S. Bancorp. We do not currently know the full extent of these increased costs, but they could adversely impact our results of operations.

After the distribution, we will compete with U.S. Bancorp with respect to clients we both serviced prior to the distribution and may not be able to retain these clients.

        Since U.S. Bancorp acquired our predecessor company in 1998, we generally operated independently of U.S. Bancorp's other operations in respect of client services. For example, a client of U.S. Bancorp would not be entitled to receive our services unless he or she also opened an account with us, and vice versa. Accordingly, we do not expect our clients to experience any significant disruption in services as a result of the separation and distribution. However, we were able to marginally increase our client base by reason of our affiliation with U.S. Bancorp. Moreover, both U.S. Bancorp and we will provide services to private individuals and to corporate clients in the middle market sales fixed income area after the distribution, and we both will compete for clients and business in this area and possibly others. We cannot assure you that the clients we gained as a result of being affiliated with U.S. Bancorp or our private individuals and corporate clients in the middle market sales fixed income area will not move some or all of their existing business from us to U.S. Bancorp or another third party. Loss of a significant portion of these clients will negatively impact our results of operations.

The continued ownership of U.S. Bancorp common stock and options by our executive officers and some of our directors will create, or will appear to create, conflicts of interest.

        Because of their current or former positions with U.S. Bancorp, substantially all of our executive officers, including our Chairman and Chief Executive Officer and our Vice Chairman, and some of our directors and director nominees own U.S. Bancorp common stock and options to purchase U.S. Bancorp common stock. While these holdings in the aggregate are insubstantial in relation to U.S. Bancorp as they currently represent, and are expected after the distribution to represent, less than 1 percent of U.S. Bancorp's outstanding common stock, the individual holdings of U.S. Bancorp stock and options that will remain with U.S. Bancorp after the distribution may be significant for some of these persons compared to that person's total assets. Even though our board of directors will consist of a majority of directors who are independent from both U.S. Bancorp and our company and our executive officers who are currently employees of U.S. Bancorp will cease to be employees of U.S. Bancorp upon consummation of the distribution, ownership of U.S. Bancorp common stock and U.S. Bancorp options by our directors and officers after the separation will create, or appear to create, conflicts of interest when these directors and officers are faced with decisions that could have different implications for U.S. Bancorp than they do for us. For example, our officers and directors who hold U.S. Bancorp stock may appear to have a conflict of interest in the event that we advise a company in connection with a restructuring of its debt obligations where U.S. Bancorp is a significant creditor or in the event that we enter into financing arrangements with U.S. Bancorp.

We are agreeing to certain restrictions to preserve the tax treatment of the distribution, which will reduce our strategic and operating flexibility.

        U.S. Bancorp intends to obtain an opinion from Wachtell, Lipton, Rosen & Katz, its special counsel, to the effect that the distribution will qualify as a transaction that is generally tax-free under Sections 355 and/or 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended. Current tax law generally creates a presumption that the distribution would be taxable to U.S. Bancorp but not to its stockholders if we engage in, or enter into an agreement to engage in, a transaction that would result in a 50 percent or greater change by vote or by value in our stock ownership during the four-year period beginning on the date that begins two years before the distribution date, unless it is established that the transaction is not pursuant to a plan or series of transactions related to the distribution.

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Temporary U.S. Treasury regulations currently in effect generally provide that whether an acquisition transaction and a distribution are part of a plan is determined based on all of the facts and circumstances, including but not limited to those specific factors listed in the regulations. In addition, the regulations provide several "safe harbors" for acquisition transactions that are not considered to be part of a plan.

        Under the tax sharing agreement to be entered into between U.S. Bancorp and us, generally we may not (1) take or fail to take any action that would cause any representations, information or covenants in the separation documents or documents relating to the opinion to be untrue, (2) take or fail to take any action that would cause the distribution to lose its tax-free status, (3) sell, issue, redeem or otherwise acquire our equity securities or equity securities of members of our group except in certain specified transactions for a period of two years following the distribution, and (4) sell or otherwise dispose of a substantial portion of our assets, liquidate, merge or consolidate with any other person for a period of two years following the distribution. During that two-year period, we may take certain actions prohibited by these covenants if we provide U.S. Bancorp with an Internal Revenue Service ruling or an unqualified opinion of counsel to the effect that these actions will not affect the tax-free nature of the separation and distribution. During the two-year period, these restrictions could substantially limit our strategic and operational flexibility, including our ability to finance our operations by issuing equity securities, make acquisitions using equity securities, repurchase our equity securities, raise money by selling assets or enter into business combination transactions.

We are agreeing to indemnify U.S. Bancorp for taxes and related losses resulting from any actions we take that cause the distribution to fail to qualify as a tax-free transaction.

        We are agreeing to indemnify U.S. Bancorp for any taxes and related losses (including any applicable interest and penalties, all related accounting, legal and other professional fees, all related court costs and all costs, expenses and damages associated with related stockholder litigation or controversies and any amount paid in respect of the liability of stockholders) resulting from (1) any act or failure to act described in the covenants above, (2) any acquisition of equity securities or assets of Piper Jaffray or any member of its group, and (3) any breach by Piper Jaffray or any member of its group of certain of our representations in the separation documents between U.S. Bancorp and us or documents relating to the opinion notwithstanding the receipt of an Internal Revenue Service ruling or an unqualified opinion of counsel. The amount of any indemnification payments could be substantial. The amount of U.S. Bancorp's taxes for which we are agreeing to indemnify U.S. Bancorp will be based on the excess of the aggregate fair market value of our stock over U.S. Bancorp's tax basis in our stock. Depending on the aggregate fair market value of our stock at the date of distribution, we currently estimate that, in the event that this indemnification obligation is triggered, the indemnification amount could range from $0 to $75 million. This estimate excludes any related losses, including but not limited to applicable interest and penalties and other related losses, as more fully described above.

If the distribution does not qualify as a tax-free distribution at the stockholder level, you will be taxed on your receipt of our stock.

        The Internal Revenue Service could determine our separation and distribution to be taxable despite our receipt of an unqualified opinion of counsel. In addition, certain future events that may or may not be within the control of U.S. Bancorp or Piper Jaffray, including certain extraordinary purchases of U.S. Bancorp common stock or our common stock, could cause the distribution not to qualify as tax-free. If the distribution does not qualify as a tax-free distribution at the stockholder level, you will be taxed on the full value of our shares that you receive (without reduction for any portion of your basis in your U.S. Bancorp shares) as a dividend for U.S. federal income tax purposes and possibly for purposes of state and local tax law to the extent of your pro rata share of U.S. Bancorp's current and accumulated earnings and profits (including U.S. Bancorp's taxable gain on the

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distribution). Under current law, assuming certain holding period requirements are met, individual citizens or residents of the United States are subject to U.S. federal income tax on dividends at a maximum rate of 15 percent. Amounts in excess of your pro rata shares of U.S. Bancorp's current and accumulated earnings and profits will be treated as a return of capital to the extent of your basis in your U.S. Bancorp common stock and thereafter as capital gain, assuming you hold your U.S. Bancorp common stock as a capital asset. Under current law, individual citizens or residents of the United States are subject to U.S. federal income tax on long-term capital gains (i.e., capital gains on assets held for more than one year) at a maximum rate of 15 percent.

The separation and distribution agreement to be entered into between U.S. Bancorp and us contains cross-indemnification obligations of U.S. Bancorp and us that either party may not be able to satisfy.

        The separation and distribution agreement provides, among other things, that we will generally indemnify U.S. Bancorp, among other things, against claims relating to or arising out of our business before and after the distribution and any losses suffered by U.S. Bancorp from our breach of the separation and distribution agreement. In addition, U.S. Bancorp has agreed to indemnify us in an amount up to $17.5 million for losses resulting from third-party claims relating to research analyst independence and certain exercises of U.S. Bancorp options in connection with the distribution and from regulatory investigations regarding the allocation of IPO shares to directors and officers of existing or potential investment banking clients, mutual fund practices known as late trading or market timing and mutual fund marketing and compensation arrangements. Accordingly, except for that limited indemnity by U.S. Bancorp, we will be responsible for actions of our business prior to the distribution, including in respect of discontinued or disposed of operations of our business. Similarly, U.S. Bancorp has agreed to indemnify us, among other things, against claims relating to or arising out of the businesses retained by U.S. Bancorp, and any losses suffered by us arising from its breach of the separation and distribution agreement.

        The ability of either U.S. Bancorp or us to collect under these indemnity provisions depends on the financial position of the indemnifying party. For example, persons may seek to hold us responsible for liabilities of the businesses retained by U.S. Bancorp. Although U.S. Bancorp has agreed to indemnify us for these liabilities under the separation and distribution agreement, if these liabilities are significant and we are held liable for them, we cannot assure you that we will be able to recover the full amount of those losses from U.S. Bancorp should it be financially unable to perform under its indemnification obligations.

Risk Factors Relating to Our Business

Developments in market and economic conditions have in the past adversely affected, and may in the future adversely affect, our business and profitability.

        As we are a securities firm, conditions in the financial markets and the economy generally have a direct and material impact on our results of operations and financial condition. For example, our investment banking revenue, in the form of underwriting discounts and financial advisory fees, is directly related to the volume and value of the transactions in which we are involved. Uncertain or unfavorable market or economic conditions, such as those that currently exist, adversely affect our business. In such an environment, the volume and size of capital-raising transactions and acquisitions and dispositions typically decrease, thereby reducing the demand for our investment banking services and increasing price competition among financial services companies seeking such engagements. Additionally, our Capital Markets business focuses primarily on the consumer, financial institutions, health care and technology industries. Such industries may experience a downturn independently of general economic and market conditions, or may face market conditions that are disproportionately worse than those impacting the economy and markets generally, which may adversely affect our business. In addition, a downturn in the financial markets may result in a decline in the volume and

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value of trading transactions and, therefore, to a decline in the revenue we receive from commissions on the execution of trading transactions and, in respect of our market-making activities, a reduction in the value of our trading positions and commissions and spreads.

        Furthermore, recent financial bankruptcies and restatements at multiple public companies have called into question the integrity of the capital markets in general. In our experience, these scandals and related governmental initiatives, such as the Sarbanes-Oxley Act of 2002 and the corporate governance rules and rule proposals issued by the Securities and Exchange Commission, the New York Stock Exchange, Inc. and the National Association of Securities Dealers, have diverted the attention of management of many clients away from capital markets transactions, such as mergers and acquisitions and securities offerings.

        Our Private Client Services revenue generated from commissions and fees and net interest on margin loan balances may decline if a market downturn results in decreased transactions or a decrease in assets under management. In addition, many of our Private Client Services clients are, and have historically been, concentrated in the midwestern states of the United States and, to a lesser extent, the mountain and western states. Accordingly, our Private Client Services revenue is derived primarily from our individual investor clients in these regions. Because of this concentration, a significant downturn in the economy in any of these regions independent of general economic and market conditions could materially and adversely affect our overall Private Client Services business.

        Our profitability may be adversely affected by our fixed costs and the possibility that we will be unable to scale back other costs in a time frame to match any decreases in revenue relating to changes in market and economic conditions. It is unclear how long the current challenging environment will last, but as long as it persists, it will continue to have a negative impact on our overall business.

We may not be able to compete successfully with other companies in the financial services industry.

        The financial services industry is extremely competitive and our overall business will be adversely affected if we are unable to compete successfully. We compete generally on the basis of such factors as quality of advice and service, reputation, price, product selection and financial resources. In recent years, we have experienced significant price competition in areas of our business including pressure on debt underwriting discounts, as well as trading spreads and commissions. We believe that price competition in these and other areas will continue as some of our competitors seek to obtain market share by reducing fees, commissions or spreads. Many of these competitors are larger than our company, have greater financial resources and may be more willing to engage in lending activities to businesses in connection with the provision of financial advisory services.

        Moreover, the decline in the volume and value of capital-raising transactions and acquisitions and dispositions over the last few years has increased competition for investment banking engagements. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Environment." Further, consolidation in the financial services industry fostered in part by changes in the regulatory framework in the U.S. has also increased competition, bolstering the capital base and geographic reach of some of our competitors. Examples of such consolidation in recent years include HSBC Holdings plc's acquisition of Household International, Inc. in 2002, Royal Bank of Canada's acquisition of Tucker Anthony Sutro in 2001, First Union Corporation's merger with Wachovia Corporation in 2001 and Chase Manhattan Corporation's acquisition of Hambrecht & Quist Group in 1999. Finally, the emergence of alternative trading systems via the Internet and other mediums through which securities and futures transactions are effected has increased competition. It appears that this trend toward using alternative trading systems is continuing to grow, which may adversely affect our commission and trading revenue, reduce our participation in the trading markets and our ability to access market information and result in the creation of new and stronger competitors.

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        We also face intense competition for qualified employees from businesses in the financial services industry. The performance of our business is highly dependent upon our ability to attract, retain and motivate highly-skilled, talented employees. For example, the primary sources of revenue in our Private Client Services business are commissions and fees earned on customer accounts managed by our financial advisors, who are regularly recruited by other firms and are able to change firms and take their client relationships with them. We have found that the market downturn and speculation regarding our future have increased competition for our Private Client Services financial advisors, and we have recently experienced some attrition. Particularly, given the relatively small size of both our company and our employee base compared to some of our competitors and the geographic locations in which we operate, the performance of our business may be adversely affected to the extent we are unable to attract, retain and motivate our employees effectively.

Our underwriting and market-making activities may place our capital at risk.

        We may incur losses and be subject to reputational harm to the extent that, for any reason, we are unable to sell securities we purchased as an underwriter at the anticipated price levels. In addition, as an underwriter, we are subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings we underwrite. As a market maker, we may own large positions in specific securities. These undiversified holdings concentrate the risk of market fluctuations and may result in greater losses than would be the case if our holdings were more diversified.

An inability to readily divest or transfer trading positions may result in financial losses to our business.

        Timely divestiture or transfer of our trading positions can be impaired by decreased trading volume, increased price volatility, concentrated trading positions, limitations on the ability to transfer in highly specialized or structured transactions to which we may be a party and changes in industry and government regulations. Our reliance on timely divestiture or transfer increases our vulnerability to price fluctuations, since we may be forced to remain in a position longer than we anticipated if, for example, trading volume in that security declines due to significant company specific, market or geo-political events. For a discussion of how we manage market risk, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Market Risk," included elsewhere in this information statement.

Use of derivative instruments as part of our risk management techniques may place our capital at risk, while our risk management techniques themselves may not fully mitigate our market risk exposure.

        Our Capital Markets business may use futures, options and swaps to hedge inventory. We do not use derivative instruments for speculative purposes. Our fixed income area manages a portfolio of interest rate swaps that hedge the residual cash flows resulting from a tender option bond program. See Note 16 to our audited combined financial statements, included elsewhere in this information statement, for further information on the tender option bond program. Our fixed income area also provides swaps and other interest rate hedging products to institutional investors. Derivative products provided to customers are hedged. However, there are risks inherent in our use of these products, including counterparty exposure and termination risk. Counterparty exposure refers to the risk that the amount of collateral in our possession on any given day may not be sufficient to fully cover the current value of the swaps if a counterparty were to suddenly default. This risk exists despite the fact that all of our swaps are collateralized. Termination risk refers to risks associated with swaps used in connection with the tender option bond program, where changes in the value of the swaps may not mirror changes in the value of the cash flows they are hedging. It is possible that losses may occur from our current exposure to derivative and interest rate hedging products and expected increasing use of these products in the future.

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        We continue to refine our risk management techniques, strategies and assessment methods on an ongoing basis. However, our risk management techniques and strategies may not be fully effective in mitigating our risk exposure in all economic market environments or against all types of risk, including risks that we fail to identify or anticipate. Some of our strategies for managing risk are based upon our use of observed historical market behavior. We apply statistical and other tools to these observations to quantify our risk exposure. Any failures in our risk management techniques and strategies to accurately quantify our risk exposure could limit our ability to manage risks. In addition, any risk management failures could cause our losses to be significantly greater than the historical measures indicate. Further, our quantified modeling does not take all risks into account. Our more qualitative approach to managing those risks could prove insufficient, exposing us to material unanticipated losses. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management," included elsewhere in this information statement, for a more detailed discussion of the policies, procedures and methods we use to identify, monitor and manage our risks.

An inability to access capital readily or on terms favorable to us could impair our ability to fund operations and could jeopardize our financial condition.

        Ready access to funds is essential to our business. We will be responsible for our own financing, and in the future we may need to incur debt or issue equity in order to fund our working capital requirements, as well as to make acquisitions and other investments. In addition to maintaining a cash position, we rely on bank financing as well as other funding sources such as the repurchase and securities lending markets for funds. We are currently in the process of arranging our financing in connection with the separation. While we believe the terms we have received to date are comparable to those we received from U.S. Bancorp, we cannot assure you that debt or equity financing will be available to us on similar or as favorable terms as those available to us when we were a part of U.S. Bancorp. Moreover, our access to funding sources could be hindered by many factors. Those factors that are specific to our business include the possibility that lenders could develop a negative perception of our long-term or short-term financial prospects if we incurred large trading losses or if the level of our business activity decreased due to a market downturn. Similarly, our access to funds may be impaired if regulatory authorities took significant action against us, or if we discovered that one of our employees had engaged in serious unauthorized or illegal activity.

Our data processing, financial and accounting systems are critical components of our operations and failure of those systems may disrupt our business, cause financial loss and constrain our growth.

        We typically transact thousands of securities trades on a daily basis across multiple markets. Our data processing, financial and accounting systems are essential to this task. A system malfunction impeding the processing of our clients' transactions could result in financial loss, liability to clients, regulatory intervention and constraints on our ability to grow. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Operational Risk," included elsewhere in this information statement, for a discussion of how we mitigate and control this operational risk. We outsource a substantial portion of our critical data processing activities, including trade processing and back office data processing. For example, we have entered into contracts with Thomson Financial, Inc. pursuant to which Thomson Financial handles our trade and back office processing, and Unisys Corporation, pursuant to which Unisys supports our data center and network management technology needs. We also contract with other third parties for our market data services, which constantly broadcast news, quotes, analytics and other relevant information to our employees. We contract with other vendors to produce and mail our customer statements. In the event that any of these service providers fails to adequately perform such services or that the relationship between that service provider and us is terminated, we may experience a significant disruption in our operations, including our ability to timely and accurately process our clients' transactions or maintain complete and accurate records of those transactions.

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Our business is subject to extensive regulation which limits our business activities, and a significant regulatory action against our company may have a material adverse financial effect or cause significant reputational harm to our company.

        As a participant in the financial services industry, we are subject to complex and extensive regulation of many aspects of our business by U.S. federal and state regulatory agencies, securities exchanges and other self-regulatory organizations and by foreign governmental agencies, regulatory bodies and securities exchanges. Generally, the requirements imposed by our regulators are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal with us. These requirements are not designed to protect our stockholders. Consequently, these regulations often serve to limit our activities, through net capital, customer protection and market conduct requirements and restrictions on the businesses in which we may operate or invest. Compliance with many of these regulations entails a number of risks, particularly in areas where applicable regulations may be unclear. In addition, regulatory authorities in all jurisdictions in which we conduct business may intervene in our business and we and our employees could be prohibited from engaging in some of our business activities, fined or otherwise disciplined for violations.

        With the integrity of the financial markets being called into question, the current environment poses heightened risk of regulatory action, which could adversely affect our ability to conduct our business or could result in fines or reputational damage to our company. For example, regulatory authorities have recently focused intense scrutiny on research analysts' interaction with investment banking departments at securities firms. This scrutiny has led to increased restrictions on the interaction between research analysts and investment banking departments at securities firms. In addition, we and several other securities firms have reached settlement agreements with certain federal and state securities regulators and self-regulatory organizations to resolve investigations into equity research and its relationship to investment banking. Certain of these restrictions could adversely impact our businesses, at least in the short-term. This issue and others that face the financial services industry are complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with them.

        Moreover, new laws or regulations or changes in the interpretation or enforcement of existing laws or regulations may also adversely affect our business. For example, the Sarbanes-Oxley Act and the rules and rule proposals, if adopted, by the SEC, the NYSE and the NASD necessitate significant changes to corporate governance and public disclosure. These provisions generally apply to companies with securities listed on U.S. securities exchanges and some provisions apply to non-U.S. issuers with securities traded on U.S. securities exchanges. To the extent that private companies forgo initial public offerings, non-U.S. issuers decline to list their securities in the United States or undertake merger or acquisition transactions, in order to avoid being listed in the United States and subject to these regulations, or companies fail to undertake merger or acquisition transactions due to such provisions, our business may be adversely affected.

Regulatory capital requirements may adversely affect our ability to expand or maintain present levels of our business or impair our ability to meet our financial obligations.

        We are subject to the SEC's uniform net capital rule, Rule 15c3-1 and the net capital rule of the NYSE, which may limit our ability to make withdrawals of capital from Piper Jaffray & Co., our broker dealer subsidiary. The uniform net capital rule sets the minimum level of net capital a broker dealer must maintain and also requires that a portion of its assets be relatively liquid. The NYSE may prohibit a member firm from expanding its business or paying cash dividends if resulting net capital falls below its requirements. Our London-based broker dealer subsidiary is also subject to similar limitations under United Kingdom laws. As Piper Jaffray Companies is a holding company, we depend on dividends, distributions and other payments from our subsidiaries to fund dividend payments, if any, and to fund all payments on our obligations, including any debt obligations. These regulatory restrictions may

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impede access to funds that Piper Jaffray Companies needs to make payments on obligations, including debt obligations, or dividend payments. In addition, underwriting commitments require a charge against net capital and, accordingly, our ability to make underwriting commitments may be limited by the requirement that we must at all times be in compliance with the applicable net capital regulations. Piper Jaffray & Co. will also be subject to certain notification requirements related to withdrawals of excess net capital. See "Our Business—Regulation," included elsewhere in this information statement.

Our exposure to legal liability is significant, and could lead to substantial damages and restrictions on our business going forward.

        We face significant legal risks in our businesses and the volume and amount of damages claimed in litigation, arbitrations, regulatory enforcement actions and other adversarial proceedings against financial services firms are increasing. These risks include potential liability under securities laws and regulations in connection with our investment banking and other corporate finance transactions. Further, companies in our industry are increasingly exposed to claims for recommending investments that are not consistent with a client's investment objectives or engaging in unauthorized or excessive trading. Our experience has been that adversarial proceedings against financial services firms typically increase in a market downturn. We are also subject to claims from disputes with our employees and our former employees under various circumstances. In addition, legal or regulatory matters involving our directors, officers or employees in their individual capacities may create exposure for us because we may be obligated or may choose to indemnify the affected individuals against liabilities and expenses they incur in connection with such matters to the extent permitted under applicable law. In addition, like other financial services companies, we may face the possibility of employee fraud or misconduct. The precautions we take to prevent and detect this activity may not be effective in all cases and we cannot assure you that we will be able to deter or prevent fraud or misconduct. Exposures from and expenses incurred related to any of the foregoing actions or proceedings could have a negative impact on our results of operations, financial condition and credit rating. For further information regarding pending legal proceedings, see "Our Business—Legal Proceedings," included elsewhere in this information statement.

We may suffer losses if our reputation is harmed.

        Our ability to attract and retain customers and employees may be adversely affected to the extent our reputation is damaged. If we fail to deal, or appear to fail to deal, with various issues that may give rise to reputational risk, we could harm our business prospects. These issues include, but are not limited to, appropriately dealing with potential conflicts of interest, legal and regulatory requirements, ethical issues, money-laundering, privacy, record-keeping, sales and trading practices and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products. Failure to appropriately address these issues could also give rise to additional legal risk to us, which could, in turn, increase the size and number of claims and damages asserted against us or subject us to regulatory enforcement actions, fines and penalties.

From the time after completion of the distribution, we expect to grant stock-based awards to our directors, officers and employees, which upon vesting and / or exercise, as applicable, will dilute the holdings of our other stockholders.

        We expect that from time to time after the distribution we will grant stock-based awards in our company with the first grant expected in connection with our annual grant of equity awards in February 2004. There are currently 2 million shares of our common stock authorized for grant under our long-term incentive plan. Assuming that all of these awards were granted immediately after the distribution, that all such awards were immediately exercisable and exercised and that no shares were used by employees to fund the purchase of our common stock, our officers, directors and employees

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would own approximately 9 percent of our outstanding common stock immediately after the distribution, based on our estimates as of, and assuming the distribution was completed on, November 30, 2003.

Risk Factors Relating to Securities Markets

Since U.S. Bancorp acquired our company in May 1998, there has not been a market for our common stock, and once our common stock begins trading, the market price of our shares may fluctuate widely.

        There has been no public market for our common stock since May 1998, when U.S. Bancorp acquired our predecessor company. On December     , 2003, in connection with the declaration by U.S. Bancorp of the record date for the distribution, our common stock began trading publicly on a "when issued" basis. We have not set an initial price for our common stock. The price for our common stock will be established by the public markets.

        We cannot predict the prices at which our common stock may trade after the distribution. Indeed, the combined market prices of our common stock and U.S. Bancorp common stock after the distribution may not equal or exceed the market value of U.S. Bancorp common stock immediately before the distribution. The market price of our common stock may fluctuate widely, depending upon many factors, some of which may be beyond our control, including:

•

changes in expectations as to our future financial performance and the future performance of the financial services industry in general, including financial estimates and recommendations by securities analysts,



•

the potential that our business profile may not fit the investment objectives of U.S. Bancorp stockholders, causing them to sell our shares after the distribution as described below,



•

differences between our actual financial and operating results and those expected by investors and analysts,



•

strategic moves by us or our competitors, such as acquisitions or restructurings,



•

changes in the regulatory framework of the financial services industry and regulatory action, and



•

changes in general economic or market conditions.

        Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our common stock.

Substantial sales of common stock may occur in connection with this distribution, which could cause our stock price to decline.

        The shares of our common stock that U.S. Bancorp distributes to its stockholders generally may be sold immediately in the public market. We believe it is probable that some U.S. Bancorp stockholders will sell our common stock received in the distribution, for reasons such as our business profile or market capitalization as an independent company not fitting their investment objectives. Moreover, index funds tied to the Standard & Poor's 500 Index, the Russell 1000 Index and other indices hold shares of U.S. Bancorp common stock. As our common stock will not be included in all of these indices, these index funds will likely be required to sell the shares of our common stock that they receive in the distribution. The sale of significant amounts of our common stock or the perception in the market that this will occur may lower the market price of our common stock.

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Provisions in our certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the market value of our common stock.

        Our certificate of incorporation and bylaws and Delaware law contain provisions that are intended to deter abusive takeover tactics by making them unacceptably expensive to the raider and to encourage prospective acquirors to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include a classified board of directors and limitations on actions by our stockholders by written consent. In addition, our board of directors has the right to issue preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquiror. Delaware law also imposes some restrictions on mergers and other business combinations between us and any holder of 15 percent or more of our outstanding common stock. We expect to adopt a rights agreement in connection with the distribution, which would impose a significant penalty on any person or group that acquires 15 percent or more of our outstanding common stock without the approval of our board of directors. We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal, and are not intended to make our company immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our company and our stockholders.

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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

        We have made forward-looking statements in this information statement, including the sections entitled "Summary," "Risk Factors," "The Distribution," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Our Business," that are based on our management's current views and assumptions regarding future events, future business conditions and the outlook for us based on currently available information. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, achievements, competitive position, potential growth opportunities, potential operating performance improvements, benefits resulting from or effects of our distribution from U.S. Bancorp, effects of competition and effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "forecast," "project," "predict," "potential," "is confident that," "will likely result," "continue," "may," "will," "should" or similar expressions or the negative of these terms or similar expressions.

        Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in, or implied by, these forward-looking statements. For example, the risk factors discussed in "Risk Factors" could cause our results to differ materially from those expressed in forward-looking statements. There may also be other risks that we are unable to predict at this time. We wish to caution readers not to rely on any of these forward-looking statements, which speak only as of the date made. We do not have any intention or obligation to update forward-looking statements after the date of this information statement.

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THE DISTRIBUTION

Background of the Distribution

        U.S. Bancorp has informed us of the following with respect to the background of the distribution. On May 1, 1998, U.S. Bancorp acquired Piper Jaffray Companies Inc. to expand its asset management business, offer investment banking services, and enhance institutional and retail brokerage services to its customers. Piper Jaffray Companies Inc. was acquired for approximately $738 million and renamed U.S. Bancorp Piper Jaffray Companies Inc. Since 1998, certain components of U.S. Bancorp Piper Jaffray Companies Inc., primarily the asset management business, were integrated with other business lines of U.S. Bancorp. During this timeframe, the business activities of U.S. Bancorp Piper Jaffray Companies Inc. became the primary component of U.S. Bancorp's capital market business segment, focusing on investment banking and brokerage business and offering equity and fixed income financial advisory, capital-raising and trading execution services. Currently, these activities represent the core of our business.

        Since the acquisition of Piper Jaffray Companies Inc. by U.S. Bancorp in 1998, the strategic focus of U.S. Bancorp has changed. The merger of U.S. Bancorp and Firstar Corporation was completed in 2001, and since then U.S. Bancorp's management has focused on developing its retail and commercial banking, fiduciary and asset management services and payment processing business activities operations and on minimizing risks and related volatility of results of operations resulting from changes in the capital markets. Subsequent to the merger, our management raised with U.S. Bancorp the possibility of pursuing a management-led buyout of our business. U.S. Bancorp determined not to pursue this possible transaction due to risks and uncertainties associated with the ability to execute this approach such as the availability of financing, and because our management did not make a firm offer. After completing its integration activities, in the fourth quarter of 2002, U.S. Bancorp began exploring strategic alternatives with respect to its capital markets business, including a possible sale of the business, or a portion of the business, to a third party, an initial public offering, establishing a tracking stock and a tax-free distribution to existing stockholders. In January 2003, U.S. Bancorp retained financial advisors to assist in evaluating these strategic alternatives. While from time to time U.S. Bancorp was contacted about the possible acquisition of all or a part of our business, no formal discussions or negotiations were ever pursued in that regard, based on U.S. Bancorp's determination outlined below that a spin-off transaction was a preferable strategic option which preserved the value of our company for U.S. Bancorp stockholders in a tax free transaction with lower execution risk than would be entailed in a sale of our company.

        In evaluating each of the possible alternatives, U.S. Bancorp considered multiple factors, including the desire to separate the capital markets business from U.S. Bancorp, the extent of execution risk, the tax implications to U.S. Bancorp and the financial implications to U.S. Bancorp and its stockholders. For example, a tracking stock would not have addressed the desire for separation of the business from U.S. Bancorp, an initial public offering presented execution risk resulting from uncertain market conditions and a sale of the Piper Jaffray business or portions thereof at a gain would have been taxable to U.S. Bancorp and thereby would have reduced the value of the transaction to U.S. Bancorp's stockholders. In addition, U.S. Bancorp did not believe it was in the best interests of its stockholders to sell the capital markets business to a financial institution that would increase competition within U.S. Bancorp's footprint. After the distribution, U.S. Bancorp will continue to operate a retail brokerage business. This retail brokerage operation is currently part of U.S. Bancorp's consumer banking business line and offers investment products and brokerage services to customers that primarily utilize the retail branch network for their banking services. Additionally, through its banking subsidiaries, U.S. Bancorp provides an array of commercial and retail banking services to customers primarily through a banking network within 24 states. A sale of our business to another financial institution would increase competition of retail brokerage services within that footprint beyond that already offered by our company. It would also provide an opportunity for a buyer to solicit customers or potential customers of U.S. Bancorp for checking, savings, lending, cash management, and other ancillary retail and commercial banking services. U.S. Bancorp also considered the potential employee and management

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implications of each alternative. After consideration of these factors, U.S. Bancorp determined that the tax-free distribution was in the best interests of U.S. Bancorp and its stockholders, in light of the available alternatives. On February 19, 2003, the U.S. Bancorp board of directors announced its intention to effect the disposition of our company through the distribution to U.S. Bancorp's stockholders.

        On December 15, 2003, the U.S. Bancorp board of directors approved the distribution of all of U.S. Bancorp's shares of our common stock to holders of U.S. Bancorp common stock. To effect the distribution, the U.S. Bancorp board declared a dividend on U.S. Bancorp common stock consisting of all of the shares of our common stock that U.S. Bancorp will own on the date of the distribution. These shares will represent 100 percent of our outstanding common stock immediately prior to the distribution. The dividend will be paid at 5:00 p.m., New York City time, on December 31, 2003, in the amount of one one-hundredth of a share of our common stock for each share outstanding of U.S. Bancorp common stock as described below.

        Please note that you will not be required to pay any cash or other consideration for the shares of our common stock distributed to you or to surrender or exchange your shares of U.S. Bancorp common stock to receive the dividend of our common stock.

Reasons for the Distribution

        U.S. Bancorp has advised us that the primary reason for the distribution is to resolve strategic business issues and related conflicts that arise from the continued operation of our business together with the other U.S. Bancorp business operations. Since the completion of the merger of U.S. Bancorp and Firstar Corporation in 2001, U.S. Bancorp's management has desired to focus on retail and commercial banking, fiduciary and asset management services and payment processing business activities and to reduce its focus on investment banking and trading activities that are subject to the volatility of the capital markets. As a focused securities firm, the Piper Jaffray business results of operations tend to be highly correlated not only to the overall strength of the economy but to a variety of more specific factors, including the volume and value of trading in securities, the volatility of the equity and fixed income markets, the level and shape of various yield curves and the demand for investment banking services as reflected by the number and size of public offerings and merger and acquisition transactions, particularly in our focus industries and sectors. These factors can fluctuate significantly, as witnessed by the adverse conditions in the financial markets from mid-2000 through early 2003 that followed several years of positive market conditions. While these factors affect elements of U.S. Bancorp's other businesses, the financial performance of the remainder of U.S. Bancorp, with its focus on retail and commercial banking, fiduciary and asset management services and payment processing business activities, is not as strongly correlated to these factors.

        U.S. Bancorp's change in strategic focus has resulted in a divergence in business strategies between the Piper Jaffray business and the rest of U.S. Bancorp. This divergence would likely result in reduced management and board of director attention by U.S. Bancorp to issues related to the capital markets business, lower capital investment or dedication of corporate resources, less focus on human capital critical to investment banking and financial advisory services, and a potential reduction in the long-term prospects of our business. Accordingly, U.S. Bancorp has determined it can best address this strategic conflict by separating our business from the rest of U.S. Bancorp's operations.

        U.S. Bancorp considered several alternatives to effect the separation of our business from U.S. Bancorp, including a sale of our business and other alternatives described above under "—Background of the Distribution." As discussed above, after consideration of these alternatives, a tax-free distribution was considered the most desirable alternative. In particular, U.S. Bancorp determined that a sale of the Piper Jaffray business would have undesirable tax implications. A sale also was rejected because it could increase competition for U.S. Bancorp's retail brokerage and other investment services within U.S. Bancorp's market more substantially than would be the case if the Piper Jaffray business functioned as a stand-alone entity. After the tax-free distribution, U.S. Bancorp will continue to operate a retail brokerage business. This retail brokerage operation is currently part of U.S. Bancorp's

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consumer banking business line and offers investment products and brokerage services to customers that primarily utilize the retail branch network for their banking services. Additionally, through its banking subsidiaries, U.S. Bancorp provides an array of commercial and retail banking services to customers primarily through a banking network within 24 states. A sale to another financial institution would increase competition of retail brokerage services within that footprint beyond that already offered by our business. It would also provide an opportunity for a buyer to solicit customers or potential customers of U.S. Bancorp for checking, savings, lending, cash management, and other ancillary retail and commercial banking services.

        We also believe that:

•

as a separate company with a board of directors and management team focused on our business, we will have enhanced strategic and operational flexibility and, as a result, will be better positioned to serve our customers and grow our business,



•

as a separate company, the benefits available to our employees through stock-based incentive compensation will be more closely tied to the performance of our business, since the stock-based awards will be based on Piper Jaffray common stock rather than U.S. Bancorp common stock. Incentive compensation is crucial in a human capital intensive business, and we believe this more direct link with company performance will enhance the value of these incentives to both our employees and our stockholders, and



•

the separation of our business from U.S. Bancorp will also offer a more focused investment opportunity in our company for investors whose objectives align more closely with our business.

Treatment of U.S. Bancorp Awards Held by Our Employees

U.S. Bancorp Options

        Many of our employees, officers and directors hold options to purchase shares of U.S. Bancorp common stock. As of November 30, 2003, our employees, officers and directors owned options to purchase approximately 13.9 million shares of U.S. Bancorp common stock and 174,019 shares of U.S. Bancorp restricted stock, representing approximately 0.8 percent of the outstanding shares of U.S. Bancorp common stock as of that date. The following describes the effect of the distribution on these U.S. Bancorp options pursuant to the terms of the applicable U.S. Bancorp stock incentive plans, which plans have not been amended in connection with the distribution.

•

U.S. Bancorp 90-day options . One group of U.S. Bancorp options held by our employees consists of U.S. Bancorp 90-day options. Since the distribution will be deemed to be a termination of employment of our employees by U.S. Bancorp, these U.S. Bancorp 90-day options generally will expire either on the distribution date or within 90 days after the distribution date. As of November 30, 2003, options to purchase approximately 8.8 million shares of U.S. Bancorp common stock held by our employees were U.S. Bancorp 90-day options.

However, a portion of these U.S. Bancorp 90-day options will be vested and in-the-money prior to their expiration, and accordingly we expect that our employees will exercise these vested and in-the-money options prior to their expiration. As of November 30, 2003, options to purchase approximately 3.1 million shares of U.S. Bancorp common stock held by our employees were vested and in-the-money U.S. Bancorp 90-day options. In addition, U.S. Bancorp 90-day options held by our employees who have reached retiree status under the terms of the applicable U.S. Bancorp stock incentive plans, meaning that they have satisfied certain age and service criteria while employees of U.S. Bancorp, will not expire in connection with the distribution but rather will remain with U.S. Bancorp and will continue to vest in accordance with their terms as if no termination of employment had occurred as a result of the distribution. As of November 30, 2003, options to purchase approximately 1.7 million shares of U.S. Bancorp common stock were U.S. Bancorp 90-day options held by our employees who had reached retiree status during their employment with U.S. Bancorp.

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The remainder of the U.S. Bancorp 90-day options held by our employees, which consisted of options to purchase approximately 4.0 million shares of U.S. Bancorp common stock as of November 30, 2003, are expected to expire on or within 90 days of the distribution.

•

U.S. Bancorp term options. The other group of U.S. Bancorp options held by our employees consists of U.S. Bancorp term options. These U.S. Bancorp term options will remain with U.S. Bancorp after the distribution and will continue to vest in accordance with their terms, as provided in the applicable U.S. Bancorp stock incentive plans. As of November 30, 2003, options to purchase approximately 5.1 million shares of U.S. Bancorp common stock held by our employees were U.S. Bancorp term options.

Like all other U.S. Bancorp options outstanding at the time of the distribution, all of the U.S. Bancorp options held by our employees that do not expire at the time of the distribution will be adjusted to reflect the change in the value of shares of U.S. Bancorp common stock due to the distribution in order to preserve the value of the options. Pursuant to the terms of the applicable U.S. Bancorp stock incentive plans, the compensation committee of the U.S. Bancorp board of directors has approved a standard adjustment to all U.S. Bancorp options outstanding on the distribution date. This adjustment will proportionately adjust both the exercise price of and the number of shares of U.S. Bancorp common stock subject to each U.S. Bancorp option to reflect the difference between the closing price per share of U.S. Bancorp common stock on the date of the distribution and the opening price per share of U.S. Bancorp common stock on the next trading day following the date of the distribution. For a further discussion of the treatment of U.S. Bancorp options held by our employees, see "Management—Treatment of U.S. Bancorp Options Held by Our Employees."

U.S. Bancorp Restricted Stock

        In addition, a portion of our employees hold shares of U.S. Bancorp restricted stock. The total amount of U.S. Bancorp restricted stock held by our employees as of November 30, 2003 was 174,019 shares. Approximately 25,781 of these shares of U.S. Bancorp restricted stock are expected to vest prior to the distribution in accordance with their terms. Since the distribution will be deemed to be a termination of employment of our employees under the terms of the applicable U.S. Bancorp stock incentive plans, approximately 76,325 shares of U.S. Bancorp restricted stock expected to be held by our employees at the time of the distribution will be forfeited in connection with the distribution. The remaining shares of U.S. Bancorp restricted stock expected to be held by our employees at the time of the distribution, totaling approximately 71,913 shares, have terms that permit these shares to continue to vest in accordance with their terms after a termination of employment such as that occurring in the distribution, and these shares will, accordingly, not be forfeited as a result of the distribution. In the distribution, all shares of U.S. Bancorp restricted stock held by our employees on the record date will be entitled to receive the dividend of our common stock on the same terms as other outstanding shares of U.S. Bancorp common stock, regardless of whether or not such U.S. Bancorp restricted stock will be forfeited on the distribution date. For a further discussion of the treatment of U.S. Bancorp restricted stock held by our employees see "Management—Treatment of U.S. Bancorp Restricted Stock Held by Our Employees."

Employee Cash Awards in Connection with the Distribution

        Human capital is critical to a financial services business such as our company, and the success of our company is dependent upon our ability to retain highly skilled and motivated employees who embody our Guiding Principles. To aid our employee retention efforts, we intend to grant cash awards to over 2,300 of our employees, including all of our executive officers, who were employees of our business on December 15, 2003. These cash awards will not be part of our regular compensation program for employees. We expect that the aggregate amount of all of these cash awards will be $47.0 million and will be comprised of three separate components:

•

cash awards related to U.S. Bancorp stock options and restricted stock held by our employees, in the aggregate amount of $41.5 million,

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•

discretionary cash awards to employees in our corporate support function, in the aggregate amount of $3 million, and



•

uniform cash awards to selected grades of employees, in the aggregate amount of $2.5 million.

        Our management will recommend to the compensation committee of our board of directors that the maximum amount payable under these cash awards to Andrew S. Duff, our Chairman and Chief Executive Officer, will be $5.1 million, to Addison L. Piper, our Vice Chairman, $159,000 and to all of our executive officers as a group (10 persons), $8.9 million. The allocation of these awards was determined by our management, including Mr. Duff. The aggregate amount of these cash awards is subject to the approval of our board of directors after the distribution, and the allocation of these cash awards among our executive officers is subject to the approval of the compensation committee of our board of directors, which will be formed following the distribution.

Cash Awards Related to Certain Stock Option and Restricted Stock Grants

        In connection with the distribution, we are particularly concerned about retaining our employees who hold U.S. Bancorp 90-day options and restricted stock and will lose value as a result of the expiration or forfeiture of these awards within 90 days following the distribution. For more details regarding the expiration of U.S. Bancorp 90-day options and restricted stock as a result of the distribution, see "Management—Treatment of U.S. Bancorp Options Held by Our Employees" and "Management—Treatment of U.S. Bancorp Restricted Stock Held by Our Employees." We believe that granting cash awards to these employees will help us retain these employees following the distribution and also will better provide them fair and equitable treatment in connection with the expiration or forfeiture of their U.S. Bancorp 90-day options and restricted stock as a result of the distribution. These cash awards will only take into account the value of U.S. Bancorp options and restricted stock that were granted under U.S. Bancorp stock incentive plans that would authorize the conversion of such U.S. Bancorp awards into cash in connection with the distribution. The aggregate amount of these cash awards associated with U.S. Bancorp options and restricted stock will be $41.5 million.

    Value of an Option

        The value of an option at any point in time is made up of two basic components—intrinsic value and time value. Intrinsic value is the difference between the market value of the underlying stock at the date the value is being measured and the exercise price of the option. Time value reflects the option's potential for gain over some specified future time period and takes into account possibilities about how the stock price might move and the length of time the option will be outstanding. A significant portion of the value of an option is derived from the potential for appreciation in the market value of the underlying stock.

        No matter when a person exercises a stock option, the person's cash outlay remains the same, that is, it will equal the exercise price of the option multiplied by the number of shares of stock underlying the option. However, the value realized by the person upon exercise of the option will vary depending on the market price of the underlying stock as of the date of exercise. For example, if an option has an exercise price of $15, and the person is forced to exercise the option at a time that the market price of the underlying stock is $20, the person will realize a gain of $5 upon exercise of the option. Assume the market price of the underlying shares subsequently doubles to $40. Had the person not been forced to exercise the option previously, the person could have exercised that option with the same cash outlay of $15, but would have realized a gain of $25 upon exercise of the option. The benefit of holding an option and choosing to exercise it later in its term is that the person can realize the appreciation in the value of the underlying stock without incurring the opportunity cost associated with the cash outlay required to exercise the option.

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    Calculation of the Aggregate Amount of These Cash Awards

        In determining the amount of the aggregate cash awards for this component, we and U.S. Bancorp calculated our estimate of $44.0 million for the aggregate lost value of these U.S. Bancorp awards as follows:

•

$10.1 million of the $44.0 million aggregate lost value is attributable to unvested U.S. Bancorp 90-day options that will expire in connection with the distribution, other than those U.S. Bancorp 90-day options that were originally granted with performance-based vesting terms, which are discussed below,



•

$5.7 million of the $44.0 million aggregate lost value is attributable to unvested U.S. Bancorp 90-day options held by our employees that were originally granted with performance-based vesting terms and that will expire in connection with the distribution,



•

$10.0 million of the $44.0 million aggregate lost value is attributable to vested, out-of-the-money U.S. Bancorp 90-day options that will expire in connection with the distribution,



•

$16.1 million of the $44.0 million aggregate lost value is attributable to vested, in-the-money U.S. Bancorp 90-day options held by our employees, and



•

$2.1 million of the $44.0 million aggregate lost value is attributable to U.S. Bancorp restricted stock that do not permit continued vesting after termination of employment and accordingly will be forfeited in connection with the distribution.

        The $16.1 million of lost value for the vested, in-the-money U.S. Bancorp 90-day options consists solely of the time value of these options, which will be lost by our employees since they will be forced to exercise these U.S. Bancorp options within 90 days of the distribution. We did not include any amounts in respect of the intrinsic value of these vested, in-the-money U.S. Bancorp 90-day options as they are capable of being exercised. This $16.1 million of lost value includes the time value of all of these vested, in-the-money U.S. Bancorp 90-day options regardless of whether employees choose to exercise these options. Additionally, the $5.7 million in respect of the performance-based U.S. Bancorp 90-day options is actually 50% of the total value of these awards. We and U.S. Bancorp determined in our discretion to reduce the amount of value attributable to these awards, since the applicable performance targets under these options have not been met and accordingly these options are unvested.

        In addition, in determining to make these cash awards, we considered the following factors:

•

Transactions involving investment banking firms often use a stock-based or deferred cash bonus program to retain key employees.



•

While we expect to grant equity awards under our long-term incentive plan, including to our employees who will receive these cash awards, starting in February 2004 in connection with our annual grant of equity awards, we will not grant new stock-based awards to replace the forfeited or expired U.S. Bancorp awards held by our employees.

        In determining the aggregate amount of these cash awards, we did not take into consideration any value associated with U.S. Bancorp terms options, U.S. Bancorp restricted stock that by its terms continues to vest after the distribution or U.S. Bancorp 90-day options held by our employees with retiree status, all of which will remain with U.S. Bancorp and not expire in connection with the distribution. In addition, we did not take into consideration any intrinsic value of vested, in-the-money U.S. Bancorp 90-day options held by our employees, as we assume employees will exercise those options prior to the distribution and realize the intrinsic value. As discussed above, we did take into consideration the time value of these vested, in-the-money U.S. Bancorp 90-day options.

        Our estimated value of these U.S. Bancorp awards that will expire, be forfeited or for which time value will not be able to be retained by our employees is approximately $44.0 million. The calculation of our estimated value for the applicable U.S. Bancorp options was determined utilizing a Black-Scholes pricing model and pricing assumptions that include:

•

the options' exercise prices as outlined in the individual option agreements,

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•

a price per share of U.S. Bancorp common stock of $27.71 (the closing price on the most recent trading day prior to November 30, 2003),



•

a term of the options equal to the remaining contractual life of the existing options,



•

stock volatility based on historical U.S. Bancorp trading volatility applicable to the remaining contractual term utilized, and



•

an estimated dividend yield on U.S. Bancorp shares of 3.0 percent.

        Because we are using the remaining contractual term of the option, the fact that an option is vested or unvested does not impact our estimated lost value of that option. We calculated the estimated lost value of the applicable U.S. Bancorp restricted stock by multiplying the number of shares of these U.S. Bancorp restricted stock by the closing price per share of U.S. Bancorp common stock on the most recent trading day prior to November 30, 2003. This estimated lost value of the applicable restricted stock does not take into account any change in the market price of U.S. Bancorp common stock that may occur as a result of the dividend of our shares in connection with the distribution value of these U.S. Bancorp awards that are expected to expire or be forfeited by our employees as a result of the distribution is different from, and is not intended to be equal to, the estimated fair value of the U.S. Bancorp awards that would be required to be determined in accordance with the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." Under SFAS 123, the remaining value of these options would be approximately $19.2 million, determined using a Black-Scholes pricing model and assumptions that include the remaining expected life of the options (that is, the original expected life of the options established at the date of original grant less the amount of time that has elapsed to date), whereas the contractual value of these options would be approximately $44.0 million, determined using a Black-Scholes pricing model and assumptions that include the remaining contractual life of the options (that is, the remaining contractual life of the options at the date of the distribution). When the remaining contractual life is used, we assume that the employee would not exercise the option, and the option would not expire, prior to the end of its contractual term, whereas when the remaining expected life is used, it is assumed that the option would be exercised or would expire sometime prior to the end of its contractual term based on assumptions regarding the average historical life of U.S. Bancorp options that were made at the time of the original grant. As a result, the value of these options determined using the remaining expected life is significantly less than the value of these options to our employees determined using the remaining contractual life of these options, since in all cases the remaining expected life is shorter than the remaining contractual life. In addition, in some cases the remaining expected life of the options may be zero when in fact the employee still holds the option. As a result, in the context of assessing the value of the awards that our employees will lose in connection with the distribution, we and U.S. Bancorp believe that the $44.0 million estimated value of these U.S. Bancorp options as determined above is a more appropriate reflection of the economic value of the awards, as it considers that the outstanding awards still have value even though the original expected life of the options, as determined as of the original grant date, may have significantly or completely elapsed. Our estimated value assumes that all of our employees would have held these options for the full term of the options. We believe that this is the most appropriate way of treating our employees fairly and equally in determining the amount of value related to the U.S. Bancorp options and restricted stock they will lose as result of the distribution.

         Determination of the Allocation of These Cash Awards

        The $41.5 million available for cash awards in this component will be allocated to employees who fit into one or both of the following categories, taking into account only those U.S. Bancorp stock-based awards that were granted under U.S. Bancorp stock incentive plans that would permit the conversion of U.S. Bancorp stock-based awards into cash in connection with the distribution:

•

employees who will lose value as a result of (a) the expiration, in connection with the distribution, of unvested U.S. Bancorp 90-day options or vested, out-of-the-money U.S. Bancorp 90-day options, (b) the exercise of vested, in-the-money U.S. Bancorp 90-day options prior to the

38

expiration of these options within 90 days after the distribution; and/or (c) the forfeiture, in connection with the distribution, of U.S. Bancorp restricted stock; and/or

•

employees who have lost time value as a result of exercising U.S. Bancorp 90-day options or U.S. Bancorp term options at a time when we had proposed a plan to replace those options with options to purchase our common stock, which plan subsequently was eliminated.

        Although every employee who fits into one or both of these categories is eligible to receive a cash award from the $41.5 million pool, our management has discretion not to grant a cash award to an eligible employee if management determines that the quality of the employee's historical performance and/or the role of the employee as it relates to the future success of our business does not justify the payment of an award whose purpose is in part retentive.

        If an employee is granted a cash award from the $41.5 million pool, the amount of the award will be based on the total value lost by the employee as a result of the exercise, expiration or forfeiture of U.S. Bancorp equity-based awards as described above. The amount of the award will not fully reflect the value lost by the employee because we are allocating an aggregate of $41.5 million to employees under this component of the cash awards, while the aggregate amount of the value lost by employees who fit into these categories is greater than $41.5 million. In addition to the lost value estimated as described on the preceding pages, when allocating awards we also have decided to consider a portion of the approximately $7.8 million of time value lost by employees who exercised U.S. Bancorp term or 90-day options at a time when we had proposed a plan to replace U.S. Bancorp stock options with options to purchase our common stock.

        To determine the final award amount to be granted to an employee, we will multiply the employee's total value lost (as estimated for purposes of allocating these awards) by a percentage, which will be determined based on the $41.5 million over the total value lost by all employees who will receive these cash awards (as estimated for purposes of allocating these awards). The same percentage will be used for all employees, including our executive officers. This percentage has been estimated for purposes of calculating the maximum awards that can be granted to our executive officers from the $41.5 million pool; however, the percentage will not be finally determined until the cash awards are actually allocated.

        We expect that all of our executive officers will receive cash awards from the $41.5 million pool, subject to approval by the compensation committee of our board of directors following the distribution. The maximum award that may be paid to each of our named executive officers from the $41.5 million pool is, for Mr. Duff, $4,567,000, and for all executive officers as a group (10 persons), $7,793,000. Based on our estimates as of November 30, 2003, the estimated lost value of the related stock-based awards held by Mr. Duff and all executive officers as a group is $4,742,000 and $8,114,000, respectively. The awards to our named executive officers do not reflect any time value lost as a result of option exercises during the time when we had proposed a plan to replace those options with options to purchase our common stock. Although Mr. Duff exercised U.S. Bancorp 90-day options to purchase a total of 25,057 shares during that time, there was no time value associated with these options exercised by Mr. Duff, and therefore his cash award will not include any amount to reflect lost value with respect to these options. An award to another of our executive officers, included in the award amount for all executive officers as a group, will reflect lost time value associated with the exercise of U.S. Bancorp 90-day options to purchase 11,750 shares of U.S. Bancorp common stock.

        We expect that the final award allocations will be determined within 30 days following the distribution. Employees who receive these awards will be paid 50 percent of the award in cash within 120 days following the distribution, and the remainder of each award will be paid out in cash on each of the first four anniversaries of the initial payment date, subject to the conditions described below.

Discretionary Cash Awards

        Another $3.0 million of the $47.0 million will be used to grant cash awards to employees who work in corporate support functions, including such functions as legal, compliance, technology, operations

39

and finance, and who are rated grades 14 and above pursuant to our grading system for employees, as well as our executive officers who manage these corporate support functions and are themselves graded employees, including Mr. Duff. The maximum aggregate amount of this discretionary cash award that is expected to be granted to our executive officers is $1.1 million, with Mr. Duff receiving a maximum award of $500,000 of such amount. A grade level represents a range of knowledge, skills and responsibilities that are sufficiently similar to warrant a common range of annual compensation. The $3.0 million will be allocated to these employees on a discretionary basis, taking into consideration the single factor of our assessment of the importance of the employee to the future success of our business. To allocate these awards we will establish a target award amount for each grade level. All support function employees rated grades 14 and above are eligible to receive a cash award, and management will have discretion to select the employees within each grade level to whom they will grant cash awards, based on the importance of the employee to the future success of our business. Our executive officers who manage these corporate support functions, and are themselves graded employees, will be eligible for these awards, subject to approval by our compensation committee. The maximum award that may be paid to these executive officers from the $3.0 million pool is, for Mr. Duff, $500,000 and, for each of the other executive officers who manages these corporate support functions, an individual award of $150,000. The maximum discretionary award to Mr. Duff, which was set by U.S. Bancorp, recognizes the significant role he has as our chairman and chief executive officer and considers the potential contribution he can make to the future success of our business. We expect that the final award allocations will be determined within 30 days following the distribution. Employees who receive these awards will receive 25 percent of the award within 120 days of the distribution and 25 percent on each of the next three anniversary dates of the initial payment, subject to the conditions described below.

Uniform Cash Awards

        The remaining $2.5 million will be allocated among employees across our company who are rated grades 13 and below. Each employee in this group will receive a cash award, which will be $2,600 for exempt employees and $1,700 for non-exempt employees. Non-exempt employees are employees who are paid on an hourly basis. Exempt employees are employees who are paid on a salaried basis. We expect that the final award allocations for these employees will be determined within 30 days following the distribution. These employees will be paid 100 percent of their cash awards in a single payment within 120 days of the distribution.

Other Award-Related Information

        Based on these payment schedules, we expect, in the aggregate, approximately $24.0 million to be paid out in cash within 120 days following the distribution, and the remaining $23.0 million to be paid out over the next four years. For retention purposes, under all of these cash awards, employees generally must be employed by us for the full calendar year preceding and continuing through each payment date in order to receive the award amount payable on that date. The awards will also be paid to the employees in accordance with the payment schedules described above, regardless of their continued employment, in the event of the applicable employee's death or disability, if the employee is retirement-eligible or if the employee's employment is terminated by us other than for cause during the 24-month period following a change in control of our company.

        Because these employee cash awards will reduce our regulatory capital as compensation expense is recognized, U.S. Bancorp intends to make a $23.5 million capital contribution to our company in the separation.

        Assuming the cash awards are allocated based on the maximum award, the aggregate amount that may be paid to our executive officers will be capped at $8.9 million, or 19 percent of the $47.0 million available for these awards. Of the $47.0 million, we expect to pay out to our employees excluding executive officers an aggregate amount of approximately $38.1 million, or 81 percent of the total amount available for these cash awards. The amounts of individual awards granted to our executive

40

officers and the payout provisions applicable to such awards are subject to approval by our compensation committee following the distribution.

The Number of Shares You Will Receive

        For each share of U.S. Bancorp common stock that you owned at 5:00 p.m., New York City time, on December 22, 2003, the record date, you will receive that number of our shares equal to the quotient obtained by dividing the total number of shares of our common stock to be distributed in the distribution by the total number of shares of U.S. Bancorp common stock outstanding at 5:00 p.m., New York City time, on the record date. This calculation results in the distribution of one one-hundredth of a share of our common stock for each share of U.S. Bancorp common stock and is illustrated as follows:

        It is important to note that if you sell your shares of U.S. Bancorp common stock between the record date and the distribution date in the "regular way" market, you will be selling your right to receive the share dividend in the distribution. Please see "—Trading Between the Record Date and Distribution Date" in the following section.

Trading Between the Record Date and Distribution Date

        Beginning on or shortly before the record date and the distribution date, there will be two markets in U.S. Bancorp common stock: a "regular way" market and an "ex-dividend" market. Shares of U.S. Bancorp common stock that trade on the regular way market will trade with an entitlement to shares of our common stock distributed pursuant to the distribution. Shares that trade on the ex-dividend market will trade without an entitlement to shares of our common stock distributed pursuant to the distribution. Therefore, if you owned shares of U.S. Bancorp common stock at 5:00 p.m., New York City time, on the record date and sell those shares on the regular way market prior to the distribution date, you will also be trading the shares of our common stock that would have been distributed to you pursuant to the distribution. If you sell those shares of U.S. Bancorp common stock on the ex-dividend market prior to the distribution date, you will still receive the shares of our common stock that were to be distributed to you pursuant to your ownership of the shares of U.S. Bancorp common stock.

        Furthermore, beginning on or shortly before the record date and ending on the distribution date there will be a "when issued trading" market in our common stock. When issued trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The when issued trading market will be a market for shares of our common stock that will be distributed to U.S. Bancorp stockholders on the distribution date. If you owned shares of U.S. Bancorp common stock at 5:00 p.m., New York City time, on the record date, then you are entitled to shares of our common stock distributed pursuant to the distribution. You may trade this entitlement to shares of our common stock, without the shares of U.S. Bancorp common stock you own, on the when issued trading market. On the first trading day following the distribution date, when issued trading with respect to our common stock will end and regular way trading will begin.

When and How You Will Receive the Dividend

        U.S. Bancorp will pay the dividend on December 31, 2003 by releasing its shares of our common stock to be distributed in the distribution to Mellon Investor Services LLC, our transfer agent. As part of the distribution, we will adopt a book-entry share transfer and registration system for our common stock. Instead of receiving physical share certificates, registered holders of U.S. Bancorp common stock entitled to the distribution will have their shares of our common stock distributed on the date of the

41

distribution credited to book-entry accounts established for them by the transfer agent. The transfer agent will mail an account statement to each such registered holder stating the number of shares of our common stock credited to the holder's account. After the distribution, you may request:

•

a transfer of all or a portion of your shares of our common stock to a brokerage or other account, and



•

receipt of one or more physical share certificates representing your shares of our common stock.

        For those holders of U.S. Bancorp common stock who hold their shares through a broker, bank or other nominee, the transfer agent will credit the shares of our common stock to the accounts of those nominees who are registered holders, who, in turn, will credit their customers' accounts with our common stock. We and U.S. Bancorp anticipate that brokers, banks and other nominees will generally credit their customers' accounts with our common stock within three to eight days of the distribution date.

        The transfer agent will not deliver any fractional shares of our common stock in connection with the distribution. Instead, the transfer agent will aggregate all fractional shares and sell them on behalf of those holders who otherwise would be entitled to receive a fractional share. We anticipate that these sales will occur as soon after the date of the distribution as practicable. Such holders will then receive a cash payment in an amount equal to their pro rata share of the total net proceeds of that sale. Such cash payment will be made to the holders in the same account in which the underlying shares are held. If you physically hold U.S. Bancorp stock certificates, your check for any cash that you may be entitled to receive instead of fractional shares of our common stock will follow separately. None of U.S. Bancorp, Piper Jaffray or the transfer agent will guarantee any minimum sale price for the fractional shares of our common stock. Neither we nor U.S. Bancorp will pay any interest on the proceeds from the sale of fractional shares.

Material Federal Income Tax Consequences of the Distribution

        The following discussion summarizes the material federal income tax consequences of the distribution. This discussion is based on the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, judicial opinions, published positions of the Internal Revenue Service, and all other applicable authorities as of the date of this document, all of which are subject to change, possibly with retroactive effect.

        The following discussion is limited to holders of U.S. Bancorp common stock that are characterized as United States persons for federal income tax purposes and may not describe all of the tax consequences that may be relevant to a holder in light of his particular circumstances or to holders subject to special rules. In addition, this summary is limited to holders that hold their U.S. Bancorp common stock as a capital asset. Accordingly, each stockholder should consult his or her tax advisor as to the particular consequences of the distribution to such stockholder, including the application of state, local and foreign tax laws, and as to possible changes in tax laws that may affect the tax consequences described herein. This summary may not be applicable to stockholders who received their U.S. Bancorp common stock pursuant to the exercise of employee stock options, under an employee stock purchase plan or otherwise as compensation.

        It is a condition to the distribution that U.S. Bancorp receive an opinion from its special counsel, Wachtell, Lipton, Rosen & Katz, to the effect that, on the basis of certain facts, representations and assumptions set forth in such opinion, the distribution will qualify as a distribution that is generally tax-free under Sections 355 and/or 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended. It is assumed for purposes of the following discussion that the distribution will so qualify.

        Subject to the discussion below relating to the receipt of cash in lieu of fractional shares, the principal federal income tax consequences of the distribution will be as follows:

•

no gain or loss will be recognized by, and no amount will be includible in the income of, a holder of U.S. Bancorp common stock solely as a result of the receipt of Piper Jaffray common stock in the distribution,

42

•

no gain or loss will be recognized by, and no amount will be includible in the income of, U.S. Bancorp as a result of the distribution, other than with respect to any "excess loss account" or "intercompany transaction" required to be taken into account under Treasury regulations relating to consolidated returns,



•

the holding period for the Piper Jaffray common stock received in the distribution will include the period during which the U.S. Bancorp common stock was held, and



•

the tax basis of U.S. Bancorp common stock held by a U.S. Bancorp stockholder immediately prior to the distribution will be apportioned, based upon relative fair market values at the time of the distribution, between such U.S. Bancorp common stock and the Piper Jaffray common stock received, including any fractional share of our common stock deemed received by such stockholder in the distribution.

        An opinion of counsel represents counsel's best legal judgment and is not binding on the Internal Revenue Service or any court. If the Internal Revenue Service subsequently held our separation and distribution to be taxable, the above consequences would not apply and both U.S. Bancorp and our common stockholders could be subject to tax. Additionally, certain future events that may or may not be within the control of U.S. Bancorp or Piper Jaffray, including certain extraordinary purchases of U.S. Bancorp common stock or our common stock, could cause the distribution not to qualify as tax-free to U.S. Bancorp and/or holders of U.S. Bancorp common stock. For example, if one or more persons were to acquire a 50 percent or greater interest in our stock or in the stock of U.S. Bancorp as part of a plan or a series of related transactions of which the distribution is a part, the distribution would be taxable to U.S. Bancorp, although not necessarily to you. Depending on the event, Piper Jaffray may have to indemnify U.S. Bancorp for some or all of the taxes and losses resulting from the distribution not qualifying under Sections 355 and/or 368(a)(1)(D) of the Internal Revenue Code as tax-free. See "Relationship with U.S. Bancorp—Agreements with U.S. Bancorp—Tax Sharing Agreement," included elsewhere in this information statement. If the distribution were taxable, then:

•

each holder of U.S. Bancorp common stock who receives shares of our common stock in the distribution would be treated as if such stockholder received a taxable distribution equal to the full value of the shares of our common stock received, taxed as a dividend to the extent of such stockholder's pro rata share of U.S. Bancorp's current and accumulated earnings and profits (including the gain to U.S. Bancorp described in the following bullet point) and then treated as a non-taxable return of capital to the extent of the holder's basis in the U.S. Bancorp common stock and finally as capital gain,



•

the consolidated group of which U.S. Bancorp is the common parent would recognize a gain equal to the excess of the fair market value of Piper Jaffray common stock on the date of the distribution over U.S. Bancorp's tax basis therein, and



•

under certain circumstances, we will be required to indemnify U.S. Bancorp for taxes on the gain described in the immediately preceding bullet point and for related losses (including any applicable interest and penalties, all related accounting, legal and other professional fees, all related court costs and all costs, expenses and damages associated with related stockholder litigation or controversies and any amount paid in respect of the liability of stockholders).

        Under current law, individual citizens or residents of the United States are subject to U.S. federal income tax on dividends at a maximum rate of 15 percent (assuming certain holding period requirements are met) and long-term capital gains (i.e., capital gains on assets held for more than one year) at a maximum rate of 15 percent. Depending on the aggregate fair value of our stock at the date of distribution, we currently estimate that, in the event that the indemnification obligation is triggered, the amount of taxes on the gain that would be recognized by U.S. Bancorp and for which we are agreeing to indemnify U.S. Bancorp could range from $0 to $75 million. This estimate excludes any related losses such as applicable interest and penalties and other items as more fully described above.

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Cash in Lieu of Fractional Shares

        No fractional shares of our common stock will be issued in the distribution. All fractional shares resulting from the distribution will be aggregated and sold by the transfer agent, and the proceeds will be distributed to the owners of such fractional shares. A stockholder who receives cash instead of a fractional share of our common stock as a part of the distribution will generally recognize capital gain or loss measured by the difference between the cash received for such fractional share and the stockholder's tax basis in the fractional share as described above. Any such capital gain or loss will be treated as a long-term or short-term gain or loss based on the stockholder's holding period for the U.S. Bancorp common stock with respect to which the stockholder received the distribution of our common stock. Payments of cash in lieu of a fractional share of our common stock made in connection with the distribution may, under certain circumstances, be subject to "backup withholding" at a rate of 30 percent unless a stockholder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the requirements of the backup withholding rules. Backup withholding does not constitute an additional tax, but merely an advance payment, which may be refunded or credited against a stockholder's federal income tax liability, provided that the required information is supplied to the Internal Revenue Service.

Information Reporting

        Current Treasury regulations require each U.S. Bancorp stockholder who receives our common stock pursuant to the distribution to attach to his or her U.S. federal income tax return for the year in which the distribution occurs a detailed statement setting forth such data as may be appropriate in order to show the applicability to the distribution of Section 355 of the Internal Revenue Code of 1986, as amended. U.S. Bancorp will provide appropriate information to each holder of record of U.S. Bancorp common stock as of the record date.

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CAPITALIZATION

        The following table presents our historical capitalization at September 30, 2003 and our pro forma capitalization at that date reflecting the distribution as if the distribution had occurred on September 30, 2003. The pro forma adjustments are based upon available information and assumptions that we believe are reasonable.

        The capitalization table below should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations," our historical combined financial statements, our unaudited combined financial statements and our unaudited pro forma combined financial statements and the notes to those financial statements, included elsewhere in this information statement.

(a)

Our broker dealer subsidiary currently is party to a $215 million subordinated debt facility with U.S. Bancorp Piper Jaffray Companies Inc. as the lender, which facility has been approved by the NYSE for regulatory net capital purposes as allowable in our broker dealer subsidiary's net capital computation. As of September 30, 2003, the entire $215 million of principal amount was outstanding. Prior to the distribution, our broker dealer subsidiary intends to prepay this $215 million subordinated debt facility and to simultaneously enter into a new $180 million subordinated debt facility with a subsidiary of U.S. Bancorp, contingent upon receipt of applicable regulatory approvals from the NYSE to permit inclusion of the entire amount outstanding under this subordinated debt facility in our broker dealer subsidiary's net capital computation. The interest rate on this subordinated debt facility is expected to be based on the three-month London Interbank Offered Rate and the entire amount outstanding would mature in 2008. As a result of these planned reductions in our subordinated debt facilities, our short-term borrowings will increase by $35 million.

(b)

The pro forma adjustments assume 19,271,108 shares of our common stock are issued and outstanding based on the distribution being effected by means of a dividend of one share of our common stock for every one hundred shares of U.S. Bancorp common stock outstanding as of November 30, 2003, excluding shares of U.S. Bancorp common stock held in treasury by U.S. Bancorp.

(c)

The pro forma adjustments include a planned capital contribution of $37.5 million by U.S. Bancorp or one of its subsidiaries on the date of distribution to provide regulatory capital to support ongoing business activities. Included in the planned capital contribution is $23.5 million related to cash awards that will be granted to our employees. In connection with the distribution, our company expects to grant cash awards to our employees in an aggregate amount of $47.0 million in an effort to retain our employees. In connection with these awards, approximately $24.0 million will be paid out in cash within 120 days following the distribution and the remaining $23.0 million will be paid out in increments of approximately $5.9 million over the next three years and approximately $5.3 million in the year thereafter. Because the employee cash award program will reduce our regulatory capital as compensation expense is recognized, U.S. Bancorp intends to make a $23.5 million capital contribution to our company on the date of the distribution. The pro forma adjustments also include the after tax impact of the $24.0 million charge related to the initial payment.

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DIVIDEND POLICY

        We do not intend to pay cash dividends on our common stock for the foreseeable future. Instead, we currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business. Our board of directors is free to change our dividend policy at any time and will make any such future determination regarding the payment of dividends based upon various factors then existing, including:

•

our financial condition, operating results and current and anticipated cash needs,



•

general economic and business conditions,



•

our strategic plans and business prospects,



•

legal, contractual and regulatory restrictions on our ability to pay dividends, and



•

other factors that our board of directors may consider to be relevant.

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SELECTED COMBINED FINANCIAL DATA

        The following table presents our selected historical combined financial data for the periods and dates indicated. The information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical combined financial statements and notes to those statements included elsewhere in this information statement. The selected combined statements of operations for the years ended December 31, 2002, 2001 and 2000, and the other financial data as of December 31, 2002 and 2001, are derived from our audited combined financial statements, included elsewhere in this information statement. The selected combined statements of operations for the nine months ended September 30, 2003 and 2002, and the other financial data as of September 30, 2003, are derived from our unaudited combined financial statements included elsewhere in this information statement and are prepared on the same basis as the audited combined financial statements including all material adjustments that we believe are necessary to present fairly in all material respects our combined results of operations for the interim periods presented. The selected combined statements of operations for the years ended December 31, 1999 and 1998, and the other financial data as of September 30, 2002, December 31, 2000, 1999 and 1998, are derived from our unaudited combined financial statements that are not included in this information statement and are prepared on the same basis as the audited combined financial statements. U.S. Bancorp has operated the businesses it will transfer to us in the separation as internal units of U.S. Bancorp through various subsidiaries and divisions that generally have been operating substantially independent from U.S. Bancorp's other subsidiaries and divisions. Our combined financial statements have been carved out from the consolidated financial statements of U.S. Bancorp by taking the historical results of operations and historical basis of the assets and liabilities of these transferred subsidiaries and divisions. Substantially all of the revenue and expenses included in our combined financial statements represent revenue generated and expenses incurred directly by these subsidiaries and divisions being transferred to us.

        Our historical combined financial information does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, including many significant changes that will occur in the operations and funding of our company as a result of our separation and distribution from U.S. Bancorp, including changes in insurance coverage, changes in tax structure, other potential increased costs associated with reduced economies of scale and other increased costs associated with being a publicly traded, stand-alone entity. For further discussion of the reasons for this, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Basis of Presentation." The historical combined statement of financial condition data set forth below reflects the assets and liabilities that are expected to be transferred to our company in accordance with the separation and distribution agreement.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

        The unaudited pro forma financial information of our company presented below was derived from the application of pro forma adjustments to our combined financial statements and gives effect to the terms related to our separation and distribution from U.S. Bancorp. These unaudited pro forma combined financial statements should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical combined financial statements and the related notes included elsewhere in this information statement.

        The unaudited pro forma combined statements of operations for the year ended December 31, 2002 and the nine months ended September 30, 2003 have been prepared as if the distribution and our separation from U.S. Bancorp had occurred as of January 1, 2002. The unaudited pro forma combined statement of financial condition as of September 30, 2003 has been prepared as if the distribution and our separation from U.S. Bancorp had occurred as of September 30, 2003. The pro forma adjustments are based upon available information and assumptions that we believe are reasonable. The unaudited pro forma combined statement of operations and statement of financial condition may not be indicative of what our operations or financial position would have been had the distribution and our separation from U.S. Bancorp taken place on the dates indicated in the notes below, because, for example, our historical combined financial statements have been carved out from the historical combined financial statements of U.S. Bancorp based on assumptions of and allocations by our management. For further discussion of this matter, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Basis of Presentation." Please see the notes to the unaudited pro forma combined financial statements for a further discussion of how these adjustments are presented in the pro forma combined financial statements.