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CONFIDENTIAL

October 20, 2003

Technology IPO Perspectives

PRESENTATION TO:

Annual Venture Capital Ecosystem Meeting

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Table of Contents

1 Historical IPO Perspectives

2 Current IPO Perspectives

3 The Global Settlement and IPO Underwriting

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TECHNOLOGY IPO PERSPECTIVES / October 20, 2003 3

1 Historical IPO Perspectives

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Historical IPO Perspectives

> 1,804 technology companies have gone public in the U.S.

> $118 billion in total capital raised

> 33% have been acquired

> 14% have gone bankrupt or liquidated

> 41% have appreciated in value since IPO date(1)

> 41 have been ten baggers(2)

> May 2001 date of the last telecom equipment IPO

By the numbers since 1980

(1) Determined at acquisition date if acquired.(2) Ten-bagger defined as lifetime stock price appreciation in excess of 1,000%.

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3

33

2

2

2

3

36 3

727 23

6

56

5

0

203

2

5

30

6

22

0

50

00

50

200

250

300

350

0

2

3

5

6

7

0

2

3

5

6

7

2000

200

2002

2003


Number of IPOs(January

,

0 December 3

, 2002)

Source: Securities Data Corporation.

Cyclicality of IPOs

follows the evolution

of new industries

and broader

economic themes

PC Revolution Retrenchment Networking Internet Revolution Retrenchment

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TECHNOLOGY IPO PERSPECTIVES / October 20, 2003

$0

$100

$200

$300

$400

$500

$

00

$ 00

$800

$900

$1,000

1980

1981

1982

1983

1984

1985

198

198

1988

1989

1990

1991

1992

1993

1994

1995

199

199

1998

1999

2000

2001

2002

2003

(inm

illions)

Average IPO Market Value Average IPO Size


Average IPO Market Value and IPO Size

Source: Securities Data Corporation.

Excludes Accenture and Agere IPOs in 2001.

(January 1, 1980 October 13, 2003)

PC Revolution Retrenchment Networking Internet RevolutionAverage IPO

market value and

size have steadily

increased as

investors demand

greater liquidity

and companies

with greater criticalmass

Retrenchment

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TECHNOLOGY IPO PERSPECTIVES / October 20, 2003


Average Number of Underwriters per Technology IPO(January 1, 1980 October 13, 2003)

2.0

1. 1.8

2.0

1.8

2.0

2.1

1.9

2.12.2

2.1

2. 2.

2.9

3.2

3.

3. 3.3

3.8

1.9

2.3

2.0

2.6

1.

0.0

0.

1.0

1.

2.0

2.

3.0

3.

.0

.

1980 1981 1982 1983 198 198 ! 1986 198" 1988 1989 1990 1991 1992 1993 199 199 ! 1996 199" 1998 1999 2000 2001 2002 2003

Source: Securities Data Corporation, EquiDesk.

Increase in deal size

and competitive

dynamic among

investment banks

has increased the

average number of

underwriters on an

IPO

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> Like the 1983 NFL quarterback class (Elway, Kelly, Marino), the 198# IPO class yielded

exceptional value

> Approximately $400 billion of value creation from 10 companies that went public in 198#

> Lesson: As industry leaders emerge, sectors consolidate and disproportionate value isascribed to #1

Phase 1: Technology emerges

Phase 2: Several companies compete to grow the technology and market

Phase 3: Leader emerges

Phase 4: Industry consolidates

Phase 5: Leader captures disproportionate value

IPO Darwinism

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Technology Sector is an IPO Leader

2002 Sector Breakdown (by # of IPOs) 2003 Sector Breakdown (by # of IPOs)

Source: EquiDesk.

> Despite a poor environment for IPOs, technology has increased its share of total IPOs in 2003

from 2002

> Given the emerging growth characteristics of technology companies, the technology sector iswell suited to capture a significant portion of the IPO total

Other

6 $

Consumer

9 $

Healthcare6 $

% inancial

Institutions

3& $

Real Estate

& 2 $

Industrials

6$

Technology

2' $

( edia/Telecom

6 $

) inancialInstitutions

270

Healthcare1 9 0

Other

1 2 0

Consumer2 1 0

Energy1 0

Real Estate3 0

Industrials3 0

Technology9 0

4 edia/Telecom1 0

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> Eight technology IPOs completed since June 2003

Financings occur in brief windows of opportunity

> Average post-IPO market capitalization was $530 mm with the smallest at $1 5 3 mm

> All issuers were profitable in 2003 and have visibility into 2004

> Issuers had limited to no exposure to telecom carrier capex

> Stocks have performed well up 49% on average

In difficult financing environment, higher levels of scrutiny are placed on those that cango public

2003 IPO Observations

Gross %

Date Company 6 roceeds @ 7 6 8 Current +/- @ 7 6 8 Current 9 003 9 004 @ 7 6 8 Current @ 7 6 8 Current

9/@ A

B

C I D E F

l G iH I P

, IH Q

. 6R R

. RS @ R

.R RS T

9.90$ -0.U V

1,437.3$ T ,W A

0. T$ XB

X

B

Y ` X

B

Y ` X

B

9/T a D

iI b c

d

e lT U

0.0T U

.00@ A

.T @

U W

.T V

504.0 776. a XB

X

B

Y ` X

B

Y ` X

B

7/ A 0 Net f ear 98.0 T W .00 T 7. @ W @ A . T V 380.8 W 68.9 0. A W 0. U W 41. 9 x U 0.7g

9 5.9xA T .9x

7/ @ A I h ass 98.0 T W .00 @ A .83 70. @ V 8 9 1.8 T ,398.8 0. @ 6 0. W T 53.8x 91.7x 34.1x 58.1x

7/16 I H teri

i G eo 39. @ 14.00 17.85 @ 7.5% 173.6 221.3 0.66 1.00 9 1. 9 x 27.0x 14.0x 17.9x

7/9 Di I itald

p eater Dq

stems 65.3 17.00 30.00 76.5% 9 9 9 .7 393.0 0.70 0.84 9 4.3x 42.9x 9 0. 9 x 35.7x

6/12 FormFactor 84.0 14.00 26.92 92.3% 46 9 .0 888.4 0.17 0.41 8 9 .4x 158.4x 34.1x 65.7x

5/12 ir

ayment 80.0 16.00 23.85 49.1%9

35.9

350.6 0.84 1.05 19.0x 28.4x 15.9

x 22.7x verage 151.8$ 49.0% 5 9 9.7$ 741.0$ 40.3x 66.5x 9 3.9x 38.7x

Gross %

Date Company 6 roceeds @ 7 6 8 Current +/- @ 7 6 8 Current 9 003 9 004 @ 7 6 8 Current @ 7 6 8 Current

9/23 AMI D E ol G ings, Inc. 600.0$ 20.00$ 19.90$ -0.5% 1,587.3$ 1,580.1$Y ` Y `

NA NA NA NA

9/18 SigmaTel 150.0 15.00 23.12 54.1% 414.0 686.8Y ` Y `

NA NA NA NA

7/30 Net f ear 98.0 14.00 17.24 23.1% 290.8 378.9 9 87.0 336.0 1.0x 1.3x 0.9x 1.1x

7/23 I h ass 98.0 14.00 23.83 70.2% 707.8 1,284.8 136.0 190.0 5.2x 9.4x 3.7x 6.8x

7/16 Interi

i G eo 39.2 14.00 17.85 27.5% 120.6 168.3 60.0 76.0 2.0x 2.8x 1.6x 2.2x

7/9 Digital Theater Systems 65.3 17.00 30.00 76.5% 178.9 349.2 51.5 68.0 3.5x 6.8x 2.6x 5.1x

6/12 FormFactor 84.0 14.00 26.92 92.3% 352.0 778.4 9 9 .0 134.0 3.8x 8.5x 2.6x 5.8x

5/12 i r ayment 80.0 16.00 23.85 49.1% 237.9 353.3 9 15.0 9 57.0 1.1x 1.6x 0.9x 1.4x

verage 9 .8x 5.1x 9 .1x 3.7x

9 004 s 6 / s

t tock 6 rice s nterprise Value s stimated u ev. 9 003 s s V / u ev 9 004 s s V / u ev

t tock 6 rice Market Cap Estimated EPS 2003EP/E

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SigmaTels IPO Case Study

Critical Mass (approximately $20 million quarterly revenues)`

High quality customer relationships

Significant growth in targeted end-markets

Profitability in year of issuance

Potential for core technology to serve additional markets in the future

Experienced management team with proven track record

FilingMid June 2003

MarketingEarly September 2003

Pricing(9/18/03)

Current(10/13/03)

$350 - $400 million $410 - $4 v 0 million $504 million $ v 99 million

Increased32%on the first dayof trading

Currentlyup w 4%

Strong visibility at least one-year forward (period that the valuation will be based upon)

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2 Current IPO Perspectives

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Current IPO Perspectives

> Downsizing of the past 3 years has led to significant operating leverage

> Positive Qtr/Qtr revenue and earnings growth in Q1 and Q2, expected for Q3

> Equity fund flows positive every month since April

2003/2004 Outlook

Domestic Equity Funds Flow

($2.0)

($9.2)

($1.9)

$4.3

$3.2

$x.

x

$ y .9

$5. x $ y .0

($12.0)

($10.0)

($8.0)

($ y .0)

($4.0)

($2.0)

$0.0

$2.0

$4.0

$y

.0

$8.0

$10.0

Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03

(in

billions)

FY 2002: ($2 .3B)FY 2003: +$20. B

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> Investors are cautious when valuations fluctuate dramatically, making IPOs difficult to

accomplish

2003/2004 Outlook (continued)

0%

10%

20%

30%

40%

50%

60%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

YTD

Percentage of Trading Days per Year NASDAQ Moved +/- 2% in One Day

Extreme levels of

volatility have given

way to greater

stability

Source: Wall Street Research.

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> Strong performance of 2003 IPO class

> Interest rates remain low

> IPO calendar beginning to build

There are currently 1 IPOs filed with the SEC 10 of these are technology companies


Current Sector Breakdown of IPO Backlog1

($ .1 Billion)

1Source: Dealogic; IPOs filed/ revised within the last 180 days, current amount filed greater than $30mm.

By number of transactions.

Technology14. %

Media/Telecom4.2%

Financial

Institutions18.8%

Energy .3%

Healthcare22.9%

Industrials2.1%

Real Estate8.3%

Other12.5%

Consumer10.4%

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> Since 1980, every ten years significant new technologies have emerged

Early to mid 1980s PC

Mid 1990s Internet

?? Mid-2000s Broadband connectivity and mobility utilizing cost-effectiveinfrastructure


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What are Company Metrics for an IPO?

Critical mass at least $100 million in revenue

Demonstrated momentum through quarterly sequential revenue and earnings growth

Profitability in year of issuance

Good visibility one year forward (the period valuation will be based upon)

Product and customer diversification

Experienced management

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> Earnings momentum focus will shift from margins to revenues by early to mid-2004; lack of

quarter/quarter revenue growth

> Jobless recovery restricts economic growth

> A few lesser quality companies capitalize on the IPO window and subsequently underperform

> Another shock to global geopolitical events

What Can Change Our Positive Bias?

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3 The Global Settlement and IPO Underwriting

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The Global Settlement and IPO Underwriting

> Banker / Analyst diligence proceeds on a dual-track

Bankers cannot ask an Analyst to visit a company

Analysts and Bankers may not attend the same meetings with companies

No discussion of anticipated equity rating is permitted

> Research Analyst Teach-Ins to salesforce

Viewed as an education opportunity, not as a sales or marketing opportunity

Can discuss business fundamentals and information contained in prospectus

May discuss the Analysts financial estimates

May NOT comment on the transaction structure or pricing

Bankers may NOT attend Teach-Ins

> Management Presentation to the salesforce

Analysts may NOT attend (permitted to view presentation from a different location)

Bankers and ECM may attend

Analyst estimates may NOT under any circumstances be announced or distributed

Underwriter Selection and Pre-Marketing

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> Roadshow Preparation

Analysts may NOT participate in the preparation of, contribute to, comment on, orreview the roadshow presentation

Bankers may NOT solicit input from Analysts on the roadshow presentation

> Marketing and Roadshow

During marketing process, no event can be attended by Bankers and Analysts together

Analysts may NOT introduce management to buyside accounts during roadshow

Analysts may NOT provide input into the roadshow schedule or identify investors totarget

Analysts may NOT attend roadshow meetings

Analyst estimates and other perspectives/opinions may NOT be discussed or distributedin any manner, at any time by Bankers or Management during the roadshow

Marketing

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> Analysts communications with Investors

Analysts may NOT make outgoing phone calls or other communications to Investors tosolicit interest in the offering

Analysts may respond to incoming calls from Investors and discuss:

Business fundamentals of the company

Information contained in the prospectus

Analysts previously published research reports and financial model

Analysts may NOT discuss or provide an opinion with respect to: Structuring or pricing of the transaction

Any information not contained in the prospectus

> Bankers and ECM personnel may NOT direct and Analyst to initiate or take calls frominvestors

> Analysts may NOT communicate investor feedback to Bankers or ECM personnel

> Analysts may not participate in the pricing call

Marketing

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CIBC World Markets

2002 & 2003 YTD Lead and Co-Managed Equity New Issues

Source: Dealogic EquiDesk.Assumptions: Ranked by number of issues for lead and co-managed deals.Includes IPOs and Follow-ons, excludes closed-end funds and REITs.

Based on calendar year pricing dates and on total issue amount, allocates 100% to each manager.

CIBCs strength is

with middle-market

companies; we have

a long record of

successfully

executing

transactions for

these companies

IssuerMar

et Cap Less than$1 Billion All

eals

Pos. Manager# of

eals

Total

Amt.($mm) Pos. Manager

# of eals

Total

Amt.($mm)

1 CIBC WorldMar ets

3 8,654 1 Credit Suisse First Boston 184 2,94

2 Merrill Lynch & Co 2 14, 15 2 Merrill Lynch & Co 1 8,138

3 Credit Suisse First Boston 8 13,8 5 3 Citigroup Global Markets Inc 150 2,815

4 UBS AG 8, 0 4 UBS AG 14 52,914

5 Lehman Brothers 55 ,558 5 JP Morgan Securities Inc 142 4,13

US Bancorp Piper Jaffray Inc 53 4, Morgan Stanley 141 5 ,

Bear, Stearns & Co 52 ,10 Goldman, Sachs & Co 131 ,85

8 JP Morgan Securities Inc 4 12,083 8 Lehman Brothers 123 48,358

9 Morgan Stanley 45 ,984 9 Banc of America Securities 104 48, 3

10 RBC Capital Markets 45 4,180 10 Deutsche Bank AG 9 41, 05

11 Deutsche Bank AG 43 8,211 11 CIBC WorldMar ets 4 19,565

12 Societe Generale 42 5, 9 12 Bear, Stearns & Co 92 32,233

13 Citigroup Global Markets Inc 39 9,832 13 US Bancorp Piper Jaffray Inc 1 ,281

14 Raymond James 39 2,823 14 Wachovia Capital Markets, LLC 59 24,1 1

15 Goldman, Sachs & Co 35 12,0 2 15 RBC Capital Markets 59 9,45

1 Banc of America Securities 35 8,03 1 Societe Generale (Paris) 55 1 ,289

1 Thomas Weisel Partners LLC 30 3,003 1 Raymond James 54 ,38

18 Legg Mason Wood Walker Inc 28 2,599 18 AG Edwards & Sons Inc 41 , 95

19 Needham & Co Inc 28 1,899 19 Legg Mason Wood Walker Inc 41 ,593

20 BMO Financial Services 25 3,0 3 20 Thomas Weisel Partners LLC 39 ,155

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