Yes, they should work with the stock exhaust. The only complication I can think that you may have is that the bolt that is included with the rearsets may not be long enough to go through the rearset bracket, frame ear, and two exhaust brackets (since the stock exhaust has two brackets on each side of the bike). It may be long enough, though.....I don't recall at the moment. If not, it's just a matter of getting a longer bolt.
If you take your tow and put it on the front peg and then set your heel on the passenger peg (if your feet are long enough to do that), that's about where your feet will be with the rearsets (approx).
Good luck!