EMPLOYEE BENEFITS AGREEMENT

Employee Benefits Plan Agreement

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PIPER JAFFRAY COMPANIES | U.S. BANCORP

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Title: EMPLOYEE BENEFITS AGREEMENT
Date: 3/8/2004
Industry: Investment Services Law Firm: Wachtell, Lipton, Rosen & Katz Sector: Financial

EMPLOYEE BENEFITS AGREEMENT, Parties: piper jaffray companies , u.s. bancorp

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EXHIBIT 10.1

EMPLOYEE BENEFITS AGREEMENT

BY AND BETWEEN

U.S. BANCORP

AND

PIPER JAFFRAY COMPANIES

DATED AS OF

DECEMBER 22, 2003

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS............................................................ 1

1.1 Affiliate.............................................................. 1

1.2 Agreement.............................................................. 1

1.3 Ancillary Agreements................................................... 1

1.4 Approved Leave of Absence.............................................. 1

1.5 Auditing Party......................................................... 1

1.6 Award.................................................................. 2

1.7 Benefit Plan........................................................... 2

1.8 Close of the Distribution Date......................................... 2

1.9 COBRA.................................................................. 2

1.10 Code................................................................... 2

1.11 Committee.............................................................. 2

1.12 Covered Employees...................................................... 2

1.13 Distribution........................................................... 2

1.14 Distribution Date...................................................... 2

1.15 Distribution Year...................................................... 2

1.16 ERISA.................................................................. 2

1.17 Former Parent Employee................................................. 3

1.18 Former Piper Jaffray Employee.......................................... 3

1.19 Health and Welfare Plans............................................... 3

1.20 HIPAA.................................................................. 3

1.21 Immediately after the Distribution Date................................ 3

1.22 Independent Third Party................................................ 3

1.23 Liabilities............................................................ 3

1.24 Match Date............................................................. 3

1.25 Non-parties............................................................ 3

1.26 NYSE................................................................... 3

1.27 Option................................................................. 3

1.28 Parent................................................................. 3

1.29 Parent Common Stock.................................................... 3

1.30 Parent Employee........................................................ 4

1.31 Parent Entities........................................................ 4

1.32 Parent Executive Benefit Plans......................................... 4

1.33 Parent Flexible Benefit Plans.......................................... 4

1.34 Parent Long-Term Incentive Plans....................................... 4

1.35 Parent Non-Qualified Retirement Plan................................... 4

1.36 Parent Non-Qualified Retirement Plan Participant....................... 4

1.37 Parent Opening Stock Value............................................. 4

1.38 Parent Pension Plan.................................................... 4

1.39 Parent Post-Retirement Welfare Benefits Plan........................... 4

1.40 Parent Savings Plan.................................................... 5

1.41 Parent Severance Pay Program........................................... 5

1.42 Parent Stock Value..................................................... 5

1.43 Participating Company.................................................. 5

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1.44 Person................................................................. 5

1.45 Piper Jaffray.......................................................... 5

1.46 Piper Jaffray Business................................................. 5

1.47 Piper Jaffray Common Stock............................................. 5

1.48 Piper Jaffray Employee................................................. 5

1.49 Piper Jaffray Entities................................................. 5

1.50 Piper Jaffray Executive Benefit Plans.................................. 6

1.51 Piper Jaffray Flexible Benefit Plan.................................... 6

1.52 Piper Jaffray Long-Term Incentive Plan................................. 6

1.53 Piper Jaffray Non-Qualified Retirement Plan............................ 6

1.54 Piper Jaffray Savings Plan............................................. 6

1.55 Piper Jaffray Savings Plan Trust....................................... 6

1.56 Restricted Stock....................................................... 6

1.57 Restricted Stock Unit.................................................. 6

1.58 Separation............................................................. 6

1.59 Separation and Distribution Agreement.................................. 6

1.60 Subsidiaries........................................................... 6

1.61 Tax Sharing Agreement.................................................. 6

1.62 Transferred Account Balances........................................... 7

1.63 Transition Date........................................................ 7

1.64 U.S.................................................................... 7

ARTICLE II GENERAL PRINCIPLES..................................................... 7

2.1 Employment of Piper Jaffray Employees.................................. 7

2.2 Assumption and Retention of Liabilities; Related Assets................ 7

2.3 Piper Jaffray Participation in Parent Benefit Plans.................... 7

2.4 Service Recognition.................................................... 8

2.5 Approval by Parent as Sole Stockholder................................. 8

ARTICLE III DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS......................... 8

3.1 Savings Plan........................................................... 8

3.2 Company Match.......................................................... 8

3.3 Parent Pension Plan.................................................... 9

(a) Retention of Parent Pension Plan................................ 9

(b) Commencement of Pension......................................... 9

ARTICLE IV HEALTH AND WELFARE PLANS............................................... 10

4.1 General................................................................ 10

(a) Establishment of Piper Jaffray Health and Welfare Plans......... 10

(b) Retention of Sponsorship and Liabilities........................ 10

4.2 Flexible Benefit Plan.................................................. 11

4.3 Workers' Compensation Liabilities...................................... 11

4.4 Payroll Taxes and Reporting of Compensation............................ 11

4.5 Parent Post-Retirement Welfare Benefits Plan........................... 12

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(a) Retention of Parent Post-Retirement Welfare Benefits Plan....... 12

(b) Piper Jaffray Post-Retirement Welfare Benefits Plans............ 12

4.6 COBRA and HIPAA Compliance............................................. 12

ARTICLE V EXECUTIVE BENEFITS AND OTHER BENEFITS.................................. 12

5.1 Assumption of Obligations.............................................. 12

5.2 Parent Executive Incentive Plan and the Annual Incentive Plan.......... 13

(a) Piper Jaffray Bonus Awards...................................... 13

(b) Parent Bonus Awards............................................. 13

5.3 Parent Long-Term Incentive Plans....................................... 13

(a) Parent Options.................................................. 13

(b) Parent Restricted Stock......................................... 14

(d) Incentive Stock Options; Foreign Grants/Awards.................. 16

(e) Miscellaneous Option and Other Award Terms...................... 14

(f) Waiting Period for Exercisability of Options and Grant

of Options and Awards........................................... 15

(g) Restrictive Covenants........................................... 16

5.4 Registration Requirements.............................................. 16

5.5 Parent Non-Qualified Retirement Plans.................................. 16

5.6 Severance Plans........................................................ 16

5.7 Employee Cash Awards in Connection with the Distribution............... 17

ARTICLE VI GENERAL AND ADMINISTRATIVE............................................. 17

6.1 Sharing of Participant Information..................................... 17

6.2 Reasonable Efforts/Cooperation......................................... 18

6.3 No Third-Party Beneficiaries........................................... 18

6.4 Audit Rights With Respect to Information Provided...................... 18

6.5 Fiduciary Matters...................................................... 19

6.6 Consent of Third Parties............................................... 19

ARTICLE VII MISCELLANEOUS.......................................................... 19

7.1 Effect If Distribution Does Not Occur.................................. 19

7.2 Relationship of Parties................................................ 19

7.3 Affiliates............................................................. 20

7.4 Notices................................................................ 20

7.5 Incorporation of Separation and Distribution Agreement Provisions...... 20

SIGNATURES OF THE PARTIES

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EMPLOYEE BENEFITS AGREEMENT

This EMPLOYEE BENEFITS AGREEMENT, dated as of December 22, 2003 is by

and between U.S. Bancorp, a Delaware corporation ("Parent"), and Piper Jaffray

Companies, a Delaware corporation ("Piper Jaffray"). Capitalized terms used

herein and not otherwise defined shall have the respective meanings assigned to

them in Article I hereof or assigned to them in the Separation and Distribution

Agreement (as defined below), as applicable.

WHEREAS, the Board of Directors of Parent has determined that it is in

the best interests of Parent and its stockholders to separate Parent's existing

businesses into two independent companies;

WHEREAS, in furtherance of the foregoing, Parent and Piper Jaffray have

entered into a Separation and Distribution Agreement, dated as of the date

hereof (the "Separation and Distribution Agreement"), and other ancillary

agreements that will govern certain matters relating to the Separation and the

relationship of Parent, Piper Jaffray and their respective Subsidiaries

following the Distribution Date; and

WHEREAS, pursuant to the Separation and Distribution Agreement, Parent

and Piper Jaffray have agreed to enter into this Agreement for the purpose of

allocating assets, Liabilities and responsibilities with respect to certain

employee compensation and benefit plans and programs between and among them.

NOW, THEREFORE, the parties hereto, intending to be legally bound,

agree as follows:

ARTICLE I

DEFINITIONS

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

following meanings:

1.1 "Affiliate" has the meaning given that term in the Separation

and Distribution Agreement.

1.2 "Agreement" means this Employee Benefits Agreement, including

all the Schedules hereto.

1.3 "Ancillary Agreements" has the meaning given that term in the

Separation and Distribution Agreement.

1.4 "Approved Leave of Absence" means an absence from active

service (i) due to an individual's inability to perform his or her regular job

duties by reason of illness or injury and resulting in eligibility to receive

benefits pursuant to the terms of the Parent Short-Term Disability Program or

the Parent Long-Term Disability Program, or (ii) pursuant to an approved leave

policy with a guaranteed right of reinstatement.

1.5 "Auditing Party" has the meaning set forth in Section 6.4(a).

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1.6 "Award," when immediately preceded by "Parent," means Parent

Restricted Stock and Parent Restricted Stock Units and, when immediately

preceded by "Piper Jaffray," means Piper Jaffray Restricted Stock and Restricted

Stock Units.

1.7 "Benefit Plan" shall mean, with respect to an entity or any of

its Subsidiaries, (a) each "employee welfare benefit plan" (as defined in

Section 3(1) of ERISA) and all other employee benefits arrangements, policies or

payroll practices (including, without limitation, severance pay, sick leave,

vacation pay, salary continuation, disability, retirement, deferred

compensation, bonus, stock option or other equity-based compensation,

hospitalization, medical insurance or life insurance) sponsored or maintained by

such entity or by any of its Subsidiaries (or to which such entity or any of its

Subsidiaries contributes or is required to contribute) and (b) all "employee

pension benefit plans" (as defined in Section 3(2) of ERISA), occupational

pension plan or arrangement or other pension arrangements sponsored, maintained

or contributed to by such entity or any of its Subsidiaries (or to which such

entity or any of its Subsidiaries contributes or is required to contribute).

When immediately preceded by "Parent," Benefit Plan means any Benefit Plan

sponsored, maintained or contributed to by Parent or a Parent Entity. When

immediately preceded by "Piper Jaffray," Benefit Plan means any Benefit Plan

sponsored, maintained or contributed to by Piper Jaffray or any Piper Jaffray

Entity. The Piper Jaffray Benefit Plans in effect prior to the Distribution are

listed in Schedule 1.7 hereto.

1.8 "Close of the Distribution Date" means 11:59:59 P.M., Eastern

Standard Time or Eastern Daylight Time (whichever shall then be in effect), on

the Distribution Date.

1.9 "COBRA" means the continuation coverage requirements for

"group health plans" under Title X of the Consolidated Omnibus Budget

Reconciliation Act of 1985, as amended, and as codified in Code Section 4980B

and ERISA Sections 601 through 608.

1.10 "Code" means the Internal Revenue Code of 1986, as amended, or

any successor federal income tax law. Reference to a specific Code provision

also includes any proposed, temporary or final regulation in force under that

provision.

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

1.12 "Covered Employees" has the meaning set forth in Section

4.2(i).

1.13 "Distribution" has the meaning given that term in the

Separation and Distribution Agreement.

1.14 "Distribution Date" has the meaning given that term in the

Separation and Distribution Agreement.

1.15 "Distribution Year" means the calendar year during which the

Distribution Date occurs.

1.16 "ERISA" means the Employee Retirement Income Security Act of

1974, as amended. Reference to a specific provision of ERISA also includes any

proposed, temporary or final regulation in force under that provision.

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1.17 "Former Parent Employee" means any individual who is a former

employee of Parent or a Parent Entity as of the Distribution Date.

1.18 "Former Piper Jaffray Employee" means any individual who is a

former employee of Piper Jaffray or a Piper Jaffray Entity as of the

Distribution Date.

1.19 "Health and Welfare Plans" shall mean any plan, fund or

program which was established or is maintained for the purpose of providing for

its participants or their beneficiaries, through the purchase of insurance or

otherwise, medical, dental, surgical or hospital care or benefits, or benefits

in the event of sickness, accident, disability, death or unemployment, or

vacation benefits, apprenticeship or other training programs or day care

centers, scholarship funds, or prepaid legal services, including any such plan,

fund or program as defined in Section 3(1) of ERISA. When immediately preceded

by "Parent," Health and Welfare Plans means each Health and Welfare Plan that is

a Parent Benefit Plan. When immediately preceded by "Piper Jaffray," Health and

Welfare Plans means each Health and Welfare Plan that is a Piper Jaffray Benefit

Plan.

1.20 "HIPAA" means the health insurance portability and

accountability requirements for "group health plans" under the Health Insurance

Portability and Accountability Act of 1996, as amended.

1.21 "Immediately after the Distribution Date" means on the first

moment of the day after the Distribution Date.

1.22 "Independent Third Party" has the meaning set forth in Section

5.3(f)(vi) of this Agreement.

1.23 "Liabilities" has the meaning given that term in the

Separation and Distribution Agreement.

1.24 "Match Date" has the meaning set forth in Section 3.2.

1.25 "Non-parties" has the meaning set forth in Section 6.4(b).

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

1.27 "Option," when immediately preceded by "Parent," means an

option (either nonqualified or incentive) to purchase shares of Parent Common

Stock pursuant to a Parent Long-Term Incentive Plan. When immediately preceded

by "Piper Jaffray," Option means an option (either nonqualified or incentive) to

purchase shares of Piper Jaffray Common Stock pursuant to the Piper Jaffray

Long-Term Incentive Plan.

1.28 "Parent" is defined in the preamble to this Agreement.

1.29 "Parent Common Stock" has the meaning set forth in the

Separation and Distribution Agreement.

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1.30 "Parent Employee" means any individual who, immediately prior

to the Close of the Distribution Date, is either actively employed by, or then

on Approved Leave of Absence from, any Parent Entity.

1.31 "Parent Entities" means the members of the Parent Group, as

defined in the Separation and Distribution Agreement, and their respective

Subsidiaries and Affiliates, excluding any business or operations (whether

current or historical, regardless of whether discontinued or sold) that are

included in the Piper Jaffray Business.

1.32 "Parent Executive Benefit Plans" means the executive benefit

and nonqualified plans, programs, and arrangements established, sponsored,

maintained, or agreed upon, by any Parent Entity for the benefit of employees

and former employees of any Parent Entity before the Close of the Distribution

Date.

1.33 "Parent Flexible Benefit Plans" means the Parent Flexible

Benefit Plan, as in effect as of the time relevant to the applicable provision

of this Agreement.

1.34 "Parent Long-Term Incentive Plans" means any of the U.S.

Bancorp 2001 Stock Incentive Plan, the U.S. Bancorp 2001 Employee Stock

Incentive Plan, the U.S. Bancorp 1999 Stock Incentive Plan, the Firstar

Corporation 1999 Employee Stock Incentive Plan, the Firstar Corporation 1998

Employee Stock Incentive Plan, the U.S. Bancorp 1998 Executive Stock Incentive

Plan, the U.S. Bancorp 1997 Stock Incentive Plan, the Star Banc Corporation 1996

Starshare Stock Incentive Plan for Employees, the 1991 Performance and Equity

Incentive Plan of the former U.S. Bancorp, the Piper Jaffray 1993 Omnibus Stock

Plan, the U.S. Bancorp 1991 Executive Stock Incentive Plan and any other stock

incentive plan of Parent, all as in effect as of the time relevant to the

applicable provisions of this Agreement.

1.35 "Parent Non-Qualified Retirement Plan" means the U.S. Bancorp

Non-Qualified Retirement Plan in effect as of the time relevant to the

applicable provision of this Agreement.

1.36 "Parent Non-Qualified Retirement Plan Participant" means any

individual who has an accrued balance in the Parent Non-Qualified Retirement

Plan as of the Distribution Date.

1.37 "Parent Opening Stock Value" means the opening per-share price

of Parent Common Stock as listed on the NYSE as of the opening of trading on the

first trading day following the Distribution Date; provided, however, that if

the Distribution occurs at a time when the NYSE is open for trading, Parent

Opening Stock Value shall mean the price at which Parent Common Stock trades as

of the moment immediately after the Distribution; and provided, further, that if

the Distribution occurs prior to opening of trading on the NYSE on the

Distribution Date, the Parent Opening Stock Value shall mean the price at which

Parent Common Stock first trades on the Distribution Date.

1.38 "Parent Pension Plan" means the U.S. Bancorp Pension Plan in

effect as of the time relevant to the applicable provision of this Agreement.

1.39 "Parent Post-Retirement Welfare Benefits Plan" means the

Health and Welfare Plan of Parent providing medical, dental or death benefits

for retirees.

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1.40 "Parent Savings Plan" means the U.S. Bancorp 401(k) Savings

Plan as in effect as of the time relevant to the applicable provision of this

Agreement.

1.41 "Parent Severance Pay Program" means the U.S. Bancorp

Severance Pay Program and the Parent Severance Pay Excess Plan, including any

severance benefits payable under the U.S. Bancorp Comprehensive Welfare Benefit

Plan or any component Benefit Plans thereof such as the U.S. Bancorp

Comprehensive Welfare Benefit Middle Management Change in Control Excess Plan,

each as in effect as of the time relevant to the applicable provision of this

Agreement.

1.42 "Parent Stock Value" means the closing per-share price of the

Parent Common Stock trading "regular way with due bills" as listed on the NYSE

as of 4:00 P.M., Eastern Standard Time or Eastern Daylight Time (whichever shall

then be in effect) on the Distribution Date; provided, however, that if the

Distribution occurs at a time when the NYSE is open for trading, Parent Stock

Value shall mean the price at which Parent Common Stock trades "regular way with

due bills" as of the moment immediately prior to the Distribution; and,

provided, further, that if the Distribution occurs prior to opening of trading

on the NYSE on the Distribution Date, Parent Stock Value shall mean the closing

per-share price of the Parent Common Stock trading "regular way with due bills"

as listed on the NYSE as of 4:00 P.M., Eastern Standard Time or Eastern Daylight

Time (whichever shall then be in effect) on the trading date immediately

preceding the Distribution Date.

1.43 "Participating Company" means (a) Parent, (b) any Person

(other than an individual) that Parent has approved for participation in, and

which is participating in, a plan sponsored by any Parent Entity, and (c) any

Person (other than an individual) which, by the terms of such a plan,

participates in such plan or any employees of which, by the terms of such plan,

participate in or are covered by such plan.

1.44 "Person" has the meaning given that term in the Separation and

Distribution Agreement.

1.45 "Piper Jaffray" is defined in the preamble to this Agreement.

1.46 "Piper Jaffray Business" has the meaning given to that term in

the Separation and Distribution Agreement.

1.47 "Piper Jaffray Common Stock" means the Piper Jaffray Common

Stock as defined in the Separation and Distribution Agreement.

1.48 "Piper Jaffray Employee" means any individual who, immediately

prior to the Distribution, is either actively employed by, or then on Approved

Leave of Absence from, a Piper Jaffray Entity.

1.49 "Piper Jaffray Entities" means the Piper Jaffray Group as

defined in the Separation and Distribution Agreement and any business or

operations (whether current or historical regardless of whether discontinued or

sold) included in the Piper Jaffray Business.

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1.50 "Piper Jaffray Executive Benefit Plans" means the executive

benefit and nonqualified plans, programs, and arrangements established,

sponsored, maintained, or agreed upon, by any Piper Jaffray Entity for the

benefit of employees and former employees of any Piper Jaffray Entity before the

Close of the Distribution Date.

1.51 "Piper Jaffray Flexible Benefit Plan" means the flexible

benefit plan to be established by Piper Jaffray pursuant to Section 4.2 of this

Agreement as in effect as of the time relevant to the applicable provision of

this agreement.

1.52 "Piper Jaffray Long-Term Incentive Plan" means the long-term

incentive plan or program to be established by Piper Jaffray, effective

immediately prior to the Distribution Date, in connection with the treatment of

Awards as described in Article V.

1.53. "Piper Jaffray Non-Qualified Retirement Plan" has the meaning

set forth in Section 5.5.

1.54 "Piper Jaffray Savings Plan" means the 401(k) and profit

sharing plan to be established by Piper Jaffray pursuant to Section 3.1 of this

Agreement, as in effect as of the time relevant to the applicable provision of

this agreement.

1.55 "Piper Jaffray Savings Plan Trust" means a trust relating to

the Piper Jaffray Savings Plan intended to qualify under Section 401(a) and be

exempt under Section 501(a) of the Code.

1.56 "Restricted Stock," when immediately preceded by "Parent,"

means shares of Parent Common Stock issued under a Parent Long-Term Incentive

Plan subject to forfeiture in the event that certain terms and conditions are

not satisfied and, when immediately preceded by "Piper Jaffray," means shares of

Piper Jaffray Common Stock issued under the Piper Jaffray Long-Term Incentive

Plan subject to forfeiture in the event that certain terms and conditions are

not satisfied.

1.57 "Restricted Stock Unit" when immediately preceded by "Parent,"

means units representing hypothetical shares of Parent Common Stock issued under

a Parent Benefit Plan and, when immediately preceded by "Piper Jaffray," means

units representing hypothetical shares of Piper Jaffray Common Stock issued

under the Piper Jaffray Long-Term Incentive Plan.

1.58 "Separation" has the meaning given that term in the Separation

and Distribution Agreement.

1.59 "Separation and Distribution Agreement" is defined in the

preamble to this Agreement.

1.60 "Subsidiaries" has the meaning given that term in the

Separation and Distribution Agreement.

1.61 "Tax Sharing Agreement" means the Tax Sharing Agreement

entered into as of the date hereof between Parent and Piper Jaffray.

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1.62 "Transferred Account Balances" has the meaning set forth in

Section 4.2(i).

1.63 "Transition Date" has the meaning set forth in Section 4.1(a).

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

of Columbia.

ARTICLE II

GENERAL PRINCIPLES

2.1 Employment of Piper Jaffray Employees. All Piper Jaffray

Employees shall continue to be employees of Piper Jaffray or another Piper

Jaffray Entity, as the case may be, immediately after the Distribution.

2.2 Assumption and Retention of Liabilities; Related Assets.

(a) As of the Distribution Date, except as expressly

provided in this Agreement, the Parent Entities shall assume or retain and

Parent hereby agrees to pay, perform, fulfill and discharge, in due course in

full (i) all Liabilities under all Parent Benefit Plans, (ii) all Liabilities

with respect to the employment or termination of employment of all Parent

Employees, Former Parent Employees and their dependents and beneficiaries, and

other service providers (including any individual who is, or was, an independent

contractor, temporary employee, temporary service worker, consultant,

freelancer, agency employee, leased employee, on-call worker, incidental worker,

or nonpayroll worker of any Parent Entity or in any other employment,

non-employment, or retainer arrangement, or relationship with any Parent

Entity), in each case to the extent arising in connection with or as a result of

employment with or the performance of services to any Parent Entity, and (iii)

any other Liabilities expressly assigned to Parent under this Agreement. All

assets held in trust to fund the Parent Benefit Plans and all insurance policies

funding the Parent Benefit Plans shall be Parent Assets (as defined in the

Separation and Distribution Agreement), except to the extent specifically

provided otherwise in this Agreement.

(b) From and after the Distribution Date, except as

expressly provided in this Agreement, Piper Jaffray and the Piper Jaffray

Entities shall assume or retain, as applicable, and Piper Jaffray hereby agrees

to pay, perform, fulfill and discharge, (i) all Liabilities under all Piper

Jaffray Benefit Plans, (ii) all Liabilities with respect to the employment or

termination of employment of all Piper Jaffray Employees and other service

providers (including any individual who is, or was, an independent contractor,

temporary employee, temporary service worker, consultant, freelancer, agency

employee, leased employee, on-call worker, incidental worker, or nonpayroll

worker of Piper Jaffray or a Piper Jaffray Entity or in any other employment,

non-employment, or retainer arrangement, or relationship with Piper Jaffray or a

Piper Jaffray Entity), and their dependents and beneficiaries, and (iii) all

Liabilities that are expressly assigned to Piper Jaffray or any Piper Jaffray

Entity under this Agreement.

2.3 Piper Jaffray Participation in Parent Benefit Plans. Except as

expressly provided in this Agreement, effective as of the Close of the

Distribution Date, Piper Jaffray and each other Piper Jaffray Entity shall cease

to be a Participating Company in any Parent Benefit Plan, and

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Parent and Piper Jaffray shall take all necessary action before the Distribution

Date to effectuate such cessation as a Participating Company.

2.4 Service Recognition. Piper Jaffray shall cause the Piper

Jaffray Benefit Plans with respect to which service is a relevant factor to

credit Piper Jaffray Employees who are employed by Piper Jaffray immediately

following the Distribution with service before the Distribution Date recognized

by Parent under the terms of Parent Benefit Plans with respect to which service

is a relevant factor, except (a) to the extent duplication of benefits would

result and (b) for purposes of benefit accruals under any defined benefit

pension plan.

2.5 Approval by Parent

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