Piper Jaffray Inc.
                              Second Century Growth
                    Deferred          Compensation Plan PIPER JAFFRAY INC.
                         SECOND CENTURY GROWTH DEFERRED
                                COMPENSATION PLAN

                                TABLE OF CONTENTS
                                                               Page
SECTION 1  INTRODUCTION                                         1
     1.1.  Establishment                                        1
     1.2.  Purpose.                                             1
     1.3.  Definitions                                          1
          1.3.1.  Account                                       1
          1.3.2.  Beneficiary                                   1
          1.3.3.  Code                                          1
          1.3.4.  ECM Investment Committee                      1
          1.3.5.  ECM Operating Committee                       1
          1.3.6.  ERISA                                         1
          1.3.7.  Executive Compensation Committee              1
          1.3.8.  Liquidity Event                               2
          1.3.9.  Management Committee                          2
          1.3.10.  Measuring Investment                         2
          1.3.11.  Participant                                  2
          1.3.12.  Plan                                         2
          1.3.13.  Plan Statement                               2
          1.3.14.  Plan Year                                    2
     1.4.  Rules of Interpretation                              2
SECTION 2  PARTICIPATION                                        3
     2.1.  Eligibility and Selection                            3
     2.2. Notification                                          3
     2.3.  Enrollment                                           3

SECTION 3  ACCOUNTS                                             3
     3.1.  Accounts                                             3
     3.2.  Credits to Accounts                                  4
          3.2.1.  Bonus Credit                                  4
          3.2.2.  Interest Credit                               4
          3.2.3.  Investment Credit                             4
     3.3.  Measuring Investments                                4
     3.4.  Charges to Accounts                                  4
          3.4.1.  Investment Charge                             4
          3.4.2.  Benefit Payment Charge                        5
          3.4.3.  Debt Set-Off Charge                           5

SECTION 4  BENEFITS                                             5
     4.1.  Benefits Payable to a Participant                    5
     4.2.  Three-Year Waiting Period                            5
     4.3.  Forfeiture of Benefits upon Competition              5
     4.4.  Forfeiture of Benefits upon Gross Misconduct         6
     4.5. No Reallocation of Forfeited Amounts                  6
     4.6. Benefits Payable to a Beneficiary.                    6
          4.6.1.  Death Before Full Payment                     6
          4.6.2.  Beneficiary Designation                       6
          4.6.3.  Failure of Designation                        7
          4.6.4.  Definitions                                   7
          4.6.5.  Special Rules                                 7

SECTION 5  ADMINISTRATION                                       8
     5.1.  Administration                                       8
     5.2.  ECM Investment Committee                             8
          5.2.1.  Appointment                                   8
          5.2.2.  Organization                                  8
          5.2.3.  Authority                                     8
          5.2.4.  Exercise of Authority                         8
          5.2.5.  Limitation on Individual's Authority          8
     5.3. ECM Operating Committee                               9
          5.3.1.  Appointment                                   9
          5.3.2.  Organization                                  9
          5.3.3.  Authority                                     9
          5.3.4.  Exercise of Authority                         9
          5.3.5.  Limitation on Individual's Authority          9
     5.4.  Binding Effect                                       9

SECTION 6  AMENDMENT AND TERMINATION
     6.1.  Amendment                                            10
     6.2.  Termination                                          10

SECTION 7  GENERAL PROVISIONS
     7.1.  Contractual Right to Benefits                        10
     7.2.  Effect on Qualified Plans                            10
     7.3.  Benefits Not Transferable                            10
     7.4.  Withholding Taxes                                    10
     7.5.  Effect on Employment Rights and Other Benefit
          Programs                                              11
     7.6.  Binding Effect of Agreement                          11


                               PIPER JAFFRAY INC.
                              SECOND CENTURY GROWTH
                           DEFERRED COMPENSATION PLAN



                           SECTION 1

                         INTRODUCTION

1.1.  Establishment.  Piper Jaffray Inc., a Delaware
corporation, has adopted this Plan by written action of its
Board of Directors dated September 26, 1996.


1.2.  Purpose.  The purpose of the Plan is to help motivate and
retain the employees who are key contributors to the success of
the Equity Capital Markets business of Piper Jaffray Inc. by
providing them with deferred bonus payments measured by the
performance of certain investments related to the focus of that
business.


1.3.  Definitions.  When the following terms are used herein
with initial capital letters, they shall have the following
meanings:


     1.3.1. Account -- the separate recordkeeping account (unfunded and
unsecured) maintained foreach Participant in connection with his/her
participation in the Plan for a specific Plan Year.

     1.3.2.  Beneficiary -- a person designated by a Participant
(or automatically by operation of this Plan Statement) to
receive a benefit equal to part or all of the balance of the
Participant's Accounts in the event of the Participant's death
prior to full payment thereof.

     1.3.3.  Code -- the Internal Revenue Code of 1986, as the
same may be amended from time to time.

     1.3.4. ECM Investment Committee -- the committee  established under Section
5.2 of the Plan Statement to make various  investment  decisions under the Plan,
as such committee may be constituted from time to time.

     1.3.5. ECM Operating  Committee -- the committee  established under Section
5.3 of the Plan  Statement to make various  administrative  decisions  under the
Plan, as such committee may be constituted from time to time.

     1.3.6. ERISA -- the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.

     1.3.7.  Executive  Compensation  Committee -- the  "Executive  Compensation
Committee" of Piper Jaffray Companies Inc., as such committee may be constituted
from time to time.

     1.3.8.  Liquidity  Event -- any  occurrence  with  respect  to a  Measuring
Investment  that would  provide its  investors  with  liquidity,  such as a cash
distribution, an initial public offering, a merger or other transaction in which
investors receive cash or securities.

     1.3.9.  Management Committee -- the "Management Committee" of Piper Jaffray
Companies Inc., as such committee may be constituted from time to time.

     1.3.10.  Measuring  Investment -- an investment related to the focus of the
Equity Capital Markets  business of Piper Jaffray Inc. that is designated by the
ECM   Investment   Committee  as  a  device  for  measuring  the  value  of  all
Participants' Accounts maintained for a specific Plan Year.

     1.3.11.  Participant -- an employee of Piper Jaffray Inc.
who becomes a Participant in the Plan for a specific Plan Year
under the rules of Section 2 of the Plan Statement.

     1.3.12.  Plan -- the unfunded deferred compensation plan
established and maintained by Piper Jaffray Inc. under this
Plan Statement for the benefit of the employees who are key
contributors to the success of its Equity Capital Markets
business.  (As used herein, "Plan" refers to the legal entity
maintained by Piper Jaffray Inc. and not to the document
pursuant to which the Plan is maintained.  That document is
referred to herein as the "Plan Statement.") The name of the
Plan is "Piper Jaffray Inc. Second Century Growth Deferred
Compensation Plan."

     1.3.13.  Plan Statement -- this document entitled Piper
Jaffray Inc. Second Century Growth Deferred Compensation Plan,
as adopted by written action of the Board of Directors of Piper
Jaffray Inc. dated September 26, 1996, as the same may be
amended from time to time.

     1.3.14.  Plan Year -- the twelve  consecutive month period that begins each
October  1 and ends the  following  September  30.  The first  Plan Year  begins
October 1, 1995, and ends September 30, 1996.

1.4.  Rules of  Interpretation.  The Plan is  intended  to be an  unfunded  plan
maintained  primarily for the purpose of providing  deferred  compensation for a
select group of management or highly compensated  employees,  within the meaning
of  ERISA  section   301(a)(3).   The   administration   of  the  Plan  and  the
interpretation  of the Plan  Statement  shall be  consistent  with that  intent.
Whenever  appropriate,  words  used  herein in the  singular  may be read in the
plural,  or words used  herein in the plural  may be read in the  singular;  the
masculine may include the feminine; and the words hereof, herein or hereunder or
other similar compounds of the word here shall mean and refer to the entire Plan
Statement and not to any particular  paragraph or section of this Plan Statement
unless the context  clearly  indicates to the contrary.  The titles given to the
various  sections  of this  Plan  Statement  are  inserted  for  convenience  of
reference  only and are not part of this Plan  Statement,  and they shall not be
considered  in  determining  the  purpose,  meaning  or intent of any  provision
hereof.  Any  reference in this Plan  Statement to a statute shall be considered
also to mean and refer to the applicable  regulations for that statute;  and any
reference in this Plan Statement to a statute or regulation  shall be considered
also to mean and  refer  to any  subsequent  amendment  or  replacement  of that
statute or  regulation.  This Plan  Statement has been executed and delivered in
the State of  Minnesota  and has been  drawn in  conformity  to the laws of that
State and shall,  except to the  extent  that  federal  law is  controlling,  be
construed  and  enforced in  accordance  with the laws of the State of Minnesota
(without regard to its conflict of law principles).

                           SECTION 2
                         PARTICIPATION

2.1.  Eligibility and Selection.  At the end of each Plan Year,
the Participants for that year shall be selected and their
deferred bonus awards shall be determined as follows:

     (a)  The Executive Compensation Committee, in its sole
          discretion, shall select the Management Committee
          members eligible to participate in the Plan for that
          year and shall determine the deferred bonus award for
          each such member.  To be eligible for selection, a
          Management Committee member must be a key contributor
          to the success of the Equity Capital Markets business
          of Piper Jaffray Inc. by directly managing or
          actively developing that business.

     (b)  The ECM Operating Committee, in its sole discretion,
          shall select the Equity Capital Markets employees
          eligible to participate in the Plan for that year and
          shall determine the deferred bonus award for each
          such employee.  To be eligible for selection, an
          Equity Capital Markets employee must be (i) a key
          contributor to the success of the Equity Capital
          Markets business of Piper Jaffray Inc., (ii) a highly
          compensated employee within the meaning of Code
          section 414(q), and (iii) a management or highly
          compensated employee within the meaning of ERISA
          section 301(a)(3).

2.2. Notification.  Piper Jaffray Inc. shall provide each
individual so selected with (i) written notification of his/her
selection and deferred bonus award, (ii) the required
enrollment forms, and (iii) either a copy of the Plan Statement
or written notification that such a copy is available upon
request.

2.3.  Enrollment.  Participation in the Plan is voluntary for
each individual so selected, but Piper Jaffray Inc. shall not
provide a cash bonus or other remuneration in lieu of such
participation.  To become a Participant, the individual must
enroll by signing and returning a participation agreement as
prescribed by Piper Jaffray Inc.

                           SECTION 3

                           ACCOUNTS

3.1.  Accounts.  Piper Jaffray Inc. shall establish and maintain
a separate Account for each Participant for each Plan Year that
he/she enrolls as a Participant.  The Account shall be for
recordkeeping purposes only and shall not represent a trust
fund or other segregation of assets for the benefit of the
Participant.

3.2.  Credits to Accounts.  The Account so established and
maintained for each Participant shall be credited from time to
time as provided in this Section 3.2.

3.2.1.  Bonus Credit.  As of the last day of the Plan Year
for which the Participant enrolls, the Account shall be
credited with the amount of his/her deferred bonus award for
that year, as determined under Section 2.1 of the Plan
Statement.

3.2.2.  Interest  Credit.  Commencing  as of the  first  day of  the  Plan  Year
immediately  following  the Plan  Year for which the  Participant  enrolls,  any
portion of the Account  balance that is not  allocated to Measuring  Investments
under Section 3.3 below shall be credited  with interest at the rate  applicable
from time to time to investors in the Piper Institutional Money Market Fund.

3.2.3.  Investment  Credit.  Commencing  as of the  first  day of the Plan  Year
immediately  following  the Plan  Year for which the  Participant  enrolls,  any
portion of the Account balance that is allocated to Measuring  Investments under
Section 3.3 below  shall be  credited  with its share of the income and gains of
such  Measuring   Investments  under  such  procedures  as  the  ECM  Investment
Committee, in its sole discretion, shall determine from time to time.

3.3.  Measuring  Investments.   The  ECM  Investment  Committee,   in  its  sole
discretion,  shall  designate  certain  investments  related to the focus of the
Equity  Capital  Markets  business of Piper  Jaffray  Inc.  to be the  Measuring
Investments for determining the value of all Participants'  Accounts  maintained
for a specific Plan Year. For this purpose,  it shall be deemed that the Account
balances  of all the  Participants  for that  year are  combined  and that  such
portion of the  combined  amount as the ECM  Investment  Committee,  in its sole
discretion,  shall determine is placed in each such designated investment on the
same terms and  conditions  as would be  available  to Piper  Jaffray Inc. as an
investor.  Each  Participant  shall be deemed to have a pro rata share (based on
the ratio of his/her  Account  balance for that year to the Account  balances of
all  Participants  for  that  year)  in each  such  designated  investment.  The
Measuring  Investments  are solely a device for computing the amount of benefits
to be paid to  Participants  under the Plan, and  Participants  have no claim or
right to any actual investments.

3.4.  Charges to Accounts.  The Account so established and
maintained for each Participant shall be charged from time to
time as provided in this Section 3.4.

3.4.1.  Investment  Charge.  Commencing  as of the  first  day of the Plan  Year
immediately  following  the Plan  Year for which the  Participant  enrolls,  any
portion of the Account balance that is allocated to Measuring  Investments under
Section 3.3 above shall be charged  with its share of the losses and expenses of
such  Measuring   Investments  under  such  procedures  as  the  ECM  Investment
Committee, in its sole discretion, shall determine from time to time.

3.4.2.  Benefit Payment Charge.  As of the date any benefit
payment is made to the Participant or to his/her Beneficiary
under the Plan, the Account shall be charged with the amount of
such benefit payment.
3.4.3.  Debt Set-Off Charge.  As the date any debt is set
off against the Account under Section 7.3 of the Plan
Statement, the Account shall be charged with the amount of
such debt.

                           SECTION 4
                           BENEFITS

4.1.  Benefits Payable to a Participant.  As soon as  administratively  feasible
after a Liquidity  Event for a particular  Measuring  Investment,  Piper Jaffray
Inc. shall pay each  Participant  whose Account is deemed to be invested in that
Measuring  Investment a benefit equal to the portion of his/her  Account that is
deemed  liquid  as a  result  of such  Liquidity  Event,  as the  ECM  Operating
Committee, in its sole discretion, shall determine. The benefit payment shall be
made in the form of cash or  securities of the type received by investors in the
Measuring Investment or in a combination of cash and such securities, as the ECM
Operating Committee, in its sole discretion, shall determine.

4.2. Three-Year Waiting Period. Notwithstanding any other provision of this Plan
Statement,  no benefit payment shall be made to any Participant until the end of
the third (3rd) Plan Year  following the Plan Year for which his/her  Account is
established.  If a Liquidity Event occurs during this three-year period, the ECM
Investment  Committee,  in its sole  discretion,  shall  direct  that the liquid
proceeds from such  Measuring  Investment be treated in any one or a combination
of the following ways for purposes of Section 3 of the Plan Statement:

     (a)  Credited with interest pursuant to Section 3.2.2 for
          payment at the end of the three-year period;

     (b)  Reinvested in another Measuring Investment pursuant to Section 3.3 for
          payment upon a subsequent  Liquidity Event for that other  investment;
          or

     (c)  Held in the form of  securities  of the type  received by investors in
          the  Measuring  Investment  for  payment at the end of the  three-year
          period,  with  any cash  dividend  or other  cash  distributions  with
          respect to such  securities  being credited with interest  pursuant to
          Section 3.2.2 for payment at the end of the threeyear period.

4.3. Forfeiture of Benefits upon Competition. If a Participant's employment with
Piper Jaffray Inc. shall be terminated  (whether  voluntarily or involuntarily),
and at any time  thereafter such  Participant  shall become Involved (as defined
below)  with a  Competitor  (as  defined  below),  then such  Participant  shall
immediately  forfeit forever all rights to benefits with respect to all Accounts
then maintained for such Participant.  Notwithstanding  the foregoing  sentence,
however,  the  Participant  shall not forfeit any benefits if the ECM  Operating
Committee,  in its sole  discretion,  determines  that  his/her  employment  was
terminated  by Piper  Jaffray  Inc.  due to a business  decision to  discontinue
operations in a particular geographic location or in a particular market niche.

For purposes of this Section 4.3.:

     (a)  The term "Involved" shall mean any  participation  with or involvement
          in  as an  employee,  partner,  shareholder  (except  as a 5% or  less
          shareholder of a public  corporation),  creditor,  director,  officer,
          principal,   agent,  consultant,  or  in  any  other  relationship  or
          capacity; and

     (b)  The term "Competitor" shall mean any person, partnership,  corporation
          or other entity engaged in any business which competes with the Equity
          Capital  Markets  business of Piper  Jaffray  Inc. in sales,  trading,
          corporate finance or research;

in each case as determined by the ECM Operating Committee, in
its sole discretion.

4.4. Forfeiture of Benefits upon Gross Misconduct.  If a Participant commits any
act  of  Gross  Misconduct  (as  defined  below)  then  such  Participant  shall
immediately  forfeit forever all rights to benefits with respect to all Accounts
then maintained for such Participant. During the resolution of a charge of Gross
Misconduct,  the  Accounts  shall be  maintained  for such  Participant,  but no
benefit payments shall be made with respect to such Accounts.

For purposes of this Section 4.4, the term "Gross Misconduct" shall mean any one
or more of the following:

     (a)  Impropriety or misbehavior of a type resulting in
          termination of employment under the policies and
          practices of Piper Jaffray Inc.; or

     (b)  Conviction of or pleading guilty or nolo contendere
          to any felony;

in each case as determined by the ECM Operating Committee, in
its sole discretion.

4.5. No Reallocation of Forfeited Amounts.  Any Account balance
forfeited under Sections 4.3 and 4.4 above shall revert to
Piper Jaffray Inc. and shall not be reallocated among the
remaining Participants.

4.6. Benefits Payable to a Beneficiary.

4.6.1.  Death Before Full Payment.  If the  Participant has an unpaid balance in
any one or more  Accounts at his/her  death,  Piper  Jaffray Inc.  shall pay the
Beneficiary of the deceased  Participant a benefit equal to the remaining  value
of those  Accounts  at the same time and in the same  amount and form as payment
would otherwise have been made to the Participant if he/she were living.

4.6.2. Beneficiary Designation. Each Participant may designate, upon forms to be
furnished  by  and  filed  with  Piper  Jaffray   Inc.,   one  or  more  primary
Beneficiaries or contingent  Beneficiaries to receive all or a specified part of
his/her unpaid Account  balances in the event of his/her death.  The Participant
may change or revoke any such designation from time to time without notice to or
consent  from  any  Beneficiary  or  spouse.  No  such  designation,  change  or
revocation shall be effective unless executed by the Participant and received by
Piper Jaffray Inc. during the  Participant's  lifetime.  Each such  designation,
change  or  revocation  shall  apply  to all  the  Accounts  maintained  for the
Participant under the Plan.

      4.6.3.  Failure of Designation.  If a Participant:

     (a)  Fails to designate a Beneficiary,

     (b)  Designates a Beneficiary and thereafter such
          designation is revoked without another Beneficiary
          being named, or

     (c)  Designates one or more Beneficiaries and all such
          Beneficiaries so designated fail to survive the
          Participant,

such Participant's unpaid Account balances, or the part thereof as to which such
Participant's  designation  fails,  as the case may be,  shall be payable to the
representative of the Participant's estate.

4.6.4.  Definitions.  When used herein and, unless the Participant has otherwise
specified  in  his/her  Beneficiary  designation,  when  used  in a  Beneficiary
designation,  "issue" means all persons who are lineal descendants of the person
whose issue are referred to, including adopted descendants and their descendants
but not including illegitimate descendants and their descendants;  "child" means
an issue of the first  generation;  "per  stirpes"  means in equal  shares among
living  children of the person  whose issue are referred to and the issue (taken
collectively)  of each deceased child of such person,  with such issue taking by
right of  representation  of such deceased child;  and "survive" and "surviving"
mean living after the death of the Participant.

     4.6.5.  Special Rules.  Unless the Participant has
otherwise specified in his/her Beneficiary designation, the
following rules shall apply:

     (a)  If there is not sufficient  evidence that a Beneficiary  was living at
          the time of the death of the Participant,  it shall be deemed that the
          Beneficiary   was  not  living  at  the  time  of  the  death  of  the
          Participant.

     (b)  The Beneficiaries  designated by the Participant shall become fixed at
          the time of the Participants death so that, if a Beneficiary  survives
          the  Participant  but dies before the receipt of all payments due such
          Beneficiary hereunder, such remaining payments shall be payable to the
          representative of such Beneficiary's estate.

    (c)  If the Participant designates as a Beneficiary the
          person who is the Participant's spouse on the date of
          the designation, either by name or by relationship,
          or both, the dissolution, annulment or other legal
          termination of the marriage between the Participant
          and such person shall automatically revoke such
          designation.  (The foregoing shall not prevent the
          Participant from designating a former spouse as a
          Beneficiary on a form executed by the Participant and
          received by Piper Jaffray Inc. after the date of the
          legal termination of the marriage between the
          Participant and such former spouse, and during the
          Participantss lifetime.)

     (d)  Any designation of a nonspouse Beneficiary by name that is accompanied
          by a description of  relationship  to the  Participant  shall be given
          effect without regard to whether the  relationship  to the Participant
          exists then or at the Participants death.

     (e)  Any designation of a Beneficiary  only by statement of relationship to
          the  Participant  shall be effective  only to designate  the person or
          persons  standing  in  such  relationship  to the  Participant  at the
          Participant's death.

The  ECM  Operating   Committee   shall  be  the  sole  judge  of  the  content,
interpretation and validity of a purported Beneficiary designation.

                           SECTION 5
                        ADMINISTRATION
5.1.  Administration.  Except for the matters specifically
assigned to the Executive Compensation Committee or the
Management Committee by this Plan Statement, the Plan shall be
administered by Piper Jaffray Inc. in accordance with the
determinations of the ECM Investment Committee and the ECM
Operating Committee.

5.2.  ECM Investment Committee.
5.2.1.  Appointment.  The Director of Equity Capital Markets shall determine the
size of the ECM  Investment  Committee  from time to time and shall  appoint the
members.  Each member of the ECM Investment  Committee  shall hold office at the
pleasure of the  Director of Equity  Capital  Markets and any  vacancies  in its
membership  shall be filled from time to time, as they occur,  by appointment by
the Director of Equity Capital Markets.

5.2.2. Organization.  The ECM Investment Committee shall hold meetings upon such
notice,  at such times and at such places as it may  determine,  and may consult
and  transact  business by  telephone  or by written  action in lieu of a formal
meeting.  Any action taken or approval given by a majority of the members of the
ECM Investment  Committee  shall be considered the action or approval of the ECM
Investment Committee.

5.2.3. Authority.  The ECM Investment Committee shall have the authority to make
such  uniform   rules  as  may  be   necessary  to  carry  out  the   investment
responsibilities  assigned to it under the Plan  Statement.  The ECM  Investment
Committee  shall  determine  any  questions  arising in the  interpretation  and
application of the Plan that are related to its investment responsibilities.

5.2.4.  Exercise of Authority.  The ECM Investment Committee
may exercise its authority in its full discretion, subject only
to the limits expressly imposed on it under the Plan Statement.

5.2.5. Limitation on Individual's Authority. If any member of the ECM Investment
Committee  is also an employee of Piper  Jaffray Inc. or a  Participant,  he/she
shall have no  authority  as such  member with  respect to any matter  specially
affecting  his/her  individual  interest  hereunder (as  distinguished  from the
interests of all Participants and Beneficiaries or a broad class of Participants
and Beneficiaries),  all such authority being reserved  exclusively to the other
members of the ECM Investment  Committee to the exclusion of such Participant or
Beneficiary,  and such  Participant  or  Beneficiary  shall act only in  his/her
individual capacity in connection with any such matter.

5.3. ECM Operating Committee.

5.3.1.  Appointment.  The Director of Equity Capital Markets shall determine the
size of the ECM  Operating  Committee  from time to time and shall  appoint  the
members.  Each member of the ECM  Operating  Committee  shall hold office at the
pleasure of the  Director of Equity  Capital  Markets and any  vacancies  in its
membership  shall be filled from time to time, as they occur,  by appointment by
the Director of Equity Capital Markets.

5.3.2.  Organization.  The ECM Operating Committee shall hold meetings upon such
notice,  at such times and at such places as it may  determine,  and may consult
and  transact  business by  telephone  or by written  action in lieu of a formal
meeting.  Any action taken or approval given by a majority of the members of the
ECM Operating  Committee  shall be considered  the action or approval of the ECM
Operating Committee.

5.3.3.  Authority.  The ECM Operating Committee shall have the authority to make
such  uniform  rules  as  may be  necessary  to  carry  out  its  administrative
responsibilities  under the Plan  Statement.  The ECM Operating  Committee shall
determine  any  questions  arising in the  administration,  interpretation,  and
application  of  the  Plan,  subject  to the  investment  authority  of the  ECM
Investment Committee.

5.3.4.  Exercise of Authority.  The ECM Operating Committee
may exercise its authority in its full discretion, subject only
to the limits expressly imposed on it under the Plan Statement.

5.3.5.  Limitation on Individual's Authority. If any member of the ECM Operating
Committee  is also an employee of Piper  Jaffray Inc. or a  Participant,  he/she
shall have no  authority  as such  member with  respect to any matter  specially
affecting  his/her  individual  interest  hereunder (as  distinguished  from the
interests of all Participants and Beneficiaries or a broad class of Participants
and Beneficiaries),  all such authority being reserved  exclusively to the other
members of the ECM Operating  Committee to the exclusion of such  Participant or
Beneficiary,  and such  Participant  or  Beneficiary  shall act only in  his/her
individual capacity in connection with any such matter.

5.4.  Binding Effect.  The determinations of the ECM Operating
Committee and the ECM Investment Committee in any matter within
their authority shall be binding and conclusive upon Piper
Jaffray Inc. and all persons having any right or benefit under
the Plan.

                           SECTION 6

                   AMENDMENT AND TERMINATION

6.1.  Amendment.  Piper Jaffray Inc. reserves the power to
amend this Plan Statement either prospectively or retroactively
or both in any respect, by action of its Board of Directors,
provided that, no amendment shall be effective to reduce or
divest benefits payable with respect to any Account of any
Participant without his/her consent.

6.2.  Termination.  Piper Jaffray Inc. reserves the right to
terminate the Plan at any time by action of its Board of
Directors; provided that, the termination of the Plan shall not
reduce or divest benefits payable with respect to any Account
of any Participant or negate the Participant's or Beneficiary's
rights with respect to such benefits.

                           SECTION 7

                      GENERAL PROVISIONS

7.1.  Contractual Right to Benefits.  The Plan creates in each
Participant a contractual right to the benefits to which he/she
becomes entitled.  This contractual right is unsecured, and the
Participant and his/her Beneficiaries are general, unsecured
creditors and may look only to the general assets of Piper
Jaffray Inc. to satisfy this contractual right.

7.2. Effect on Qualified Plans. A Participant's  Recognized  Compensation  under
the Piper  Jaffray  Companies  ESOP  shall not  include  any  credits to his/her
Accounts  under this Plan or any  benefit  payments  made  under  this  Plan.  A
Participant's  Recognized  Compensation under the Piper Jaffray Companies 401(k)
Plan shall not include any credits to his/her  Accounts  under this Plan, but it
shall  include  (subject  to the terms of that plan) any benefit  payments  made
under this Plan while the  Participant  is in Recognized  Employment  under that
plan.

7.3. Benefits Not Transferable.  Neither a Participant nor any Beneficiary shall
have any  transmissible  interest in the payments due  hereunder or any right to
anticipate,  alienate,  dispose of,  pledge or encumber  the same prior to their
actual  receipt,  nor shall any  Account  or any  benefit  payment be subject to
attachment,  garnishment,  execution  following  judgment or other legal process
instituted by creditors of the  Participant or  Beneficiary;  provided that, the
balance of each Account and all benefit payments hereunder shall at all times be
subject to setoff, as directed by the ECM Operating Committee, for debts owed by
the  Participant or  Beneficiary  to Piper Jaffray Inc.  and/or any other entity
controlling, controlled by, or under common control with Piper Jaffray Inc.

7.4.  Withholding Taxes.  Piper Jaffray Inc. may withhold from
any benefit payment made under the Plan (and transmit to the
proper taxing authority) such amount as it may be required to
withhold under any federal, state or other law.

7.5. Effect on Employment Rights and Other Benefit Programs.  The Plan shall not
give any Participant any right to be retained in the employment of Piper Jaffray
Inc.  The Plan shall not replace any  contract of  employment,  whether  oral or
written, between Piper Jaffray Inc. and the Participant. The Plan is in addition
to, and not in lieu of, any other employee  benefit plan or program in which the
Participant  may be or become  eligible to  participate  by reason of employment
with Piper  Jaffray Inc. No payments  made under this Plan shall have any effect
on  payments  to be made  under  any  other  employee  benefit  plan or  program
maintained by Piper  Jaffray Inc.,  except as provided in Section 7.2 above with
respect to the Piper Jaffray Companies 401(k) Plan.

7.6.  Binding Effect of Agreement.  The Plan shall be binding
upon and inure to the benefit of the successors and assigns of
Piper Jaffray Inc., and the Beneficiaries, personal
representatives and heirs of the Participant.

      IN WITNESS  WHEREOF,  Piper Jaffray Inc. has caused this Plan Statement to
be executed  by its duly  authorized  officers as of the 26th day of  September,
1996.

                              PIPER JAFFRAY INC.
                              By __/s/ Andrew Duff
                              Its President

                              And
                              /s/ Bruce Huber
                              Its Managing Director