Combine sugar and syrup in a small saucepan; bring to a boil. Remove from heat; add peanut butter, stirring until smooth.
Combine peanut butter mixture and cereal; mix well. Press mixture evenly into a lightly greased 13- x 9- x 2-inch baking pan, using back of spoon.
Combine chocolate and butterscotch morsels in top of a double boiler; cook over simmering water, stirring constantly, until morsels melt. Spread evenly over mixture in pan. Chill; cut into 1 1/2-inch squares.