<PAGE>

                                                                   Exhibit 10.14

            GREATER BAY BANCORP 1996 STOCK OPTION PLAN, AS AMENDED
            ------------------------------------------------------
                            As of January 23, 2000

1.  PURPOSE.
    -------

     The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, by purchasing Shares of the Company's
Common Stock. The Plan provides for the grant of Nonstatutory Options, ISOs
intended to qualify under Section 422 of the Code, and the grant of Restricted
Stock Awards.

2.  DEFINITIONS.
    -----------

     (a)  "Board of Directors" shall mean the Board of Directors of the Company,
          ------------------
as constituted from time to time.

     (b)  "Change in Control" shall mean the occurrence of any of the following
          -----------------
events:

          (i)    A change in the composition of the Board of Directors, as a
     result of which fewer than one-half of the incumbent directors are
     directors who either:

                 (A)  Had been directors of the Company 24 months prior to such
          change; or

                 (B)  Were elected, or nominated for election, to the Board of
          Directors 24 months prior to such change and who were still in office
          at the time of the election or nomination;

          (ii)   Any "person" (as such term is used in Sections 13(d) and 14(d)
     of the Exchange Act) by the acquisition or aggregation of securities is or
     becomes the beneficial owner, directly or indirectly, of securities of the
     Company representing 50 percent or more of the combined voting power of the
     Company's then outstanding securities. For purposes of this Paragraph (ii),
     the term "person" shall not include an employee benefit plan maintained by
     the Company;

          (iii)  The effective date of any merger, consolidation or other
     reorganization of the Company, other than a merger, consolidation or other
     reorganization of the Company in which the holders of the voting capital
     stock of the Company immediately prior to the merger, consolidation or
     other reorganization hold more that 50 percent of the voting capital stock
     of the surviving entity or its parent immediately after the consolidation,
     merger or other reorganization;

          (iv)   The shareholders of the Company approve any plan or proposal
     for the liquidation or dissolution of the Company; or
<PAGE>

          (v)  The shareholders of the Company approve the sale or transfer of
     substantially all of the Company's assets to parties that are not within a
     "controlled group of corporations" (as that term is defined in section 1563
     of the Code) in which the Company is a member.

     (c)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
           ----

     (d)  "Committee" shall mean a committee of the Board of Directors, as
           ---------
described in Section 3(a), or in the absence of such a committee, the Board of
Directors.

     (e)  "Company" shall mean Greater Bay Bancorp, a California corporation,
           -------
formerly known as Mid-Peninsula Bancorp, a California corporation.

     (f)  "Employee" shall mean:
           --------

          (i)   Any individual who is a common-law employee of the Company or of
     a Subsidiary;

          (ii)  A member of the Board of Directors; and

          (iii) An independent contractor who performs services for the Company
     or a Subsidiary and who is not a member of the Board of Directors.

Service as an independent contractor or member of the Board of Directors shall
be considered employment for all purposes of the Plan, except as provided in
Section 4(a).

     (g)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
           ------------
amended.

     (h)  "Exercise Price" shall mean the amount for which one Share may be
           --------------
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

     (i)  "Fair Market Value" shall mean the market price of Stock, determined
           -----------------
by the Committee as follows:

          (i)   If Stock was traded over-the-counter on the date in question but
     was not traded on the Nasdaq system or the Nasdaq National Market System,
     then the Fair Market Value shall be equal to the mean between the last
     reported representative bid and asked prices quoted for such date by the
     principal automated inter-dealer quotation system on which Stock is quoted
     or, if Stock is not quoted on any such system, by the "Pink Sheets"
     published by the National Quotation Bureau, Inc.;

          (ii)  If Stock was traded over-the-counter on the date in question and
     was traded on the Nasdaq system or the Nasdaq National Market System, then
     the Fair Market Value shall be equal to the last-transaction price quoted
     for such date by the Nasdaq system or the Nasdaq National Market System;

                                       2
<PAGE>

         (iii) If Stock was traded on a stock exchange on the date in question,
     then the Fair Market Value shall be equal to the closing price reported by
     the applicable composite transactions report for such date; and

         (iv)  If none of the foregoing provisions is applicable, then the Fair
     Market Value shall be determined by the Committee in good faith on such
     basis as it deems appropriate.

In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.

     (j) "Grantee" means an individual who holds a Restricted Stock Award.
          -------

     (k) "ISO" shall mean an employee incentive stock option described in
          ---
Section 422(b) of the Code.

     (l) "Nonstatutory Option" shall mean a stock option not described in
          -------------------
Sections 422(b) or 423(b) of the Code.

     (m) "Option" shall mean an ISO or Nonstatutory Option granted under the
          ------
Plan and entitling the holder to purchase Shares.

     (n) "Optionee" shall mean an individual who holds an Option.
          --------

     (o) "Plan" shall mean this Greater Bay Bancorp 1996 Stock Option Plan, as
          ----
it may be amended from time to time.

     (p) "Restricted Stock" means shares of Common Stock issued or issuable
          ----------------
pursuant to a grant of Restricted Stock Award.

     (q) "Restricted Stock Award" means the right to earn Restricted Stock under
          ----------------------
the Plan.

     (r) "Restricted Stock Award Agreement" means a written agreement between
          --------------------------------
the Company and the Grantee which contains the terms, conditions and
restrictions pertaining to his or her Restricted Stock Award.

     (s) "Restrictions" shall mean (a) the restrictions on sale or other
          ------------
transfer (b) the exposure  to forfeiture set forth in Section 4 of the
Restricted Award Agreement and/or (c) the restrictions relating to performance,
if any, set forth on Appendix A of the Restricted Stock Award Agreement.

     (t) "Retirement" shall have the same meaning as "Retirement," as defined in
          ----------
the Greater Bay Bancorp 401(k) Profit Sharing Plan.

     (u) "Service" shall mean service as an Employee.
          -------

     (v) "Share" shall mean one share of Stock, as adjusted in accordance with
          -----
Section 9 (if applicable).

                                       3
<PAGE>

     (w)  "Stock" shall mean the Common Stock of the Company.
           -----

     (x)  "Stock Option Agreement" shall mean the agreement between the Company
           ----------------------
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

     (y)  "Subsidiary" shall mean any corporation, if the Company and/or one or
           ----------
more other Subsidiaries own not less than 50 percent of the total combined
voting power of all classes of outstanding stock of such corporation.  A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

     (z)  "Substitute Option" shall mean an option described in Section 6(j).
           -----------------

     (aa) "Substitute Restricted Stock Award" shall mean a restricted stock
           ---------------------------------
award described in Section 7(m).

     (bb) "Total and Permanent Disability" shall mean that the Optionee or
           ------------------------------
Grantee is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted, or can be expected to last, for a
continuous period of not less than one year.

3.  ADMINISTRATION.
    --------------

     (a) Committee Membership.  The Board of Directors shall have the authority
         --------------------
to administer the Plan but may delegate its administrative powers under the
Plan, in whole or in part, to one or more committees of the Board of Directors.
With respect to the participation of Employees who are subject to Section 16 of
the Exchange Act, the Plan may be administered by a committee composed solely of
two or more members of the Board of Directors who qualify as "nonemployee
directors" as defined in Securities and Exchange Commission Rule 16b-3 under the
Exchange Act. The Plan may be administered by a committee composed solely of two
or more members of the Board of Directors who qualify as "outside directors" as
defined by the Internal Revenue Service for awards intended to qualify for an
exemption under Section 162(m)(4)(C) of the Code.

     (b) Committee Procedures.  The Board of Directors shall designate one of
         --------------------
the members of any Committee appointed under paragraph (a) as chairman.  Any
such Committee may hold meetings at such times and places as it shall determine.
The acts of a majority of the Committee members present at meetings at which a
quorum exists, or acts reduced to or approved in writing by all Committee
members, shall be valid acts of the Committee.

     (c) Committee Responsibilities.  Subject to the provisions of the Plan, any
         --------------------------
such Committee shall have full authority and discretion to take the following
actions:

          (i)   To interpret the Plan and to apply its provisions;

          (ii)  To adopt, amend or rescind rules, procedures and forms relating
     to the Plan;

                                       4
<PAGE>

          (iii)  To authorize any person to execute, on behalf of the Company,
     any instrument (including, but not limited to, Stock Option Agreements and
     Restricted Stock Award Agreements) required to carry out the purposes of
     the Plan;

          (iv)   To determine when Options and Restricted Stock Awards are to be
     granted under the Plan;

          (v)    To select the Optionees and Grantees;

          (vi)   To determine the number of Shares to be made subject to each
     Option and Restricted Stock Award;

          (vii)  To prescribe the terms and conditions of each Option, including
     (without limitation) the Exercise Price, to determine whether such Option
     is to be classified as an ISO or as a Nonstatutory Option, and to specify
     the provisions of the Stock Option Agreement relating to such Option;

          (viii) To prescribe the terms and conditions of each Restricted Stock
     Award, including (without limitation) Restrictions (if any), and to specify
     the provisions of the Restricted Stock Award Agreement relating to such
     Restricted Stock Award;

          (ix)   To amend any outstanding Stock Option Agreement and Restricted
     Stock Award Agreement, subject to applicable legal restrictions and to the
     consent of the Optionee or Grantee who entered into such agreement;

          (x)    To prescribe the consideration for the grant of each Option and
     Restricted Stock Award under the Plan and to determine the sufficiency of
     such consideration; and

          (xi)   To take any other actions deemed necessary or advisable for the
     administration of the Plan.

All decisions, interpretations and other actions of the Committee shall be final
and binding on all Optionees and Grantees, and all persons deriving their rights
from an Optionee or Grantee. No member of the Committee shall be liable for any
action that he or she has taken or has failed to take in good faith with respect
to the Plan or any Option or Restricted Stock Award.

4.  ELIGIBILITY.
    -----------

     (a) General Rules.  Only Employees shall be eligible for designation as
         -------------
Optionees or Grantees by the Committee.  In addition, only Employees who are
common-law employees of the Company or a Subsidiary shall be eligible for the
grant of ISOs.

     (b) Ten-Percent Stockholders.  An Employee who owns more than 10 percent of
         ------------------------
the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless:

          (i)    The Exercise Price is at least 110 percent of the Fair Market
     Value of a Share on the date of grant; and

                                       5
<PAGE>

          (ii) Such ISO by its terms is not exercisable after the expiration of
     five years from the date of grant.

     (c) Attribution Rules.  For purposes of Subsection (b) above, in
         -----------------
determining stock ownership, the rules of Section 424(d) of the Code shall
apply.

     (d) Outstanding Stock.  For purposes of Subsection (b) above, "outstanding
         -----------------
stock" shall include all stock actually issued and outstanding immediately after
the grant.  "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.

5.  STOCK SUBJECT TO PLAN.
    ---------------------

     (a) Basic Limitation.  Shares reserved for issuance pursuant to the
         ----------------
exercise of Options and Restricted Stock Awards granted under the Plan shall be
authorized but unissued Shares.  The aggregate number of Shares which may be
issued pursuant to the exercise of Options and Restricted Stock Awards granted
under the Plan shall be 4,915,780, all of which may be issued pursuant to the
exercise of ISOs, Nonstatutory Options or Restricted Stock Awards granted under
the Plan. The number of Shares which are subject to Options or Restricted Stock
Awards outstanding at any time under the Plan shall not exceed the number of
Shares which then remain available for issuance under the Plan.  The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.

     (b) Additional Shares.  In the event that any outstanding option granted
         -----------------
under this Plan, including Substitute Options, or the Prior Plan, for any reason
expires or is canceled or otherwise terminated, the Shares allocable to the
unexercised portion of such option shall become available for the purposes of
this Plan.  In the event that any outstanding Restricted Stock Award granted
under this Plan, including Substitute Restricted Stock Awards, for any reason
expires or is canceled, forfeited or otherwise terminated, the Shares allocable
to the unearned portion of such Restricted Stock Award shall become available
for the purposes of this Plan.

6.  TERMS AND CONDITIONS OF OPTIONS.
    -------------------------------

     (a) Stock Option Agreement.  Each grant of an Option under the Plan shall
         ----------------------
be evidenced by a Stock Option Agreement executed by the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.

     (b) Number of Shares.  Each Stock Option Agreement shall specify the number
         ----------------
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9.  Options granted to any Optionee in a
single calendar year shall in no event cover more than 60,000 Shares, subject to
                                                       ------
adjustment in accordance with Section 9.  The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.

                                       6
<PAGE>

     (c) Exercise Price.  Each Stock Option Agreement shall specify the Exercise
         --------------
Price.  The Exercise Price of an Option shall not be less than 100 percent of
the Fair Market Value of a Share on the date of grant, except as otherwise
provided in Section 4(b) with respect to ISO's and Section 6(i) with respect to
Substitute Options.  The Exercise Price shall be payable in a form described in
Section 8.

     (d) Withholding Taxes.  As a condition to the exercise of an Option, the
         -----------------
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection
with the disposition of Shares acquired by exercising an Option. The Committee
may permit the Optionee to satisfy all or part of his or her tax obligations
related to the Option by having the Company withhold a portion of any Shares
that otherwise would be issued to him or her or by surrendering any Shares that
previously were acquired by him or her. Such Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.
The payment of taxes by assigning Shares to the Company, if permitted by the
Committee, shall be subject to such restrictions as the Committee may impose.

     (e) Exercisability.  Each Stock Option Agreement shall specify the date
         --------------
when all or any installment of the Option is to become exercisable.  The vesting
of any Option shall be determined by the Committee at its sole discretion;
provided however, that:

            (i)   Each Stock Option Agreement shall provide for immediate
     exercisability of the entire Option in the event of a Change in Control.
     In addition, each Stock Option Agreement shall provide that during the 15
     day period prior to the effective date of a merger, consolidation or other
     reorganization which would constitute a Change in Control, each holder of
     an Option shall have the right, subject to earlier expiration or
     termination of the Option in accordance with its terms, to exercise the
     entire Option which exercise shall be deemed effective immediately prior to
     the effective date of such merger, consolidation or other reorganization
     and be subject to the occurrence of such effective date.

            (ii)  In the event that an Optionee's Service terminates, the Option
     shall be exercisable only to the extent the Option was vested as of the
     date of such termination, unless otherwise specified in the Optionee's
     Stock Option Agreement.

     (f) Term.  Each Stock Option Agreement shall specify the term of the
         ----
Option. The term of an ISO shall not exceed 10 years from the date of grant,
except as otherwise provided in Section 4(b). Subject to the preceding sentence,
the Committee at its sole discretion shall determine when an Option is to
expire. In the event that the Optionee's Service terminates:

            (i)   As a result of such Optionee's death or Total and Permanent
     Disability, the term of the Option shall expire twelve months (or such
     other period specified in the Optionee's Stock Option Agreement) after such
     death or Total and Permanent Disability but not later than the original
     expiration date specified in the Stock Option Agreement.

                                       7
<PAGE>

          (ii)   As a result of termination by the Company for cause, the term
     of the Option shall expire thirty days after the Company's notice or advice
     of such termination is dispatched to Employee, but not later than the
     original expiration date specified in the Stock Option Agreement. For
     purposes of this Paragraph (ii), "cause" shall mean an act of embezzlement,
     disclosure of any of the secrets or confidential information of the
     Company, the inducement of any client or customer of the Company to break
     any contract with the Company, or the inducement of any principal for whom
     the Company acts as agent to terminate such agency relationship, the
     engagement of any conduct which constitutes unfair competition with the
     Company, the removal of Optionee from office by any court or bank
     regulatory agency, or such other similar acts which the Committee in its
     discretion determine to constitute good cause for termination of Optionee's
     Service. As used in this Paragraph (ii), Company includes Subsidiaries of
     the Company.

          (iii)  As a result of termination for any reason other than Total and
     Permanent Disability, death or cause, the term of the Option shall expire
     three months (or such other period specified in the Optionee's Stock Option
     Agreement) after such termination, but not later than the original
     expiration date specified in the Stock Option Agreement.

     (g) Transferability.  During an Optionee's lifetime, such Optionee's ISO(s)
         ---------------
shall be exercisable only by him or her and shall not be transferable.  An
Optionee's Nonstatutory Options shall also not be transferable during the
Optionee's lifetime, except to the extent otherwise permitted in the Optionee's
Stock Option Agreement.  Subject to prior permitted transfers, in the event of
an Optionee's death, such Optionee's Option(s) shall not be transferable other
than by will, by written beneficiary designation or by the laws of descent and
distribution.

     (h) No Rights as a Stockholder.  An Optionee, or a transferee of an
         --------------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares.  No adjustments shall be made, except as provided
in Section 9.

     (i) Modification, Extension and Renewal of Options.  Within the limitations
         ----------------------------------------------
of the Plan, the Committee may modify, extend or renew outstanding Options or
may accept the cancellation of outstanding Options (to the extent not previously
exercised) in return for the grant of new Options at the same or a different
price.  The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, impair such Optionee's rights or increase
his or her obligations under such Option.

     (j) Substitute Options.  If the Company at any time should succeed to the
         ------------------
business of another corporation through merger or consolidation, or through the
acquisition of stock or assets of such corporation, Options may be granted under
the Plan in substitution of options previously granted by such corporation to
purchase shares of its stock which options are outstanding at the date of the
succession ("Surrendered Options").  It is specifically intended that this
section of the Plan shall authorize the granting and issuance of Substitute
Options pursuant to the terms of: (i) the Amended and Restated Agreement and
Plan of Reorganization by and between Mid-Peninsula Bancorp and Cupertino
National Bancorp dated June 26, 1996 and (ii) the Agreement and Plan of
Reorganization by and among the Company, GBB Acquisition Corp., and Peninsula
Bank of Commerce dated November 3, 1997.  The Committee shall have discretion to
determine

                                       8
<PAGE>

the extent to which such Substitute Options shall be granted, the persons to
receive such Substitute Options, the number of Shares to be subject to such
Substitute Options, and the terms and conditions of such Substitute Options
which shall, to the extent permissible within the terms and conditions of the
Plan, be equivalent to the terms and conditions of the Surrendered Options. The
Exercise Price may be determined without regard to Section 6(c); provided
however, that the Exercise Price of each Substitute Option shall be an amount
such that, in the sole and absolute judgment of the Committee (and if the
Substitute Options are to be ISO's, in compliance with Section 424(a) of the
Code), the economic benefit provided by such Substitute Option is not greater
than the economic benefit represented by the Surrendered Option as of the date
of the succession.

7.   TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
     -----------------------------------------------

       (a) Restricted Stock Award Agreement.  Each grant of a Restricted Stock
           --------------------------------
Award under the Plan shall be evidenced by a Restricted Stock Award Agreement
executed by the Grantee and the Company.  Such Restricted Stock Award shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions, including any Restrictions, which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Restricted Stock Award Agreement.  The Restricted Stock Award
Agreement shall specify the purchase price (if any) for the Restricted Stock.
The provisions of the various Restricted Stock Award Agreements entered into
under the Plan need not be identical.

       (b) Number of Shares.  Each Restricted Stock Award Agreement shall
           ----------------
specify the number of Shares that are subject to the Restricted Stock Award and
shall provide for the adjustment of such number in accordance with Section 9.

       (c) Withholding Taxes.  As a condition to the lapse of any Restrictions
           -----------------
to the Restricted Stock Award, the Grantee shall make such arrangements as the
Committee may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that arise in connection with such lapse.
The Committee may permit the Grantee to satisfy all or part of his or her tax
obligations related to the Restricted Stock Award by having the Company withhold
a portion of any Shares that otherwise would be issued to him or her or by
surrendering any Shares that previously were acquired by him or her. Such Shares
shall be valued at their Fair Market Value on the date when taxes otherwise
would be withheld in cash. The payment of taxes by assigning Shares to the
Company, if permitted by the Committee, shall be subject to such restrictions as
the Committee may impose.

       (d)  Restrictions.  Each Restricted Stock Award Agreement shall specify
            ------------
any Restrictions on the Restricted Stock Award. Each Restricted Stock Award
Agreement shall specify the date(s) when all or any Restrictions to the
Restricted Stock Award shall lapse or the Restrictions (if any) relating to
performance satisfaction of which shall cause such Restrictions to lapse. The
lapse of any Restrictions shall be determined by the Committee in its sole
discretion, provided, however, that each Restricted Stock Award Agreement shall
provide that all Restrictions shall lapse upon a Change in Control.

                                       9
<PAGE>

       (e) Escrow of Restricted Stock.  Until all Restrictions have expired or
           --------------------------
been removed, the Secretary or such other escrow holder as the Board of
Directors may appoint shall retain custody of the stock certificates
representing the Restricted Stock subject to the Award; provided, however, that
in no event shall the Grantee retain physical custody of any certificates
representing shares of Restricted Stock awarded to him or her.

       (f) Termination of Service and Forfeiture of Restricted Stock.  Each
           ---------------------------------------------------------
Restricted Stock Award Agreement shall specify the term of the Restricted Stock
Award. Subject to the preceding sentence, the Committee at its sole discretion
shall determine when a Restricted Stock Award is to expire.  In the event that
the Grantee's Service terminates:

            (i)    As a result of such Grantee's death or Total and Permanent
       Disability, or in the event of Grantee's Retirement, the term of the
       Restricted Stock Award shall expire and any Restrictions on the
       Restricted Stock Awards immediately shall lapse upon such death, Total
       and Permanent Disability or Retirement but not later than the original
       expiration date specified in the Restricted Stock Award Agreement.

            (ii)   As a result of termination by the Company for cause, or any
       other event resulting in the termination of Grantee's Service not
       specified in Section 7(f)(i) above, the term of the Restricted Stock
       Award shall expire thirty days after the Company's notice or advice of
       such termination is dispatched to Employee, but not later than the
       original expiration date specified in the Restricted Stock Award
       Agreement. In the event that a Grantee's Service terminates for cause, or
       any other event resulting in the termination of Grantee's service not
       specified in Section 7(f)(i) above, the Shares subject to the Restricted
       Stock Award shall be earned only to the extent the such Shares were
       earned as of the date of such termination, unless otherwise specified in
       the Grantee's Restricted Stock Award Agreement. In such event, the
       Grantee shall forfeit the right to earn any Restricted Stock subject to
       the Restricted Stock Award as to which vesting has not yet occurred, and
       the Restricted Stock so forfeited shall be returned to the Company.

       For purposes of this Paragraph (ii), "cause" shall mean an act of
embezzlement, disclosure of any of the secrets or confidential information of
the Company, the inducement of any client or customer of the Company to break
any contract with the Company, or the inducement of any principal for whom the
Company acts as agent to terminate such agency relationship, the engagement of
any conduct which constitutes unfair competition with the Company, the removal
of Grantee from office by any court or bank regulatory agency, or such other
similar acts which the Committee in its discretion determine to constitute good
cause for termination of Grantee's Service.  As used in this Paragraph (ii),
Company includes Subsidiaries of the Company.

       (g) No Fractional Shares.  In determining the number of shares of
           --------------------
Restricted Stock which are earned, fractional shares shall be rounded down to
the nearest whole number, provided that such fractional shares shall be
aggregated and earned at such time as all Restrictions lapse or expire.

                                       10
<PAGE>

       (h) Timing of Distributions: General Rule.  Except as provided in
           -------------------------------------
Subsection (i) below, certificates representing Restricted Stock shall be
distributed to the Grantee as soon as practicable after all Restrictions have
lapsed or expired.

       (i) Conditions to Issuance of Certificates.  The Company shall not be
           --------------------------------------
required to issue or deliver any certificate or certificates for shares of stock
pursuant to this Agreement prior to fulfillment of all of the following
conditions:

            (i)    The listing of such shares on all stock exchanges on which
       such class of stock is then listed;

            (ii)   The registration or qualification of such shares under any
       federal or state securities laws or under rulings or regulations of the
       Securities and Exchange Commission or of any other governmental
       regulatory body, which the Board of Directors shall, in its sole and
       absolute discretion, deem necessary or advisable;

            (iii)  The obtaining of any approval or other clearance from any
       state or federal governmental agency which the Board of Directors shall,
       in its sole and absolute discretion, determine to be necessary or
       advisable;

            (iv)   The lapse of such reasonable period of time as the Board of
       Directors may from time to time establish for reasons of administrative
       convenience;

            (v)    The receipt by the Company of full payment for any applicable
       withholding tax.

       (j) Transferability.  A Grantee's Restricted Stock Award shall not be
           ---------------
transferable during the Grantee's lifetime, except to the extent otherwise
permitted in the Grantee's Restricted Stock Award Agreement.  Subject to prior
permitted transfers, in the event of a Grantee's death, such Grantee's
Restricted Stock Award(s) shall not be transferable other than by will, by
written beneficiary designation or by the laws of descent and distribution.

       (k) Rights as Stockholder.  Upon the delivery of Restricted Stock to the
           ---------------------
escrow holder pursuant to the Restricted Stock Award Agreement, the Grantee
shall have all the rights of a stockholder of the Company with respect to the
Restricted Stock, subject to the Restrictions and the Restricted Stock
Agreement, including the right to vote the Restricted Stock and the right to
receive all dividends or other distributions paid or made with respect to the
Restricted Stock; provided, however, that any additional Shares of Restricted
Stock to which Grantee shall be entitled as a result of stock dividends, stock
splits or any other form of recapitalization in respect of Shares of Restricted
Stock subject to Restrictions shall also be subject to the Restrictions until
the Restrictions on the underlying shares of Restricted Stock lapse or expire.

       (l) Modification, Extension and Renewal of Options.  Within the
           ----------------------------------------------
limitations of the Plan, the Committee may modify, extend or renew outstanding
Restricted Stock Awards or may accept the cancellation of outstanding Restricted
Stock Awards (to the extent not previously earned) in return for the grant of
new Restricted Stock Awards at the same or a different price. The foregoing
notwithstanding, no modification of a Restricted Stock Award shall, without the

                                       11
<PAGE>

consent of the Grantee, impair such Grantee's rights or increase his or her
obligations under such Restricted Stock Award.

       (m) Substitute Restricted Stock Award.  If the Company at any time should
           ---------------------------------
succeed to the business of another corporation through merger or consolidation,
or through the acquisition of stock or assets of such corporation, Restricted
Stock Awards may be granted under the Plan in substitution of restricted stock
awards previously granted by such corporation with respect to shares of its
stock which restricted stock awards are outstanding at the date of the
succession ("Surrendered Restricted Stock Awards").   The Committee shall have
discretion to determine the extent to which such Substitute Restricted Stock
Awards shall be granted, the persons to receive such Substitute Restricted Stock
Awards, the number of Shares to be subject to such Restricted Stock Awards, and
the terms, conditions and restrictions of such Substitute Restricted Stock
Awards which shall, to the extent permissible within the terms and conditions of
the Plan, be equivalent to the terms, conditions and restrictions of the
Surrendered Restricted Stock Awards.  The Restrictions may be determined in the
sole discretion of the Committee; provided however, that the Restrictions of
each Substitute Restricted Stock Award shall be equivalent to the Restrictions
represented by the Surrendered Restricted Stock Award as of the date of the
succession.

8.   PAYMENT FOR SHARES.
     ------------------

       (a) General Rule.  The entire consideration for Shares issued under the
           ------------
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as follows:

            (i)    ISOs.  In the case of an ISO granted under the Plan, payment
                   ----
       shall be made only pursuant to the express provisions of the applicable
       Stock Option Agreement. However, the Committee (at its sole discretion)
       may specify in the Stock Option Agreement that payment may be made
       pursuant to Subsections (b), (c) or (d) below.

            (ii)   Nonstatutory Options. In the case of a Nonstatutory Option
                   --------------------
       granted under the Plan, the Committee (at its sole discretion) may accept
       payment pursuant to Subsections (b), (c), or (d) below.

            (iii)  Restricted Stock Awards. In the case of a Restricted Stock
                   -----------------------
       Award granted under the Plan, payment (if any) shall be made only
       pursuant to the express provisions of the applicable Restricted Stock
       Award Agreement.

       (b) Surrender of Stock.  To the extent that this Subsection (b) is
           ------------------
applicable, payment may be made all or in part with Shares which have already
been owned by the Optionee or Grantee or his or her representative for more than
6 months and which are surrendered to the Company in good form for transfer.
Such Shares shall be valued at their Fair Market Value on the date when the new
Shares are purchased under the Plan.

       (c) Exercise/Sale.  To the extent that this Subsection (c) is applicable,
           -------------
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales

                                       12
<PAGE>

proceeds to the Company in payment of all or part of the Exercise Price of the
Option, or the consideration for the Restricted Stock Award, whichever the case
may be, and any withholding taxes.

       (d) Exercise/Pledge.  To the extent that this Subsection (d) is
           ---------------
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of the
Exercise Price of the Option, or the consideration for the Restricted Stock
Award, whichever the case may be, and any withholding taxes.

9.   ADJUSTMENT OF SHARES.
     --------------------

       (a) General.  In the event of a subdivision of the outstanding Stock, a
           -------
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall make
appropriate adjustments in one or more of:

            (i)    The number of Shares available under Section 5 for future
       grants;

            (ii)   The limit set forth in Section 6(b) and Section 7(b);

            (iii)  The number of Shares covered by each outstanding Option and
       consideration for each outstanding Restricted Stock Award; or

            (iv) The Exercise Price under each outstanding Option and Restricted
       Stock Award.

       (b) Reorganizations.  In the event that the Company is a party to a
           ---------------
merger, consolidation or other reorganization which would constitute a Change in
Control, such agreement may provide, subject to the provisions of Section
6(e)(i) and the proviso of Section 7(d) (which provide for the immediate
acceleration of the vesting and exercisability of all shares subject to
outstanding Options and the immediate lapse of all restrictions on Restricted
Stock Awards), (i) for the assumption of outstanding Options and Restricted
Stock Awards by the surviving corporation or its parent, for their continuation
by the Company (if the Company is a surviving corporation), or (ii) for
cancellation of the Options or Restricted Stock Awards upon payment of a cash
settlement per Option or Restricted Stock Award equal to the difference between
the amount to be paid for one Share under such agreement and the then-current
Fair Market Value of such Share on an unrestricted basis, or (iii) in the event
the agreement does not provide for either of the events specified in
subparagraphs (i) and (ii) above, the cancellation of Options not exercised
prior to the effective date of such merger, consolidation or other
reorganization, in all cases without the Optionees' or Grantees' consent.

       (c) Reservation of Rights.  Except as provided in this Section 9, an
           ---------------------
Optionee or Grantee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of

                                       13
<PAGE>

any class. Any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option and the number of or consideration
for Shares subject to a Restricted Stock Award. The grant of an Option or
Restricted Stock Award pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

10.  SECURITIES LAWS.
     ---------------

       Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares complies with (or is exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange on which the
Company's securities may then be listed.

11.  NO RETENTION RIGHTS.
     -------------------

       Neither the Plan nor any Option or Restricted Stock Award shall be deemed
to give any individual a right to remain an employee or consultant of the
Company or a Subsidiary.  The Company and its Subsidiaries reserve the right to
terminate the service of any employee or consultant at any time, with or without
cause, subject to applicable laws and a written employment agreement (if any).

12.  DURATION AND AMENDMENTS.
     -----------------------

       (a) Term of the Plan.  The Plan, as set forth herein, shall become
           ----------------
effective as of the Effective Date, provided that the Plan has been approved by
the shareholders of the Company in the manner required by applicable law or
regulation.  The Plan, if not extended, shall terminate automatically ten years
after the Effective Date, except that any ISO's granted under the Plan must be
granted by September 18, 2006, ten years after the Plan was adopted by the Board
of Directors.  It may be terminated on any earlier date pursuant to Subsection
(b) below.

       (b) Right to Amend or Terminate the Plan.  The Board of Directors may
           ------------------------------------
amend, suspend or terminate the Plan at any time and for any reason.  An
amendment of the Plan shall be subject to the approval of the Company's
shareholders only to the extent required by applicable laws or regulations.

       (c) Effect of Amendment or Termination.  No Shares shall be issued or
           ----------------------------------
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not adversely affect any Share previously issued or any
Option or Restricted Stock Award previously granted under the Plan.

                                       14