PROVIDIAN FINANCIAL CORPORATION STOCK OWNERSHIP PLAN

                      Amended and Restated October 21, 1998

                             Effective June 1, 1999

                Terms for Participation by Non-Employee Directors



     1. Eligibility.  Each Non-Employee  Director shall be granted Nonrestricted
Stock and Restricted Stock in accordance with the terms and conditions contained
in this Appendix.  Capitalized terms not otherwise defined herein shall have the
meaning given to them in the Plan.

     2. Participation Elections. Each Non-Employee Director may elect to receive
shares of Nonrestricted  Stock under the Plan in lieu of payment of a portion or
all of his or her annual  retainer.  Such an  election  may be for any dollar or
percentage  amount equal to at least 25% of the Non-Employee  Director's  annual
retainer.  The election must be made prior to the beginning of the annual June 1
to May 31 Board cycle (the "Board Cycle"). Any amount of the annual retainer not
elected to be received in Nonrestricted Stock shall be paid in cash.

     3.  Grants of  Nonrestricted  Stock.  On a quarterly  basis  during a Board
Cycle,  each  participating  Non-Employee  Director shall be granted a number of
shares  of  Nonrestricted  Stock  having  a fair  market  value,  determined  by
averaging the high and low per share  trading  prices of the Common Stock on the
New York Stock  Exchange  ("NYSE") on the date of grant ("Fair  Market  Value"),
equal to 25% of the amount of the annual  retainer  elected  to be  received  in
Nonrestricted  Stock for such Board  Cycle,  rounded  down to the  nearest  full
share.  The date of grant  shall be the first day of each  quarter  of the Board
Cycle on which the  Common  Stock is traded on the  NYSE.  For this  purpose,  a
quarter of the Board Cycle shall be the period of three months  commencing  each
June 1, September 1, December 1 and March 1.

     4.  Grants  of  Matching  Restricted  Stock.  Each  Non-Employee   Director
receiving a grant of Nonrestricted Stock hereunder shall also be granted, on the
date of grant of the Nonrestricted Stock, a number of shares of Restricted Stock
having a Fair Market  Value equal to  one-sixteenth  (1/16) of the  Non-Employee
Director's  annual  retainer  for the full Board Cycle with respect to which the
Nonrestricted Stock is granted, rounded down to the nearest full share.

     5.  Corresponding  Shares.  For purposes of the Plan, a number of shares of
Nonrestricted  Stock granted under paragraph 3 equal to the number of Restricted
Shares  granted  on the  same  date  under  paragraph  4 shall be  deemed  to be
"corresponding  shares" as referred to in Sections 7.a, 8.c and 9.c of the Plan.
Any additional  shares of Nonrestricted  Stock granted at such time shall not be
corresponding shares.

     6.  Restrictions.  Shares of Restricted Stock and  corresponding  shares of
Nonrestricted  Stock granted  hereunder shall be subject to the restrictions and
other  applicable  limitations  set forth in the Plan.  For such  purposes,  the
Restricted  Period  applicable  to fifty  percent (50%) of the shares under each
grant of  Restricted  Stock  shall be three (3) years  from the first day of the
Board  Cycle to which the  election  to receive  shares of  Nonrestricted  Stock
corresponds (the "Vesting  Commencement  Date").  The Restricted  Period for the
remaining fifty percent (50%) of the shares under each grant of Restricted Stock
shall be six (6) years from the Vesting Commencement Date.

     7. Other Terms. Shares of Nonrestricted Stock and Restricted Stock
granted  hereunder to  Non-Employee  Directors shall otherwise be subject to the
terms  of the Plan  applicable  to  Non-Employee  Directors  or to  Participants
generally   (other   than   provisions   specifically   applying   to   Employee
Participants).