PROVIDIAN FINANCIAL CORPORATION STOCK OWNERSHIP PLAN

                      Amended and Restated October 21, 1998

                            Effective January 1, 1999

              Terms for Participation by Non-Employee Directors of
                   Providian National Bank and Providian Bank



     1. Eligibility.  Each Non-Employee  Director of Providian National Bank and
Providian  Bank who is not also an employee of Providian  Financial  Corporation
("Providian"), Providian National Bank, Providian Bank or any other affiliate of
Providian (a "Non-Employee Bank 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 Bank 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,  excluding  any  committee  chair
retainer.  Such an election may be for any percentage of the  Non-Employee  Bank
Director's annual retainer equal to or greater than 25% of such annual retainer,
up to a maximum  which shall  initially  be 50% and may be changed  from time to
time with the approval of the Chief Executive Officer of Providian. The election
must be made prior to the beginning of the annual calendar year 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 Bank 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
January 1, April 1, July 1 and October 1.

     4. Grants of Matching  Restricted  Stock.  Each  Non-Employee Bank 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
Bank  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 Bank 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).