SUMMIT BANCORP


     MANAGEMENT INCENTIVE PLAN
     January 1, 1999


I.       Purpose

         The Purpose of the Management Incentive Plan (MIP) is to:

          *    Encourage  the   achievement   of  corporate  and  profit  center
               performance goals and other business development objectives.

          *    Reinforce the importance of  coordination  among the sectors that
               together form the total corporation.

          *    Enable  Summit to attract and retain key  employees  by providing
               the   opportunity   to  receive   awards  which   reflect   their
               contribution to achieving corporate objectives.

II.      Overview

         The Plan is designed to reward the attainment of  predetermined  annual
         performance  objectives.  While the  measurement  factors  that will be
         considered in determining whether performance  objectives have been met
         will generally remain constant,  the qualitative and quantitative goals
         with respect to these factors will inevitably change from year to year.
         The  expectation  is that the goals set for each year will  represent a
         management challenge that will be comparable to that of any other year,
         in light of internal resources and the external  environment facing the
         business at the time.

III.     Administration

         The Plan shall be administered  under the direction of the Compensation
         Committee  (The  Committee)  of the Board of  Directors  of Summit.  No
         member of the  Committee  while  serving as such shall be eligible  for
         participation  in the  Plan.  The  Committee  has  exclusive  and final
         authority in all  determinations  affecting the Plan and shall have the
         authority  to  interpret  the  Plan,  establish  and  revise  rules and
         regulations  for the  Plan and  make an  other  determinations  that it
         believes necessary or advisable for the administration of the Plan.

IV.      Eligibility

         All full time and part time  salaried  employees of Summit  Bancorp and
         subsidiaries  (Summit) in salary grades  determined by the Compensation
         Committee  of Summit from time to time,  who are not  participating  in
         another  incentive  plan,  are eligible to participate in the Plan. The
         initial  salary  grades  will be A66 and above and salary  grades TL1 -
         TL5.  An  employee  must be on the active  payroll  and in one of these
         salary grades for a minimum of 3 months in any Plan year to be eligible
         for an incentive award.

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V.       Incentive Award Opportunity

         Each  eligible  salary grade is assigned to a target award  opportunity
         expressed  as a percent  of base  salary.  The  range of  earned  award
         opportunity  is 0-150%  of the  target  award  based on  attainment  of
         corporate  performance   objectives  and  management's   assessment  of
         individual performance.

VI.      Annual Performance Objectives

         Specific annual performance  objectives are established which emphasize
         different measures of Summit's performance. In recent years, these have
         included   achievement  of  Financial  Plan   Objectives,   Peer  Group
         Comparisons and Franchise Positioning Objectives.

         In addition to specific performance objectives:

                  The  Chief   Executive   evaluates  the   performance  of  key
                  executives   eligible   for  awards  with   respect  to  their
                  leadership in support of Summit's overall business development
                  strategy and human resources development.

                  The Chief  Executive may also adjust results  derived from the
                  guidelines  to  reflect  top  management  and Board  judgments
                  concerning  the  quality of the  performance  in the  economic
                  environment in which the results were obtained.

VII.     Determination of Awards

         Based  on  the  achievement  of  annual  performance  objectives,   the
         Committee will determine the funding of the incentive pool as a percent
         of target award guidelines.  The pool is then allocated to participants
         based  on  individual  performance.  Incentives  may be  paid up to 150
         percent  of target  award for  performance  that  clearly  goes  beyond
         expectation.  When performance falls below expectation, an individual's
         incentive may be reduced or withheld.

         An employee's incentive award payment will be prorated, as appropriate,
         to reflect  his/her time in an eligible  position during the Plan year.
         In  addition  to new  hires,  employee  movement  that may  result in a
         prorated award include; promotion,  demotion,  retirement, death, leave
         of absence, certain terminations without cause and movement into or out
         of another incentive plan.

VIII.    Time of Payment

         All  incentives  earned  under the Plan will be paid in cash during the
         first quarter  following the end of the Plan Year as defined in Section
         12.


IX.      No Right to Payment of the Incentive


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         The Plan does not confer  enforceable rights on any participant to seek
         in any manner to compel the  payment  of an award  under the Plan;  the
         decision to make any payment to any  participant  rests within the sole
         and unfettered discretion of the Committee and the Chief Executive.

         In order to  receive  an award,  a  participant  must be on the  active
         payroll as of the date of the payout  unless the  participant  has left
         the  payroll  through   retirement,   disability,   death,  or  certain
         terminations as determined by the Committee.

X.       Special Limitations

         The aggregate  incentive paid under this Plan to the participant  group
         shall  not  exceed  50  percent  of the  participants'  aggregate  base
         salaries at the end of the year for which the incentives are paid.

         No  incentives  will  normally  be paid for any Plan  year in which the
         after-tax income is less than seven percent of average capital employed
         for the year.

         The  above  limitations  notwithstanding,  the  Committee  may,  in its
         judgment,   provide  for  incentive  awards  to  any  individual  whose
         performance  clearly so warrants.  No  participant in this Plan will be
         eligible  for any  other  annual  incentive  arrangement,  except  that
         prorated awards may be made to participants  shifted from one incentive
         arrangement to another during the year.

XI.      Miscellaneous Provisions

         In the case of an employee's death, any payment under the Plan shall be
         made to  his/her  designated  beneficiary,  under the  defined  benefit
         pension  plan  covering  the  individual,  or in the  absence  of  such
         designation, by will or the laws of descent and distribution.

         Neither this Plan nor any action taken  hereunder shall be construed as
         giving any employee any right to be retained in the employ of Summit.

         Summit shall have the right to deduct from all  incentive any taxes and
         other  amounts  required  by law to be  withheld  with  respect to such
         awards.

         The Board of  Directors of Summit may amend,  suspend or terminate  the
         Plan or any portion thereof at any time. This Plan shall be governed by
         the  laws  of  the  State  of  New  Jersey,  without  consideration  of
         principles of conflict of laws.


XII.     Fiscal Year

         The Plan is designated to operate on an annual basis commencing January
         1, 1999. The Plan year shall be January 1 through December 31.







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