<PAGE>
                          SVB FINANCIAL SERVICES, INC.

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                     TO BE HELD ON THURSDAY, APRIL 27, 2000

                                    5:30 P.M.

         Notice is hereby given that the Annual Meeting of  Shareholders  of SVB
Financial Services,  Inc. will be held at the Raritan Valley Country Club, Route
28, Somerville,  New Jersey 08876, on Thursday, April 27, 2000 at 5:30 P.M., for
the following purposes:

         1.      Election  of five (5)  Directors  for the terms as set forth in
                 the accompanying Proxy Statement.

         2.      Approval of SVB Financial  Services,  Inc. 2000 Incentive Stock
                 Option Plan

         3.      Approval of SVB Financial  Services,  Inc. 2000 Directors Stock
                 Option Plan

         4.      Transaction  of such other business as may properly come before
                 the meeting or any adjournment thereof.

         Only those  shareholders of record of SVB Financial  Services,  Inc. at
the close of business on March 15, 2000,  shall be entitled to notice of, and to
vote at, the meeting. Each share of stock is entitled to one vote.

                                              By order of the Board of Directors



                                              Keith B. McCarthy
                                              Acting Secretary

Somerville, New Jersey
March 30, 2000

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
WE ASK THAT YOU  RETURN  YOUR  COMPLETED  PROXY AS SOON AS  POSSIBLE  USING  THE
ENVELOPE PROVIDED AND IN ANY CASE NO LATER THAN 3:00 P.M. ON APRIL 26, 2000.

--------------------------------------------------------------------------------
IMPORTANT:  THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM.  A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.  NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
--------------------------------------------------------------------------------
<PAGE>
                          SVB FINANCIAL SERVICES, INC.

                               103 West End Avenue
                                  P.O. Box 931

                          Somerville, New Jersey 08876

                                 PROXY STATEMENT

                 ANNUAL MEETING OF SHAREHOLDERS - APRIL 27, 2000

         This Proxy  Statement  is furnished to  shareholders  of SVB  Financial
Services, Inc. (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company for the Annual Meeting of  Shareholders to
be held at 5:30 P.M. on Thursday,  April 27, 2000 and all adjournments  thereof.
This Proxy Statement and accompanying materials are being mailed to shareholders
on or about March 30, 2000.

         The close of business March 15, 2000, has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
meeting.  As of the  record  date there were  issued and  outstanding  2,958,526
shares  of Common  Stock,  with a par  value of $2.09  per  share  (the  "Common
Stock").

         The Company  owns 100% of Somerset  Valley Bank (the  "Bank").  At this
time,  the  Company's  investment  in the Bank accounts for virtually all of its
assets and source of income.  Accordingly,  to avoid  misleading  or  incomplete
information, portions of the following material discuss the Bank.

         Holders of a majority of the outstanding shares of Common Stock present
in person or by proxy will  constitute  a quorum for the purpose of  transacting
business at the annual meeting.  ALL SHAREHOLDERS ARE URGED TO VOTE AND SIGN THE
ENCLOSED  PROXY AND RETURN IT PROMPTLY  TO THE  TRANSFER  AGENT IN THE  ENCLOSED
RETURN ENVELOPE.

         When properly executed, a proxy will be voted in the manner directed by
the shareholder. However, if no contrary specification is made, it will be voted
FOR all of the Directors and the proposals listed in this Proxy Statement.

         A proxy may be revoked at any time  before it is  exercised  by written
notice to the  Secretary of the Company,  103 West End Avenue,  Somerville,  New
Jersey 08876,  bearing a date later than the proxy.  The presence at the meeting
of any shareholder who submitted a proxy shall not revoke such proxy unless such
shareholder  shall file written  notice of revocation  with the Secretary of the
Company prior to the voting of the proxy.  All properly  executed  proxies which
are  received  by the  Secretary  and are not  revoked  will be voted.  Where no
instructions are indicated, properly executed proxies will be voted "FOR" all of
the Directors and the Proposals.

         THIS SOLICITATION IS MADE BY THE MANAGEMENT OF THE COMPANY and the cost
thereof  shall be borne by the Company.  Proxies may be  solicited  by mail,  in
person or by telephone or facsimile by  directors,  officers or employees of the
Company and its  subsidiary,  Somerset Valley Bank. Such persons will receive no
additional compensation for their solicitation activities and will be reimbursed
only for their actual expenses in connection  therewith.  The Company will, upon
request, reimburse custodians, nominees, and fiduciaries for reasonable expenses
in  forwarding  materials to the proper  shareholders.  Mr.  Willem  Kooyker,  a
Director of the Company, has informed the Company that he is opposed to Proposal
3 "Approval of the SVB  Financial  Services,  Inc. 2000  Directors  Stock Option
Plan." It is his position that the current compensation of the Board is adequate
and an increase at this time is inappropriate.

Voting Rights
         Each share of Common Stock is entitled to one vote (non  cumulative) on
all matters presented for

                                      - 1 -
<PAGE>
shareholder vote.  Abstentions and broker non-votes are counted for the purposes
of  determining  the  presence  or absence of a quorum  for the  transaction  of
business.  Abstentions are counted separately and are not considered as either a
vote  "FOR" or  "AGAINST"  in  tabulations  of votes  cast on  proposals  by the
shareholders.   Broker  non-votes  are  not  counted  at  all  for  purposes  of
determining whether a proposal has been approved.

         Under New Jersey law and the Company's  By-Laws a majority of the votes
cast at a meeting at which a quorum to transact business is present shall decide
the  election  of  Directors.  A majority  of the votes  cast is also  needed to
approve Proposal 2 and Proposal 3.

Directors/Principal Shareholders/Executive Officers

         In accordance  with the By-Laws of the Company,  its Board of Directors
shall,  from time to time,  fix the exact  number of  directors,  up to 25.  The
number is  presently  fixed at 14. All named below as  Directors  are  presently
members of the Board and have served since the Company's inception in 1996. They
have also been members of the Board of the Bank since 1990 with the exception of
Mr. Bernstein, who has been a member since 1991.

         The Company's  Certificate of Incorporation  provides that the Board of
Directors  be  classified  and divided  into three  classes,  as nearly equal in
number as possible.  The five (5) Directors  listed below have been nominated to
serve until the 2003  Annual  Meeting or until  their  successor  is elected and
qualified, or until their earlier resignation or removal.

         The  following  table  presents  the  name,  title,  address,  age  and
principal  occupation  of each  nominee for Director  followed by the  remaining
Directors and the Executive Officers, the number of shares and the percentage of
the  outstanding  shares  of Common  Stock of the  Company  beneficially  owned,
directly or indirectly, by each of them as of March 15, 2000. Each Director with
the exception of Mr.  Corcoran owns 8,190 options to purchase  8,190 shares at a
price of $6.19 per share.  These are included in the number of shares  listed in
the table. These options expire June 26, 2002.

         If Proposal 3 is approved  each  Director  will be granted an option to
purchase  4,500  shares of Common  Stock at fair market value on the date of the
grant. Mr. Kooyker, who objects to Proposal 3, will not be granted these options
at this time.
<PAGE>
<TABLE>
<CAPTION>
                                                                                     Shares
DIRECTORS                                                                         Beneficially     % of Total
Name, Title, and Address             Age        Principal Occupation                 Owned        Outstanding
------------------------             ---        --------------------                 -----        -----------

Directors Nominated to Serve Until the 2003 Annual Meeting:

<S>                                  <C>                                              <C>             <C>
John K. Kitchen                      56      President of Title Central               61,320          1.94
  Chairman of the Board & Director           Agency, a title insurance
P.O. Box 421                                 firm
Somerville, NJ 08876

Anthony J. Santye, Jr.               49      Managing Partner of                      53,751(1)       1.70
  Director                                   A. J. Santye and Co., an
36 East Main Street                          accounting and consulting
Somerville, NJ 08876                         firm

G. Robert Santye                     46      Director of Real Estate and              37,220(1)       1.18
  Vice Chairman & Director                   Business Valuation Services
36 East Main Street                          for A. J. Santye and Co.
Somerville, NJ 08876

Herman C. Simonse                    68      President of HCS Consultants, Inc.       45,150          1.43
  Director
93 Douglass Avenue
Bernardsville, NJ 07924

Donald R. Tourville                  63      Chairman and CEO of Zeus                 160,740         5.09
  Director                                   Scientific, Inc., a manufacturer
P.O. Box 38                                  of diagnostic test kits
Raritan, NJ 08869
</TABLE>
                                      - 2 -

<PAGE>
<TABLE>
<CAPTION>
                                                                                          Shares
DIRECTORS                                                                              Beneficially     % of Total
Name, Title, and Address             Age        Principal Occupation                      Owned        Outstanding
------------------------             ---        --------------------                      -----        -----------
Directors Whose Terms Expire in 2001. (9)

<S>                                   <C>                                                 <C>               <C>
Bernard Bernstein                     62          President & CEO,                        118,040           3.74
  Director                                        Mid-State Lumber Corp.,
200 Industrial Parkway                            a wholesale lumber
Branchburg, NJ 08876                              distributor

Robert P. Corcoran                    59          President & CEO                          42,210(2)        1.34
  President, CEO & Director                       Somerset Valley Bank
12 Harvest Court                                  SVB Financial Services, Inc.
Flemington, NJ 08822

Raymond L. Hughes                     68          President of N.J. Risk                   54,369(3)        1.72
  Director                                        Managers & Consultants
20 West End Avenue
Somerville, NJ 08876

S. Tucker S. Johnson                  34          Farmer                                   63,231           2.00
  Director
P.O. Box 675
Oldwick, NJ 08858

Directors Whose Terms Expire in 2002.

Willem Kooyker                        57          Chairman & CEO of Blenheim              279,547(4)        8.85
  Director                                        Investments, Inc., an international
2 Worlds Fair Drive                               fund management firm
Somerset, NJ 08875

Frank Orlando                         66          Retired                                 135,269(5)        4.28
  Director
786 Princeton Avenue
Brick, NJ 08724

Gilbert E. Pittenger                  75          Retired                                  18,479            .59
  Director
RD #1, Box 91
New Ringgold, PA 17960

Frederick D. Quick                    68          President of Hesco                      194,670(6)        6.16
  Director                                        Electric Supply Co., Inc.,
924 River Road                                    a lighting and electrical
Neshanic Station, NJ 08853                        supply firm

Donald Sciaretta                      44          President of Claremont                   80,920           2.56
  Director                                        Construction Group, Inc.
P.O. Box 808
Far Hills, NJ 07931
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                   <C>                                                 <C>               <C>
Executive Officers
Keith B. McCarthy                     42          Chief Operating                          45,780(7)        1.45
  Executive Vice President &                      Officer of the Bank
  Treasurer                                       Executive Vice President &
501 Red School Lane                               Treasurer of the Company
Phillipsburg, NJ 08865

Arthur E. Brattlof                    56          Executive Vice President &               26,747(8)         .85
9 Steeple Chase Court                             Chief Lending Officer
Bedminster, NJ 07921                              of the Bank
                                                                                        ---------          -----
Total Directors and Executive Officers as a Group                                       1,417,443          44.88
</TABLE>


The denominator in determining the % of Total Outstanding  Shares was 3,157,943,
which includes outstanding stock options for 199,417 shares and 2,958,526 shares
issued and outstanding.

Principal Shareholder

         In addition to those named in the above list, the following is a holder
of  more  than  5% of  the  outstanding  shares  of  the  Common  Stock.

                                             Shares
                                           Beneficially      % of Total
         Name and Address                     Owned         Outstanding
         -----------------------         ---------------    ------------
         Mark S. Gold, MD                    180,150           5.70
         2002 San Marco Blvd.
         Jacksonville, FL 32207


                                      - 3 -
<PAGE>
1)       Includes  20,059 shares held by the A. J. Santye Co., PA Profit Sharing
         Plan over which he and his brother,  G. Robert Santye, Vice Chairman of
         the Company, are trustees.

2)       Included in this total are options to purchase  10,080  shares at $3.97
         which  expire  April 30, 2001 and 10,500  shares at $6.19 which  expire
         November 20, 2002.

3)       Includes  5,040  shares held by  Hughes-Plumer  Pension Fund and 28,224
         shares held by Hughes-Plumer and Associates Profit Sharing Plan.

4)       Includes  100,800  shares  held in trusts  for his three  children  and
         10,558 shares held in an annuity in which his wife is a trustee.

5)       Includes  68,040 shares held by Eight Mountain  Trail,  Inc.  Employees
         Profit   Sharing   Plan  and  4,000  shares  held  in  trusts  for  his
         grandchildren.

6)       Includes 31,500 shares held by Quick Family Investments LP.

7)       Includes  options to purchase 10,080 shares at $3.97 which expire April
         30, 2001 and 10,500 shares at $6.19 which expire November 20, 2002.

8)       Includes  options to purchase 13,104 shares at $3.97 which expire April
         30, 2001 and 10,500 shares at $6.19 which expire November 20, 2002.

9)       This does not include  Mark Gold,  M.D.,  who served as Director  until
         December 27, 1999 and resigned to pursue other interests.

Section 16(a) Beneficial Ownership Reporting Compliance

         The  following  Directors  failed to file on a timely  basis  Form 4 as
required by Section  16(a) of the  Securities  Exchange Act of 1934 for the year
ended December 31, 1999.

                                                     Number of
                      Director's Name               Late Reports
                  ------------------------          -------------
                  S. Tucker S. Johnson                      7
                  Bernard Bernstein                         2
                  Gilbert Pittenger                         1
                  Donald Sciaretta                          2

Director Committees

         All members of the Board of  Directors of the Company also serve on the
Board of  Directors  of the  Bank.  There  are six  committees  of the  Board of
Directors of the Company and the Bank.

         The  Executive  Committee is a committee of the Company and composed of
Messrs. Bernstein,  Corcoran,  Kitchen, Kooyker,  Pittenger, Quick, G. R. Santye
and  Tourville.  The  Committee  reviews  and  approves  the  Bank's  budget and
establishes the Bank's long range and strategic plans.
<PAGE>
         The Audit  Committee  is a committee  of the  Company  and  composed of
Messrs.  Hughes,  Johnson,  Quick, A. J. Santye, Jr. and Simonse.  The Committee
formulates the Bank's audit policy,  chooses the Company's  accounting  firm and
reviews audits conducted by the Company's  internal and external  auditors.  The
members of the Audit  Committee are independent as defined by Rule 4200 (a) (15)
of the National Association of Securities Dealers listing

                                      - 4 -
<PAGE>
standards.

         The Audit Committee has reviewed and discussed the financial statements
with management. The Audit Committee has discussed with the independent auditors
the matters required to be discussed by SAS 61.

         The Audit  Committee has received  written  disclosures  and the letter
from the independent  accountants required by Standards Board Standard No. 1 and
has discussed with the  independent  accountants  the  independent  accountants'
independence.  Based on the reviews and discussions  above,  the Audit Committee
recommended to the Board of Directors that the audited  financial  statements be
included in the Company's  Annual Report on Form 10-KSB for 1999 for filing with
the Securities and Exchange Commission.

         The Loan  Committee  is a committee of the Bank and composed of Messrs.
Bernstein,  Corcoran, Hughes, Kitchen, A. J. Santye, Jr., Sciaretta, Simonse and
Tourville. The Committee reviews and approves loans within certain predetermined
parameters,  monitors the quality of the portfolio and insures that  credit/rate
risks  and  the  mix  of  loans  are   consistent   with  the  Bank's  loan  and
asset/liability management policies.

         The Real Estate  Committee  is a committee  of the Bank and composed of
Messrs. Hughes, G. R. Santye, Sciaretta and Simonse, reviews appraisals for real
estate mortgages and  construction  loans and advises the Loan Committee and the
Board with respect to real estate lending.

         The  Investment  Committee  is a committee  of the Bank and composed of
Messrs.  Bernstein,  Johnson,  Kooyker,  Orlando and Pittenger and  periodically
reviews the Bank's investment portfolio for adherence to policy and approves its
investment strategy.

         The  Compensation  Committee is a committee of the Bank and composed of
Messrs.  Bernstein,  Johnson, Kitchen, Kooyker, Orlando, Quick and A. J. Santye,
Jr. The Committee approves compensation and bonuses for the Bank's officers.

         Messrs.  Corcoran  and  Kitchen  are  ex-officio  members  of  all  the
committees,  except  the  Audit  Committee.  Mr.  McCarthy,  is a  non-director,
non-voting member of the Executive and Investment Committees.  Mr. Brattlof is a
non-director voting member of the Loan Committee.

         During 1999,  the Board of Directors  held 12 meetings,  the  Executive
Committee 3 meetings,  the Loan  Committee  14 meetings,  the Audit  Committee 3
meetings,  the Investment  Committee 4 meetings,  the  Compensation  Committee 5
meetings,  and the Real Estate  Committee  14 meetings.  In  addition,  there is
significant  communication  between the Board of Directors and the Company which
occurs apart from the regularly  scheduled Board and Committee meetings and as a
result,  the Bank does not  regard  attendance  at  meetings  to be the  primary
criterion  to evaluate the  contribution  made by a Director.  During 1999,  all
Directors  attended at least 75% of the total Board and Committee  meetings with
the exception of Messrs. Hughes and Johnson. Attendance percentages for the Loan
Committee  and Real Estate  Committee  are not  included  in these  percentages.
Because of the frequency of Loan Committee and Real Estate  Committee  meetings,
only three  Director Loan  Committee  members are required to conduct  committee
meetings as set forth in the Bank's policy.

                                      - 5 -
<PAGE>
Executive Compensation

         The following  table  summarizes  all  compensation  earned in the past
three  complete  fiscal years for services  performed in all  capacities for the
Company and the Bank with respect to the Executive  Officers.  The  compensation
noted in the table has been paid by the Bank. No  compensation  has been paid by
the Company:

<TABLE>
<CAPTION>
                                                     Annual
                                                  Compensation                          All Other
Name and Position                 Year                Salary             Bonus        Compensation
------------------                ----          -----------------    ------------    --------------
<S>                               <C>               <C>               <C>              <C>
Robert P. Corcoran                1999              $156,000          $ 24,570(1)      $ 17,556(3)
President & CEO of                1998               150,000            28,735           16,692(3)
the Company and the Bank          1997               136,500            25,088           16,410(3)


Keith B. McCarthy                 1999               113,000            13,348(1)         6,493(4)
Treasurer of the Company          1998               108,650            15,609           23,233(5)
Chief Operating Officer of        1997               102,500            14,216            4,703(4)
the Bank

Arthur E. Brattlof                1999               104,000            12,285(1)         4,735(2)
Executive Vice President          1998               100,000            14,367            4,624(2)
of the Bank                       1997                88,500            12,204            3,467(2)
</TABLE>

1)       The  Bonus  for  1999 is based  75% on a  comparison  of the  Company's
         results for 1999 in  comparison  with certain  predetermined  financial
         goals,  this portion is the amount  stated in the table.  The remaining
         25% is based on a  comparison  of the Bank's  results with a group of 9
         similar  banks as chosen by the  Compensation  Committee  of the Board.
         Since the  results  of the peer group are not  available  at this time,
         this amount has neither been determined nor paid.

2)       Represents matching amounts contributed by the Bank to the 401(k) Plan.

3)       Includes  matching  contributions to the 401(k) Plan of $6,240 in 1999,
         $6,799  in 1998 and  $5,308 in 1997,  Director  fees of $5,400 in 1999,
         $4,950 in 1998 and $4,950 in 1997 and term life insurance premiums paid
         by the Company of $5,916 in 1999, $4,943 in 1998 and $6,152 in 1997.

4)       Includes  matching  contributions  to the 401(k) Plan of $5,144 in 1999
         and $4,028 in 1997 and life  insurance  premiums paid by the Company of
         $1,349 in 1999 and $675 in 1997.

5)       Includes  matching  contributions  to the 401(k)  Plan of $5,072,  life
         insurance  premiums paid by the Company of $1,349 and a gain of $16,812
         on the exercise of 7,200 options and their subsequent sale.

         The Bank also maintains  various medical,  life and disability  benefit
plans covering all its full-time  employees.  The Bank also provides automobiles
to the three  executive  officers  mentioned in the previous table and one other
officer of the Bank. Such officers have some personal use of those vehicles such
as commuting to and from the Bank.
<PAGE>

Bonus Plan

         During  1999,  the  Compensation  Committee  of the Board of  Directors
approved a bonus plan for the three  executive  officers  listed in the previous
table.  Under the terms of the plan,  cash bonuses will be paid to the executive
officers  based upon a formula  that  includes  the  Company  achieving  certain
predetermined  financial goals,  the officers  achieving  certain  predetermined
personal objectives and the performance of the Bank in comparison to the results
of a group of 9 similar banks as chosen by the Committee.

         Bonuses were paid to other employees of the Company,  who were employed
by the  Company  for  the  entire  year  based  on the  achievement  of  certain
predetermined financial goals.

                                      - 6 -
<PAGE>
1997 Restated Incentive Stock Option Plan

         On  April  24,  1997,  the  shareholders  approved  the  1997  Restated
Incentive  Stock Option Plan,  which  provides for officers and employees of the
Company to purchase up to 173,048 shares of Common Stock, as adjusted for splits
and a stock dividend. As of March 15, 2000 all options under this Plan have been
distributed.  The  purpose  of the Plan is to (i)  replace  and  expand  certain
existing  stock  options  of the Bank (ii)  assist the  Company  and the Bank in
attracting and retaining  qualified persons as their employees and (iii) to help
insure that employees of the Company and the Bank have shared economic interests
with the shareholders of the Company.

         No options were granted under the Plan in 1999.

         The following table depicts  information  with respect to stock options
for the three executive officers listed in the previous table:
<TABLE>
<CAPTION>
               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                   AND DECEMBER 31, 1999 OPTION/SAR VALUES (1)

----------------------------------------------------------------------------------------------------------
                                                                  NUMBER OF
                                                                 UNEXERCISED               VALUE OF
                           NUMBER OF                             SECURITIES               UNEXERCISED
                             SHARES                              UNDERLYING              IN-THE-MONEY
                            ACQUIRED                           OPTIONS/SARs AT          OPTION/SARs AT
                               ON             VALUE           DECEMBER 31, 1999        DECEMBER 31, 1999
NAME                        EXERCISE         REALIZED            EXERCISABLE              EXERCISABLE
----------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>                   <C>                      <C>
Robert P. Corcoran           10,080          $50,020               20,580                   $80,220
Keith B. McCarthy            17,640          $83,328               20,580                   $80,220
Arthur E. Brattlof              -                -                 23,604                   $95,436
</TABLE>
(1)      All data is adjusted for the 5% stock dividend.


Certain Agreements

         The  Company  has  entered  into  employment  agreements  with  Messrs.
Corcoran,  McCarthy and Brattlof.  The agreements provide for severance payments
in the event the  officers  are  terminated  without  cause or resign  with good
reason.  Such  benefits  are  equivalent  to two times the base  salary  for Mr.
Corcoran  payable  over 24  months  and one times the base  salary  for  Messrs.
McCarthy  and  Brattlof  payable  over 12  months.  In the  event of a change of
control all three officers would receive a severance  payment equal to two times
base  salary  payable  over 24  months  plus an  annual  payment  for two  years
equivalent to the average bonus paid during the last three years of employment.

Benefit Plans

         The Bank maintains a 401(k) Plan covering  substantially all employees.
Under  the  terms  of the  Plan,  the  Bank  will  match  67%  of an  employee's
contribution,  up to 6% of the employee's salary.  Employees become fully vested
in the Bank's  contribution  after five years of service.  The Bank  contributed
$66,000 to the Plan in 1999.
<PAGE>
         During 1999, the Bank  established a Supplemental  Retirement Plan. The
Plan  covers the three  officers  listed in the table  above.  Mr.  Corcoran  is
covered under a defined  benefit plan,  which  provides a benefit of $75,000 per
year upon his retirement at age 65 for a period of ten years.  Mr.  Brattlof and
Mr. McCarthy are covered under a defined  contribution plan, the object of which
is to provide  for an income of $50,000 per year each upon their  retirement  at
age 65 for a period of ten years.  The Bank expensed  $25,000 for these plans in
1999.

                                      - 7 -
<PAGE>
Director Compensation

         During 1999, Directors of the Bank received compensation for service on
the Board of Directors of $450 per Board of Directors  meeting attended and $100
for each  committee  meeting.  Mr.  John K.  Kitchen  as  Chairman  of the Board
received compensation of $30,000 in addition to his other per meeting fees.

         No  compensation  was  paid  for  Board of  Directors  meetings  of the
Company. Directors are paid $100 for each committee meeting attended.

1997 Directors Stock Option Plan

         On April 24, 1997, the  shareholders  of the Company  approved the 1997
Directors  Stock  Option  Plan.  The Plan is intended  to promote the  Company's
interest  by  establishing  a  mechanism  to  reward  Directors  based on future
increases  in the  value of the  Company's  stock.  This will  help  retain  the
services of persons who are now  Directors  and provide  incentives  for them to
exert maximum efforts for the success of the Company and its affiliates.

         On June 26, 1997,  each non employee  member of the Company's  Board of
Directors was granted an option to purchase  8,190  shares,  as adjusted for the
stock splits and stock dividend, of the Common Stock of the Company at $6.19 per
share, which was the fair market value of the Common Stock as of that date.

         As there  were 14  Directors  eligible  to  participate  under the 1997
Directors  Stock Option  Plan,  all of the shares  available  under the Plan are
subject to option. Therefore, no shares were granted during 1999.

Transactions with Related Persons

         It is currently the policy of the Company and Bank not to extend credit
or make loans to any of its Directors or their affiliates.

         A  partnership  made up of,  among  others,  all but one of the  Bank's
Directors  owns and leases the  premises  to the Bank at 103 West End Avenue and
117 West End Avenue.  The lease for 103 West End Avenue,  which is the principal
banking  facility,  was reviewed by both the FDIC and the  Department of Banking
prior to the Bank's opening in 1991 to determine that the terms of the lease are
comparable to those the Bank would have  received in an arms length  transaction
with an unaffiliated third party. Neither the FDIC nor the Department of Banking
objected to the terms of the lease.  The office  space at 117 West End Avenue is
also leased at such comparable terms.

            PROPOSAL TO APPROVE THE 2000 INCENTIVE STOCK OPTION PLAN

         The  purpose of the 2000  Incentive  Stock  Option Plan is to provide a
means by which  selected  employees  of the  Company and its  affiliates  (which
includes  Somerset Valley Bank and  subsidiaries) may be given an opportunity to
purchase  stock of the  Company.  The  Company,  by means of the Plan,  seeks to
retain the  services of persons who are now  employees  of the Company or of its
affiliates,  to secure and retain the  services of new  employees of the Company
and of its  affiliates,  and to  provide  incentives  for such  persons to exert
maximum efforts for the success of the Company and its affiliates.

         The  following  is a  summary  of the  proposed  features  of the  2000
Incentive Stock Option Plan,  which is qualified in its entirety by reference to
the 2000  Incentive  Stock Option Plan which is annexed  hereto as Exhibit A. As
indicated in the text of the 2000 Incentive  Stock Option Plan, any provision of
the 2000 Stock  Option  Plan which is  determined  to be  inconsistent  with the
applicable laws and regulations will be deemed void.

                                      - 8 -
<PAGE>
Administration

         The 2000 Incentive Stock Option Plan may be administered by a Committee
appointed by the Board of  Directors  composed of not fewer than two (2) members
of the Board to serve in its place with respect to the Plan. All members of such
committee shall be  Disinterested  Persons,  to the extent required or desirable
under regulations of the United States Securities and Exchange Commission (SEC).
Disinterested  persons are persons not eligible for awards under the Plan. Under
the  terms of the 2000  Incentive  Stock  Option  Plan,  the  Committee  has the
authority  to (i)  determine  the  employees  who  shall  receive  the  grant of
incentive stock options,  the time or times at which,  options shall be granted,
the number of shares of stock subject to each option and the vesting schedule of
such  options  (ii)  determine  the fair market value of the Common Stock of the
Company or of its affiliates,  (iii) determine the exercise price per share (but
not less than 100% of fair market value) at which options may be exercised, (iv)
determine the terms and  provisions of each option granted and the forms of each
option  agreement,  and  subject to the consent of the  optionee,  to modify and
amend any  outstanding  option  agreement,  (v)  accelerate  or defer  (with the
consent of the optionee) the date of any  outstanding  option,  to authorize any
person to execute on behalf of the Company any instrument required to effectuate
the grant of an option previously granted by the Committee,  (vi) amend the 2000
Stock Option Plan if required by the Internal  Revenue Code of 1986,  as amended
or by Rule  16(b)-3 of the Exchange  Act (vii)  construe or  interpret  the 2000
Stock  Option  Plan,  (viii)  authorize  the sale of shares  of Common  Stock in
connection with exercise of the options, (ix) to effect, with the consent of the
optionee,   the  cancellation  of  any  outstanding  options  and  to  grant  in
substitution  thereof new options  relating to the same or different  numbers of
shares, (x) make all other determinations  deemed necessary or advisable for the
administration of the plan.

Shares Reserved

         Subject to adjustments  for certain  changes in the number of shares of
Common Stock, a total of 150,000  shares of the Company's  Common Stock shall be
available  for issuance  under the 2000 Stock Option Plan.  Stock subject to the
plan may be  unissued  shares or  reacquired  shares,  bought  on the  market or
otherwise.  Incentive  stock options may be granted to eligible  persons in such
number and at such times as the Committee may determine.  However, to the extent
that the aggregate  fair market value  (determined  at the time of the grant) of
stock with respect to which  incentive  stock  options are  exercisable  for the
first  time by any  optionee  during  any  calendar  year under all plans of the
Company and its affiliates exceed One Hundred Thousand ($100,000)  Dollars,  the
options or portions  thereof  that exceed such limit shall be treated as options
not qualified for incentive stock option treatment.

Eligibility

         Options under the 2000 Incentive  Stock Option Plan may be granted only
to  employees  of the  Company or of its  affiliates.  A Director  shall only be
eligible  for  the  benefits  of the  plan  if he or she is  also  an  employee,
provided,  however, a Director shall in no event be eligible for the benefits of
the plan unless at the time  discretion  is  exercised  in the  selection of the
Director as a person to whom options may be granted,  or in the selection of the
Director as a person to whom options may be granted,  or in the determination of
the number of  optioned  shares  which may be covered by options  granted to the
Director: (i) the Committee consists only of non-employee Directors; or (ii) the
plan otherwise  complies with the requirements of Section 16 (b) and the related
SEC  roles.  This  provision  does not  apply  prior  to the  date of the  first
registration  of an equity  security  of the  Company  under  Section  12 of the
Exchange Act.
<PAGE>
         No person shall be eligible for the grant of an incentive stock option,
if, at the time of the grant,  such person owns or is deemed to own  pursuant to
Section  424  (d) of the  Internal  Revenue  Code of  1986,  as  amended,  stock
possessing more than ten (10%) of the total combined voting power of all classes
of stock of the Company or of any of its  affiliates,  unless the exercise price
of the option is at least one hundred and ten percent  (110%) of the fair market
value (as defined in the 2000 Incentive  Stock Option Plan) of such stock at the
date of the grant and the incentive  stock option is not  exercisable  after the
expiration of five (5) years from the date of the grant.

                                      - 9 -
<PAGE>
Terms of Options

         The exercise price shall not be less than one hundred percent (100%) of
the fair market  value (as defined in the 2000  Incentive  Stock Option Plan) of
the stock  subject to the  option on the date the  option is granted  (except as
noted under Eligibility with respect to owners of ten (10%) percent of the total
combined  voting  stock of the Company or of any of its  affiliates.)  No option
shall be exercisable after the expiration of five (5) years from the date it was
granted and the term of the option shall be stated in the Option Agreement.

         Generally,  an option shall be deemed  exercised when written notice of
such exercise has been given to the Company in accordance  with the terms of the
Option  Agreement by the person entitled to exercise the option and full payment
has been  received by the  Company.  The  purchase  price of the stock  acquired
pursuant to the option shall be paid,  at the time the option is  exercised,  to
the extent permitted by the statutes and regulations at the time that the option
is exercised, either in cash or check.

         In the event that an  optionee's  continuous  status as an employee (as
defined in the 2000 Incentive Stock Option Plan) terminates (other than by death
or  disability),  the  optionee may exercise his or her option but only prior to
(i) the  expiration of three (3) months after the date of such  termination  and
(ii) expiration of the term of the option as set forth in the Option  Agreement,
and only to the extent that the  optionee  was entitled to exercise it as of the
date of such termination.

         In the  event  that an  optionee's  continuous  status  as an  employee
terminates as a result of the optionee's disability,  the optionee or his or her
personal  representative  may exercise his or her option, but only within twelve
(12) months from the date of such termination,  and only to the extent that such
optionee was entitled to exercise it on the date of such  termination (but in no
event  later than the  expiration  of the term of the option as set forth in the
Option Agreement).

         In the event of the death of the optionee, the option may be exercised,
at any time  within  twelve (12)  months of the death of the  optionee  (or such
longer or shorter time as may be specified  in the Option  Agreement)  but in no
event  later than the  expiration  date of the option as set forth in the Option
Agreement.

Nontransferability

         An incentive stock option shall not be transferrable  except by will or
by the laws of descent  and  distribution  and shall be  exercisable  during the
lifetime of the optionee only by such person.

Amendment

         The Committee at any time may amend the Plan, provided however, that if
required or desirable  under SEC Rule 16b-3 no amendment shall be made more than
once every six (6) months,  other than to comport  with the changes in the Code,
ERISA, or other rules and regulation promulgated thereunder.  It is contemplated
that the  Committee  may  amend  the Plan in any  respect  the  Committee  deems
necessary or advisable to bring the Plan and the Options granted thereunder into
compliance with the Code and Rule 16b-3.
<PAGE>
         The Company will obtain  shareholder  approval of any Plan amendment to
the extent  necessary or desirable to comply with Rule 16b-3 or with the Code or
any  successor  rule or  statute  or other  rule or  regulation,  including  the
requirements  of any exchange or  quotation  system on which the Common Stock is
listed or quoted.  The rights and  obligations  under the options granted before
the  amendment of the Plan shall not be altered or impaired by the  amendment of
the Plan unless consented to in writing by the optionee.

                                     - 10 -
<PAGE>
Termination

         The Committee  may suspend or terminate the Plan at any time,  however,
the rights and  obligations  under any  obligation  granted while the Plan is in
effect shall not be altered or impaired by the  suspension or termination of the
Plan except with the consent of the optionee. Unless sooner terminated, the Plan
shall  terminate  within ten (10) years of the date the Plan was  adopted by the
Board of Directors or approved by the shareholders whichever date is earlier.

Adjustments upon Changes in Capitalization or Merger

         Subject to any required action by the shareholders of the Company,  the
number of shares of Common Stock subject to the Plan and the number of shares of
Common Stock that have been  authorized  for  issuance  under the Plan but as to
which no option  has yet been  granted  or have been  returned  to the Plan upon
cancellation or expiration, as well as the price per share of Common Stock shall
be proportionally  adjusted for any increase or decrease in the number of issued
shares of the  Common  Stock,  resulting  from a stock  split,  stock  dividend,
combination  or  reclassification  of shares of Common  Stock  effected  without
consideration  by the Company.  Such adjustment  shall be made by the Committee,
whose determination shall be final, binding and conclusive.

         In the  event  of  dissolution  or  liquidation  of the  Company,  each
outstanding option will terminate  immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.  The Committee may,
in its sole  discretion,  declare that any option  shall  terminate as of a date
fixed by the  Committee  and give each optionee the right to exercise his or her
option as to all or any part of the optioned shares,  including the shares as to
which the option would not otherwise be exercisable.

         In the event of a proposed sale of  substantially  all of the assets of
the Company, or the merger, restructure,  reorganization or consolidation of the
Company with or into another entity or entities in which the shareholders of the
Company  receive  cash or  securities  of  another  issuer,  or any  combination
thereof,  in exchange for their shares of Common Stock, each outstanding  option
shall be assumed or an equivalent  option shall be substituted by such successor
entity  or  an  affiliate  of  such  successor  entity,   unless  the  Committee
determines,  in the  exercise  of  its  sole  discretion  and in  lieu  of  such
assumption or  substitution,  that the optionee shall have the right to exercise
the option as to all optioned  shares,  including  shares as to which the option
would not otherwise be vested.  Notwithstanding  anything to the contrary in the
Plan,  the Committee may grant  options  which provide for  acceleration  of the
vesting of shares  subject to an option upon Change of Control as defined in the
Plan.

Certain Federal Income Tax Consequences

         The following  summary  generally  describes the principal Federal (and
not state and local) income tax  consequences  of options granted under the 2000
Incentive  Stock  Option  Plan.  It is general in nature and is not  intended to
cover all tax  consequences  that may apply to a particular  participant  in the
2000 Incentive Stock Option Plan to the Company.  The provisions of the Code and
regulations  thereunder  relating  to these  matters are  complicated  and their
impact  in any one  case may  depend  upon the  particular  circumstances.  This
discussion is based on the Code as currently in effect.

         If an incentive  stock option is awarded to a participant in accordance
with the terms of the 2000  Incentive  Stock  Option  Plan,  no  income  will be
recognized by such participant at the time of the grant.
<PAGE>

         Generally,  on exercise of an incentive  stock option,  the participant
will  not  recognize  any  income  and the  Company  will not be  entitled  to a
deduction for tax purposes.  However,  the difference between the purchase price
and the fair market value of the shares of Common Stock  received on the date of
exercise  will be treated as a positive  adjustment in  determining  alternative
minimum  taxable  income,  which may subject the  participant to the alternative
minimum  tax.  Upon the  disposition  of shares  acquired  upon  exercise  of an
incentive  stock  option  under  the  2000  Incentive  Stock  Option  Plan,  the
participant  will ordinarily  recognize  long-term or short term capital gain or
loss

                                     - 11 -
<PAGE>
(depending  on  the  applicable  holding  period).  Generally,  however,  if the
participant  disposes of shares of Common  Stock  acquired  upon  exercise of an
incentive  stock  option  within two years after the date of grant or within one
year after the date of exercise (a  "disqualifying  disposition"),  the optionee
will recognize  ordinary income, and the Company will be entitled to a deduction
for tax  purposes,  the  amount of the  excess of the fair  market  value of the
shares on the date of exercise over the purchase  price (or the gain on sale, if
less).  Any excess of the amount  realized by the optionee on the  disqualifying
disposition  over the fair market value of the shares on the date of exercise of
the incentive stock option will ordinarily  constitute capital gain. In the case
of an optionee subject to the restrictions of Section 16(b) of the Exchange Act,
the relevant date in measuring the optionee's  ordinary income and the Company's
tax  deduction in connection  with any such  disqualifying  disposition.  May be
affected by compliance with the requirements of Section 16 (b).

Shareholder Approval Required

         Approval of the 2000 Incentive Stock Option Plan by the shareholders is
required in order for incentive stock options to qualify as  "performance-based"
compensation  under Section 162(m) of the Code,  for incentive  stock options to
meet the  requirements  of Section  422 of the Code.  Approval is also a listing
requirement of the NASDAQ National Market.

New Plan Benefits Table

         The Company  has not  included a benefits  table  because the number of
incentive stock options that will be awarded to employees in the future pursuant
to the 2000  Incentive  Stock Option Plan cannot be  determined at this time. In
addition,  because no incentive stock option will have an exercise price of less
than  the  fair  market  value of the  Common  Stock at the date of  shareholder
approval, these incentive stock options have no value at the present time.

         The Board of Directors believes that the adoption of the 2000 Incentive
Stock  Option Plan is in the best  interests  of the  shareholders.  Among other
things,  the 2000  Incentive  Stock  Option  Plan  will  tend to  encourage  the
retention of equity  ownership in the Company by  employees,  which will tend to
align the interest of such employees with the interests of shareholders.

         THE  BOARD  OF  DIRECTORS  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE FOR
APPROVAL OF THE 2000 INCENTIVE STOCK OPTION PLAN.

            PROPOSAL TO APPROVE THE 2000 DIRECTORS STOCK OPTION PLAN

         The  2000  Directors   Stock  Option  Plan  was  adopted,   subject  to
shareholder  approval,  by the Board of Directors on January 27, 2000.  The 2000
Directors  Stock Option Plan is intended to promote the  Company's  interests by
establishing a mechanism to reward  Directors based upon future increases in the
value of the Company's stock.  This will help retain the services of persons who
are now Directors and provide  incentives for them to exert maximum  efforts for
the success of the Company and its affiliates.

         The  following  is a  summary  of the  proposed  features  of the  2000
Directors Stock Option Plan,  which is qualified in its entirety by reference to
the 2000  Directors  Stock Option Plan which is annexed  hereto as Exhibit B. As
indicated in the text of the 2000 Directors  Stock Option Plan, any provision of
the 2000 Directors Stock Option Plan which is determined to be inconsistent with
the applicable laws and regulations will be deemed void.

<PAGE>

Administration

         The 2000 Directors Stock Option Plan may be administered by a Committee
appointed by the Board of  Directors  composed of not fewer than two (2) members
of the Board to serve in its place with respect to the Plan.

                                     - 12 -
<PAGE>
No member of the  Committee  may be an employee or officer of the Company or any
affiliate.  Under  the  terms of the  2000  Directors  Stock  Option  Plan,  the
Committee has the authority to (i) determine the fair market value of the Common
Stock  of the  Company  or of its  affiliates,  (ii)  determine  the  terms  and
provisions of each option  granted and the forms of each option  agreement,  and
subject to the  consent  of the  optionee,  to modify and amend any  outstanding
option  agreement,  (iii) accelerate or defer (with the consent of the optionee)
the date of any  outstanding  option,  (iv)  authorize  any person to execute on
behalf of the Company any  instrument  required  to  effectuate  the grant of an
option,  (v) construe or interpret the 2000  Directors  Stock Option Plan,  (vi)
authorize the sale of shares of Common Stock in connection  with exercise of the
options,  (vii) to effect, with the consent of the optionee, the cancellation of
any  outstanding  options  and to  grant in  substitution  thereof  new  options
relating  to the same or  different  numbers  of shares,  (viii)  make all other
determinations deemed necessary or advisable for the administration of the plan.

Shares Reserved

         Subject to adjustments  for certain  changes in the number of shares of
Common Stock.  A total of 60,000  shares of the Company's  Common Stock shall be
available for issuance under the 2000 Directors Stock Option Plan. Stock subject
to the Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

Eligibility and Grant of Options

         Upon approval of the 2000 Directors Stock Option Plan each non-employee
member of the  Company's  Board of Directors  as of December 31, 1999,  with the
exception of Mr.  Kooyker,  who has declined to  participate in the Plan at this
time,  will be granted an option to purchase 4,615 shares of the Common Stock at
100% of the fair  market  value as of the date of  shareholder  approval.  As of
March 15, 2000, the fair market value of the Common Stock is $8.875 per share. A
Director  is not  eligible  to  participate  if  he/she  is also an  officer  or
employee.  The only person who is both a Director  and an Officer is Mr.  Robert
Corcoran.  Accordingly,  as a group all  Directors,  with the  exception  of Mr.
Kooyker,  who are not  officers or employees  will  receive  options to purchase
55,380 shares available under the 2000 Directors Stock Option Plan upon approval
by the shareholders.

Terms of Options

         The exercise price shall not be less than one hundred percent (100%) of
the fair market  value (as defined in the 2000  Directors  Stock Option Plan) of
the stock  subject to the option on the date the  option is  granted.  No Option
shall be exercisable after the expiration of five (5) years from the date it was
granted and the term of the option shall be stated in the Option Agreement.

         Generally,  an option shall be deemed  exercised when written notice of
such exercise has been given to the Company in accordance  with the terms of the
Option  Agreement by the person entitled to exercise the option and full payment
has been  received by the  Company.  The  purchase  price of the stock  acquired
pursuant to the option shall be paid,  at the time the option is  exercised,  to
the extent permitted by the statutes and regulations at the time that the option
is exercised, either in cash or check.

<PAGE>

         In the event that an  optionee's  continuous  status as a Director  (as
defined in the 2000 Directors Stock Option Plan) terminates (other than by death
or  disability),  the  optionee may exercise his or her option but only prior to
(i) the  expiration of three (3) months after the date of such  termination  and
(ii) expiration of the term of the option as set forth in the Option  Agreement,
and only to the extent that the  optionee  was entitled to exercise it as of the
date of such termination.

                                     - 13 -
<PAGE>
         In the  event  that  an  optionee's  continuous  status  as a  Director
terminates as a result of the optionee's disability,  the optionee or his or her
personal  representative  may exercise his or her option, but only within twelve
(12) months from the date of such termination,  and only to the extent that such
optionee was entitled to exercise it on the date of such  termination (but in no
event  later than the  expiration  of the term of the option as set forth in the
Option Agreement).

         In the event of the death of the optionee, the option may be exercised,
at any time  within  twelve (12)  months of the death of the  optionee  (or such
longer or shorter time as may be specified  in the Option  Agreement)  but in no
event  later than the  expiration  date of the option as set forth in the Option
Agreement.

Transferability

         A Director's  stock option shall not be  transferrable  except:  (i) by
will or by laws of descent and distribution or pursuant to a qualified  domestic
relations  order,  as defined by the Code or Title I of the Employee  Retirement
Income Act, as amended  ("ERISA"),  or the rules thereunder (a "QDRO") and shall
be  exercisable  during the lifetime of the optionee  only by such person or any
transferee  pursuant to a QDRO;  or (ii) without  payment of  consideration,  to
immediate  family  members (i.e.  spouses,  children and  grandchildren)  of the
optionee or to a trust for the benefit of such family  members,  or  partnership
whose only partners are such family members.

Adjustments upon Changes in Capitalization or Merger

         Subject to any required action by the shareholders of the Company,  the
number of shares of Common Stock subject to the Plan and the number of shares of
Common Stock that have been  authorized  for  issuance  under the Plan but as to
which no option  has yet been  granted  or have been  returned  to the Plan upon
cancellation or expiration, as well as the price per share of Common Stock shall
be proportionally  adjusted for any increase or decrease in the number of issued
shares of the  Common  Stock,  resulting  from a stock  split,  stock  dividend,
combination  or  reclassification  of shares of Common  Stock  effected  without
consideration  by the Company.  Such adjustment  shall be made by the Committee,
whose determination shall be final, binding and conclusive.

         In the  event  of  dissolution  or  liquidation  of the  Company,  each
outstanding option will terminate  immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee.  The Committee may,
in its sole  discretion,  declare that any option  shall  terminate as of a date
fixed by the  Committee  and give each optionee the right to exercise his or her
option as to all or any part of the optioned shares,  including the shares as to
which the option would not otherwise be exercisable.

         In the event of a proposed sale of  substantially  all of the assets of
the Company, or the merger, restructure,  reorganization or consolidation of the
Company with or into another entity or entities in which the shareholders of the
Company  receive  cash or  securities  of  another  issuer,  or any  combination
thereof,  in exchange for their shares of Common Stock, each outstanding  option
shall be assumed or an equivalent  option shall be substituted by such successor
entity  or  an  affiliate  of  such  successor  entity,   unless  the  Committee
determines,  in the  exercise  of  its  sole  discretion  and in  lieu  of  such
assumption or  substitution,  that the optionee shall have the right to exercise
the option as to all optioned  shares,  including  shares as to which the option
would not otherwise be vested.  Notwithstanding  anything to the contrary in the
Plan,  the Committee may grant  options  which provide for  acceleration  of the
vesting of shares  subject to an option upon Change of Control as defined in the
Plan.
<PAGE>

Certain Federal Income Tax Consequences

         The following  summary  generally  describes the principal federal (and
not state and local) income tax  consequences  of options granted under the 2000
Directors  Stock  Option  Plan.  It is general in nature and is not  intended to
cover all tax  consequences  that may apply to a particular  participant  in the
2000 Directors  Stock Option Plan or to the Company.  The provisions of the Code
and the  regulations  thereunder  relating to these matters are  complicated and
their impact in any one case may depend upon the particular circumstances.  This
discussion is based

                                     - 14 -
<PAGE>
on the Code as currently in effect.

         If a grant is awarded to a participant in accordance  with the terms of
the 2000  Directors  Stock Option  Plan,  no income will be  recognized  by such
participant at the time the grant is awarded.

         Generally,  on exercise of a nonqualified  stock option,  the amount by
which the fair market value of the Common Stock on the date of exercise  exceeds
the purchase price of such shares will be taxable to the participant as ordinary
income,  and will be deductible for tax purposes by the Company,  in the year in
which the participant  recognizes the ordinary income. The disposition of shares
acquired upon exercise of a nonqualified  stock option ordinarily will result in
long  term or short  term  capital  gain or loss  (depending  on the  applicable
holding  period) in an amount  equal to the  difference  between  (i) the amount
realized on such  disposition and (ii) the sum of (x) the purchase price and (y)
the amount of ordinary income  recognized in connection with the exercise of the
nonqualified stock option.

         Section  16(b)  of  the  Exchange  Act  generally   requires  officers,
directors and ten percent  shareholders of the Company to disgorge  profits from
buying and selling the Common Stock within a six month period. Generally, unless
the  participants in the 2000 Directors Stock Option Plan elect  otherwise,  the
relevant date for measuring the amount of ordinary  income to be recognized upon
the  exercise  of a  nonqualified  stock  option will  generally  be the date of
exercise.

         If a nonqualified  stock option is exercised  through the use of Common
Stock previously owned by the participant,  such exercise  generally will not be
considered a taxable  disposition of the  previously  owned shares and, thus, no
gain or loss will be recognized  with respect to the shares used to exercise the
option.

         The Company  may be  required  to withhold  tax on the amount of income
recognized by an optionee upon exercise of a nonqualified stock option.

Shareholder Approval

         While  shareholder  approval of the 2000 Directors Stock Option Plan is
no longer  required by Section  16(b) of Exchange Act or by New Jersey law, such
approval  is  required  by the  explicit  terms of the  Plan and by the  listing
requirements. Should shareholder approval not be obtained the Plan will not take
effect.

         MR.  WILLEM  KOOYKER HAS INFORMED THE COMPANY THAT HE IS OPPOSED TO THE
2000  DIRECTORS  STOCK  OPTION  PLAN.  IT  IS  HIS  POSITION  THAT  THE  CURRENT
COMPENSATION  OF THE  BOARD  IS  ADEQUATE  AND  AN  INCREASE  AT  THIS  TIME  IS
INAPPROPRIATE. THE REMAINING DIRECTORS RECOMMEND A VOTE FOR APPROVAL OF THE 2000
DIRECTORS OPTION PLAN.

New Plan Benefit Table

         The Company has not included a benefits  table because the options will
have  exercise  prices  equal to the fair market value of the Common Stock as of
the date of  shareholder  approval,  these  options have no value at the present
time.

Independent Public Accountants

         The  Board of  Directors  has  selected  Grant  Thornton  LLP to be the
independent  public  accountants  for the  Company  for the fiscal  year  ending
December 31,  2000. A member of that firm will be present at the Annual  Meeting
and available to respond to  appropriate  questions from the  shareholders,  and
make a statement if desired to do so.

                                     - 15 -
<PAGE>
Financial and Other Information Incorporated by Reference

         A copy of the  Company's  1999  Annual  Report  is  being  sent to each
shareholder  along  with this  Proxy  Statement  and is  incorporated  herein by
reference.  This information  should be read by shareholders in conjunction with
this Proxy Statement.

Proposals by Security Holders

         Proposals by  shareholders  intended to be presented at the 2001 Annual
Meeting of Shareholders (which the Company currently intends to hold in April of
2001) must be received by the  Secretary of the Company by November 28, 2000 for
inclusion in its Proxy Statement and form of proxy relating to that meeting.  If
the date of the next  annual  meeting is changed by more than 30  calendar  days
from such anticipated time frame, the Company shall, in a timely manner,  inform
its  shareholders  of the change and the date by which proposals of shareholders
must be received.  All such proposals should be directed to the attention of the
Secretary,  SVB Financial Services, Inc., 103 West End Avenue,  Somerville,  New
Jersey 08876.

Other Matters Which May Properly Come Before the Meeting

         The  Board  of  Directors  knows  of no  other  business  that  will be
presented for  consideration at the Annual Meeting other than that stated in the
Notice.  Should  any other  matter  properly  come  before the  meeting  and any
adjournment  thereof,  it is intended  that proxies in the enclosed form will be
voted in  respect  thereof  in  accordance  with the  judgment  of the person or
persons voting the proxies.

                                     - 16 -
<PAGE>
                                                                       EXHIBIT A


                          SVB FINANCIAL SERVICES, INC.

                        2000 INCENTIVE STOCK OPTION PLAN

1.       PURPOSES.

                  (a) Opportunity to Purchase Stock.  The purpose of the Plan is
to provide a means by which selected Employees of the Company and its Affiliates
may be given an opportunity to purchase  stock of the Company.  The Company,  by
means of the Plan, seeks to retain the services of persons who are now Employees
of the  Company  and its  Affiliates,  to secure and retain the  services of new
Employees of the Company and its Affiliates,  and to provide incentives for such
persons  to  exert  maximum  efforts  for the  success  of the  Company  and its
Affiliates.

                  (b)  Incentive  Stock  Options.  The Company  intends that the
Options issued under the Plan shall be Incentive Stock Options.

                  (c) The 2000  Incentive  Stock Option Plan is a new  incentive
stock option plan in addition to the Company's  existing 1997 Restated Incentive
Stock Option Plan.

1.       DEFINITIONS.

                  (a)  "Affiliate"  means any parent  corporation  or subsidiary
corporation  of the Company,  as those terms are defined in Sections  424(e) and
(f) respectively of the Code, whether such corporations are now or are hereafter
existing.

                  (b)  "Board" means the Board of Directors of the Company.

                  (c)  "Change of  Control"  means the  occurrence,  at any time
after December 31, 1996, of (i) a merger or consolidation of the Company with or
into  another  Person or the merger of another  Person  into the  Company or the
transfer  ownership  of any voting stock of the Company to any Person or "group"
(as such term is defined in Section 13 (d)(3) of the Securities and Exchange Act
of 1934, as amended (the "Exchange  Act")), of Persons as a consequence of which
those Persons who held the voting stock of the Company immediately prior to such
merger,  consolidation  or transfer do not hold either  directly or indirectly a
majority of the voting stock of the Company (or, if  applicable,  the  surviving
company of such merger or consolidation)  after the consummation of such merger,
consolidation  or  transfer;  (ii) the sale of all or  substantially  all of the
assets of the  Company to any Person or  "group"  of Persons  (other  than to an
entity  which owns a  majority  or more of the Common  Stock of the  Company,  a
subsidiary  of the  Company,  or an  entity  whose  equity  interests  are owned
directly or  indirectly  by the Company or by an entity  which owns  directly or
indirectly a majority or more of the Common Stock of the Company);  or (iii) any
event or series of events  (which event or series of events must include a proxy
fight or proxy  solicitation  with  respect to the  election of directors of the
Company made in opposition to the nominees recommended by the Continuing

                                       1
<PAGE>
Directors)  during any  period of 12  consecutive  months all or any  portion of
which is after as a result of which a majority of the Board of  Directors of the
Company consists of individuals other than Continuing Directors.

                 (d)   "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended.

                 (e)   "Committee"  means the Board of  Directors of the Company
unless a separate  Committee has been appointed by the Board in accordance  with
Section 3(c) of the Plan.

                 (f)  "Common  Stock"  means the common  stock of SVB  Financial
Services, Inc., a New Jersey corporation.

                 (g)  "Company" means SVB Financial Services, Inc., a New Jersey
corporation.

                 (h)   "Continuing  Directors of the Company" means with respect
to any period of 12 consecutive months (i) any members of the Board of Directors
of the Company on the first day of such period,  (ii) any member of the Board of
Directors  of the  Company  elected  after the  first day of such  period at any
annual meeting of the  shareholders who were nominated by the Board of Directors
or a committee  thereof,  if a majority of the members of the Board of Directors
or such Committee were Continuing Directors at the time of such nomination,  and
(iii) any members of the Board of  Directors  of the Company  elected to succeed
Continuing  Directors  of the Board of Directors  or a committee  thereof,  if a
majority  of the  members  of the  Board of  Directors  or such  committee  were
Continuing Directors at the time of such election.

                 (i)  "Continuous Status as an Employee" means the employment or
relationship as an employee is not interrupted or terminated with the Company or
any  Affiliate.  Continuous  Status  as an  Employee  shall  not  be  considered
interrupted in the case of : (1) any sick leave, military leave, or any leave of
absence approved by the Committee;  provided,  however, that for purposes of the
Incentive Stock Options,  any such leave is for a period of not more than ninety
(90) days or  reemployment  upon the  expiration  of such leave is guaranteed by
contract  or  statute;  or (2)  transfers  between  locations  of the Company or
between the Company and its  Affiliates or between the Company or its Affiliates
on the one hand and their successors, on the other hand.

                 (j)  "Director" means a member of the Board.

                 (k)  "Disability"  means  permanent  and total  disability  as
defined in Section 22 (e) (3) of the Code.

                 (l)  "Non-Employee Director" means a Director who is considered
to be a  "non-employee  director" in accordance with Section (b) (3) (i) of Rule
16b-3, and any other applicable rules,  regulations and  interpretations  of the
Securities and Exchange Commission.

                                       2
<PAGE>
                  (m) "Employee"  means  any  person,  including  officers  and
Directors,  employed  by the  Company  or any  Affiliate.  Neither  service as a
Director nor payment of a director's  fee by the Company  shall be sufficient to
constitute "employment" by the Company.

                  (n) "Exchange  Act" means the  Securities  and Exchange Act of
1934, as amended.

                  (o) "Fair Market Value" means,  as of the any date,  the value
of the Common Stock determined as follows:

                  (i) If the  Common  Stock is listed on any  established  stock
exchange or a national market system,  including without limitation the National
Market System of the National Association of Securities Dealers,  Inc. Automated
Quotation  (NASDAQ)  System,  the Fair Market  Value of a share of Common  Stock
shall be the  Closing  sales  price for such stock on the date of  determination
(or, if no such price is  reported  on such date,  such price as reported on the
nearest  preceding  day) as quoted on such system or exchange (or exchange  with
the  greatest  volume of trading in the Common  Stock),  as reported in The Wall
Street Journal or such other source as the Committee deems reliable;

                  (ii) If the Common  Stock is quoted on the NASDAQ  System (but
not  on  the  National  Market  System  thereof)  or is  regularly  quoted  by a
recognized  securities  dealer but  selling  prices are not  reported,  the Fair
Market Value of a share of Common Stock shall be the mean of the closing bid and
the asked prices for the Common Stock on the date of determination  (or, if such
prices are not  reported  for such date,  such prices as reported on the nearest
preceding  date), as reported in the Wall Street Journal or such other source as
the Committee deems reliable;

                  (iii) If the Fair Market Value is not  determined  pursuant to
(i) or (ii) above,  then the Fair Market Value shall be determined in good faith
by the Committee.

                  (p) "Incentive Stock Option" means an Option  qualifying as an
incentive  stock  option  within the  meaning of Section 422 of the Code and the
regulations promulgated thereunder.

                  (q) "Nonstatutory Stock Option" means an Option not qualifying
as an Incentive  Stock Option  within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

                                       3
<PAGE>
                  (r) "Officer"  means a person who is an officer of the Company
within  the  meaning  of  Section  16 of the  Exchange  Act  and the  rules  and
regulations promulgated thereunder.

                  (s) "Option"  means  a stock  option  granted  pursuant to the
Plan.

                  (t) "Option  Agreement" means a written  agreement between the
Company and the Optionee  evidencing  the  conditions  of an  individual  Option
grant.  The Option Agreement shall be subject to the terms and conditions of the
Plan.

                  (u) "Optioned  Shares"  means with  respect to any Option the
Shares of the Common Stock subject to the Option.

                  (v) "Optionee"  means an Employee or Consultant  who holds an
outstanding Option.

                  (w) "Person" means an individual or an entity.

                  (x) "Plan" the SVB Financial  Services,  Inc.  2000  Incentive
Stock Option Plan.

                  (y) "Rule  16b-3"  means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3.

                  (z) "Shares"  shall mean a share of Common Stock,  as adjusted
in accordance with Section 10.

2.       ADMINISTRATION.

                  (a)  Committee.   The  Plan  shall  be   administered  by  the
Committee.

                  (b) Powers.  The Committee  shall have the power,  subject to,
and within the limitations of, the express provisions of the Plan to:

                           (i)     grant Options;

                           (ii)    determine,  in  accordance  with Section 6 of
                                   the Plan,  the Fair Market Value per Share of
                                   the Common Stock;

                           (iii)   determine,  in accordance with Section 6, the
                                   exercise price per Share at which Options may
                                   be exercised;

                           (iv)    determine the Employees to whom, and the time
                                   or times at which,  Options shall be granted,
                                   the  number  of  shares  of  Optioned   Stock
                                   subject  to  each   Option  and  the  vesting
                                   schedule of such Options;

                                       4
<PAGE>

                           (v)     determine  the terms and  provisions  of each
                                   Option  granted (which need not be identical)
                                   and the forms of Option  Agreements and, with
                                   the consent of the  Optionee,  and subject to
                                   Section   11,   to   modify   or  amend   any
                                   outstanding Option;

                           (vi)    accelerate  or defer (with the consent of the
                                   Optionee) the date of any outstanding Option;

                           (vii)   authorize  any person to execute on behalf of
                                   the  Company  any   instrument   required  to
                                   effectuate the grant of an Option  previously
                                   granted by the Committee;

                           (viii)  amend the Plan as provided in Section 11;

                           (ix)    construe and  interpret  the Plan and Options
                                   granted under it, and to establish, amend and
                                   revoke   rules   and   regulations   for  the
                                   administration   of  the  Plan,   subject  to
                                   Section 11; including  correcting any defect,
                                   omission or  inconsistency  in the Plan or in
                                   any  Option  Agreement,  in any manner and to
                                   the  extent  it  shall  deem   necessary   or
                                   expedient to make the Plan Fully effective;

                           (x)     authorize the sale of shares of the Company's
                                   Common Stock in connection  with the exercise
                                   of the Options;

                           (xi)    effect,  at any time  and from  time to time,
                                   with the  consent of the  affected  Optionee,
                                   the  cancellation  of any or all  outstanding
                                   Options and grant in substitution thereof new
                                   Options  relating  to the  same or  different
                                   numbers  of Shares,  but  having an  exercise
                                   price per share  consistent with Section 6(b)
                                   at the date of the new Option grant; and

                           (xii)   make all other determination deemed necessary
                                   or advisable  for the  administration  of the
                                   Plan.

                  (c) Committee.  The Board may appoint a committee  composed of
not fewer than two (2)  members of the Board to serve in its place with  respect
to the  Plan.  All of the  members  of such  Committee  shall  be  Disinterested
Persons,  if  required  under  Section 3 (d).  From time to time,  the Board may
increase the size of the Committee and appoint such additional  members,  remove
members (with or without  cause) and  substitute  new members of the  committee,
fill  vacancies,  (however  caused)  and  remove  members of the  committee  and
thereafter  directly  administer  the Plan,  all to the extent  permitted by the
rules  governing  plans intended to qualify as a  discretionary  plan under Rule
16b-3.

                                       5

<PAGE>
                  (d)  Exchange  Act  Registration.   Any  requirement  that  an
administrator of the Plan be a Disinterested Person shall not apply (i) prior to
the date of the first  registration  of an equity  security of the Company under
Section 12 of the Exchange Act or (ii) if the Board or the  Committee  expressly
declares that such requirement shall not apply. Any  Disinterested  Person shall
otherwise comply with the requirements of Rule 16b-3.

3.       SHARES SUBJECT TO PLAN.

                  (a) Number of Shares.  Subject to the provisions of Section 10
relating  to  adjustments  upon  changes  in stock,  the stock  that may be sold
pursuant to Options is 150,000  shares of the  Company's  Common  Stock.  If any
Option shall for any reason expire or otherwise  terminate  without  having been
exercised in full,  the Optioned  Shares not  purchased  under such Option shall
revert to and again become available for issuance under the Plan unless the Plan
shall have terminated;  provided,  however,  that Shares that have actually been
issued  under the Plan  shall not be  returned  to the Plan and shall not become
available for future issuance under the Plan.

                  (b) Stock  Subject to Plan.  The stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

4.       ELIGIBILITY.

                  (a)  Employees.  Incentive  Stock  Options  may be  granted to
Employees only.

                  (b) 10% Holders.  No person shall be eligible for the grant of
an Incentive Stock Option, if, at the time of the grant, such person owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten (10%) of the total  combined  voting  power of all  classes  of stock of the
Company or of any of its  Affiliates  unless the exercise price of the Option is
at least one hundred ten percent  (110%) of the Fair Market  Value of such stock
at the date of the grant and the Incentive Stock Option is not exercisable after
the expiration of five (5) years from the date of the grant.

                  (c)  Directors.  A  Director  shall only be  eligible  for the
benefits of this Plan if he or she is also an  Employee,  provided,  however,  a
Director  shall in no event be eligible  for the  benefits of the Plan unless at
the time discretion is exercised in the selection of the Director as a person to
whom Options may be granted,  or in the selection of the Director as a person to
whom Options may be granted,  or in the  determination of the number of Optioned
Shares  which  may be  covered  by  Options  granted  to the  Director:  (i) the
Committee consists only of Non-Employee  Directors;  or, (ii) the Plan otherwise
complies with the requirements of Section 16b-3.

                  (d) Other Limits on  Incentive  Stock  Options.  To the extent
that the aggregate  Fair Market Value  (determined  at the time of the grant) of
stock with respect to which  Incentive

                                       6
<PAGE>

Stock  Options are  exercisable  for the first time by any  Optionee  during any
calendar  year under all plans of the  Company  and its  Affiliates  exceeds One
Hundred Thousand ($100,000) Dollars, the Options or portions thereof that exceed
such limit  (according to the order in which they were granted) shall be treated
as Nonstatutory Stock Options.

5.       OPTION PROVISIONS.

                  Each Option  Agreement  shall be in such form and contain such
terms and conditions as the Committee shall deem appropriate.  In the event that
any provision of the Option  Agreement and the Plan conflict,  the provisions of
the  Plan  shall  control.  The  provisions  of  separate  Options  need  not be
identical,  but each Option  Agreement shall include  (through  incorporation of
provisions  hereof by  reference  in the  Option  Agreement  or  otherwise)  the
substance of each of the following provisions:

                  (a) Term. No Option shall be exercisable  after the expiration
of five (5) years from the date it was granted and the term of each Option shall
be stated in the Option Agreement.

                  (b) Price.  Subject to Section 5, the exercise  price shall be
not less than one hundred  percent  (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.  The exercise  price of
each Stock Option shall not be less than the par value of the Optioned Shares on
the date the Option was exercised.

                  (c)  Consideration.  The  purchase  price  of  stock  acquired
pursuant  to an Option  shall be paid,  to the extent  permitted  by  applicable
statutes and regulations at the time the Option is exercised,  either in cash or
check.

                  (d)  Exercise.  Subject  to 9(f),  an  Option  shall be deemed
exercised  when written notice of such exercise has been given to the Company in
accordance  with the terms of the Option  Agreement  by the person  entitled  to
exercise  the Option and full  payment for the Shares with  respect to which the
Option is  exercised  has been  received by the  Company by cash or check.  Each
Optionee who exercises an Option shall,  upon notification of the amount due (if
any) and prior to or concurrent  with delivery of the  certificate  representing
the Shares,  pay to the Company by cash or check,  amounts  necessary to satisfy
applicable federal, state or local tax withholding requirements.

                  (e)  Non-Transferability.  An Incentive Stock Option shall not
be transferrable except by will or by laws of descent and distribution and shall
be exercisable during the lifetime of the Optionee only by such person.

                  (f) Vesting. The total number of shares of stock subject to an
Option may, but need not, be allocated in periodic  installments (which may, but
need not, be equal).  The Option  Agreement  may provide  that from time to time
during  each of the  installment  periods,  the option  may  become  exercisable
("Vest")  with respect to some of all of the Shares  allotted to that period and
may

                                       7
<PAGE>
be exercised  with respect to some or all of the Shares  allotted to such period
and/or any prior  period as to which the Option  became  vested but has not been
fully  exercised.  During the remainder of the term of the Option,  (if its term
extends beyond the end of the installment  period),  the Option may be exercised
from time to time with  respect  to any  Shares  then  remaining  subject to the
Option.  The  provisions  of the  this  subsection  are  subject  to any  Option
provisions  governing  minimum  number of  Shares  as to which an Option  may be
exercised. Options may not be exercised in fractional shares.

                  (g)  Securities  Compliance.   The  Company  may  require  any
Optionee, or any person to whom an Option is transferred under Section 6 (f), as
a  condition  of  exercising  such  Option,   (i)  to  give  written  assurances
satisfactory  to the Company as to the  Optionee's  knowledge and  experience in
financial  and  business  matters  and/or to employ a  purchaser  representative
reasonably  satisfactory to the Company who is knowledgeable  and experienced in
financial  and business  matters,  and that he or she is capable of  evaluating,
alone,  or together with the purchaser  representative,  the merits and risks of
exercising  the Option;  (ii) to give  written  assurances  satisfactory  to the
Company  stating that such person is acquiring  the stock  subject to the Option
for such  person's own account and not with the present  intention of selling or
otherwise  distributing the stock; and (iii) to deliver such other documentation
as may be  necessary  to comply with federal and state  securities  laws.  These
requirements  and any assurances given pursuant to such  requirements,  shall be
inoperative  if (i) the  issuance of the Shares upon the  exercise of the Option
has been  registered  under a then effective  registration  statement  under the
Securities Act of 1933, as amended (the  "Securities  Act"),  and all applicable
state  securities laws, or (ii) as to any such  requirement,  a determination is
made by counsel for the  Company  that such  requirement  need not be met in the
circumstances under the applicable securities laws. The Company may, upon advice
of Counsel to the Company,  place legends on stock certificates issued under the
Plan as such counsel  deems  necessary and  appropriate  in order to comply with
applicable  securities laws,  including but not limited to, legends  restricting
the  transfer  of the stock,  and may enter  stop-transfer  orders  against  the
transfer of the Shares of Common  Stock  issued upon the  exercise of an Option.
The Company has no obligation to undertake registration of Options or the Shares
of Common Stock issued upon the exercise of an Option.

                  (h)  Termination  of  Employment.  In the event an  Optionee's
Continuous Status an Employee  terminates (other than by the Optionee's death or
disability),  the  Optionee may exercise his or her Option but only prior to the
(i) expiration of three (3) months after the date of such  termination  and (ii)
expiration of the term of the Option as set forth in the Option  Agreement,  and
only to the extent that the  Optionee was entitled to exercise it at the date of
such  termination.  If, at the date of such  termination,  the  Optionee  is not
entitled  to  exercise  his or her  entire  Option,  the  Shares  covered by the
unexercisable  portion of the Option shall revert to and again become  available
for issuance under the Plan. If after  termination,  the Optionee does not fully
exercise his or her Option  within the time  specified in the Option  Agreement,
the Option shall terminate and the Shares covered by the unexercised  portion of
the such Plan shall revert to and again become available under the Plan.

                                        8
<PAGE>
                  (i)  Disability  of Optionee.  In the event that an Optionee's
Continuous  Status  as an  Employee  terminates  as a result  of the  Optionee's
Disability,  the Optionee or his or her personal representative may exercise his
or her  Option,  but  only  within  twelve  (12)  months  from  the date of such
termination,  and only to the extent that the  Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
the term of the Option as set forth in the Option Agreement). If, at the date of
such  termination,  the  Optionee is not  entitled to exercise his or her entire
Option,  the Shares  covered by the  unexercisable  portion of the Option  shall
revert to and again be available under the Plan. If, after such termination, the
Optionee  does not fully  exercise  his or her  Option  within  the time  period
specified  herein,  the Option  shall  terminate  and the Shares  covered by the
unexercised  portion of the Option shall  revert to and again  become  available
under the Plan.

                  (j)  Death  of  Optionee.  In the  event  of the  death  of an
Optionee,  the Option may be  exercised , at any time within  twelve (12) months
following  the date of death (or such longer or shorter time as may be specified
in the Option  Agreement) but in no event later than the expiration  date of the
Option as set forth in the Option  agreement,  by the Optionee's  estate or by a
person who acquired the right to exercise the Option by bequest or  inheritance,
but only to the extent that the  Optionee was entitled to exercise the Option as
of the date of his or her death.  If at the time of death,  the Optionee was not
entitled to exercise his or her entire  Option,  then the Shares  covered by the
unexercisable  portion of the Option shall revert to and again become  available
under the Plan. If, after death, the Optionee's  estate or a person who acquired
the right to exercise the Option,  does not fully exercise the Option within the
time period specified herein, then the Shares covered by the unexercised portion
of the Option shall revert to and again become available under the Plan.

6.       COVENANTS OF THE COMPANY.

                  (a)  Reserves.  During the term of the  Options,  the  Company
shall  keep  available  at all  times  and shall  reserve  the  number of shares
required to satisfy such Options upon exercise.

                  (b)  Regulatory  Approvals.  The Company shall seek and obtain
from each regulatory commission or agency having jurisdiction over the Plan such
authority  as may be  required  to issue and sell  Shares  upon  exercise of the
Options; provided,  however, that this undertaking shall not require the Company
to register under the Securities Act either the Plan or any Option or any Shares
issued or issuable pursuant to such Options.  If, after reasonable efforts,  the
Company  is unable  to obtain  from such  regulatory  commission  or agency  the
authority that counsel for the Company deems  necessary for the lawful  issuance
and sale of the Shares under the Plan,  the Company  shall be relieved  from any
liability  for  failure to issue or sell Shares  upon  exercise of such  Options
unless and until authority is obtained.

         7.       USE OF PROCEEDS FROM STOCK.

                                       9

<PAGE>
                  Proceeds from the sale of the stock  pursuant to Options shall
constitute general funds of the Company.

         8.       MISCELLANEOUS.


                  (a)  Acceleration  of Vesting.  The  committee  shall have the
power to  accelerate  the time at which an Option may first be  exercised or the
time during which an Option or any part thereof will Vest  pursuant to Section 6
(g),  notwithstanding the provisions in the Option Agreement stating the time at
which it may first be exercised or the time during which it will Vest.

                  (b) No Rights as  Shareholder.  Neither  an  Optionee  nor any
person to whom an Option is transferred under Section 6(f) shall be deemed to be
the  holder of or to have any of the  rights of a holder  with  respect  to, any
Shares subject to such Option  including,  but not limited to, rights to vote or
to receive dividends unless and until such person has satisfied all requirements
for  the  exercise  of the  Option  according  to its  terms,  the  certificates
evidencing  such  Shares  have been issued and such person has become the record
owner of such Shares.

                  (c) No Right To Continue as  Employee.  Nothing in the Plan or
any instrument executed or Option granted pursuant thereto shall confer upon any
Employee, or Optionee any right to continue in the employ of the Company, or any
Affiliate or shall affect the right of the Company or any Affiliate to terminate
the employment or the  relationship  of any Employee or Optionee with or without
cause.

                  (d) Date of Grant.  Once shareholder  approval of the Plan has
been obtained,  the date of grant of an Option shall,  for all purposes,  be the
date on which the Committee makes the determination granting such Option. Notice
of the  determination  shall be given to each Optionee  within a reasonable time
after the date of such grant. The Code may cause the grant date to be recognized
as the date of the grant even though shareholder approval has not been obtained.

                  (e) Rule 16b-3.  With respect to persons subject to Section 16
of the Exchange Act, transactions under the Plan are intended to comply with all
applicable  conditions  of Rule  16b-3  and with  respect  to such  persons  all
transactions shall be subject to such conditions  regardless of whether they are
expressly  set forth in the Plan or the  Option  Agreement.  To the  extent  any
provision of the Plan or action by the Committee  fails to comply,  it shall not
apply to such persons or their  transactions  and shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.

                  (f) Conditions Upon Exercise of Options.  Notwithstanding  any
other provisions,  Shares shall not be issued and Options shall not be exercised
unless he exercise of such Option and the  Issuance  and delivery of such Shares
pursuant  thereto shall comply with all relevant  provisions  of law,  including
without  limitation,  the Securities Act of 1933, as amended,  applicable  state
securities  laws,  the  Exchange  Act,  the  rules and  regulations  promulgated

                                       10
<PAGE>
thereunder,  and the requirements of any stock exchange  (including NASDAQ) upon
which the  Shares  may then be  listed,  and  shall be  further  subject  to the
approval of counsel for the Company with respect to such compliance.

                  (g) Grants Exceeding  Allotted Shares.  If the Optioned Shares
exceed,  as of the date of the grant,  the  number of shares  that may be issued
under the Plan without  additional  shareholder  approval,  such Option shall be
void with  respect to such  excess  Shares,  unless  shareholder  approval of an
amendment to the Plan  sufficiently  increasing  the number of Shares subject to
the Plan is timely obtained in accordance with Section 11 of the Plan.

                  (h) Notice.  Any written notice to the Company required by any
of the provisions of the Plan shall be addressed to the Secretary of the Company
and shall be  effective  when it is  received.  Any  written  notice to Optionee
required by the Plan shall be  addressed  to the Optionee at the address on file
for the Optionee with the Company and shall become  effective 3 days after it is
mailed by  certified  mail,  postage  prepaid to such  address or at the time of
delivery if delivered sooner by messenger or overnight delivery service.

9.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

                  (a) Changes in Capitalization.  Subject to any required action
by the shareholders of the Company, the maximum number of Shares of Common Stock
subject  to the Plan,  the  number of shares  of Common  Stock  covered  by each
outstanding  Option  and the  number of shares  of Common  Stock  that have been
authorized  for  issuance  under the Plan but as to which no Option has yet been
granted or have been returned to the plan upon  cancellation or expiration of an
option,  as well as the price per share of Common Stock shall be  proportionally
adjusted  for any  increase or  decrease  in the number of issued  shares of the
Common Stock,  resulting  from a stock split,  stock  dividend,  combination  or
reclassification of shares of Common Stock effected without consideration by the
Company;  provided, however that the conversion of any convertible securities of
the  Company  shall  not be deemed to have been  "effected  without  receipt  of
consideration."   Such  adjustment  shall  be  made  by  the  Committee,   whose
determination in that respect shall be final, binding and conclusive.  Except as
expressly  provided herein, no issuance by the Company of shares of stock of any
class,  or  securities  convertible  into  shares of stock of any  class,  shall
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number or exercise price of Optioned Shares.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution  or  liquidation  of  the  Company,  each  outstanding  Option  will
terminate  immediately prior to the consummation of such proposed action, unless
otherwise  provided by the Committee.  The Committee may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as of
a date fixed by the  Committee  and give each Optionee the right to exercise his
or her Option as to all or any part of the Optioned Shares,  including Shares as
to which the Option would not otherwise be exercisable.

                                       11
<PAGE>


                  (c) Merger or Asset  Sale.  Subject to Section 10 (b),  in the
event  of a  proposed  sale of all or  substantially  all of the  assets  of the
Company,  or the merger,  restructure,  reorganization  or  consolidation of the
Company with or into another entity or entities in which the shareholders of the
Company  receive  cash or  securities  of  another  issuer,  or any  combination
thereof,  in exchange for their shares of Common Stock, each outstanding  Option
shall be assumed or an equivalent  option shall be substituted by such successor
entity  or  an  Affiliate  of  such  successor  entity,   unless  the  Committee
determines,  in the  exercise  of  its  sole  discretion  and in  lieu  of  such
assumption or  substitution,  that the Optionee shall have the right to exercise
the Option as to all Optioned  Shares,  including  Shares as to which the Option
would  not  otherwise  be  vested.  If  the  Committee  makes  an  Option  fully
exercisable  in lieu of  assumption  or  substitution  in the event of a merger,
restructure,  reorganization,  consolidation  or sale of assets,  the  Committee
shall  notify the  Optionee  that the Option  shall be fully  exercisable  for a
period of thirty (30) days from the notice,  and the Option will  terminate upon
the  expiration  of such period.  For the purposes of this  Section,  the Option
shall  be  considered  to be  assumed  if  following  the  merger,  restructure,
reorganization, consolidation or sale of assets, the Option confers the right to
purchase, for each Optioned Share immediately prior to the merger,  restructure,
reorganization,  consolidation or sale of assets, the consideration  (whether in
stock,  cash, or other securities or property) received in the merger or sale of
asset by holders of Common  Stock for each share of Common  Stock for each share
of  Common  Stock  held  on  the  effective  date  of  the  consummation  of the
transaction (and if holders were offered a choice of consideration,  the type of
consideration,  the  type of  Common  Stock);  provided,  however,  that if such
consideration  received in the solely common  equity of the successor  entity or
its Affiliates,  the Committee may, with the consent of the successor entity the
Optionee,  provide for the consideration to be received upon the exercise of the
Option,  for each  Optioned  Share,  to be solely  Common Stock of the successor
entity  or  its  Affiliates  equal  Common  Stock  in the  merger,  restructure,
reorganization, consolidation or sale of assets.

                  (d)  Change  of  Control.   Notwithstanding  anything  to  the
contrary,  the Committee may grant options which provide for the acceleration of
the  vesting  of shares  subject  to an Option  upon a Change of  Control.  Such
provisions shall be set forth in the Option Agreement.

         10.      AMENDMENT OF THE PLAN.

                  (a)  Amendments by the  Committee.  The Committee at any time,
from time to time, may amend the Plan,  provided,  however,  that if required by
Rule 16b-3,  no amendment  shall be made more than once every six months,  other
than to comport with the changes in the Code, ERISA or the rules and regulations
promulgated thereunder.

                  (b) Compliance  with the Code and Rule 16b-3.  It is expressly
contemplated  that the Committee may amend the Plan in any respect the Committee
deems necessary or advisable to bring the Plan and the Options granted hereunder
into compliance with the Code and Rule 16b-3.

                                       12
<PAGE>
                  (c)  Shareholder  Approval.  Notwithstanding  anything  to the
contrary, the Company shall obtain shareholder approval of any Plan amendment to
the extent necessary or desirable to comply with Rule 16b-3 or with the Code (or
any  successor  rule or statute or other  applicable  law,  rule or  regulation,
including  the  requirements  or any exchange or  quotation  system on which the
Common Stock is listed or quoted).  Such shareholder approval, if required shall
be obtained  in such manner and to such degree as is required by the  applicable
law, rule or regulation.

                  (d) Rights and Obligations Granted Prior to Amendments. Rights
and obligations  under any Option granted before amendment of the Plan shall not
be altered or  impaired  by any  amendment  of the Plan  unless (i) the  Company
requests  the  consent of the  Optionee  or his or her  successor  and (ii) such
person consents in writing.

11.      TERMINATION OR SUSPENSION OF THE PLAN.

                  (a)  Termination  Date. The Committee may suspend or terminate
the Plan at any time. Unless sooner terminated,  the Plan shall terminate within
ten (10) years of the date the Plan is adopted  by,  the Board of  Directors  or
approved by shareholders  of the Company which ever date is earlier.  No Options
may be granted under the Plan while it is suspended or after it is terminated.

                  (b)  Alteration  of Existing  Rights.  Rights and  obligations
under any  Option  granted  while the Plan is in effect  shall not be altered or
impaired by the suspension or termination of the Plan except with the consent of
the Optionee or his or her successor.

12.      EFFECTIVE DATE OF PLAN.

         The Plan shall become  effective  as  determined  by the Board,  but no
Options granted under the Plan shall be exercised  unless and until the Plan has
been approved by the shareholders of the Company.  Continuance of the Plan shall
be subject to the approval of the shareholders within 12 months from the date of
the Plan or the Board.

                                       13
<PAGE>


                                                                       EXHIBIT B

                          SVB FINANCIAL SERVICES, INC.

                        2000 DIRECTORS STOCK OPTION PLAN


2.       PURPOSES.

                  (a) Opportunity to Purchase Stock.  The purpose of the Plan is
to provide a means by which  Directors of the Company and its  Affiliates may be
given an opportunity to purchase stock of the Company.  The Company, by means of
the Plan,  seeks to retain  the  services  of persons  who are now  Non-Employee
Directors of the Company and its Affiliates,  and to provide incentives for such
persons  to  exert  maximum  efforts  for the  success  of the  Company  and its
Affiliates.

                  (b) Nonstatutory  Stock Options.  The Company intends that the
Options issued under the Plan shall be Nonstatutory Stock Options.

13.      DEFINITIONS.

                  (a)  "Affiliate"  means any parent  corporation  or subsidiary
corporation  of the Company,  as those terms are defined in Sections  424(e) and
(f) respectively of the Code, whether such corporations are now or are hereafter
existing.

                  (b) "Board" means the Board of Directors of the Company.

                  (c)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended.

                  (d)  "Committee"  means the Board of  Directors of the Company
unless a separate  Committee has been appointed by the Board in accordance  with
Section 3(c) of the Plan.

                  (e) "Common  Stock"  means the common  stock of SVB  Financial
Services, Inc., a New Jersey corporation.

                  (f)   "Company"   means  SVB  Financial   Services,   Inc.,  a
corporation of the State of New Jersey.

                  (g) "Continuous  Status as a Director" means the  relationship
as member of the Board of Directors is not  interrupted  or terminated  with the
Company  or  any  Affiliate.  Continuous  Status  as a  Director  shall  not  be
considered  interrupted in the case of : (1) any sick leave,  military leave, or
any leave of absence approved by the Committee.

                                       1
<PAGE>

                  (h)  "Director"  means a  member  of the  Board  and  includes
Directors  who are officers and Employees of the Company or its  Affiliates  and
Directors  that are neither  Employees  or Officers of the Company or any of its
Affiliates.

                  (i)  "Disability"  means  permanent  and total  disability  as
defined in Section 22 (e) (3) of the Code.

                  (j) "Non-Employee Director" means a Director who is considered
to be a  "non-employee  director" in accordance with Section (b) (3) (i) of Rule
16b-3, and any other applicable rules,  regulations and  interpretations  of the
Securities and Exchange Commission.

                  (k)  "Employee"  means  any  person,  including  officers  and
Directors,  employed  by the  Company  or any  Affiliate.  Neither  service as a
Director nor payment of a director's  fee by the Company  shall be sufficient to
constitute "employment" by the Company.

                  (l) "Exchange  Act" means the  Securities  and Exchange Act of
1934, as amended.

                  (m) "Fair Market Value" means,  as of the any date,  the value
of the Common Stock determined as follows:

                           (i)      If  the  Common   Stock  is  listed  on  any
                                    established  stock  exchange  or a  national
                                    market system,  including without limitation
                                    the National  Market  System of the National
                                    Association  of  Securities  Dealers,   Inc.
                                    Automated  Quotation  (NASDAQ)  System,  the
                                    Fair Market Value of a Share of Common Stock
                                    shall be the  Closing  sales  price for such
                                    stock on the date of  determination  (or, if
                                    no such price is reported on such date, such
                                    price as reported  on the nearest  preceding
                                    day) as  quoted on such  system or  exchange
                                    (or  exchange  with the  greatest  volume of
                                    trading in the Common Stock), as reported in
                                    The Wall Street Journal or such other source
                                    as the Committee deems reliable;

                           (ii)     If the Common  Stock is quoted on the NASDAQ
                                    System  (but  not  on  the  National  Market
                                    System thereof) or is regularly  quoted by a
                                    recognized  securities  dealer  but  selling
                                    prices  are not  reported,  the Fair  Market
                                    Value of a Share of  Common  Stock  shall be
                                    the mean of the  closing  bid and the  asked
                                    prices for the  Common  Stock on the date of
                                    determination  (or,  if such  prices are not
                                    reported  for  such  date,  such  prices  as
                                    reported on the nearest  preceding date), as
                                    reported in the Wall Street  Journal or such
                                    other   source   as  the   Committee   deems
                                    reliable;

                                       2
<PAGE>


                           (iii)    If the Fair Market  Value is not  determined
                                    pursuant to (i) or (ii) above, then the Fair
                                    Market  Value  shall be  determined  in good
                                    faith by the Committee.

                  (n)   "Non-Statutory   Stock   Option"  means  an  Option  not
qualifying as an Incentive Stock Option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                  (o) "Officer"  means a person who is an officer of the Company
within  the  meaning  of  Section  16 of the  Exchange  Act  and the  rules  and
regulations promulgated thereunder.

                  (p)"Option" means a stock option granted pursuant to the Plan.


                  (q) "Option  Agreement" means a written  agreement between the
Company and the Optionee  evidencing  the  conditions  of an  individual  Option
grant.  The Option Agreement shall be subject to the terms and conditions of the
Plan.

                  (r)  "Optioned  Shares"  means with  respect to any Option the
Shares of the Common Stock subject to the Option.

                  (s)  "Optionee"  means a  Director  who  holds an  outstanding
Option.

                  (t) "Person" means an individual or an entity.

                  (u) "Plan" the SVB Financial  Services,  Inc.  2000  Directors
Stock Option Plan.

                  (v) "Rule  16b-3"  means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3.

                  (w) "Shares"  shall mean a Share of Common Stock,  as adjusted
in accordance with Section 10.
14.      ADMINISTRATION.

                  (a)  Committee.   The  Plan  shall  be   administered  by  the
Committee.

                  (b) Powers.  The Committee  shall have the power,  subject to,
and within the limitations of, the express provisions of the Plan to:

                           (i)      determine,  in accordance  with Section 6 of
                                    the Plan, the Fair Market Value per Share of
                                    the Common Stock;

                                        3
<PAGE>
                           (ii)     determine  the  terms,  provisions,  and the
                                    forms of  Option  Agreements  and,  with the
                                    consent  of the  Optionee,  and  subject  to
                                    Section   11,   to   modify   or  amend  any
                                    outstanding Option;

                           (iii)    accelerate or defer (with the consent of the
                                    Optionee)   the  date  of  any   outstanding
                                    Option;

                           (iv)     authorize any person to execute on behalf of
                                    the  Company  any  instrument   required  to
                                    effectuate the grant of an Option;

                           (v)      construe and  interpret the Plan and Options
                                    granted  under it, and to  establish,  amend
                                    and  revoke  rules and  regulations  for the
                                    administration  of  the  Plan,   subject  to
                                    Section 11; including correcting any defect,
                                    omission or  inconsistency in the Plan or in
                                    any Option  Agreement,  in any manner and to
                                    the  extent  it  shall  deem   necessary  or
                                    expedient to make the Plan Fully effective;

                           (vi)     effect,  at any time and from  time to time,
                                    with the consent of the  affected  Optionee,
                                    the  cancellation  of any or all outstanding
                                    Options  and grant in  substitution  thereof
                                    new Options  relating to the same numbers of
                                    Shares,  but  having an  exercise  price per
                                    Share  consistent  with  Section 6(b) at the
                                    date of the new Option grant; and

                           (vii)    make   all   other   determination    deemed
                                    necessary    or     advisable     for    the
                                    administration of the Plan.

                  (c) Committee.  The Board may appoint a committee  composed of
not fewer than two (2)  members of the Board to serve in its place with  respect
to the  Plan.  All of the  members  of such  Committee  shall  be Non-  Employee
Directors,  if required  under  Section 3(d).  From time to time,  the Board may
increase the size of the Committee and appoint such additional  members,  remove
members (with or without  cause) and  substitute  new members of the  committee,
fill  vacancies,  (however  caused)  and  remove  members of the  committee  and
thereafter  directly  administer  the Plan,  all to the extent  permitted by the
rules  governing  plans intended to qualify as a  discretionary  plan under Rule
16b-3.

                  (d)  Exchange  Act  Registration.   Any  requirement  that  an
administrator  of the Plan be a  Non-Employee  Director  shall  not apply if the
Board or the Committee expressly declares that such requirement shall not apply.
Any  Non-Employee  Director shall otherwise comply with the requirements of Rule
16b-3.

                                       4
<PAGE>

15       GRANT OF OPTIONS AND SHARES SUBJECT TO PLAN.

                  (a)  Upon  the  Effective  Date of the  Plan as set  forth  in
Section 13 hereof,  each Non-Employee  Director as of December 31, 1999 shall be
granted an Option to purchase  4,500  Shares of the Common  Stock at Fair Market
Value on said Effective Date.

                  (b) Number of Shares.  Subject to the provisions of Section 10
relating  to  adjustments  upon  changes  in stock,  the stock  that may be sold
pursuant  to Options is 60,000  Shares of the  Company's  Common  Stock.  If any
Option shall for any reason expire or otherwise  terminate  without  having been
exercised in full, the Optioned Shares not purchased under such Option shall not
become available for future issuance under the Plan.

                  (c) Stock  Subject to Plan.  The stock subject to the Plan may
be unissued shares or reacquired shares, bought on the market or otherwise.

16       ELIGIBILITY.

                  (a) Directors  Eligible.  Nonstatutory  Stock Options shall be
granted to each of the  Non-Employee  Directors  upon the Effective  Date of the
Plan as set forth in Section 13 hereof  immediately  following  adoption  of the
Plan by the Board and  approval  thereof  by the  stockholders  as  provided  in
Section 13 hereafter.

                  (b)  Directors.  A Director shall be eligible for the benefits
of the Plan only if he/she is a Non-Employee Director.

17       OPTION PROVISIONS.

                  Each Option  Agreement  shall be in such form and contain such
terms and conditions as the Committee shall deem appropriate.  In the event that
any provision of the Option  Agreement and the Plan conflict,  the provisions of
the  Plan  shall  control.  The  provisions  of  separate  Options  need  not be
identical,  but each Option  Agreement shall include  (through  incorporation of
provisions  hereof by  reference  in the  Option  Agreement  or  otherwise)  the
substance of each of the following provisions:

                  (a) Term. No Option shall be exercisable  after the expiration
of five (5) years from the date it was granted and the term of each Option shall
be stated in the Option Agreement.

                  (b)  Price.  The  exercise  price  shall be not less  than one
hundred  percent  (100%) of the Fair  Market  Value of the stock  subject to the
Option on the date the  Option is  granted.  The  exercise  price of each  Stock
Option shall not be less than the par value of the  Optioned  Shares on the date
the Option was exercised.

                                       5
<PAGE>
                  (c)  Consideration.  The  purchase  price  of  stock  acquired
pursuant  to an Option  shall be paid,  to the extent  permitted  by  applicable
statutes and regulations at the time the Option is exercised,  either in cash or
check.

                  (d)  Exercise.  Subject  to 9(f),  an  Option  shall be deemed
exercised  when written notice of such exercise has been given to the Company in
accordance  with the terms of the Option  Agreement  by the person  entitled  to
exercise  the Option and full  payment for the Shares with  respect to which the
Option is  exercised  has been  received by the  Company by cash or check.  Each
Optionee who exercises an Option shall,  upon notification of the amount due (if
any) and prior to or concurrent  with delivery of the  certificate  representing
the Shares,  pay to the Company by cash or check,  amounts  necessary to satisfy
applicable federal, state or local tax withholding requirements.

                  (e) Non-Transferability. A Directors Stock Option shall not be
transferrable  except:  (i) by will or by laws of descent  and  distribution  or
pursuant  to a qualified  domestic  relations  order,  as defined by the Code or
Title I of the Employee Retirement Income Act, as amended ("ERISA), or the rules
thereunder  (a  "QDRO")  and shall be  exercisable  during the  lifetime  of the
Optionee  only by such  person or any  transferee  pursuant  to a QDRO;  or (ii)
without payment of  consideration,  to immediate  family members (i.e.  spouses,
children  and  grandchildren)  of the  Optionee or to a trust for the benefit of
such family members, or partnership whose only partners are such family members.

                  (f)  Securities  Compliance.   The  Company  may  require  any
Optionee, or any person to whom an Option is transferred under Section 6 (f), as
a  condition  of  exercising  such  Option,   (i)  to  give  written  assurances
satisfactory  to the Company as to the  Optionee's  knowledge and  experience in
financial  and  business  matters  and/or to employ a  purchaser  representative
reasonably  satisfactory to the Company who is knowledgeable  and experienced in
financial  and business  matters,  and that he or she is capable of  evaluating,
alone,  or together with the purchaser  representative,  the merits and risks of
exercising  the Option;  (ii) to give  written  assurances  satisfactory  to the
Company  stating that such person is acquiring  the stock  subject to the Option
for such  person's own account and not with the present  intention of selling or
otherwise  distributing the stock; and (iii) to deliver such other documentation
as may be  necessary  to comply with federal and state  securities  laws.  These
requirements  and any assurances given pursuant to such  requirements,  shall be
inoperative  if (i) the  issuance of the Shares upon the  exercise of the Option
has been  registered  under a then effective  registration  statement  under the
Securities Act of 1933, as amended (the  "Securities  Act"),  and all applicable
state  securities laws, or (ii) as to any such  requirement,  a determination is
made by counsel for the  Company  that such  requirement  need not be met in the
circumstances under the applicable securities laws. The Company may, upon advice
of Counsel to the Company,  place legends on stock certificates issued under the
Plan as such counsel  deems  necessary and  appropriate  in order to comply with
applicable  securities laws,  including but not limited to, legends  restricting
the  transfer  of the stock,  and may enter  stop-transfer  orders  against  the
transfer of the Shares of Common  Stock  issued upon the  exercise of an Option.
The Company has no

                                       6
<PAGE>

obligation  to undertake  registration  of Options or the Shares of Common Stock
issued upon the exercise of an Option.

                  (g)  Termination  of  Service.  In  the  event  an  Optionee's
Continuous  Status a Director  terminates (other than by the Optionee's death or
disability),  the  Optionee may exercise his or her Option but only prior to the
(i) expiration of three (3) months after the date of such  termination  and (ii)
expiration of the term of the Option as set forth in the Option  Agreement,  and
only to the extent that the  Optionee was entitled to exercise it at the date of
such termination. If after termination, the Optionee does not fully exercise his
or her Option  within the time  specified  in the Option  Agreement,  the Option
shall terminate.

                  (h)  Disability  of Optionee.  In the event that an Optionee's
Continuous  Status  as a  Director  terminates  as a  result  of the  Optionee's
Disability,  the Optionee or his or her personal representative may exercise his
or her  Option,  but  only  within  twelve  (12)  months  from  the date of such
termination,  and only to the extent that the  Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
the term of the Option as set forth in the  Option  Agreement).  If,  after such
termination,  the Optionee does not fully  exercise his or her Option within the
time period specified herein, then the Option shall terminate.

                  (i)  Death  of  Optionee.  In the  event  of the  death  of an
Optionee,  the Option may be  exercised , at any time within  twelve (12) months
following  the date of death (or such longer or shorter time as may be specified
in the Option  Agreement) but in no event later than the expiration  date of the
Option as set forth in the Option  agreement,  by the Optionee's  estate or by a
person who acquired the right to exercise the Option by bequest or  inheritance,
but only to the extent that the  Optionee was entitled to exercise the Option as
of the date of his or her death.  If, after death,  the  Optionee's  estate or a
person who acquired the right to exercise  the Option,  does not fully  exercise
the Option  within  the time  period  specified  herein,  then the Option  shall
terminate.

18       COVENANTS OF THE COMPANY.

                  (a)  Reserves.  During the term of the  Options,  the  Company
shall  keep  available  at all  times  and shall  reserve  the  number of Shares
required to satisfy such Options upon exercise.

                  (b)  Regulatory  Approvals.  The Company shall seek and obtain
from each regulatory commission or agency having jurisdiction over the Plan such
authority  as may be  required  to issue and sell  Shares  upon  exercise of the
Options; provided,  however, that this undertaking shall not require the Company
to register under the Securities Act either the Plan or any Option or any Shares
issued or issuable pursuant to such Options.  If, after reasonable efforts,  the
Company  is unable  to obtain  from such  regulatory  commission  or agency  the
authority that counsel for the Company deems  necessary for the lawful  issuance
and sale of the Shares under the Plan,  the Company  shall be relieved  from any
liability  for  failure to issue or sell Shares  upon  exercise of such  Options
unless and until authority is obtained.

                                       7
<PAGE>

19       USE OF PROCEEDS FROM STOCK.

                  Proceeds from the sale of the stock  pursuant to Options shall
constitute general funds of the Company.

20       MISCELLANEOUS.

                  (a) No Rights as  Shareholder.  Neither  an  Optionee  nor any
person to whom an Option is transferred under Section 6(f) shall be deemed to be
the  holder of or to have any of the  rights of a holder  with  respect  to, any
Shares subject to such Option  including,  but not limited to, rights to vote or
to receive dividends unless and until such person has satisfied all requirements
for  the  exercise  of the  Option  according  to its  terms,  the  certificates
evidencing  such  Shares  have been issued and such person has become the record
owner of such Shares.

                  (b) No Right To Continue as  Director.  Nothing in the Plan or
any instrument executed or Option granted pursuant thereto shall confer upon any
Director or Optionee any right to continue in the employ of the Company,  or any
Affiliate,  or to continue to serve as a member of the Board of Directors of the
Company  or any  Affiliate  or shall  affect  the  right of the  Company  or any
Affiliate to terminate  the  employment  or the  relationship  of any  Director,
Employee, Officer or Optionee with or without cause.

                  (c) Date of Grant.  Once Shareholder  approval of the Plan has
been obtained,  the date of grant of an Option shall,  for all purposes,  be the
date on which the Shareholder approval of the Plan was obtained. Notice shall be
given to each Optionee within a reasonable time after the date of such grant.

                  (d) Rule 16b-3.  With respect to persons subject to Section 16
of the Exchange Act, transactions under the Plan are intended to comply with all
applicable  conditions  of Rule  16b-3  and with  respect  to such  persons  all
transactions shall be subject to such conditions  regardless of whether they are
expressly  set forth in the Plan or the  Option  Agreement.  To the  extent  any
provision of the Plan or action by the Committee  fails to comply,  it shall not
apply to such persons or their  transactions  and shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.

                  (e) Conditions Upon Exercise of Options.  Notwithstanding  any
other provisions,  Shares shall not be issued and Options shall not be exercised
unless the  exercise of such Option and the Issuance and delivery of such Shares
pursuant  thereto shall comply with all relevant  provisions  of law,  including
without  limitation,  the Securities Act of 1933, as amended,  applicable  state
securities  laws,  the  Exchange  Act,  the  rules and  regulations  promulgated
thereunder,  and the requirements of any stock exchange  (including NASDAQ) upon
which the  Shares  may then be  listed,
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and shall be further  subject to the  approval of counsel  for the Company  with
respect to such compliance.

                  (f) Notice.  Any written notice to the Company required by any
of the provisions of the Plan shall be addressed to the Secretary of the Company
and shall be  effective  when it is  received.  Any  written  notice to Optionee
required by the Plan shall be  addressed  to the Optionee at the address on file
for the Optionee with the Company and shall become  effective 3 days after it is
mailed by  certified  mail,  postage  prepaid to such  address or at the time of
delivery if delivered sooner by messenger or overnight delivery service.

21       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

                  (a) Changes in Capitalization.  Subject to any required action
by the Shareholders of the Company, the maximum number of Shares of Common Stock
subject  to the Plan,  the  number of Shares  of Common  Stock  covered  by each
outstanding  Option  and the  number of Shares  of Common  Stock  that have been
authorized  for issuance  under the Plan but have been returned to the plan upon
cancellation  or  expiration  of an  option,  as well as the  price per Share of
Common  Stock shall be  proportionally  adjusted for any increase or decrease in
the number of issued Shares of the Common Stock,  resulting  from a stock split,
stock  dividend,  combination  or  reclassification  of Shares  of Common  Stock
effected  without  consideration  by the  Company;  provided,  however  that the
conversion of any  convertible  securities of the Company shall not be deemed to
have been "effected without receipt of consideration."  Such adjustment shall be
made by the  Committee,  whose  determination  in that  respect  shall be final,
binding and conclusive.  Except as expressly provided herein, no issuance by the
Company of Shares of stock of any class, or securities  convertible  into Shares
of stock of any class,  shall affect,  and no adjustment by reason thereof shall
be made with respect to, the number or exercise price of Optioned Shares.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution  or  liquidation  of  the  Company,  each  outstanding  Option  will
terminate  immediately prior to the consummation of such proposed action, unless
otherwise  provided by the Committee.  The Committee may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as of
a date fixed by the  Committee  and give each Optionee the right to exercise his
or her Option as to all or any part of the Optioned Shares,  including Shares as
to which the Option would not otherwise be exercisable.

                  (c) Merger or Asset  Sale.  Subject to Section 10 (b),  in the
event  of a  proposed  sale of all or  substantially  all of the  assets  of the
Company,  or the merger,  restructure,  reorganization  or  consolidation of the
Company with or into another entity or entities in which the Shareholders of the
Company  receive  cash or  securities  of  another  issuer,  or any  combination
thereof,  in exchange for their Shares of Common Stock, each outstanding  Option
shall be assumed or an equivalent  option shall be substituted by such successor
entity  or  an  Affiliate  of  such  successor  entity,   unless  the  Committee
determines,  in the  exercise  of  its  sole  discretion  and in  lieu  of  such
assumption or

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<PAGE>

substitution,  that the Optionee  shall have the right to exercise the Option as
to all  Optioned  Shares,  including  Shares  as to which the  Option  would not
otherwise be vested.  If the Committee makes an Option fully exercisable in lieu
of  assumption  or  substitution   in  the  event  of  a  merger,   restructure,
reorganization,  consolidation or sale of assets, the Committee shall notify the
Optionee that the Option shall be fully  exercisable for a period of thirty (30)
days from the notice,  and the Option will terminate upon the expiration of such
period.  For the purposes of this Section,  the Option shall be considered to be
assumed if following the merger, restructure,  reorganization,  consolidation or
sale of assets,  the Option  confers the right to  purchase,  for each  Optioned
Share   immediately   prior   to  the   merger,   restructure,   reorganization,
consolidation or sale of assets,  the consideration  (whether in stock, cash, or
other securities or property) received in the merger or sale of asset by holders
of Common  Stock for each Share of Common  Stock for each Share of Common  Stock
held  on the  effective  date of the  consummation  of the  transaction  (and if
holders were offered a choice of consideration,  the type of consideration,  the
type of Common Stock); provided, however, that if such consideration received in
the  solely  common  equity  of the  successor  entity  or its  Affiliates,  the
Committee  may, with the consent of the successor  entity the Optionee,  provide
for the  consideration to be received upon the exercise of the Option,  for each
Optioned  Share,  to be  solely  Common  Stock of the  successor  entity  or its
Affiliates  equal  Common  Stock  in the  merger,  restructure,  reorganization,
consolidation or sale of assets.

22       AMENDMENT OF THE PLAN.

                  (a)  Amendments by the  Committee.  The Committee at any time,
from time to time, may amend the Plan,  provided,  however,  that if required by
Rule 16b-3,  no amendment  shall be made more than once every six months,  other
than to comport with the changes in the Code, ERISA or the rules and regulations
promulgated thereunder.

                  (b) Compliance  with the Code and Rule 16b-3.  It is expressly
contemplated  that the Committee may amend the Plan in any respect the Committee
deems necessary or advisable to bring the Plan and the Options granted hereunder
into compliance with the Code and Rule 16b-3.

                  (c)  Shareholder  Approval.  Notwithstanding  anything  to the
contrary, the Company shall obtain Shareholder approval of any Plan amendment to
the extent necessary or desirable to comply with Rule 16b-3 or with the Code (or
any  successor  rule or statute or other  applicable  law,  rule or  regulation,
including  the  requirements  o any  exchange or  quotation  system on which the
Common Stock may be listed or quoted).  Such Shareholder  approval, if required,
shall be  obtained  in such  manner  and to such  degree as is  required  by the
applicable law, rule or regulation.

                  (d) Rights and Obligations Granted Prior to Amendments. Rights
and obligations  under any Option granted before amendment of the Plan shall not
be altered or  impaired  by any  amendment  of the Plan  unless (i) the  Company
requests  the  consent of the  Optionee  or his or her  successor  and (ii) such
person consents in writing.

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23    TERMINATION OR SUSPENSION OF THE PLAN.

                  (a)  Termination  Date. The Committee may suspend or terminate
the Plan at any time. Unless sooner terminated,  the Plan shall terminate within
ten (10) years of the date the Plan is adopted  by,  the Board of  Directors  or
approved by Shareholders  of the Company which ever date is earlier.  No Options
may be granted under the Plan while it is suspended or after it is terminated.

                  (b)  Alteration  of Existing  Rights.  Rights and  obligations
under any  Option  granted  while the Plan is in effect  shall not be altered or
impaired by the suspension or termination of the Plan except with the consent of
the Optionee or his or her successor.

24    EFFECTIVE DATE OF PLAN AND GRANT OF OPTIONS.

                  The  Plan  and the  Options  granted  hereunder  shall  become
effective as of the date of approval of the Plan by the affirmative votes of the
holders of a majority of the Common Stock present, or represented,  and entitled
to vote at the 2000 Annual meeting of the  Shareholders  duly held in accordance
with the applicable laws of the State of New Jersey.