SVB FINANCIAL SERVICES, INC.

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                     TO BE HELD ON THURSDAY, APRIL 24, 1997

                                    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 24, 1997 at 5:30 P.M., for
the following purposes:

         1.    Election of fifteen (15)  Directors for the terms as set forth in
               the accompanying Proxy Statement.

         2.    Approval  of the  SVB  Financial  Services,  Inc.  1997  Restated
               Incentive  Stock  Option Plan as more fully  described as Exhibit
               "A" of the Proxy Statement.

         3.    Approval of the SVB Financial Services, Inc. 1997 Directors Stock
               Option Plan as more fully  described  as Exhibit "B" of the Proxy
               Statement.

         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 21,  1997,  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



                                                        Marguerite Eppler
                                                           Secretary

Somerville, New Jersey
March 27, 1997


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 23, 1997.



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 24, 1997


         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 24, 1997 and all adjournments  thereof.
This Proxy Statement and accompanying materials are being mailed to shareholders
on or about March 27, 1997.

         The close of business March 21, 1997, 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  1,369,655
shares  of Common  Stock,  with a par  value of $4.17  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" the
Directors and the proposals set forth below.

         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.
<PAGE>
Voting Rights

         Each share of Common Stock is entitled to one vote (non  cumulative) on
all matters presented for 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 and the  proposals  relating to Stock Option Plans set
forth in this Proxy Statement.

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 15. All named below, except as noted, are presently
members of the Board and have served since the  Company's  incorporation  except
Dr. Gold who was  appointed  in July,  1996.  They have all been  members of the
Board of the Bank since 1990 with the exception of Mr. Bernstein, who has been a
member  since 1991 and Dr. Gold who was one of the  original  Board  Members and
Incorporators of the Bank and was reappointed to the Board in August, 1996.

         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 1997 Annual Meeting of  Shareholders  is the first such
meeting since the Company was incorporated. In the election of Directors at this
First Annual Meeting,  the term of office of the first class shall expire at the
next  Annual  Meeting of  Shareholders,  the term of office of the second  class
shall  expire at the 1999  Annual  Meeting of  Shareholders  and the term of the
third class shall expire at the 2000 Annual Meeting of Shareholders. After 1997,
at each Annual Meeting of Shareholders,  Directors (equal in number to the class
whose term expires at the time of such meeting)  shall be elected to hold office
until the third succeeding Annual Meeting of Shareholders.

         Each  Director no matter when elected  will hold office  until  his/her
successor  is elected and  qualified,  or until  their  earlier  resignation  or
removal.

         The following  table presents the name, age and address of each nominee
for Director  and the  Executive  Officers,  the class to which each nominee for
Director is assigned, the number of shares and the percentage of the outstanding
shares of common stock of the Bank beneficially  owned,  directly or indirectly,
by each of them as of March 21,  1997.  There is no one other  than the  persons
listed below who owns beneficially 5% or more of the outstanding common stock.
<PAGE>
<TABLE>
<CAPTION>
                                                                              Shares             % of
Name & Address                                                              Beneficially         Total
Title                               Age    Principal Occupation                Owned          Outstanding
-----                               ---    --------------------                -----          -----------
<S>                                 <C>     <C>                                <C>                <C>
Directors Nominated to Serve
Until the 1998 Annual Meeting:

Bernard Bernstein                   59      President & CEO,                     50,662           3.70
  Director                                  Mid-State Lumber Corp.,
200 Industrial Parkway                      a wholesale lumber
Branchburg, NJ 08876                        distributor

Robert P. Corcoran                  56      President & CEO                       6,000(1)         .44
  President, CEO & Director                 Somerset Valley Bank
12 Harvest Court                            SVB Financial Services, Inc.
Flemington, NJ 08822

Mark S. Gold, MD                    47      Author & Professor                   81,886(2)        5.98
Director                                    University of Florida
2002 San Marco Blvd.
Suite 300
Jacksonville, FL 32207

Raymond L. Hughes                   65      President of N.J. Risk               31,090(3)        2.27
  Director                                  Managers & Consultants
20 West End Avenue
Somerville, NJ 08876

S. Tucker S. Johnson                31      Farmer                               19,860           1.45
  Director
P.O. Box 675
Oldwick, NJ 08858

Directors Nominated to Serve
Until the 1999 Annual Meeting:

Willem Kooyker                      54      Chairman of Tricon Holding          129,218(4)        9.43
  Director                                  LTD, an international
2 Worlds Drive                              commodities firm
Somerset, NJ 08875

Frank Orlando                       63      Retired                              57,960(5)        4.23
  Director
786 Princeton Avenue
Brick, NJ 08724

Gilbert E. Pittenger                72      Retired                              33,092(6)        2.42
  Director
RD #1, Box 91
New Ringgold, PA 17960

Frederick D. Quick                  65      President of Hesco  88,800(7)                           6.48
  Director                                  Electric Supply Co., Inc.,
924 River Road                              a lighting and electrical
Neshanic Station, NJ 08853                  supply firm
<PAGE>

Donald Sciaretta                    41      President of Claremont               30,300           2.21
  Director                                  Construction Group, Inc.
P.O. Box 808
Far Hills, NJ 07931

Directors nominated to serve
until the 2000 Annual Meeting:

John K. Kitchen                     53      President of Title Central           25,339(8)        1.85
  Chairman of Board & Director              Agency, a title insurance
P.O. Box 421                                firm
Somerville, NJ 08876

Anthony J. Santye, Jr.              46      Managing Partner of A.J.             18,480(9)(10)    1.35
  Director                                  Santye and Co., an
36 East Main Street                         accounting and consulting
Somerville, NJ 08876                        firm

G. Robert Santye                    43      Director of Real Estate and          11,520(9)(11)     .84
  Vice Chairman & Director                  Business Valuation Services
36 East Main Street                         for A.J. Santye and Co.
Somerville, NJ 08876


Herman C. Simonse                   65      Executive Vice President of          17,600           1.28
  Director                                  Belle Mead Development
93 Douglass Avenue                          Corporation
Bernardsville, NJ 07924

Donald R. Tourville                 60      Chairman and CEO of Zeus             66,176           4.83
  Director                                  Scientific, Inc., a manu-
P.O. Box 38                                 facturer of diagnostic
Raritan, NJ 08869                           test kits

Executive Officers:

Keith B. McCarthy                   39      Chief Operating                       3,600(12)        .26
  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                  53      Executive Vice President &            1,497(13)        .11
9 Steeple Chase Court                       Chief Lending Officer
Bedminster, NJ 07921                        of the Bank

Total Directors and Executive Officers as a Group                                                49.13

1)      Includes 720 shares in the name of his son, a minor. He also has options
        to purchase 10,800 shares at $8.33 which expire in August 1999 and 4,800
        shares at $8.33 which expire in April 2001.

2)      Includes 2,880 shares owned by his wife as custodian for his children.

3)      Includes 2,400 shares owned by Hughes-Plumer  Pension Fund and 13,440 by
        Hughes-Plumer Profit Sharing Plan.

4)      Includes 48,000 shares held in trusts for his three children.
<PAGE>

5)      Includes  32,400 shares held by Eight  Mountain  Trail,  Inc.  Employees
        Profit Sharing Plan.

6)      Includes 1,920 shares owned by Effective Controls, Inc. and 6,452 shares
        held in Trusts for the benefit of his grandchildren.

7)      Includes 15,000 shares owned by Hesco Electric Supply Company, Inc.

8)      Includes 1,680 shares held by his wife as custodian for his children and
        259 shares held by his daughter, a minor.

9)      Anthony J. Santye, Jr. and G. Robert Santye are brothers.

10)     Includes 9,552 shares held by A.J.  Santye Co., PA, Profit Sharing Plan,
        1,680  shares held by his wife and 2,160 shares held by his wife for the
        benefit of his children.

11)     Includes 3,120 shares held by his wife.


12)     In addition, Mr. McCarthy has options to purchase 12,000 shares at $8.33
        which  expire  August 1999 and 4,800  shares at $8.33 which expire April
        2001.

13)     In addition,  Mr. Brattlof has options to purchase 6,240 shares at $8.33
        which expire April 2001.
</TABLE>
Director Committees

         All of the Board of Directors of the Company also serve on the Board of
Directors  of the Bank.  The  Company  has only had  business  activities  since
September 3, 1996 and its Board has not yet established any committees.

         There are six committees of the Board of Directors of the Bank.

         The  Executive  Committee  is  composed of Messrs.  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.

         The Loan Committee, composed of Messrs. Bernstein, Hughes, A.J. Santye,
Jr., Sciaretta,  Simonse, Tourville,  Kitchen and Corcoran, 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,  composed  of Messrs.  Hughes,  Sciaretta,
Simonse,  and G.R.  Santye,  reviews  appraisals  for real estate  mortgages and
construction  loans and advises the Loan Committee and the Board with respect to
real estate lending.

         The Audit Committee,  composed of Messrs. Hughes,  Johnson, Quick, A.J.
Santye,  Jr. and  Simonse,  formulates  the Bank's  audit  policy,  chooses  the
Company's accounting firm and reviews audits conducted by the Company's internal
and external auditors.
<PAGE>
         The  Investment  Committee,  composed  of Messrs.  Bernstein,  Kooyker,
Johnson,  Orlando and  Pittenger,  periodically  reviews  the Bank's  investment
portfolio for adherence to bank policy and approves its investment strategy.

         The Compensation Committee is composed of Messrs.  Bernstein,  Johnson,
Kitchen,  Kooyker,  Quick,  Orlando 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 Bank's
committees. Mr. McCarthy, is a non-director,  non-voting member of the Executive
and  Investment  Committees.   Mr.  Brattlof,   Senior  Vice  President,   is  a
non-director voting member of the Loan Committee.

         During 1996,  the Board of Directors  held 12 meetings,  the  Executive
Committee 2 meetings,  the Loan  Committee  13 meetings,  the Audit  Committee 2
meetings,  the Investment  Committee 3 meetings,  the  Compensation  Committee 2
meetings,  and the Real  Estate  Committee  9 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 1996,  all
Directors  attended at least 75% of the total Board and Committee  meetings with
the exception of Messrs. Hughes and Kooyker. Attendance percentages for the Loan
Committee  are not included in these  percentages.  Because of the  frequency of
Loan Committee meetings, only three Director Loan Committee members are required
to conduct committee meetings as set forth in the Bank's policy.

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>
                                                                                                          All
Name and                            Year             Annual Compensation                                 Other
Position                                                   Salary                  Bonus             Compensation
<S>                                 <C>                   <C>                    <C>                    <C>
Robert P. Corcoran                  1996                  $130,000               $20,573(1)             $8,468(3)
President & CEO of                  1995                   125,000                31,250                 9,089(3)
the Company and the Bank            1994                   115,000                 5,750                 2,415(2)



Keith B. McCarthy                   1996                   97,650                12,202(1)               2,592(2)
Treasurer of the Company            1995                   93,000                13,350                  2,672(2)
Chief Operating Officer of          1994                   85,000                 4,250                  1,784(2)
the Bank

Arthur E. Brattlof                  1996                   82,000                10,246(1)               2,176(2)
Executive Vice President            1995                   78,000                11,700                  2,271(2)
of the Bank                         1994                   73,000                 3,660                  1,537(2)


<PAGE>

1)       The  Bonus  for  1996 is based  75% on a  comparison  of the  Company's
         results for 1996 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 10
         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 $3,450 in 1996
         and $3,706 in 1995,  Director fees of $3,000 in 1996 and $1,800 in 1995
         and term life insurance  premiums paid by the Company of $2,017 in 1996
         and $3,538 in 1995.
</TABLE>
         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  table  above and one other
officer of the Bank. Such officers have some personal use of those vehicles such
as commuting to and from the Bank.

Bonus Plan

         During 1996, the  Compensation  Committee of the Board of Directors has
approved  a bonus  plan for the  three  executive  officers  listed in the table
above.  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 10 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.

1994 Stock Option Plan

         During 1994,  the  Shareholders  of the Bank approved the 1994 Somerset
Valley Bank Stock Option Plan (the "Plan").  The Plan was intended to enable the
Bank to attract and retain  capable  officers and key  employees  and to provide
them with  incentives  to promote the best  interest of the Bank by enabling and
encouraging  them through the grant of incentive stock options and  nonqualified
stock options (collectively, the "Options") to acquire Bank stock.

         The Plan was  administered  by a Committee of the Board of Directors of
the Bank which was  composed  of at least  three (3)  members  of the Board.  No
member of the Committee was eligible to  participate in the Plan for a period of
at least one (1) year prior to his or her election to serve on the Committee.

         The persons  eligible to  participate in the Plan were officers and key
employees of the Bank and its  subsidiaries  who were designated by the Board of
Directors upon recommendation by the Committee.

         Note:  The share amounts and prices in the following have been adjusted
for the six for five  exchange  of the  shares of the  Company  for those of the
Bank.
<PAGE>
         During 1996 the Bank was acquired by the Company.

         There were 51,409 shares of common stock  available for the granting of
options under the Plan. During 1994, Messrs.  Corcoran and McCarthy were granted
options to purchase  12,000 shares each at a price of $8.33 per share for a five
year period  expiring  August 1999.  No options were  granted  during 1995.  Mr.
Corcoran exercised 1,200 of these options during 1996.

         During 1996,  26,400 options were granted under the plan to 12 officers
including  the three  executive  officers  named in the table above who received
15,840 or 61% of the  options  granted.  The  executive  officers  received  the
following  amounts:  Mr. Corcoran 4,800 options,  Mr. McCarthy 4,800 options and
Mr.  Brattlof  6,240  options.  All options  were granted at $8.33 per share and
expire April 30, 2001.

         On October 31, 1996,  the Board of  Directors of the Company  agreed to
transfer and assume the stock option plan of the Bank.
<PAGE>
        PROPOSAL TO APPROVE THE 1997 RESTATED INCENTIVE STOCK OPTION PLAN

         In order to update the 1994 Stock Option Plan after its transfer to and
assumption  by the Company,  the 1997 Restated  Incentive  Stock Option Plan was
prepared and adopted, subject to Shareholder Approval, by the Board of Directors
on January 31, 1997.  The purpose of the 1997  Restated  Incentive  Stock Option
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 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  1997
Restated  Incentive  Stock  Option  Plan,  which is qualified in its entirety by
reference  to the 1997  Restated  Incentive  Stock  Option Plan which is annexed
hereto as Exhibit A. As  indicated  in the text of the 1997  Restated  Incentive
Stock Option Plan, any provision of the 1997 Restated Stock Option Plan which is
determined to be inconsistent  with the applicable laws and regulations  will be
deemed void.

Administration

         The 1997 Restated  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, if required.  Under the terms
of the  1997  Restated  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 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 1997 Restated Stock Option Plan if required by
the Internal  Revenue Code of 1986,  as amended or by Rule 16b-3 of the Exchange
Act (vii)  construe or interpret  the 1997  Restated  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 82,404  shares of the Company's  Common Stock shall be
available  for issuance  under the 1997  Restated  Stock  Option Plan,  of which
50,400  have  previously  been  issued to  employees  pursuant to the 1994 Stock
Option  Plan.  Stock  subject to the plan may be unissued  shares or  reacquired
<PAGE>
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 Nonstatutory Options.

Eligibility

         Options  under the 1997  Restated  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 16b-3 of the Exchange
Act. 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.

         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 1997  Restated  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.

Terms of Options

         The exercise price shall not be less than one hundred percent (100%) of
the Fair Market Value (as defined in the 1997  Restated  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.
<PAGE>
         In the event that an  Optionee's  Continuous  Status as an Employee (as
defined in the 1997 Restated 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  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 by Section 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.

         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.

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.
<PAGE>
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 1997
Restated  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 1997 Restated 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 1997 Restated  Incentive Stock Option Plan, no income will
be recognized by such participant at the time of the grant.

         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
<PAGE>
Incentive  Stock  Option  under  the  1997  Incentive  Stock  Option  Plan,  the
participant  will ordinarily  recognize  long-term or short term capital gain or
loss (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), the relevant date
in measuring the optionee's  ordinary  income and the Company's tax deduction in
connection with any such disqualifying disposition will normally be the later of
(i) the date the six-month  period after the date grant lapses and (ii) the date
of exercise of the Incentive Stock Option.

Shareholder Approval Required

         Approval of the 1997 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.

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 1997 Restated 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 1997 Restated
Incentive Stock Option Plan is in the best interests of the shareholders.  Among
other  things,  the 1997  Restated  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 1997 INCENTIVE STOCK OPTION PLAN.


            PROPOSAL TO APPROVE THE 1997 DIRECTORS STOCK OPTION PLAN

         The  1997  Directors   Stock  Option  Plan  was  adopted,   subject  to
Shareholder  Approval,  by the Board of Directors on January 31, 1997.  The 1997
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.
<PAGE>
         The  following  is a  summary  of the  proposed  features  of the  1997
Directors Stock Option Plan,  which is qualified in its entirety by reference to
the 1997  Directors  Stock Option Plan which is annexed  hereto as Exhibit B. As
indicated in the text of the 1997 Directors  Stock Option Plan, any provision of
the 1997 Directors Stock Option Plan which is determined to be inconsistent with
the applicable laws and regulations will be deemed void.

Administration

         The 1997 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.  No member of the
Committee may be an Employee or Officer of the Company or any  Affiliate.  Under
the  terms of the 1997  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) the Internal  Revenue Code of 1986, as amended or (v)
construe or interpret the 1997 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 54,600  shares of the Company's  Common Stock shall be
available for issuance under the 1997 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 1997 Directors Stock Option Plan each Non-Employee
member of the  Company's  Board of  Directors  as of  December  31, 1996 will be
granted an option to purchase  3,900  shares of the Common  Stock at 100% of the
Fair Market Value as of the date of Shareholder  Approval. As of March 27, 1997,
the Fair Market Value of the Common Stock is $13.00 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,  the
President and Chief Executive  Officer of the Company.  Accordingly,  as a group
all Directors who are not officers or employees will receive options to purchase
all 54,600  shares  available  under the 1997  Directors  Stock Option Plan upon
approval by the Shareholders.

         As there  are 14  Directors  eligible  to  participate  under  the 1997
Directors  Stock Option  Plan,  upon  Shareholder  Approval all of the shares of
Common Stock available under the Plan will be subject to option.

Terms of Options

         The exercise price shall not be less than one hundred percent (100%) of
the Fair Market  Value (as defined in the 1997  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.
<PAGE>
         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 a Director  (as
defined in the 1997 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.

         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.

Shareholder Approval

         While  Shareholder  Approval of the 1997 Directors Stock Option Plan is
no longer  required by Rule 16(b) under the  Securities and Exchange Act of 1934
or by New Jersey law,  such  approval is required by the  explicit  terms of the
Plan. Should Shareholder Approval not be obtained the Plan will not take effect.

New Plan Benefit Table

         The  Company  has not  included a benefits  table  because no  Director
Options are now  outstanding  and, since they 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.

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.
<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 1997
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
1997 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 on the Code as currently in effect.

         If a Grant is awarded to a participant in accordance  with the terms of
the 1997  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  Securities  Exchange  Act of 1934,  as  amended
("Section  16(b)"),  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 1997  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 be the later of (x) the date the six month period
following  the date of the  Grant  lapses  and (y) the date of  exercise  of the
Nonqualified Stock Option.

         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.

         THE  BOARD  OF  DIRECTORS  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE FOR
APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN.

Certain Agreements

         The  Company  has  entered  into  employment  agreements  with  Messrs.
Corcoran,  McCarthy  and  Brattlof.  The  agreements  provide for the payment of
bonuses as determined by the  Compensation  Committee of the Board of Directors,
see "Bonus Plan". 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
<PAGE>
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.

Director Compensation

         No  compensation  was  paid  for  Board of  Directors  meetings  of the
Company.

         During 1996, Directors of the Bank received compensation for service on
the Board of Directors of $250 per Board of Directors  meeting attended and $100
for each  committee  meeting.  John K. Kitchen as Chairman of the Board received
compensation of $6,000 in addition to his other per meeting fees.

         During  1997,  Directors  of the Bank  will  receive  $450 for Board of
Directors  meetings  attended  and $100 for  Committee  meetings  attended.  Mr.
Kitchen  with  receive  $24,000 as Chairman in addition to his other per meeting
fees.

Benefit Plans

         The Bank maintains a 401(k) plan covering  substantially all employees.
Under  the  terms  of the  plan,  the  Bank  will  match  50%  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
$25,495 to the plan in 1996.

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 as
well as additional  office space in the adjacent 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 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.

Independent Public Accountants

         The  Board  of  Directors  has  selected   Grant  Thornton  to  be  the
independent  public  accountants  for the  Company  for the fiscal  year  ending
December 31,  1997. 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.

         Arthur  Andersen  LLP  was the  Company's  and  its  subsidiary  Bank's
independent  public accountant from its inception in 1991 through the year ended
December  31,  1996.  They will also have a member  of their  firm  present  and
available to respond to appropriate questions from the shareholders,  and make a
statement if desired to do so.
<PAGE>
         The  report  of  Arthur  Andersen  LLP  on the  consolidated  financial
statements of the Company as of and for the year ended December 31, 1996 did not
contain an adverse  opinion or a disclaimer of opinion,  nor was it qualified or
modified as to uncertainty, audit scope, or accounting principles.

         The  decision  to  change  accountants  was  recommended  by the  Audit
Committee of the Board of Directors and approved by the Board of Directors.

         There were no  disagreements  with Arthur Andersen LLP on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure.

Financial and Other Information Incorporated by Reference

         A copy of the Company's 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 security  holders  intended to be  presented  at the 1998
Annual Meeting of Shareholders  (which the Company  currently intends to hold in
April of 1998) must be received by the  Secretary of the Company by November 28,
1997 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 fame, the Company shall,  in a timely
manner, inform its stockholders of the change and the date by which proposals of
stockholders  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.
<PAGE>
                                    EXHIBIT A

                          SVB FINANCIAL SERVICES, INC.

                    1997 RESTATED INCENTIVE STOCK OPTION PLAN

         1. PURPOSES.

                  (a)  Restated  Plan.  This 1997  Incentive  Stock  Option Plan
modifies  and  restates  the 1994  Stock  Option  Plan  adopted  by the Board of
Directors  of Somerset  Valley Bank on March 31, 1994 and which was  ratified by
the  shareholders  of the Bank on April 26, 1994. The 1994 Stock Option Plan was
assigned by Somerset Valley Bank to SVB Financial  Services,  Inc. by resolution
of the Boards of Directors of both  corporations  at meetings of the  respective
Boards of Directors  held on October 31,  1996.  The  Restated  Incentive  Stock
Option  Plan  restates  the  provisions  of the  1994  Stock  Option  Plan as to
Incentive Stock Options only.

                  (b) 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.

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

         2.  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 nay 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
<PAGE>
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
Directors)  during any  period of 12  consecutive  months all or any  portion of
which is after (i) the date set forth above, and (ii) the date the Company first
has securities  registered  under Section 12 of the Exchange Act, 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.

         (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.
<PAGE>
         (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.

         (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.  1997 Restated  Incentive
Stock Option Plan.

         (y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any  successor
to Rule 16b-3.
<PAGE>
         (z)  "Shares"  shall  mean a share of  Common  Stock,  as  adjusted  in
accordance with Section 10.

         3.  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;

                  (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.
<PAGE>
         (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.

         (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.

         4.  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 82,404  shares of the Company's  Common Stock,  of which Options have
previously  been issued to Employees for 50,400  shares of the Company's  Common
Stock pursuant to the 1994 Stock Option Plan. 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.

         5.  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
<PAGE>
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. This Section 5 (c) shall not apply prior
to the date of the first registration of an equity security of the Company under
Section 12 of the Exchange Act.

         (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  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.

         6.  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 be
exercised  with  respect to some or all of the Shares  allotted  to such  period
<PAGE>
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.

         (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
<PAGE>
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.

         7.  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.

         8.  USE OF PROCEEDS FROM STOCK.

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

         9.  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.
<PAGE>
         (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
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,  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.
<PAGE>
         10.  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.

         (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
<PAGE>
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.

         11.  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 is
listed or quoted).  Such shareholder  approval,  f 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.

         12.  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.

         13.  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 month from the date of
the Plan or the Board.
<PAGE>
                                    EXHIBIT B

                          SVB FINANCIAL SERVICES, INC.

                        1997 DIRECTORS STOCK OPTION PLAN


         1. 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.

         2.  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.

         (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.
<PAGE>
         (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;

                  (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. 1997 Directors Stock Option
Plan.
                                     <PAGE>
         (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.

         3.  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;

                  (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 (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  Non-Employee  Director shall otherwise comply
with the requirements of Rule 16b-3.
<PAGE>
         4.  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, 1996 shall be granted an
Option to purchase 3,900 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 54,600 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.

         5.  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.

         6.  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.

         (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
<PAGE>
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
Compnay 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.

         (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
<PAGE>
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.

         7.  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.

         8.  USE OF PROCEEDS FROM STOCK.

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

         9.  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.
<PAGE>
         (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,  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.

         10.  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  Compnay;  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
<PAGE>
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  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.

         11.  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.
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         (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.

         12.  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.

         13.  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 1997 Annual  meeting of the  Shareholders  duly held in accordance  with the
applicable laws of the State of New Jersey.