Exhibit 10(ii)


                           MONTEREY BAY BANCORP, INC.
                     STOCK AWARD PLAN FOR OUTSIDE DIRECTORS
             (as adopted March 18, 1999 and revised April 22, 1999)


Monterey Bay  Bancorp,  Inc.  (the  "Company"),  hereby  adopts the Monterey Bay
Bancorp, Inc. Stock Award Plan for Outside Directors.

1. PURPOSE. This Stock Award Plan for Outside Directors (the "Plan") is intended
to advance the  interests of the Company by  providing  directors of the Company
who are not  full-time  employees  of the  Company  or a  parent  or  subsidiary
("Outside  Directors")  with the opportunity to elect to receive shares of stock
of the  Company in lieu of cash fees for serving as a director of the Company or
any of its subsidiaries and an additional  incentive to promote its success. The
Plan has been  adopted by the Board of  Directors  of the Company (the "Board of
Directors").

The Plan shall become  effective  as of March 18, 1999.  The Plan was revised on
April 22, 1999.

2.  ELIGIBILITY AND AWARD OF STOCK.

    (a) Before the beginning of any fiscal year of the Company,  except the 1999
    fiscal year,  for which such  election must be made prior to April 30, 1999,
    an Outside  Director  may elect to  receive  all or any part of the fees for
    such  year (or in the case of fiscal  1999 for the last nine  months of such
    year) in whole shares of Company Stock. If the Outside Director so elects to
    receive  Company  Stock,  the Director  shall be awarded the number of whole
    shares of Company Stock that,  when  multiplied by the Fair Market Value (as
    described  below) of the Company Stock,  shall as nearly as possible  equal,
    but not exceed the dollar  amount of the fees  elected to be received in the
    form of whole shares of Common Stock (fractional  shares will be forfeited).
    Once awarded,  such shares of Company Stock shall be subject to restrictions
    and provisions as otherwise provided in this Award Plan.

    (b) For purposes of the Plan,  the Fair Market Value of Company  Stock shall
    be the share price  proximate  on, or prior to, the award date (see  Section
    2(c) below).

    (c) For  purposes  of the  Plan,  the  Award  date  shall be the date of the
    monthly board meeting.

    (d) Company Stock shall be awarded under the Plan quarterly or  periodically
    as  deemed  appropriate.  If at any time  there  are not  sufficient  shares
    available  under the Plan to permit an automatic  award as described  above,
    the award shall be reduced  pro


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    rata (to zero,  if  necessary) so as not to exceed the number of shares then
    available under the Plan.

    (e) The  Company  Stock  awarded  under the Plan shall be  restricted  as in
    Section 4 below.

    (f)  Prior  to the  first  payment  of fees  following  the date on which an
    Outside  Director is first elected or appointed to the Board of Directors as
    an Outside  Director,  the Company shall  provide such Outside  Director the
    opportunity  to elect to receive  whole  shares of Company  Stock in lieu of
    cash compensation as provided in subparagraph (b) above.

3. STOCK.  The Company has  reserved an  aggregate  of 24,000  shares of Company
Stock for  issuance  pursuant  to the Plan.  The  Company  may also elect to use
shares of treasury  stock or may purchase  shares of stock in the open market to
satisfy  its  obligations  under the Plan.  The  aggregate  number is subject to
adjustment  as  provided  in Section 6. In the event of a change in the  capital
structure of the Company (as provided in Section 6), the shares  resulting  from
such change shall be deemed to be Company  Stock within the meaning of the Plan.
The aggregate number of shares of Company Stock reserved shall be reduced by the
issuance of shares under the Plan.

4.  RESTRICTIONS ON COMPANY STOCK.

    (a) Except as provided in Section 5 below,  all Company  Stock  issued under
    the Plan shall constitute "restricted securities" within the meaning of Rule
    144 under the  Securities  Act of 1933, as amended (the  "Securities  Act").
    Accordingly,  Company Stock issued to an Outside Director under the Plan may
    only  be  resold  by  such  Outside  Director  either  (i)  pursuant  to the
    requirements  of Rule 144 under the Securities  Act,  including the one year
    holding period thereof, (ii) pursuant to an effective registration statement
    under  the Act,  or  (iii)  pursuant  to an  applicable  exemption  from the
    registration requirements of the Securities Act.

    (b) Certificates representing restricted Company Stock issued under the Plan
    shall bear a legend  referring to the restrictions set forth in the Plan. If
    stock dividends or other non-cash  distributions  are declared on restricted
    Company Stock, such stock dividends or other  distributions shall be subject
    to the same restrictions as the underlying shares of Company Stock.

5.  ISSUANCE OF COMPANY  STOCK.  The  Company  shall not be required to issue or
deliver any  certificate  for shares of Company  Stock before the Company  shall
have been advised by counsel that all applicable  legal  requirements  have been
complied with. The Company may place on a certificate representing Company Stock
any legend  required  pursuant to Section 4, and any legend deemed  necessary by
the Company's counsel to comply with federal or state securities laws. No shares
of Company Stock shall be issued under the Plan unless the Outside Director pays
to the Company, or makes arrangements  satisfactory to the Company regarding the
payment  of,  any  applicable  withholding  or


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other taxes.  Until the Outside  Director has been issued a certificate  for the
shares of  Company  Stock  acquired,  the  Outside  Director  shall  possess  no
shareholder rights with respect to the shares.

6. EFFECT OF STOCK DIVIDENDS AND OTHER CHANGES. Appropriate adjustments shall be
made  automatically to the number and kind of shares to be issued under the Plan
and any other relevant  provisions if there are any changes in the Company Stock
by reason of a stock  dividend,  stock split,  combination of shares,  spin-off,
reclassification, recapitalization, merger, consolidation or other change in the
Company's capital stock (including, but not limited to, the creation or issuance
to  shareholders  generally  of rights,  options or warrants for the purchase of
common stock or preferred stock of the Company). If the adjustment would produce
fractional  shares, the fractional shares shall be eliminated by rounding to the
nearest whole share.

7.  ADMINISTRATION  OF THE PLAN. The Board of Directors shall be responsible for
the proper  implementation  of the Plan.  The Board of Directors  shall have all
powers  vested  in it by the  terms of the Plan.  Any  decision  of the Board of
Directors with respect to the Plan shall be final and  conclusive.  The Board of
Directors  may act only by a majority of its members in office,  except that the
members  may  authorize  any one or more of their  number or any  officer of the
Company to execute and deliver  documents  on behalf of the Board of  Directors.
The Board of  Directors  may  consult  with  counsel,  who may be counsel to the
Company,  and shall not incur any  liability  for action  taken in good faith in
reliance upon the advice of counsel.

8. EXPIRATION AND TERMINATION OF THE PLAN.  Company Stock shall be awarded under
the Plan until the plan is  terminated  by the Board of  Directors or until such
earlier  date when  termination  of the Plan shall be  required  by law.  If not
sooner terminated, the Plan shall terminate automatically on December 31, 2008.

9. AMENDMENTS. The Board of Directors may from time to time make such changes in
and additions to the plan as it may deem  appropriate.  The  termination  of the
Plan or any change or addition to the Plan shall not, without the consent of any
Outside  Director who is adversely  affected  thereby,  alter any Company  Stock
awards previously made to the Outside Director pursuant to the Plan.

10.  NOTICE.  All notices and other  communications  required or permitted to be
given  under the Plan shall be in writing  and shall be deemed to have been duly
given if  delivered  personally  or mailed  first  class,  postage  prepaid,  as
follows:  if to the Company, at its principal business address, to the attention
of the Secretary; if to any Outside Director, at the last address of the Outside
Director  known to the sender at the time the notice or other  communication  is
sent.


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         IN WITNESS  WHEREOF,  the  Company  has caused this Plan to be executed
this 18th day of March, 1999 and amended on April 22, 1999.

                                     MONTEREY BAY BANCORP, INC.


                                     By:  /s/ Marshall G. Delk                  
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                                          Marshall G. Delk
                                          President and Chief Operating Officer

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