PROVIDIAN FINANCIAL CORPORATION

                        1997 EMPLOYEE STOCK PURCHASE PLAN

                             Adopted August 7, 1997
               Approved by the Stockholders on [___________, 1998]


1.   Purpose.

     (a) The purpose of this 1997 Employee  Stock  Purchase Plan (the "Plan") is
to provide a means by which  employees of  Providian  Financial  Corporation,  a
Delaware  corporation  (the  "Company"),  and  its  Affiliates,  as  defined  in
subparagraph 1(b), which are designated as provided in subparagraph 2(b), may be
given an opportunity to purchase stock of the Company.

     (b) The word  "Affiliate" as used in the Plan means any parent  corporation
or subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f),  respectively,  of the Internal Revenue Code of 1986, as amended
(the "Code").

     (c) The Company,  by means of the Plan, seeks to retain the services of its
employees,  to secure and retain the services of new  employees,  and to provide
incentives  for such  persons to exert  maximum  efforts  for the success of the
Company.

     (d) The Company  intends  that the rights to purchase  stock of the Company
granted under the Plan be  considered  options  issued under an "employee  stock
purchase plan" as that term is defined in Section 423(b) of the Code.

2.   Administration.

     (a) The Plan shall be administered  by the Human  Resources  Committee (the
"Committee")  of the  Board of  Directors  (the  "Board")  of the  Company.  The
Committee  shall have, in connection  with the  administration  of the Plan, all
powers  possessed  by the Board,  subject,  however,  to such  resolutions,  not
inconsistent  with the  provisions  of the Plan,  as may be adopted from time to
time by the Board.  Notwithstanding  anything to the foregoing,  the Board shall
have  full  power  and  authority  to take any  action  that may be taken by the
Committee hereunder.

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

          (i) To determine  when and how rights to purchase stock of the Company
     shall be granted and the  provisions of each offering of such rights (which
     need not be identical).

          (ii) To designate  from time to time which  Affiliates  of the Company
     shall be eligible to participate in the Plan.

          (iii) To construe and interpret the Plan and rights  granted under it,
     and  to  establish,   amend  and  revoke  rules  and  regulations  for  its
     administration.  The Board or the Committee, in the exercise of this power,
     may correct any defect,  omission or inconsistency in the Plan, in a manner
     and to the extent it shall deem  necessary  or  expedient  to make the Plan
     fully effective.

          (iv) To amend the Plan as provided in paragraph 13.

          (v) Generally, to exercise such powers and to perform such acts as the
     Board or the  Committee  deems  necessary  or expedient to promote the best
     interests  of the  Company and its  Affiliates  and to carry out the intent
     that the Plan be treated as an "employee  stock  purchase  plan" within the
     meaning of Section 423 of the Code.

3.   Shares Subject to the Plan.

     (a) Subject to the provisions of paragraph 12 relating to adjustments  upon
changes in stock,  the stock that may be sold  pursuant to rights  granted under
the Plan shall not exceed in the aggregate one million (1,000,000) shares of the
Company's common stock (the "Common Stock"). If any right granted under the Plan
shall for any reason terminate  without having been exercised,  the Common Stock
not purchased under such right shall again become available for the Plan.

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

4.   Grant of Rights; Offering.

     The Board or the  Committee  may from time to time grant or provide for the
grant of  rights  to  purchase  Common  Stock of the  Company  under the Plan to
eligible  employees (an "Offering") on a date or dates (the "Offering  Date(s)")
selected by the Board or the Committee.  Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate,  which shall comply with the  requirements of Section  423(b)(5) of
the Code that all  employees  granted  rights to  purchase  stock under the Plan
shall  have the same  rights  and  privileges.  The terms and  conditions  of an
Offering shall be incorporated by reference into the Plan and treated as part of
the Plan. The provisions of separate  Offerings need not be identical,  but each
Offering shall include (through  incorporation of the provisions of this Plan by
reference  in the document  comprising  the  Offering or  otherwise)  the period
during  which the  Offering  shall be  effective,  which period shall not exceed
twenty-seven (27) months beginning with the Offering Date, and the substance of
the provisions contained in paragraphs 5 through 8, inclusive.

5.   Eligibility.

     (a) Rights may be granted only to employees of the Company or, as the Board
or the Committee may designate as provided in subparagraph 2(b), to employees of
any  Affiliate  of the  Company.  Except as provided in  subparagraph  5(b),  an
employee  of the  Company or any  Affiliate  shall not be eligible to be granted
rights under the Plan unless,  on the Offering  Date,  such employee has been in
the employ of the Company or any Affiliate for such continuous  period preceding
such grant as the Board or the Committee may require,  but in no event shall the
required  period of  continuous  employment  be equal to or greater than two (2)
years. In addition,  unless  otherwise  determined by the Board or the Committee
and set  forth in the  terms of the  applicable  Offering,  no  employee  of the
Company or any Affiliate  shall be eligible to be granted  rights under the Plan
unless,  on the Offering Date,  such  employee's  customary  employment with the
Company  or such  Affiliate  is for at least  twenty  (20) hours per week and at
least five (5) months per calendar year.

     (b) The Board or the Committee may provide that each person who, during the
course of an  Offering,  first  becomes an  eligible  employee of the Company or
designated  Affiliate  will, on a date or dates  specified in the Offering which
coincides  with the day on which such  person  becomes an  eligible  employee or
occurs  thereafter,  receive a right  under that  Offering,  which  right  shall
thereafter  be deemed to be a part of that  Offering.  Such right shall have the
same  characteristics as any rights originally  granted under that Offering,  as
described herein, except that:

          (i) the date on which  such right is  granted  shall be the  "Offering
     Date"  of such  right  for all  purposes,  including  determination  of the
     exercise price of such right;

          (ii) the period of the Offering with respect to such right shall begin
     on its Offering Date and end coincident with the end of such Offering; and

          (iii) the Board or the Committee may provide that if such person first
     becomes an eligible  employee within a specified  period of time before the
     end of the  Offering,  he or she will not  receive  any  right  under  that
     Offering.

     (c) No  employee  shall be eligible  for the grant of any rights  under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph  5(c),  the  rules of  Section  424(d) of the Code  shall  apply in
determining the stock  ownership of any employee,  and stock which such employee
may purchase under all outstanding  rights and options shall be treated as stock
owned by such employee.

     (d) An eligible  employee may be granted rights under the Plan only if such
rights,  together with any other rights granted under  "employee  stock purchase
plans" of the Company and any Affiliates,  as specified by Section  423(b)(8) of
the Code, do not permit such employee's  rights to purchase stock of the Company
or any Affiliate to accrue at a rate which exceeds twenty-five  thousand dollars
($25,000) of fair market value of such stock (determined at the time such rights
are granted) for each calendar year in which such rights are  outstanding at any
time.

     (e) Officers of the Company and any designated  Affiliate shall be eligible
to participate in Offerings under the Plan, provided, however, that the Board or
the Committee  may provide in an Offering that certain  employees who are highly
compensated  employees  within the meaning of Section  423(b)(4)(D)  of the Code
shall not be eligible to participate.

6.   Rights; Purchase Price.

     (a) On each Offering Date, each eligible employee,  pursuant to an Offering
made under the Plan,  shall be granted the right to purchase up to the number of
shares of Common Stock of the Company  purchasable with a percentage  designated
by the  Board  or the  Committee  not  exceeding  twenty  percent  (20%) of such
employee's  Earnings (as defined in  subparagraph  7(a)) during the period which
begins on the  Offering  Date (or such later date as the Board or the  Committee
determines  for a  particular  Offering)  and  ends on the  date  stated  in the
Offering,  which date shall be no later than the end of the Offering.  The Board
or the  Committee  shall  establish  one or more dates  during an Offering  (the
"Purchase  Date(s)") on which rights  granted  under the Plan shall be exercised
and purchases of Common Stock carried out in accordance with such Offering.

     (b) In connection  with each Offering made under the Plan, the Board or the
Committee  may specify a maximum  number of shares that may be  purchased by any
employee as well as a maximum  aggregate  number of shares that may be purchased
by all eligible employees pursuant to such Offering.  In addition, in connection
with each Offering that contains more than one Purchase  Date,  the Board or the
Committee  may  specify  a  maximum  aggregate  number  of  shares  which may be
purchased  by all  eligible  employees  on any  given  Purchase  Date  under the
Offering.  If the aggregate  purchase of shares upon exercise of rights  granted
under the Offering would exceed any such maximum aggregate number,  the Board or
the Committee  shall make a pro rata  allocation  of the shares  available in as
nearly a  uniform  manner  as shall be  practicable  and as it shall  deem to be
equitable.

     (c) The purchase price of stock  acquired  pursuant to rights granted under
the Plan shall be not less than the lesser of:

          (i) an amount equal to  eighty-five  percent  (85%) of the fair market
     value of the stock on the Offering Date; or

          (ii) an amount equal to  eighty-five  percent (85%) of the fair market
     value of the stock on the Purchase Date.

7.   Participation; Withdrawal; Termination.

     (a) An eligible  employee may become a participant  in the Plan pursuant to
an Offering by delivering a  participation  agreement to the Company  within the
time specified in the Offering, in such form as the Company provides.  Each such
agreement shall  authorize  payroll  deductions of up to the maximum  percentage
specified by the Board or the Committee of such  employee's  Earnings during the
Offering.  "Earnings"  is  defined  as an  employee's  regular  salary  or wages
(including  amounts thereof  elected to be deferred by the employee,  that would
otherwise  have been paid,  under any  arrangement  established  by the  Company
intended to comply with Section 401(k), Section 402(e)(3),  Section 125, Section
402(h),  or Section 403(b) of the Code, and also including any deferrals under a
non-qualified  deferred  compensation  plan or  arrangement  established  by the
Company),  and may include,  if determined by the Board or the Committee and set
forth in the terms of the Offering,  all of the following items of compensation:
bonuses,  commissions,  overtime pay,  incentive pay, profit  sharing,  or other
remuneration   (excluding  fringe  benefits)  paid  directly  to  the  employee.
Notwithstanding  the foregoing,  Earnings shall not include the cost of employee
benefits  paid  for  by  the  Company  or an  Affiliate,  education  or  tuition
reimbursements,  imputed  income  arising  under any group  insurance or benefit
program, traveling expenses, business and moving expense reimbursements,  income
received in connection with stock options,  contributions made by the Company or
an Affiliate under any employee benefit plan, and similar items of compensation,
as determined by the Board or the  Committee.  The payroll  deductions  made for
each participant  shall be credited to an account for such participant under the
Plan and shall be deposited with the general funds of the Company. A participant
may reduce  (including  to zero) or increase  such  payroll  deductions,  and an
eligible employee may begin such payroll deductions,  after the beginning of any
Offering only as provided for in the Offering. A participant may make additional
payments  into  his or her  account  only if  specifically  provided  for in the
Offering and only if the  participant  has not had the maximum  amount  withheld
during the Offering.

     (b) At any time during an Offering,  a participant may terminate his or her
payroll  deductions  under the Plan and withdraw from the Offering by delivering
to the Company a notice of withdrawal in such form as the Company provides. Such
withdrawal may be elected at any time prior to the end of the Offering except as
provided by the Board or the  Committee in the  Offering.  Upon such  withdrawal
from the  Offering  by a  participant,  the  Company  shall  distribute  to such
participant all of his or her  accumulated  payroll  deductions  (reduced to the
extent,  if any,  such  deductions  have  been  used to  acquire  stock  for the
participant) under the Offering,  without interest, and such participant's right
to acquire Common Stock under that Offering shall be automatically terminated. A
participant's  withdrawal  from an  Offering  will  have  no  effect  upon  such
participant's  eligibility to participate in any other  Offerings under the Plan
but such participant will be required to deliver a new  participation  agreement
in order to participate in subsequent Offerings under the Plan.

     (c) Rights granted  pursuant to any Offering under the Plan shall terminate
immediately  upon cessation of a  participant's  employment with the Company and
any designated  Affiliate,  for any reason,  and the Company shall distribute to
such  terminated  employee  all of his or  her  accumulated  payroll  deductions
(reduced to the extent,  if any, such deductions have been used to acquire stock
for the terminated employee), under the Offering, without interest.

     (d)  Rights  granted  under  the  Plan  shall  not  be  transferable  by  a
participant other than by will or the laws of descent and distribution,  or by a
beneficiary  designation as provided in paragraph 14, and during a participant's
lifetime, shall be exercisable only by such participant.

8.   Exercise.

     (a) On  each  Purchase  Date  specified  in  the  relevant  Offering,  each
participant's  accumulated  payroll  deductions  and other  additional  payments
specifically  provided for in the Offering  (without any increase for  interest)
will be applied to the purchase of whole  shares of stock of the Company,  up to
the maximum number of shares permitted pursuant to the terms of the Plan and the
applicable  Offering,  at the purchase price  specified in the Offering.  Unless
otherwise provided for in the applicable Offering, no fractional shares shall be
issued upon the exercise of rights granted under the Plan.  The amount,  if any,
of accumulated payroll deductions remaining in each participant's  account after
the  purchase of shares  which is less than the amount  required to purchase one
share of stock on the final  Purchase Date of an Offering  shall be held in each
such  participant's  account for the purchase of shares under the next  Offering
under the Plan,  unless such participant  withdraws from such next Offering,  as
provided in  subparagraph  7(b), or is no longer  eligible to be granted  rights
under the Plan, as provided in  paragraph 5,  in which case such amount shall be
distributed to the participant after such final Purchase Date, without interest.
The  amount,  if  any,  of  accumulated  payroll  deductions  remaining  in  any
participant's  account  on the  final  Purchase  Date of an  Offering  after the
purchase  of  shares  which is equal to or in  excess  of the value of one whole
share of common stock shall be distributed in full to the participant after such
Purchase Date, without interest.

     (b) No rights  granted under the Plan may be exercised to any extent unless
the shares to be issued  upon such  exercise  under the Plan  (including  rights
granted thereunder) are covered by an effective  registration statement pursuant
to the Securities Act of 1933, as amended (the "Securities Act") and the Plan is
in material  compliance with all applicable state,  foreign and other securities
and other laws  applicable  to the Plan.  If on a Purchase  Date in any Offering
hereunder the Plan is not so registered or in such compliance, no rights granted
under the Plan or any Offering shall be exercised on such Purchase Date, and the
Purchase  Date shall be delayed  until the Plan is subject to such an  effective
registration statement and such compliance,  except that the Purchase Date shall
not be delayed  more than twelve (12) months and the  Purchase  Date shall in no
event be more than  twenty-seven  (27) months from the Offering  Date. If on the
Purchase  Date of any  Offering  hereunder,  as  delayed to the  maximum  extent
permissible,  the  Plan is not  registered  and in such  compliance,  no  rights
granted  under  the Plan or any  Offering  shall be  exercised  and all  payroll
deductions  accumulated during the Offering (reduced to the extent, if any, such
deductions  have  been  used to  acquire  stock)  shall  be  distributed  to the
participants, without interest.

9.   Covenants of the Company.

     (a) During  the terms of the rights  granted  under the Plan,  the  Company
shall at all times keep available as authorized but unissued  shares that number
of shares of stock required to satisfy such rights.

     (b) The Company shall seek to obtain from each federal,  state,  foreign or
other  regulatory  commission or agency having  jurisdiction  over the Plan such
authority as may be required to issue and sell shares of stock upon  exercise of
the rights granted under the Plan. If, after reasonable efforts,  the Company is
unable to obtain from any such  regulatory  commission  or agency the  authority
which counsel for the Company deems  necessary for the lawful  issuance and sale
of stock under the Plan,  the Company  shall be relieved  from any liability for
failure to issue and sell stock upon  exercise of such  rights  unless and until
such authority is obtained.

10.  Use of Proceeds from Stock.

     Proceeds from the sale of stock to participants  pursuant to rights granted
under the Plan shall constitute general funds of the Company.

11.  Rights as a Stockholder.

     A  participant  shall not be deemed to be the  holder of, or to have any of
the rights of a holder  with  respect to, any shares  subject to rights  granted
under the Plan unless and until the participant's  shares acquired upon exercise
of rights  hereunder  are  recorded in the books of the Company (or its transfer
agent).

12.  Adjustments upon Changes in Stock.

     (a) If any change is made in the stock  subject to the Plan,  or subject to
any   rights   granted   under   the  Plan   (through   merger,   consolidation,
reorganization,  recapitalization,  stock  dividend,  dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares,  change in corporate  structure or other  transaction  not involving the
receipt of consideration by the Company),  the Plan and outstanding  rights will
be appropriately  adjusted in the class(es) and maximum number of shares subject
to the Plan and the  class(es) and number of shares and price per share of stock
subject to outstanding  rights.  Such adjustments  shall be made by the Board or
the  Committee,   the  determination  of  which  shall  be  final,  binding  and
conclusive.  (The conversion of any convertible  securities of the Company shall
not be treated as a "transaction  not involving the receipt of  consideration by
the Company.")

     (b) In the event of: (1) a dissolution or liquidation of the Company; (2) a
merger or consolidation  in which the Company is not the surviving  corporation;
(3) a reverse merger in which the Company is the surviving  corporation  but the
shares of the  Company's  Common Stock  outstanding  immediately  preceding  the
merger are converted by virtue of the merger into other property, whether in the
form of  securities,  cash or otherwise;  or (4) the  acquisition by any person,
entity or group within the meaning of Section  13(d) or 14(d) of the  Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  or any  comparable
successor  provisions  (excluding  any employee  benefit plan, or related trust,
sponsored or  maintained  by the Company or any Affiliate of the Company) of the
beneficial  ownership  (within the meaning of Rule 13d-3  promulgated  under the
Exchange  Act,  or  comparable  successor  rule) of  securities  of the  Company
representing  at least fifty percent (50%) of the combined voting power entitled
to vote in the election of  directors,  then,  as determined by the Board in its
sole   discretion  (i)  any  surviving  or  acquiring   corporation  may  assume
outstanding  rights or substitute  similar rights for those under the Plan, (ii)
such  rights may  continue  in full  force and  effect,  or (iii)  participants'
accumulated  payroll deductions may be used to purchase Common Stock immediately
prior to the transaction  described above and the participants' rights under the
ongoing Offering terminated.

13.  Amendment of the Plan.

     (a) The  Board or the  Committee  at any time,  and from time to time,  may
amend  the Plan.  However,  except as  provided  in  paragraph  12  relating  to
adjustments  upon  changes in stock,  no  amendment  shall be  effective  unless
approved by the  stockholders of the Company within twelve (12) months before or
after the  adoption of the  amendment  if such  amendment  requires  stockholder
approval in order for the Plan to obtain  employee stock purchase plan treatment
under Section 423 of the Code or to comply with the  requirements  of Rule 16b-3
promulgated under the Exchange Act.

     (b) The Board or the  Committee may amend the Plan in any respect the Board
or the Committee deems necessary or advisable to provide eligible employees with
the maximum benefits provided or to be provided under the provisions of the Code
and the regulations  promulgated  thereunder relating to employee stock purchase
plans and/or to bring the Plan and/or rights  granted  under it into  compliance
therewith.

     (c) Rights and obligations under any rights granted before amendment of the
Plan shall not be altered or impaired by any amendment of the Plan,  except with
the  consent  of the  person  to whom such  rights  were  granted,  or except as
necessary  to comply  with any laws or  governmental  regulations,  or except as
necessary to ensure that the Plan and/or  rights  granted  under the Plan comply
with the requirements of Section 423 of the Code.

14.  Designation of Beneficiary.

     (a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash,  if any, from the  participant's  account under the
Plan  in the  event  of such  participant's  death  subsequent  to the end of an
Offering but prior to delivery to the  participant  of such shares and cash.  In
addition,  a participant may file a written  designation of a beneficiary who is
to receive any cash from the  participant's  account under the Plan in the event
of such participant's death during an Offering.

     (b) Such  designation of beneficiary  may be changed by the  participant at
any time by written notice in the form  prescribed by the Company.  In the event
of the  death of a  participant  and in the  absence  of a  beneficiary  validly
designated under the Plan who is living at the time of such participant's death,
the  Company   shall  deliver  such  shares  and/or  cash  to  the  executor  or
administrator  of the  estate  of the  participant,  or if no such  executor  or
administrator has been appointed (to the knowledge of the Company), the Company,
in its sole discretion,  may deliver such shares and/or cash to the spouse or to
any one or more  dependents  or relatives of the  participant,  or if no spouse,
dependent or relative is known to the Company,  then to such other person as the
Company may designate.

15.  Termination or Suspension of the Plan.

     (a) The Board or the Committee in its discretion,  may suspend or terminate
the Plan at any time.  No rights may be granted under the Plan while the Plan is
suspended or after it is terminated.

     (b) Rights and  obligations  under any rights  granted while the Plan is in
effect  shall not be altered or impaired by  suspension  or  termination  of the
Plan, except as expressly provided in the Plan or with the consent of the person
to whom such rights were granted, or except as necessary to comply with any laws
or  governmental  regulation,  or except as  necessary  to ensure  that the Plan
and/or rights granted under the Plan comply with the requirements of Section 423
of the Code.

16.  Effective Date of Plan.

     The Plan shall become  effective upon adoption by the Board (the "Effective
Date"), but no rights granted under the Plan shall be exercised unless and until
the Plan has been approved by the stockholders of the Company within twelve (12)
months before or after the date the Plan is adopted by the Board, which date may
be prior to the Effective Date.