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                   American Business Financial Services, Inc.
                       Executive Management Incentive Plan
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Executive Summary
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The Incentive Plan is based on pre-established goals and objectives focused on
those primary business drivers needed to meet Corporate objectives and improve
shareholder value. The Incentive Plan directly links performance on three levels
- Corporate, Business Unit / Departmental and Individual goals - to award
payments that are contingent upon the Corporation achieving its financial goals.
The Corporation must meet its financial goals before any Incentive Plan payments
can be made.

Plan Objectives
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The Incentive Plan is designed to meet the following objectives:
o  Provide a competitive total incentive compensation opportunity for senior
   managers;
o  Focus management attention on the key business goals and objectives;
o  Motivate individual and team actions toward the achievement of those
   objectives;
o  Reward managers based on three primary areas of measurement: corporate,
   business unit/departmental, and individual; and
o  Create consistent performance goals and rewards for all executives.

Participation
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Participation is limited to executives at the senior vice president and above
reporting level as identified by the Chairman/CEO and approved by the
Compensation Committee of the Board of Directors. Participants will receive
formal notification of their eligibility at the beginning of each fiscal year.
Target incentive award amounts will be determined by the Chairman/CEO based on
the participant's level within the Corporation management structure and an
assessment of the manager's contributions to the Corporation as made by the
Chairman/CEO in consultation with the heads of the major business units, as
appropriate.

o  Officers whose bonus is determined pursuant to written employment agreements
   with the Corporation will not be eligible to participate in the Incentive
   Plan.

o  Deceased or disabled participants will be eligible to receive a prorated
   award for the relevant fiscal year based upon their service through the date
   employment ended. Prorated awards will be based on the months of service
   rendered in the fiscal year divided by 12.


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o  Participants whose employment terminates for any other reason will
   immediately terminate participation in this Incentive Plan and will not
   receive any unpaid awards for the current or prior fiscal years.


Development of Performance Standards
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Prior to the beginning of each fiscal year, each participant will develop goals
and objectives, in conjunction with his or her supervisor, and submit them to
Human Resources for review and approval by the Chairman/CEO and heads of the
major business units, as appropriate.

Performance Categories:
-----------------------
1.  Corporate - Incentive Plan payments will only be made if the Corporation
    achieves its financial goals.

2.  Business/Departmental - based upon business line, corporate needs and
    benchmarks:
        o   Quantitative Business Goals and Objectives,
        o   Qualitative Business Goals and Objectives,
        o   Cumulative category weight of 70%.

3.  Individual - based upon individual and corporate needs:
        o   Quantitative Personal Goals and Objectives,
        o   Qualitative Personal Goals and Objectives,
        o   Cumulative category weight of 30%.

Performance Measurement and Employee Feedback
---------------------------------------------
o    Annual performance assessment will be based on achievement of Corporate,
     Business / Departmental and Individual goals and objectives, within each
     category and by category as noted above.

o    Weighting of each Business and Individual goal is recommended by each
     participant and with concurrence of his or her Business Unit Head and the
     Chairman/CEO or his designee. The Chairman/CEO will make the final
     determination of the appropriate weight.

o    Total performance equals the sum of each participant's performance in each
     category - Business / Departmental and Individual.

o    Award payments will not be made unless Corporate financial goal threshold
     is reached. Any exceptions to this rule will be at the Board of Directors
     discretion.

o    Following the close of the fiscal year, a formal assessment of the
     participant's performance against his or her established goals will be
     prepared and shared with the participant and become part of the
     participant's permanent record. Awards will be made annually.


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Award Attainment
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Incentive awards will be calculated as soon as practical after the close of the
fiscal year and following release of the audited financial results.

o    Award amounts are based on the performance assessment factor reflecting the
     level of achievement against the pre-determined goals and objectives.

o    No bonus award will be paid in any case for total performance under 80% of
     the performance goal.


Compensation Committee
----------------------
All determinations regarding the level of compensation paid pursuant to this
Incentive Plan shall be made by the Compensation Committee of the Board of
Directors. The Compensation Committee shall also determine the timing and the
form of the incentive payment. The aggregate amount of the award to be paid
pursuant to this Incentive Plan may be a combination of cash and Corporation
stock pursuant to the terms of the 2001 Stock Incentive Plan.

Amendment and Termination
-------------------------
The Corporation reserves the right to amend, suspend or terminate this Incentive
Plan at any time provided however, no such action shall result in the forfeiture
of an award that is earned but unpaid as of the date of such amendment,
suspension or termination.




Participant Acknowledgement:___________________________

Date:________________




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