Document:

<PAGE>
                                                                    Exhibit 10.1

                         MARLIN BUSINESS SERVICES CORP.

                          2003 EQUITY COMPENSATION PLAN
<PAGE>
                                TABLE OF CONTENTS

                                                                           PAGE

SECTION 1   Administration...............................................    1

SECTION 2   Grants.......................................................    2

SECTION 3   Shares Subject to the Plan...................................    2

SECTION 4   Eligibility for Participation................................    3

SECTION 5   Options......................................................    4

SECTION 6   Stock Appreciation Rights....................................    8

SECTION 7   Stock Awards.................................................    9

SECTION 8   Stock Units..................................................   10

SECTION 9   Other Equity Awards..........................................   10

SECTION 10  Dividend Equivalents.........................................   11

SECTION 11  Right of Recapture...........................................   11

SECTION 12  Qualified Performance-Based Compensation.....................   11

SECTION 13  Deferrals....................................................   12

SECTION 14  Withholding of Taxes.........................................   12

SECTION 15  Transferability of Grants....................................   13

SECTION 16  Change of Control of the Company.............................   13

SECTION 17  Consequences of a Change of Control..........................   14

SECTION 18  Limitations On Issuance Or Transfer Of Shares................   15

SECTION 19  Amendment and Termination of the Plan........................   15

SECTION 20  Funding of the Plan..........................................   16

SECTION 21  Rights of Participants.......................................   16

SECTION 22  No Fractional Shares.........................................   16

SECTION 23  Headings.....................................................   16

SECTION 24  Effective Date of the Plan...................................   16

SECTION 25  Miscellaneous................................................   16

                                       -i-
<PAGE>
                         MARLIN BUSINESS SERVICES CORP.
                         2003 EQUITY COMPENSATION PLAN

      The purpose of the Marlin Business Services Corp. 2003 Equity Compensation
Plan (the "Plan") is to provide (i) designated employees of Marlin Business
Services Corp. (the "Company") and its subsidiaries, (ii) certain consultants
and advisors who perform services for the Company or its subsidiaries and (iii)
non-employee members of the Board of Directors of the Company (the "Board") with
the opportunity to receive grants of incentive stock options, nonqualified stock
options, stock appreciation rights, stock awards, stock units and other
equity-based awards. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefitting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.

      It is contemplated that on or prior to the completion of the initial
public offering of the Company's common stock, Marlin Leasing Corporation
("Marlin Leasing") will be reorganized and become a wholly-owned subsidiary of
the Company. The effective date of the reorganization is referred to as the
"Reorganization Date." It is contemplated that in connection with the
reorganization of Marlin Leasing, the Company will assume the Marlin Leasing
Corporation 1997 Equity Compensation Plan (the "Marlin Leasing 1997 Plan") and
merge the Marlin Leasing 1997 Plan into this Plan, so that no additional grants
will be made under the Marlin Leasing 1997 Plan. Outstanding grants under the
Marlin Leasing 1997 Plan will continue in effect according to their terms as in
effect on the Reorganization Date (subject to such amendments as the Committee
(as defined below) determines, consistent with the Marlin Leasing 1997 Plan),
and the shares with respect to outstanding grants under the Marlin Leasing 1997
Plan will be issued or transferred under this Plan.

SECTION 1   Administration

      (a) Committee. The Plan shall be administered and interpreted by a
committee consisting of members of the Board, which shall be appointed by the
Board (the "Committee"). The Committee may consist of two or more persons who
are "outside directors" as defined under section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), and related Treasury regulations, and
"non-employee directors" as defined under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). However, the Board shall
ratify or approve any grants as it deems appropriate, and the Board shall
approve and administer all grants made to non-employee directors. The Committee
may delegate authority to one or more subcommittees, as it deems appropriate. To
the extent a Board or subcommittee administers the Plan, references in the Plan
to the "Committee" shall be deemed to refer to such Board or subcommittee.

      (b) Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) deal with any other matters
arising under the Plan. However, no previously granted option may be repriced,
replaced or regranted through cancellation or by
<PAGE>
lowering the option exercise price, unless the shareholders of the Company
provide prior approval.

      (c) Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.

SECTION 2   Grants

      Awards under the Plan may consist of grants of incentive stock options as
described in Section 5 ("Incentive Stock Options"), nonqualified stock options
as described in Section 5 ("Nonqualified Stock Options") (Incentive Stock
Options and Nonqualified Stock Options are collectively referred to as
"Options"), stock appreciation rights as described in Section 6 ("SARs"), stock
awards as described in Section 7 ("Stock Awards"), stock units as described in
Section 8 ("Stock Units"), and other equity-based awards as described in Section
9 ("Other Equity Awards") (hereinafter collectively referred to as "Grants").
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument or an amendment to the grant instrument (the "Grant
Instrument"). All Grants shall be made conditional upon the Grantee's
acknowledgement, in writing or by acceptance of the Grant, that all decisions
and determinations of the Committee shall be final and binding on the Grantee,
his or her beneficiaries and any other person having or claiming an interest
under such Grant. Grants under a particular Section of the Plan need not be
uniform as among the grantees.

SECTION 3   Shares Subject to the Plan

      (a) Shares Authorized. Subject to adjustment as described below, the
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 2,100,000 shares; provided,
however, that not more than 1,050,000 shares of Company Stock shall be available
for issuance as Stock Awards (excluding restricted shares received as a result
of an early exercise of an Option pursuant to Section 5(d)(ii)), Stock Units and
Other Equity Awards. The maximum number of authorized shares includes shares
that will cover outstanding grants under the Marlin Leasing 1997 Plan, which is
expected to be assumed on the Reorganization Date as described above. The
maximum aggregate number of shares of Company Stock that shall be subject to
Grants made under the Plan to any individual during any calendar year shall be
100,000 shares, subject to adjustment as described below.

                                       2
<PAGE>
      (b) Determination of Authorized Shares. The shares may be authorized but
unissued shares of Company Stock or reacquired shares of Company Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options or SARs granted under the Plan (including
options outstanding on the Reorganization Date under the Marlin Leasing 1997
Plan) terminate, expire, or are canceled, forfeited, exchanged or surrendered
without having been exercised or if any Stock Awards, Stock Units, or Other
Equity Awards are forfeited, the shares subject to such Grants shall again be
available for purposes of the Plan. Shares of Company Stock surrendered in
payment of the exercise price of an Option shall again be available for issuance
or transfer under the Plan. To the extent any Grants are paid in cash, and not
in shares of Company Stock, any shares previously subject to such Grants shall
again be available for issuance or transfer under the Plan.

      (c) Adjustments. If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a
class without the Company's receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spinoff or the Company's payment of an extraordinary dividend or distribution,
the maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the Plan
may be granted in any year, the number and kind of shares covered by outstanding
Grants, the kind of shares to be issued or transferred under the Plan, and the
price per share or the applicable market value of such Grants shall, unless the
Committee determines otherwise, be appropriately adjusted by the Committee to
reflect any increase or decrease in the number of, or change in the kind or
value of, issued shares of Company Stock to preclude, to the extent practicable,
the enlargement or dilution of rights and benefits under such Grants; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated. Any adjustments determined by the Committee shall be final, binding
and conclusive.

SECTION 4   Eligibility for Participation

      (a) Eligible Persons. All employees of the Company and its subsidiaries
("Employees"), including Employees who are officers or members of the Board, and
members of the Board who are not Employees ("Non-Employee Directors") shall be
eligible to participate in the Plan. Consultants and advisors who perform
services for the Company or any of its subsidiaries ("Key Advisors") shall be
eligible to participate in the Plan if the Key Advisors render bona fide
services to the Company or its subsidiaries, the services are not in connection
with the offer and sale of securities in a capital-raising transaction and the
Key Advisors do not directly or indirectly promote or maintain a market for the
Company's securities.

      (b) Selection of Grantees. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines. Employees, Key Advisors and Non-Employee
Directors who receive Grants under this Plan shall hereinafter be referred to as
"Grantees".

                                       3
<PAGE>
SECTION 5   Options

      The Committee may grant Options to an Employee, Non-Employee Director or
Key Advisor, upon such terms as the Committee deems appropriate. The following
provisions are applicable to Options:

      (a) Number of Shares. The Committee shall determine the number of shares
of Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors.

      (b) Type of Option and Price.

            (i) The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code or Nonqualified Stock Options that are not intended so to
qualify or any combination of Incentive Stock Options and Nonqualified Stock
Options, all in accordance with the terms and conditions set forth herein.
Incentive Stock Options may be granted only to employees of the Company or its
subsidiaries, as defined in Section 424 of the Code. Nonqualified Stock Options
may be granted to Employees, Non-Employee Directors and Key Advisors.

            (ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may be equal to or
greater than the Fair Market Value (as defined below) of a share of Company
Stock on the date the Option is granted; provided, however, that an Incentive
Stock Option may not be granted to an Employee who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any subsidiary of the Company, unless the
Exercise Price per share is not less than 110% of the Fair Market Value of
Company Stock on the date of grant.

            (iii) If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or the Nasdaq
National Market, the last reported sale price thereof on the relevant date or
(if there were no trades on that date) the latest preceding date upon which a
sale was reported, or (y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and "asked" prices
of Company Stock on the relevant date, as reported on Nasdaq or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid" or "asked"
quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.

      (c) Option Term. The Committee shall determine the term of each Option.
The term of any Option shall not exceed ten years from the date of grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any subsidiary of the
Company, may not have a term that exceeds five years from the date of grant.

                                       4
<PAGE>
      (d) Exercisability of Options.

            (i) Options shall become exercisable in accordance with such terms
and conditions, consistent with the Plan, as may be determined by the Committee
and specified in the Grant Instrument or in the Grantee's employment agreement,
if any, with the Employer. The Committee may accelerate the exercisability of
any or all outstanding Options at any time for any reason.

            (ii) The Committee may provide in a Grant Instrument that the
Grantee may elect to exercise part or all of an Option before it otherwise has
become exercisable. Any shares so purchased shall be restricted shares and shall
be subject to a repurchase right in favor of the Company during a specified
restriction period, with the repurchase price equal to the lesser of (A) the
Exercise Price or (B) the Fair Market Value of such shares at the time of
repurchase, or such other restrictions as the Committee deems appropriate.

      (e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, shall have an Exercise Price not less than 85% of the
Fair Market Value of the Company Stock on the date of grant, and may not be
exercisable for at least six months after the date of grant (except that such
Options may become exercisable, as determined by the Committee, upon the
Grantee's death, Disability or retirement, or upon a Change of Control or other
circumstances permitted by applicable regulations).

      (f) Termination of Employment, Disability or Death.

            (i) Except as provided below or in the Grantee's employment
agreement, if any, with the Employer, an Option may only be exercised while the
Grantee is employed by, or providing service to, the Employer (as defined below)
as an Employee, Key Advisor or member of the Board.

            (ii) In the event that a Grantee ceases to be employed by, or
provide service to, the Employer for any reason other than Disability, death, or
termination for Cause (as defined below), any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days after
the date on which the Grantee ceases to be employed by, or provide service to,
the Employer (or within such other period of time as may be specified by the
Committee or in the Grantee's employment agreement, if any, with the Employer),
but in any event no later than the date of expiration of the Option term. Except
as otherwise provided by the Committee, any of the Grantee's Options that are
not otherwise exercisable as of the date on which the Grantee ceases to be
employed by, or provide service to, the Employer shall terminate as of such
date.

            (iii) In the event the Grantee ceases to be employed by, or provide
service to, the Employer on account of a termination for Cause by the Employer,
any Option held by the Grantee shall terminate as of the date the Grantee ceases
to be employed by, or provide service to, the Employer. In addition,
notwithstanding any other provisions of this Section 5, if the Committee
determines that the Grantee has engaged in conduct that constitutes Cause at any
time while the Grantee is employed by, or providing service to, the Employer or
after the Grantee's

                                       5
<PAGE>
termination of employment or service, any Option held by the Grantee shall
immediately terminate and the Grantee shall automatically forfeit all shares
underlying any exercised portion of an Option for which the Company has not yet
delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an Option, the
Company may withhold delivery of share certificates pending resolution of an
inquiry that could lead to a finding resulting in a forfeiture.

            (iv) In the event the Grantee ceases to be employed by, or provide
service to, the Employer because the Grantee is Disabled, any Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within one
year after the date on which the Grantee ceases to be employed by, or provide
service to, the Employer (or within such other period of time as may be
specified by the Committee or in the Grantee's employment agreement, if any),
but in any event no later than the date of expiration of the Option term. Except
as otherwise provided by the Committee, any of the Grantee's Options which are
not otherwise exercisable as of the date on which the Grantee ceases to be
employed by, or provide service to, the Employer shall terminate as of such
date.

            (v) If the Grantee dies while employed by, or providing service to,
the Employer or within 90 days after the date on which the Grantee ceases to be
employed or provide service on account of a termination specified in Section
5(f)(ii) above (or within such other period of time as may be specified by the
Committee or in the Grantee's employment agreement, if any, with the Employer),
any Option that is otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of
time as may be specified by the Committee or in the Grantee's employment
agreement, if any), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Employer shall terminate as
of such date.

            (vi) For purposes of the Plan:

                  (A) The term "Employer" shall mean the Company and its
      subsidiary corporations or other affiliates, as determined by the
      Committee.

                  (B) "Employed by, or provide service to, the Employer" shall
      mean employment or service as an Employee, Key Advisor or member of the
      Board (so that, for purposes of exercising Options and SARs and satisfying
      conditions with respect to Stock Awards, Stock Units, Dividend Equivalents
      and Other Equity Awards, a Grantee shall not be considered to have
      terminated employment or service until the Grantee ceases to be an
      Employee, Key Advisor and member of the Board), unless the Committee
      determines otherwise.

                  (C) "Disability" shall mean, except as otherwise defined in
      the Grantee's employment agreement, if any, with the Employer, a Grantee's
      becoming disabled within the meaning of section 22(e)(3) of the Code,
      within the meaning of the

                                       6
<PAGE>
      Employer's long-term disability plan applicable to the Grantee, or as
      otherwise determined by the Committee.

                  (D) "Cause" shall mean, except to the extent specified
      otherwise by the Committee or defined in the Grantee's employment
      agreement, if any, with the Employer, a finding by the Committee that the
      Grantee (i) has materially breached his or her employment or service
      contract with the Employer and which breach has been materially and
      demonstrably detrimental to the Employer and has not been remedied by the
      Grantee after notice has been provided to the Grantee of such breach, (ii)
      has engaged in disloyalty to the Company, including, without limitation,
      fraud, embezzlement, theft, commission of a felony or proven dishonesty,
      (iii) has disclosed trade secrets or confidential information of the
      Employer to persons not entitled to receive such information, (iv) has
      breached any written non-competition or non-solicitation agreement between
      the Grantee and the Employer or (v) has engaged in such other behavior
      detrimental to the interests of the Employer as the Committee determines.

      (g) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Grantee shall pay the Exercise Price for an Option as specified by
the Committee (w) in cash, (x) with the approval of the Committee, by delivering
shares of Company Stock owned by the Grantee (including Company Stock acquired
in connection with the exercise of an Option, subject to such restrictions as
the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the Exercise Price or by attestation (on a form prescribed by
the Committee) to ownership of shares of Company Stock having a Fair Market
Value on the date of exercise equal to the Exercise Price, (y) payment through a
broker in accordance with procedures permitted by Regulation T of the Federal
Reserve Board, or (z) by such other method as the Committee may approve. Shares
of Company Stock used to exercise an Option shall have been held by the Grantee
for the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option. The Grantee shall pay the Exercise Price and
the amount of any withholding tax due (pursuant to Section 15) at such time as
may be specified by the Committee.

      (h) Reload Options. In the event that shares of Company Stock are used to
exercise an Option, the terms of such Option may provide for a Grant of
additional Options, or the Committee may grant additional Options, to purchase a
number of shares of Company Stock equal to the number of whole shares used to
exercise the Option and the number of whole shares, if any, withheld in payment
of any taxes. Such Options shall be granted with an Exercise Price equal to the
Fair Market Value of the Company Stock on the date of grant of such additional
Options, or at such other Exercise Price as the Committee may establish, for a
term not longer than the unexpired term of the exercised Option and on such
other terms as the Committee shall determine.

      (i) Limits on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year, under the Plan or any other
stock option plan of the Company or a subsidiary, exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock Option. An

                                       7
<PAGE>
Incentive Stock Option shall not be granted to any person who is not an Employee
of the Company or a subsidiary (within the meaning of section 424(f) of the
Code) of the Company.

SECTION 6   Stock Appreciation Rights

      The Committee may grant stock appreciation rights ("SARs") to an Employee,
Non-Employee Director or Key Advisor separately or in tandem with any Option.
The following provisions are applicable to SARs:

      (a) Base Amount. The Committee shall establish the base amount of the SAR
at the time the SAR is granted. Unless the Committee determines otherwise, the
base amount of each SAR shall be equal to the per share Exercise Price of the
related Option or, if there is no related Option, the Fair Market Value of a
share of Company Stock as of the date of Grant of the SAR.

      (b) Tandem SARs. The Committee may grant tandem SARs either at the time
the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the date of the grant of the Incentive Stock Option.
In the case of tandem SARs, the number of SARs granted to a Grantee that shall
be exercisable during a specified period shall not exceed the number of shares
of Company Stock that the Grantee may purchase upon the exercise of the related
Option during such period. Upon the exercise of an Option, the SARs relating to
the Company Stock covered by such Option shall terminate. Upon the exercise of
SARs, the related Option shall terminate to the extent of an equal number of
shares of Company Stock.

      (c) Exercisability. An SAR shall be exercisable during the period
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument or in
the Grantee's employment agreement, if any, with the Employer. The Committee may
accelerate the exercisability of any or all outstanding SARs at any time for any
reason. SARs may only be exercised while the Grantee is employed by, or
providing service to, the Employer or during the applicable period after
termination of employment or service as described in Section 5(f). A tandem SAR
shall be exercisable only during the period when the Option to which it is
related is also exercisable.

      (d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, shall have a base amount not less than 85% of the Fair
Market Value of the Company Stock on the date of grant, and may not be
exercisable for at least six months after the date of grant (except that such
SARs may become exercisable, as determined by the Committee, upon the Grantee's
death, Disability or retirement, or upon a Change of Control or other
circumstances permitted by applicable regulations).

      (e) Value of SARs. When a Grantee exercises SARs, the Grantee shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Company Stock or
a combination thereof. The stock appreciation for an SAR is the amount by which
the Fair Market Value of the underlying Company Stock on the date of exercise of
the SAR exceeds the base amount of the SAR as described in subsection (a).

                                       8
<PAGE>
      (f) Form of Payment. The Committee shall determine whether the
appreciation in an SAR shall be paid in the form of cash, shares of Company
Stock, or a combination of the two, in such proportion as the Committee deems
appropriate. For purposes of calculating the number of shares of Company Stock
to be received, shares of Company Stock shall be valued at their Fair Market
Value on the date of exercise of the SAR. If shares of Company Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.

SECTION 7   Stock Awards

      The Committee may issue or transfer shares of Company Stock to an
Employee, Non-Employee Director or Key Advisor under a Stock Award, upon such
terms as the Committee deems appropriate. The following provisions are
applicable to Stock Awards:

      (a) General Requirements. Shares of Company Stock issued or transferred
pursuant to Stock Awards may be issued or transferred for cash consideration or
for no cash consideration, and subject to restrictions or no restrictions, as
determined by the Committee. The Committee may, but shall not be required to,
establish conditions under which restrictions on Stock Awards shall lapse over a
period of time or according to such other criteria as the Committee deems
appropriate, including, without limitation, restrictions based upon the
achievement of specific performance goals. The period of time during which the
Stock Awards will remain subject to restrictions will be designated in the Grant
Instrument as the "Restriction Period."

      (b) Number of Shares. The Committee shall determine the number of shares
of Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.

      (c) Requirement of Employment or Service. If the Grantee ceases to be
employed by, or provide service to, the Employer during a period designated in
the Grant Instrument as the Restriction Period, or if other specified conditions
are not met, the Stock Award shall terminate as to all shares covered by the
Grant as to which the restrictions have not lapsed, and those shares of Company
Stock must be immediately returned to the Company, unless the Grantee's
employment agreement, if any, with the Employer provides otherwise. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

      (d) Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except to a successor under
Section 15(a). Each certificate for a share of a Stock Award shall contain a
legend giving appropriate notice of the restrictions in the Grant. The Grantee
shall be entitled to have the legend removed from the stock certificate covering
the shares subject to restrictions when all restrictions on such shares have
lapsed. The Committee may determine that the Company will not issue certificates
for Stock Awards until all restrictions on such shares have lapsed, or that the
Company will retain possession of certificates for shares of Stock Awards until
all restrictions on such shares have lapsed.

      (e) Right to Vote and to Receive Dividends. Unless the Committee
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, subject to any

                                       9
<PAGE>
restrictions deemed appropriate by the Committee, including, without limitation,
the achievement of specific performance goals.

      (f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.

SECTION 8   Stock Units

      The Committee may grant phantom units representing one or more shares of
Company Stock to an Employee, Non-Employee Director or Key Advisor, upon such
terms and conditions as the Committee deems appropriate. The following
provisions are applicable to Stock Units:

      (a) Crediting of Units. Each Stock Unit shall represent the right of the
Grantee to receive an amount based on the value of a share of Company Stock, if
specified conditions are met. All Stock Units shall be credited to bookkeeping
accounts established on the Company's records for purposes of the Plan.

      (b) Terms of Stock Units. The Committee may grant Stock Units that are
payable if specified performance goals or other conditions are met, or under
other circumstances. Stock Units may be paid at the end of a specified
performance period or other period, or payment may be deferred to a date
authorized by the Committee. The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.

      (c) Requirement of Employment or Service. If the Grantee ceases to be
employed by, or provide service to, the Employer during a specified period, or
if other conditions established by the Committee are not met, the Grantee's
Stock Units shall be forfeited, unless the Grantee's employment agreement, if
any, with the Employer provides otherwise. The Committee may, however, provide
for complete or partial exceptions to this requirement as it deems appropriate.

      (d) Payment With Respect to Stock Units. Payments with respect to Stock
Units shall be made in cash, in Company Stock, or in a combination of the two,
as determined by the Committee.

SECTION 9   Other Equity Awards

      The Committee may grant Other Equity Awards, which are awards (other than
those described in Sections 5, 6, 7, 8 and 10 of the Plan) that are based on,
measured by or payable in Company Stock to any Employee, Non-Employee Director
or Key Advisor, on such terms and conditions as the Committee shall determine.
Other Equity Awards may be awarded subject to the achievement of performance
goals or other conditions and may be payable in cash, Company Stock or any
combination of the foregoing, as the Committee shall determine.

                                       10
<PAGE>
SECTION 10  Dividend Equivalents

      The Committee may include in a Grant Instrument with respect to any Grant
a dividend equivalent right ("Dividend Equivalents") entitling the Grantee to
receive amounts equal to the ordinary dividends that would be paid, during the
time the Grant is outstanding and unexercised, on the shares of Company Stock
covered by the Grant as if such shares were then outstanding. The Committee
shall determine whether Dividend Equivalents shall be paid currently or credited
to a bookkeeping account as a dollar amount or in the form of Stock Units. The
Committee shall determine whether Dividend Equivalents shall be paid in cash, in
shares of Company Stock or in a combination, whether they shall be conditioned
upon the exercise, vesting or payment of the Grant to which they relate, and
such other terms and conditions as the Committee deems appropriate.

SECTION 11  Right of Recapture

      The Committee may provide in a Grant Instrument that if at any time within
the one year period after the date on which a Grantee exercises an Option or
SAR, or on which a Stock Award, Stock Unit or Other Equity Award vests or is
paid (each of which events is referred to as a "Realization Event"), the Grantee
(a) is terminated for Cause or (b) engages in any activity that constitutes
Cause, the Grantee shall be required to pay to the Company any gain realized by
the Grantee from the Realization Event, upon notice from the Company. Such gain
shall be determined as of the date of the Realization Event, without regard to
any subsequent change in the Fair Market Value of Company Stock. The Company
shall have the right to offset such gain against any amounts otherwise owed to
the Grantee by the Company (whether as wages, vacation pay, or pursuant to any
benefit plan or other compensatory arrangement), to the extent permitted by
applicable law.

SECTION 12  Qualified Performance-Based Compensation

      (a) Designation as Qualified Performance-Based Compensation. The Committee
may determine that Stock Awards, Stock Units, Dividend Equivalents or Other
Equity Awards granted to an Employee shall be considered "qualified
performance-based compensation" under section 162(m) of the Code. The provisions
of this Section 12 shall apply to Grants of Stock Awards, Stock Units, Dividend
Equivalents and Other Equity Awards that are to be considered "qualified
performance-based compensation" under section 162(m) of the Code.

      (b) Performance Goals. When Stock Awards, Stock Units, Dividend
Equivalents or Other Equity Awards that are to be considered "qualified
performance-based compensation" are granted, the Committee shall establish in
writing (i) the objective performance goals that must be met, (ii) the
performance period during which the performance goals must be met, (iii) the
threshold, target and maximum amounts that may be paid if the performance goals
are met, and (iv) any other conditions that the Committee deems appropriate and
consistent with the Plan and Section 162(m) of the Code, including the
employment requirements and payment terms. The performance goals may relate to
the Employee's business unit or the performance of the Company and its
subsidiaries as a whole, or any combination of the foregoing. The Committee
shall use objectively determinable performance goals based on one or more of the
following criteria: total stockholder return; total stockholder return as
compared to total stockholder return

                                       11
<PAGE>
of comparable companies or a publicly available index; net income; pretax
earnings; earnings before interest expense and taxes (EBIT); earnings before
interest expense, taxes, depreciation and amortization (EBITDA); earnings per
share; return on equity; return on assets; revenues; asset growth; operating
ratios; access to and availability of funding; or asset quality.

      (c) Establishment of Goals. The Committee shall establish the performance
goals in writing either before the beginning of the performance period or during
a period ending no later than the earlier of (i) 90 days after the beginning of
the performance period or (ii) the date on which 25% of the performance period
has been completed, or such other date as may be required or permitted under
applicable regulations under section 162(m) of the Code. The performance goals
shall satisfy the requirements for "qualified performance-based compensation,"
including the requirement that the achievement of the goals be substantially
uncertain at the time they are established and that the goals be established in
such a way that a third party with knowledge of the relevant facts could
determine whether and to what extent the performance goals have been met. The
Committee shall not have discretion to increase the amount of compensation that
is payable upon achievement of the designated performance goals.

      (d) Maximum Payment. The maximum number of shares of Company Stock that
may be subject to Grants made to an individual during a calendar year shall not
exceed the individual limit set forth in Section 3(a) of the Plan. If Dividend
Equivalents are granted as "qualified performance based compensation," the
maximum amount of Dividend Equivalents that may be credited to the Employee's
account in a calendar year is $250,000.

      (e) Announcement of Grants. The Committee shall certify and announce the
results for each performance period to all Grantees immediately following the
announcement of the Company's financial results for the performance period. If
and to the extent that the Committee does not certify that the performance goals
have been met, the grants of Stock Awards, Stock Units, Dividend Equivalents or
Other Equity Awards for the performance period shall be forfeited or shall not
be made, as applicable. Any Grants that are to be paid as a result of
achievement of performance goals shall be paid as specified in the Grant
Instrument.

      (f) Death, Disability or Other Circumstances. The Committee may provide
that Stock Awards, Stock Units, Dividend Equivalents or Other Equity Awards
shall be payable or restrictions on Stock Awards shall lapse, in whole or in
part, in the event of the Grantee's death or Disability during the Performance
Period, or under other circumstances consistent with the Treasury regulations
and rulings under section 162(m) of the Code.

SECTION 13  Deferrals

      The Committee may permit or require a Grantee to defer receipt of the
payment of cash or the delivery of shares that would otherwise be due to such
Grantee in connection with any Grant. If any such deferral election is permitted
or required, the Committee shall establish rules and procedures for such
deferrals.

SECTION 14  Withholding of Taxes

      (a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Employer may

                                       12
<PAGE>
require that the Grantee or other person receiving or exercising Grants pay to
the Employer the amount of any federal, state or local taxes that the Employer
is required to withhold with respect to such Grants, or the Employer may deduct
from other wages paid by the Employer the amount of any withholding taxes due
with respect to such Grants.

      (b) Election to Withhold Shares. If the Committee so permits, a Grantee
may elect to satisfy the Employer's tax withholding obligation with respect to
Grants paid in Company Stock by having shares withheld up to an amount that does
not exceed the minimum applicable withholding tax rate for federal (including
FICA), state and local tax liabilities. The election must be in a form and
manner prescribed by the Committee and may be subject to the prior approval of
the Committee.

SECTION 15  Transferability of Grants

      (a) Nontransferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Grants other than Incentive
Stock Options, if permitted in any specific case by the Committee, pursuant to a
domestic relations order or otherwise as permitted by the Committee. When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee may exercise such rights. Any such successor must
furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.

      (b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing,
the Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members, or one or more trusts or other
entities for the benefit of or owned by family members, consistent with the
applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.

SECTION 16  Change of Control of the Company

      As used herein, a "Change of Control" shall be deemed to have occurred if:

      (a) Any "person" (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 40% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of the initial public offering of the Company Stock and a Change of
Control shall not be deemed to occur as a result of a transaction in which the
Company becomes a subsidiary of another corporation and in which the
shareholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such
shareholders to more than 40% of all votes to which all shareholders of the
parent corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote);

                                       13
<PAGE>
      (b) The consummation of (i) a merger or consolidation of the Company with
another corporation where the shareholders of the Company, immediately prior to
the merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such shareholders to more than 40% of
all votes to which all shareholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote), (ii) a sale or
other disposition of all or substantially all of the assets of the Company, or
(iii) a liquidation or dissolution of the Company; or

      (c) After the date on which this Plan is approved by the shareholders of
the Company, directors are elected such that a majority of the members of the
Board shall have been members of the Board for less than two years, unless the
election or nomination for election of each new director who was not a director
at the beginning of such two-year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.

SECTION 17  Consequences of a Change of Control

      (a) Notice and Acceleration. Upon a Change of Control (i) the Company
shall provide each Grantee with outstanding Grants written notice of such Change
of Control, (ii) all outstanding Options and SARs shall automatically accelerate
and become fully exercisable, (iii) the restrictions and conditions on all
outstanding Stock Awards shall immediately lapse, and (iv) all Grantees holding
Stock Units, Dividend Equivalents and Other Equity Awards shall receive a
payment in settlement of such Stock Units, Dividend Equivalents and Other Equity
Awards in an amount determined by the Committee.

      (b) Assumption of Grants. Upon a Change of Control where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
and SARs that are not exercised shall be assumed by, or replaced with comparable
options or rights by, the surviving corporation (or a parent or subsidiary of
the surviving corporation), and other outstanding Grants shall be converted to
similar grants of the surviving corporation (or a parent or subsidiary of the
surviving corporation).

      (c) Other Alternatives. Notwithstanding the foregoing, in the event of a
Change of Control, unless the Grantee's employment agreement, if any, with the
Employer provides otherwise, the Committee may take one or both of the following
actions with respect to any or all outstanding Options and SARs: the Committee
may (i) require that Grantees surrender their outstanding Options and SARs in
exchange for a payment by the Company, in cash or Company Stock as determined by
the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options and SARs exceeds the Exercise Price of the Options or the base amount of
the SARs, as applicable, or (ii) after giving Grantees an opportunity to
exercise their outstanding Options and SARs, terminate any or all unexercised
Options and SARs at such time as the Committee deems appropriate. Such surrender
or termination shall take place as of the date of the Change of Control or such
other date as the Committee may specify.

                                       14
<PAGE>
SECTION 18  Limitations On Issuance Or Transfer Of Shares

      No Company Stock shall be issued or transferred in connection with any
Grant hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Grant made to any Grantee hereunder on such Grantee's undertaking in writing
to comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable, and
certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or
transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.

SECTION 19  Amendment and Termination of the Plan

      (a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without shareholder
approval if such approval is required in order to comply with the Code or
applicable laws or to comply with applicable stock exchange requirements.

      (b) Shareholder Approval for "Qualified Performance-Based Compensation".
If Stock Awards, Stock Units, Dividend Equivalents or Other Equity Awards are
granted as "qualified performance-based compensation" under Section 12 above,
the Plan must be reapproved by the shareholders no later than the first
shareholders meeting that occurs in the fifth year following the year in which
the shareholders previously approved the provisions of Section 12, if required
by section 162(m) of the Code or the regulations thereunder.

      (c) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the shareholders.

      (d) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 25(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated
or amended under Section 25(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan. However, no previously granted Option may
be repriced, replaced or regranted through cancellation or by lowering the
Exercise Price, unless the shareholders of the Company provide prior approval.

      (e) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

                                       15
<PAGE>
SECTION 20  Funding of the Plan

      This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan.

SECTION 21  Rights of Participants

      Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee
Director or other person to any claim or right to be granted a Grant under this
Plan. Neither this Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Employer or any other employment rights.

SECTION 22  No Fractional Shares

      No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

SECTION 23  Headings

      Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

SECTION 24  Effective Date of the Plan

      The Plan shall be effective on October 12, 2003.

SECTION 25  Miscellaneous

      (a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes, or (ii) limit the
right of the Company to grant stock options or make other awards outside of this
Plan. Without limiting the foregoing, the Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company, the parent or any of their subsidiaries in
substitution for a stock option or stock awards grant made by such corporation.
The terms and conditions of the substitute grants may vary from the terms and
conditions required by the Plan and from those of the substituted stock
incentives. The Committee shall prescribe the provisions of the substitute
grants.

      (b) Compliance with Law. The Plan, the exercise of Options and SARs and
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may

                                       16
<PAGE>
be required. After a public offering of the Company's Stock, with respect to
persons subject to section 16 of the Exchange Act, it is the intent of the
Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In
addition, it is the intent of the Company that the Plan and applicable Grants
under the Plan comply with the applicable provisions of section 162(m) (after a
public offering of the Company's Stock) and section 422 of the Code. To the
extent that any legal requirement of section 16 of the Exchange Act or section
162(m) or 422 of the Code as set forth in the Plan ceases to be required under
section 16 of the Exchange Act or section 162(m) or 422 of the Code, that Plan
provision shall cease to apply. The Committee may revoke any Grant if it is
contrary to law or modify a Grant to bring it into compliance with any valid and
mandatory government regulation. The Committee may agree to limit its authority
under this Section.

      (c) Employees Subject to Taxation Outside the United States. With respect
to Grantees who are subject to taxation in countries other than the United
States, the Committee may make Grants on such terms and conditions as the
Committee deems appropriate to comply with the laws of the applicable countries,
and the Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.

      (d) Employment Agreements. If a Grantee has entered into an employment
agreement with the Employer, the terms of the Grantee's employment agreement
shall govern Grants made to the Grantee under the Plan, to the extent consistent
with the terms of the Plan.

      (e) Governing Law. The validity, construction, interpretation and effect
of the Plan and Grant Instruments issued under the Plan shall be governed and
construed by and determined in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to the conflict of laws provisions thereof.

                                       17<PAGE>
                                                                    Exhibit 10.2

                         MARLIN BUSINESS SERVICES CORP.

                        2003 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                TABLE OF CONTENTS

<TABLE>
<S>                                                           <C>
I.       PURPOSE OF THE PLAN................................    1

II.      DEFINITIONS........................................    1

III.     ADMINISTRATION OF THE PLAN.........................    4

IV.      STOCK SUBJECT TO PLAN..............................    4

V.       OFFERING PERIODS...................................    4

VI.      ELIGIBILITY........................................    5

VII.     PAYROLL DEDUCTIONS.................................    5

VIII.    PURCHASE RIGHTS....................................    6

IX.      ACCRUAL LIMITATIONS................................    9

X.       EFFECTIVE DATE AND TERM OF THE PLAN................   10

XI.      AMENDMENT OF THE PLAN..............................   10

XII.     GENERAL PROVISIONS.................................   11

SCHEDULE A..................................................  A-1
</TABLE>

                                       i
<PAGE>
I.       PURPOSE OF THE PLAN

         The Plan (as defined in Article II) is intended to promote the
interests of the Company (as defined in Article II) by providing eligible
employees of a Participating Employer (as defined in Article II) with the
opportunity to acquire a proprietary interest in the Company through
participation in a payroll deduction-based employee stock purchase plan designed
to qualify under section 423 of the Code. The Plan is not intended and shall not
be construed as constituting an "employee benefit plan," within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

II.      DEFINITIONS

         A. "Board" shall mean the Company's Board of Directors.

         B. "Change in Control" shall mean a change in ownership of the Company
pursuant to any of the following transactions:

                  (i) Any "person" (as such term is used in sections 13(d) and
         14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in
         Rule 13d-3 under the Exchange Act), directly or indirectly, of
         securities of the Company representing more than 40% of the voting
         power of the then outstanding securities of the Company; provided that
         a Change in Control shall not be deemed to occur as a result of the
         initial public offering of the Common Stock and a Change in Control
         shall not be deemed to occur as a result of a transaction in which the
         Company becomes a subsidiary of another corporation and in which the
         shareholders of the Company, immediately prior to the transaction, will
         beneficially own, immediately after the transaction, shares entitling
         such shareholders to more than 40% of all votes to which all
         shareholders of the parent corporation would be entitled in the
         election of directors (without consideration of the rights of any class
         of stock to elect directors by a separate class vote);

                  (ii) The consummation of (A) a merger or consolidation of the
         Company with another corporation where the shareholders of the Company,
         immediately prior to the merger or consolidation, will not beneficially
         own, immediately after the merger or consolidation, shares entitling
         such shareholders to more than 40% of all votes to which all
         shareholders of the surviving corporation would be entitled in the
         election of directors (without consideration of the rights of any class
         of stock to elect directors by a separate class vote), (B) a sale or
         other disposition of all or substantially all of the assets of the
         Company, or (C) a liquidation or dissolution of the Company; or

                  (iii) After the date on which this Plan is approved by the
         shareholders of the Company, directors are elected such that a majority
         of the members of the Board shall have been members of the Board for
         less than two years, unless the election or nomination for election of
         each new director who was not a director at the beginning of such
         two-year period was approved by a vote of

                                       2
<PAGE>
         at least two-thirds of the directors then still in office who were
         directors at the beginning of such period.

         C. "Code" shall mean the Internal Revenue Code of 1986, as amended.

         D. "Common Stock" shall mean the common stock of the Company.

         E. "Company Affiliate" shall mean any parent or subsidiary corporation
of the Company (as determined in accordance with section 424 of the Code),
whether now existing or subsequently established.

         F. "Company" shall mean Marlin Business Services Corp., a Pennsylvania
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Marlin Business Services Corp. that shall by
appropriate action adopt the Plan.

         G. "Compensation" shall mean (i) the regular base salary paid to a
Participant by one or more Participating Employers during the Participant's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, commissions, profit-sharing distributions or other
incentive-type payments received during such period. Such Compensation shall be
calculated before deduction of (A) any income or employment tax withholdings or
(B) any contributions made by the Participant to any section 401(k) of the Code
salary deferral plan or any section 125 of the Code cafeteria benefit program
now or hereafter established by the Company or any Company Affiliate. However,
Compensation shall NOT include any contributions made by the Company or any
Company Affiliate on the Participant's behalf to any employee benefit or welfare
plan now or hereafter established (other than section 401(k) of the Code or
section 125 of the Code contributions deducted from such Compensation).

         H. "Effective Time" shall mean the time at which the Underwriting
Agreement is executed and the Common Stock is priced for the initial public
offering of such Common Stock. Any Company Affiliate that becomes a
Participating Employer after such Effective Time shall designate an effective
date with respect to its employee-Participants.

         I. "Eligible Employee" shall mean any person who is employed by a
Participating Employer on a basis under which he or she is regularly expected to
render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under section 3401(a) of
the Code.

         J. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         K. "Fair Market Value" per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

                  (i) If the Common Stock is at the time traded on the Nasdaq
         National Market, then the Fair Market Value shall be the closing
         selling price per share of Common Stock on the date in question, as
         such price is reported by the National Association of Securities
         Dealers on the Nasdaq National Market and

                                       3
<PAGE>
         published in The Wall Street Journal. If there is no closing selling
         price for the Common Stock on the date in question, then the Fair
         Market Value shall be the closing selling price on the last preceding
         date for which such quotation exists.

                  (ii) If the Common Stock is at the time listed on any Stock
         Exchange, then the Fair Market Value shall be the closing selling price
         per share of Common Stock on the date in question on the Stock Exchange
         determined by the Plan Administrator to be the primary market for the
         Common Stock, as such price is officially quoted in the composite tape
         of transactions on such exchange and published in The Wall Street
         Journal. If there is no closing selling price for the Common Stock on
         the date in question, then the Fair Market Value shall be the closing
         selling price on the last preceding date for which such quotation
         exists.

                  (iii) For purposes of the initial offering period that begins
         at the Effective Time, the Fair Market Value shall be deemed to be
         equal to the price per share at which the Common Stock is sold in the
         initial public offering pursuant to the Underwriting Agreement.

         L. "1933 Act" shall mean the Securities Act of 1933, as amended.

         M. "Participant" shall mean any Eligible Employee of a Participating
Employer who is actively participating in the Plan.

         N. "Participating Employer" shall mean the Company and such Company
Affiliate(s) as may be authorized from time to time by the Board to extend the
benefits of the Plan to their Eligible Employees. The Participating Employers in
the Plan are listed in the attached Schedule A.

         O. "Plan" shall mean the Marlin Business Services Corp. 2003 Employee
Stock Purchase Plan, as set forth in this document.

         P. "Plan Administrator" shall mean the committee of two (2) or more
Board members appointed by the Board to administer the Plan or such other
committee appointed by the Board to administer the Plan.

         Q. "Purchase Date" shall mean the last business day of each Purchase
Interval. The initial Purchase Date shall be June 30, 2004.

         R. "Purchase Interval" shall mean each successive six (6)-month period
within a particular offering period at the end of which there shall be purchased
shares of Common Stock on behalf of each Participant.

         S. "Stock Exchange" shall mean either the American Stock Exchange or
the New York Stock Exchange.

                                       4
<PAGE>
         T. "Underwriting Agreement" shall mean the agreement between the
Company and the underwriter or underwriters managing the initial public offering
of the Common Stock.

III.     ADMINISTRATION OF THE PLAN

         The Plan Administrator shall have full discretionary authority to
interpret and construe any provision of the Plan and to adopt such rules and
regulations for administering the Plan as it may deem necessary in order to
comply with the requirements of section 423 of the Code. Decisions of the Plan
Administrator shall be final and binding on all parties having an interest in
the Plan. As a condition of participating in the Plan, all Participants must
acknowledge, in writing or by completing the enrollment forms to participate in
the Plan, that all decisions and determinations of the Plan Administrator shall
be final and binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest under the Plan on behalf of the
Participant.

IV.      STOCK SUBJECT TO PLAN

         A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The number of shares of Common Stock initially
reserved for issuance over the term of the Plan shall be limited to 200,000
shares.

         B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Company's receipt of consideration, appropriate adjustments shall be made to
(i) the maximum number and class of securities issuable under the Plan, (ii) the
maximum number and class of securities purchasable per Participant on any one
Purchase Date, (iii) the maximum number and class of securities purchasable in
total by all Participants on any one Purchase Date, and (iv) the number and
class of securities and the price per share in effect under each outstanding
purchase right, in order to prevent the dilution or enlargement of benefits
thereunder.

V.       OFFERING PERIODS

         A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of overlapping offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.

         B. Each offering period shall be of such duration (not to exceed twelve
(12) months) as determined by the Plan Administrator prior to the start date of
such offering period. Offering periods shall commence at six (6) month intervals
on the first business day of January and July each year over the term of the
Plan. Accordingly, two (2) separate offering periods shall commence in each
calendar year the Plan remains in existence. However, the initial offering
period shall commence at the Effective Time and terminate on the last business
day in December 2004.

                                       5
<PAGE>
         C. Each offering period shall consist of a series of one or more
successive Purchase Intervals. Purchase Intervals shall run from the first
business day in January to the last business day in June each year and from the
first business day in July to the last business day in December each year.
However, the first Purchase Interval in effect under the initial offering period
shall commence at the Effective Time and terminate on the last business day in
June 2004.

         D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within a particular offering period be less than the Fair Market
Value per share of Common Stock on the start date of that offering period, then
the individuals participating in such offering period shall, immediately after
the purchase of shares of Common Stock on their behalf on such Purchase Date, be
transferred from that offering period and automatically enrolled in the next
offering period commencing after such Purchase Date.

VI.      ELIGIBILITY

         A. Each individual who is an Eligible Employee on the start date of any
offering period under the Plan may enter that offering period on such start
date. However, an Eligible Employee may participate in only one offering period
at a time. For the initial offering period commencing at the Effective Time,
each individual who is an Eligible Employee at that time shall automatically be
enrolled as a Participant with a contribution rate equal to ten percent (10%) of
his or her Compensation.

         B. Except as otherwise provided in Sections V.D and VI.A. above, an
Eligible Employee must, in order to participate in the Plan for a particular
offering period, complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) at such time on or before the start date of that offering period, as
determined by the Plan Administrator.

VII.     PAYROLL DEDUCTIONS

         A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock during an offering period may be any multiple
of one percent (1%) of the Compensation paid to the Participant during each
Purchase Interval within that offering period, up to a maximum of ten percent
(10%). The deduction rate so authorized shall continue in effect throughout the
offering period, except to the extent such rate is changed in accordance with
the following guidelines:

                  (i) The Participant may, at any time during the offering
         period, reduce his or her rate of payroll deduction (or, to the extent
         applicable, the percentage of Compensation to serve as his or her lump
         sum contribution for the initial Purchase Interval of the first
         offering period) to become effective as soon as possible after filing
         the appropriate form with the Plan Administrator. The Participant may
         not, however, effect more than one (1) such reduction per Purchase
         Interval.

                                       6
<PAGE>
                  (ii) The Participant may, prior to the commencement of any new
         Purchase Interval within the offering period, increase the rate of his
         or her payroll deduction by filing the appropriate form with the Plan
         Administrator. The new rate (which may not exceed the ten percent (10%)
         maximum) shall become effective on the start date of the first Purchase
         Interval following the filing of such form.

         B. Payroll deductions shall begin on the first pay day administratively
feasible following the start date of the offering period and shall (unless
sooner terminated by the Participant) continue through the pay day ending with
or immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be required
to be held in any segregated account or trust fund and may be commingled with
the general assets of the Company and used for general corporate purposes.

         C. For the initial Purchase Interval of the first offering period under
the Plan, no payroll deductions shall be required of the Participant until such
time as the Participant affirmatively elects to commence such payroll deductions
following his or her receipt of the 1993 Act prospectus for the Plan. In the
absence of such payroll deductions, if the Participant elects to have shares of
Common Stock purchased on his or her behalf on the Purchase Date for that
initial Purchase Interval, the Participant will be required to contribute the
applicable percentage of his or her Compensation to the Plan in a lump sum
payment immediately prior to the close of that Purchase Interval.

         D. Payroll deductions shall automatically cease upon the termination of
the Participant's purchase right in accordance with the provisions of the Plan.

         E. The Participant's acquisition of Common Stock under the Plan on any
Purchase Date shall neither limit nor require the Participant's acquisition of
Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.

VIII.    PURCHASE RIGHTS

         A. Grant of Purchase Rights. A Participant shall be granted a separate
purchase right for each offering period in which he or she is enrolled. The
purchase right shall be granted on the start date of the offering period and
shall provide the Participant with the right to purchase shares of Common Stock,
in a series of successive installments during that offering period, upon the
terms set forth below. The Participant shall execute a stock purchase agreement
embodying such terms and such other provisions (not inconsistent with the Plan)
as the Plan Administrator may deem advisable.

         Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of section 424(d) of the Code) or hold outstanding
options or other rights to purchase,

                                       7
<PAGE>
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Company or any Company Affiliate.

         B. Exercise of the Purchase Right. Each purchase right shall be
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
effected by applying the Participant's payroll deductions (or, to the extent
applicable, his or her lump sum contribution) for the Purchase Interval ending
on such Purchase Date to the purchase of whole shares of Common Stock at the
purchase price in effect for the Participant for that Purchase Date.

         C. Purchase Price. The purchase price per share at which Common Stock
will be purchased on the Participant's behalf on each Purchase Date within the
particular offering period in which he or she is enrolled shall be equal to,
unless the Plan Administrator determines otherwise prior to the beginning of the
particular offering period, ninety-five percent (95%) of the lower of (i) the
Fair Market Value per share of Common Stock on the start date of that offering
period or (ii) the Fair Market Value per share of Common Stock on that Purchase
Date.

         D. Number of Purchasable Shares. The number of shares of Common Stock
purchasable by a Participant on each Purchase Date during the particular
offering period in which he or she is enrolled shall be the number of whole
shares obtained by dividing the amount collected from the Participant through
payroll deductions during the Purchase Interval ending with that Purchase Date
(or, to the extent applicable, his or her lump sum contribution for that
Purchase Interval) by the purchase price in effect for the Participant for that
Purchase Date. However, the maximum number of shares of Common Stock purchasable
per Participant on any one Purchase Date shall not exceed 900 shares, subject to
periodic adjustments in the event of certain changes in the Company's
capitalization. In addition, the maximum number of shares of Common Stock
purchasable in total by all Participants in the Plan on any one Purchase Date
shall not exceed 50,000 shares, subject to periodic adjustments in the event of
certain changes in the Company's capitalization. However, the Plan Administrator
shall have the discretionary authority, exercisable prior to the start of any
offering period under the Plan, to increase or decrease the limitations to be in
effect for the number of shares purchasable per Participant and in total by all
Participants enrolled in that particular offering period on each Purchase Date
which occurs during that offering period.

         E. Excess Payroll Deductions. Any payroll deductions not applied to the
purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable per Participant or in
total by all Participants on the Purchase Date shall be promptly refunded.

         F. Suspension of Payroll Deductions. In the event that a Participant
is, by reason of the accrual limitations in Article IX, precluded from
purchasing additional shares of Common Stock on one or more Purchase Dates
during the offering period in which he or she is enrolled, then no further
payroll deductions shall be collected from such Participant with respect to
those

                                       8
<PAGE>
Purchase Dates. The suspension of such deductions shall not terminate the
Participant's purchase right for the offering period in which he or she is
enrolled, and payroll deductions shall automatically resume on behalf of such
Participant once he or she is again able to purchase shares during that offering
period in compliance with the accrual limitations of Article IX.

         G. Withdrawal from Offering Period. The following provisions shall
govern the Participant's withdrawal from an offering period:

                  (i) A Participant may withdraw from the offering period in
         which he or she is enrolled at any time prior to the next scheduled
         Purchase Date by filing the appropriate form with the Plan
         Administrator (or its designate), and no further payroll deductions
         shall be collected from the Participant with respect to that offering
         period. Any payroll deductions collected during the Purchase Interval
         in which such withdrawal occurs shall, at the Participant's election,
         be immediately refunded or held for the purchase of shares on the next
         Purchase Date. If no such election is made at the time of such
         withdrawal, then the payroll deductions collected from the Participant
         during the Purchase Interval in which such withdrawal occurs shall be
         refunded as soon as possible.

                  (ii) The Participant's withdrawal from a particular offering
         period shall be irrevocable, and the Participant may not subsequently
         rejoin that offering period at a later date. In order to resume
         participation in any subsequent offering period, such individual must
         re-enroll in the Plan (by making a timely filing of the prescribed
         enrollment forms) on or before the start date of that offering period.

         H. Termination of Purchase Right. Should the Participant cease to
remain an Eligible Employee for any reason (including death, disability or
change in status) while his or her purchase right remains outstanding, then that
purchase right shall immediately terminate, and all of the Participant's payroll
deductions for the Purchase Interval in which the purchase right so terminates
shall be immediately refunded.

         I. Change in Control. Each outstanding purchase right shall
automatically be exercised, immediately prior to the effective date of any
Change in Control, by applying the payroll deductions of each Participant for
the Purchase Interval in which such Change in Control occurs to the purchase of
whole shares of Common Stock at a purchase price per share equal to, unless the
Plan Administrator determines otherwise prior to the beginning of the particular
offering period, ninety-five percent (95%) of the lower of (i) the Fair Market
Value per share of Common Stock on the start date of the offering period in
which such individual is enrolled at the time of such Change in Control or (ii)
the Fair Market Value per share of Common Stock immediately prior to the
effective date of such Change in Control. However, the applicable limitation on
the number of shares of Common Stock purchasable per Participant shall continue
to apply to any such purchase, but not the limitation applicable to the maximum
number of shares of Common Stock purchasable in total by all Participants on any
one Purchase Date.

                                       9
<PAGE>
         The Company shall use its best efforts to provide at least ten (10)
days' prior written notice of the occurrence of any Change in Control, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.

         J. Proration of Purchase Rights. Should the total number of shares of
Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.

         K. Assignability. The purchase right shall be exercisable only by the
Participant and shall not be assignable or transferable by the Participant.

         L. Shareholder Rights. A Participant shall have no shareholder rights
with respect to the shares subject to his or her outstanding purchase right
until the shares are purchased on the Participant's behalf in accordance with
the provisions of the Plan and the Participant has become a holder of record of
the purchased shares.

IX.      ACCRUAL LIMITATIONS

         A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
section 423 of the Code)) of the Company or any Company Affiliate, would
otherwise permit such Participant to purchase more than Twenty-Five Thousand
Dollars ($25,000.00) worth of stock of the Company or any Company Affiliate
(determined on the basis of the Fair Market Value per share on the date or dates
such rights are granted) for each calendar year such rights are at any time
outstanding.

         B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:

                  (i) The right to acquire Common Stock under each outstanding
         purchase right shall accrue in a series of installments on each
         successive Purchase Date during the offering period in which such right
         remains outstanding.

                  (ii) No right to acquire Common Stock under any outstanding
         purchase right shall accrue to the extent the Participant has already
         accrued in the same calendar year the right to acquire Common Stock
         under one or more other purchase rights at a rate equal to Twenty-Five
         Thousand Dollars ($25,000.00) worth of Common Stock (determined on the
         basis of the Fair Market Value per share on the date or dates of grant)
         for each calendar year such rights were at any time outstanding.

                                       10
<PAGE>
         C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions that the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.

         D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.

X.       EFFECTIVE DATE AND TERM OF THE PLAN

         A. The Plan was adopted by the Board on October 12, 2003, and shall
become effective at the Effective Time, provided no purchase rights granted
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the shareholders of
the Company and (ii) the Company shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such shareholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and all sums collected from Participants during
the initial offering period hereunder shall be refunded.

         B. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest of (i) the last business day in October 2013, (ii) the date on
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Change in Control. No
further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following such termination.

XI.      AMENDMENT OF THE PLAN

         A. The Board may alter, amend, suspend or terminate the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Company will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the Company to recognize
compensation expense in the absence of such amendment or termination.

         B. In no event may the Board effect any of the following amendments or
revisions to the Plan without the approval of the Company's shareholders: (i)
increase the number of shares of Common Stock issuable under the Plan, except
for permissible adjustments

                                       11
<PAGE>
in the event of certain changes in the Company's capitalization, (ii) alter the
purchase price formula so as to reduce the purchase price payable for the shares
of Common Stock purchasable under the Plan or (iii) modify the eligibility
requirements for participation in the Plan.

XII.     GENERAL PROVISIONS

         A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.

         B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Company or any Company Affiliate for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Company Affiliate employing such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's employment at any time for any reason, with or without cause.

         C. The provisions of the Plan shall be governed by the laws of the
Commonwealth of Pennsylvania, without resort to that Commonwealth's
conflict-of-laws rules.

                                       12
<PAGE>
                                   SCHEDULE A

                             PARTICIPATING EMPLOYERS

Marlin Leasing Corporation

                                      A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]