EXHIBIT 10.3

NEW CENTURY FINANCIAL CORPORATION
KEY EMPLOYEE INCENTIVE PLAN

PLAN OBJECTIVE:
The New Century Financial Corporation Executive Incentive Plan (the “Plan”) is
designed to maximize assets available for distribution to creditors by providing
incentives to certain key employees of New Century Financial Corporation (the
“Company”) to maximize the consideration received by the Company upon the
consummation of the sale of the (i) Company’s servicing assets and servicing
platform pursuant to that certain agreement Asset Purchase Agreement with
Carrington Capital Management, LLC and its affiliate, dated April 2, 2007, or
the overbid process contemplated therein (the “Servicing Assets Sale”)
(ii) certain mortgage loans originated by the Company, as well as residual
interests in certain securitization trusts owned by the Company pursuant to that
certain Asset Purchase Agreement with Greenwich Capital Financial Products,
Inc., dated April 2, 2007, or the overbid process contemplated therein (the
“Mortgage Assets Sale”) and (iii) the Company’s wholesale, retail and other
financial asset classes (other than tax refunds and assets included in the
Servicing Assets Sale and the Mortgage Assets Sale) (the “Other Assets Sale”).

ELIGIBLE EMPLOYEES:
The Plan covers the employees of the Company and its subsidiaries listed on the
tables titled “Tier I Employees” (the “Tier I Employees”), “Tier II Employees”
(the “Tier II Employees”), “Tier III Employees” (the “Tier III Employees”) and
“Tier IV Employees” (the “Tier IV Employees”) (collectively, the “Plan
Participants”), each attached as part of Exhibit A hereto (“Exhibit A”). Plan
Participants will be eligible to participate in and receive that share, if any,
of those Plan Pools (as defined below) as has been set forth opposite their name
on Exhibit A, with the entitlement to any award subject to the other terms and
conditions of the Plan as set forth herein.

All payments under the Plan shall be in lieu of any other performance bonus or
retention compensation under any other plan, program, agreement, applicable law
or policy otherwise applicable to the Plan Participants by the Company or any of
its subsidiaries (collectively, the “Debtors”). As a condition precedent of any
obligation of the Company to make any payment to a Plan Participant under the
Plan, the Plan Participant shall, prior to or upon the date that such payment is
made to the Plan Participant, be required to fully execute and return to the
Company a general release and waiver of claims, excluding those claims
specifically excepted from the release and waiver as described therein, in
substantially the form attached hereto as Exhibit B. The Company shall have no
obligation to make any payment under the Plan and shall not make any payment to
any Plan Participant that does not satisfy such release requirement or who
otherwise revokes such release within any revocation period afforded by
applicable law.

PLAN POOLS:
The amounts contributed (each a “Contribution”) by the Company, if any, to make
payments under the Plan (the “Plan Pools”) shall be based on the liquidation
prices received for sales (the “Sales”) of the Company’s various assets and
shall be calculated as follows:

Servicing Assets Sale Pool
The Contribution to the Servicing Assets Sale Pool, if any, upon the
consummation of the Servicing Assets Sale (the “Servicing Assets Sale
Contribution”) will be calculated based on the extent to which the ratio of
(i) the net liquidation price to (ii) the principal amount of loans held by
securitization trusts and third party whole loan purchasers for which the
Company has mortgage service rights (such ratio, “BPS”) equals or exceeds 50.0.
There will be no Servicing Asset Sale Contribution if BPS is less than 50.0. If
BPS is equal to 50.0, the Servicing Assets Sale Contribution will be $710,581.
If BPS is greater than 50.0, the Servicing Assets Sale Contribution will be
increased proportionately e.g. if BPS is 57.5 (115% of 50.0), the Servicing
Assets Sale Contribution will be $817,168 (115% of $710,581).

Mortgage Assets Sale Pool
The Contribution to the Mortgage Assets Sale Pool, if any, upon the consummation
of the Mortgage Assets Sale (the “Mortgage Assets Sale Contribution”) will be
based on the extent to which the liquidation price (the “Mortgage Assets Sale
Price”) equals or exceeds $47,250,000. There will be no Mortgage Asset Sale
Contribution if the Mortgage Assets Sale Price is less than $47,250,000. If the
Mortgage Asset Sale Price is equal to $47,250,000, the Mortgage Asset Sale
Contribution will be $222,190. If the Mortgage Asset Sale Price is greater than
$47,250,000, the Mortgage Assets Sale Contribution will be equal to $222,190
plus 2% of the amount by which the Mortgage Asset Sale Price exceeds $47,250,000
e.g. if the Mortgage Assets Sale Price is $54,337,500, the Mortgage Assets Sale
Contribution will be $363,940 ($222,190 + (($54,337,500 – $47,250,000) X 2%)).

Other Assets Sale Pool
The Contribution to the Other Assets Sale Pool, if any, upon the consummation of
the Other Assets Sale (the “Other Assets Sale Contribution”) will be based on
the extent to which the liquidation price (the “Other Assets Sale Price”) equals
or exceeds the Other Assets Sale target price set forth on Exhibit C (the
“Target Price”). There will be no Other Assets Sale Contribution if the Other
Assets Sale Price is less than the Target Price. If the Other Asset Sale Price
is equal to the Target Price, the Other Asset Sale Contribution will be
$786,340. If the Other Assets Sale Price is greater than the Target Price and
equal to or less than $37,375,000, then the Other Assets Sale Contribution will
be equal to $786,340 plus 2.5% of the amount by which the Other Assets Sale
Price exceeds the Target Price, e.g. if the Other Assets Sale Price is $X, which
exceeds the Target Price but is equal to or less than $37,375,000, the Other
Assets Sale Contribution will be calculated as follows: Other Assets Sale
Contribution = ($786,340 + (($X – Target Price) X 2.5%)) (the “2.5%
Contribution”). If the Other Assets Sale Price is greater than the Target Price
and greater than $37,375,000, then the Other Assets Sale Contribution will be
equal to $786,340 plus the 2.5% Contribution plus 6% of the amount by which the
Other Assets Sale Price exceeds $37,375,000, e.g. if the Other Assets Sale Price
is $Y, which exceeds the Target Price and $37,375,000, the Other Assets Sale
Contribution will be calculated as follows: Other Assets Sale Contribution =
($786,340 + 2.5% Contribution + (($Y – $37,375,000) X 6%)).

PLAN PAYMENTS:
Awards will be paid within 50 days following the consummation of each respective
Sale; provided, however, that if any portion of the sales price for any of the
asset classes is held back or subject to an escrow (each a “Holdback”) by the
purchaser thereof, a proportionate percentage of the contribution to the Plan
Pool for that asset class will be held back by the Company and will be
contributed to such Plan Pool, if at all, at such time as the purchaser delivers
payment of the Holdback, with the related awards being paid to the Plan
Participants within 50 days thereafter.

TERMINATION OF EMPLOYMENT:
Awards under the Plan are offered as discretionary incentive amounts. If a Plan
Participant voluntarily terminates employment or is terminated “for cause”, such
Plan Participant will not thereafter be entitled to any unpaid awards, including
for unpaid awards related to Holdbacks as described above. In the event a Plan
Participant’s employment is terminated by the Company or one of its subsidiaries
other than “for cause”, the Participant will be entitled to any unpaid awards.

Additionally, if there is any ongoing investigation by the Audit Committee (the
“Audit Committee”) of the Company’s Board of Directors (the “Board”) into the
actions or omissions of a Plan Participant at the time such Plan Participant
becomes entitled to any Incentive Bonus under the Plan, which could result in
the Company having the right to terminate such Plan Participant “for cause”, the
Company will be entitled to delay payment of such bonus (without any interest
accruing thereon) until the matter is determined by the Audit Committee. If the
Company would have the right to terminate such Plan Participant “for cause”
based on the findings of the Audit Committee, then the Company will not be
obligated to make and will not make any payments of such bonus (even if such
Plan Participant’s employment had terminated for other reasons) to such Plan
Participant.

For purposes of the Plan, the term “for cause” means, either before or after the
adoption of the Plan:

  •   Commission of a crime against the Company or its affiliates, customers or
employees, whether prosecuted or not;

  •   a finding by the Audit Committee that the Plan Participant engaged in
willful misconduct, or was grossly negligent, in the performance of his or her
duties;

  •   Conviction of (or pleading guilty or nolo contendere to, or entering a
similar plea to) any other crime or violation of law, statute or regulation that
creates an inability to perform job duties;

  •   Failure or inability to perform job duties due to intoxication by drugs or
alcohol during working hours;

  •   A material and direct conflict of interest, not specifically waived in
advance by the Company;

  •   Unauthorized use or disclosure of confidential information that belongs to
the Company or its affiliates, customers or employees;

  •   Habitual neglect of duties or repeated absences from work;

  •   Refusal to follow the instructions of a supervisor or the Board (or a
committee thereof); or

  •   Other material misconduct including, but not limited to: falsification of
Company records; theft; sexual harassment; or possession of firearms, controlled
substances or illegal drugs on Company premises or while performing Company
business.

FURTHER ACTIONS:
As a condition to each Plan Participants participation in the Plan, such Plan
Participant shall agree to take such further actions as are reasonably requested
by the Company, including such actions as the Company may request subsequent to
the termination of such Plan Participant’s employment with the Company or its
subsidiaries, as the case may be, to assist the Company and its subsidiaries in
the conduct of the bankruptcy cases filed under chapter 11 of the United States
Bankruptcy Code to which they are currently parties.

CHANGE OF ADDRESS:
The Plan Participants shall be responsible for notifying the Company of any
change of address before payment is made by mail notification to [Name].

NO PROMISE OF CONTINUED EMPLOYMENT, FULL-TIME ATTENTION, AND GOOD STANDING:
The Plan and any Plan Participant’s selection as a participant in the Plan does
not, and is in no manner intended to constitute, a promise of employment for any
period of time or to change a Plan Participant’s status, if applicable, as an at
will employee subject to termination of employment by his or her employer at any
time for any reason.

TAXES:
All payments will be subject to standard withholding and deductions. Neither the
Company nor any of its subsidiaries, officers or agents makes or has made any
representation about the tax consequences of any payments or benefits offered by
the Company to any Plan Participant under the Plan.

SEVERABILITY:
If any provision of the Plan is determined to be invalid or unenforceable, in
whole or in part, this determination will not affect any other provision of the
Plan and the provision in question shall be modified so as to be rendered
enforceable in a manner consistent with the intent of the parties insofar as
possible. Any waiver of or breach of any of the terms of the Plan shall not
operate or be construed as a waiver of any other breach of such terms or
conditions or of any other terms and conditions, nor shall any failure to
enforce any provision hereof operate or be construed as a waiver of such
provision or of any other provision.

CHOICE OF LAW AND VENUE:
The Plan will be governed by the laws of the State of California,
notwithstanding that State’s conflict of law provisions. The Company and each of
the Plan Participants shall irrevocably and unconditionally consent to the
exclusive jurisdiction of the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”). The Company and each of the Plan Participants
shall irrevocably and unconditionally waive any objection to the laying of venue
of any action, suit, or proceeding arising out of or related to the Plan in the
Bankruptcy Court and shall further irrevocably and unconditionally waive and
agree not to plead or claim that any such action, suit or proceeding brought in
the Bankruptcy Court has been brought in an inconvenient forum.

ENTIRE AGREEMENT AND AMENDMENT:
This document constitutes the complete, final and exclusive embodiment of the
terms and conditions of the Plan and may only be modified in writing signed by
an authorized officer of the Company. Any agreement between any Plan Participant
and the Company or any of its subsidiaries with regard to the Plan and its
subject matter is superseded in its entirety by this document.

NO ASSIGNMENT:
The rights of a Plan Participant or any other person to any payment or other
benefits under the Plan may not be assigned, transferred, pledged, or encumbered
except by will or the laws of decent or distribution.