EXHIBIT 10.2

NEW CENTURY FINANCIAL CORPORATION
KEY EMPLOYEE INCENTIVE RETENTION PLAN

PLAN OBJECTIVE:
The New Century Financial Corporation Key Employee Incentive Retention Plan (the
“Plan”) is designed to (a) assist New Century Financial Corporation (the
“Company”) to retain key personnel critical to the successful operation of the
Company and its subsidiaries and (b) maximize assets available for distribution
to creditors by providing incentives to certain personnel to maximize the
consideration received by the Company upon the consummation of the sale of
(i) the Company’s servicing assets and servicing platform pursuant to that
certain 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. All Plan Participants
will be eligible to participate in the Retention Pool (as defined below) and the
Critical Retention Pool (as defined below) and receive Retention Bonuses (as
defined below) and Critical Retention Bonuses (as defined below), however, only
those employees with an amount set forth opposite their name in the column for
an Incentive Pool (as defined below) will be eligible to participate in and
receive Incentive Bonuses (as defined below) from that Incentive Pool. The
entitlement to any bonus is 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 pay any Retention Bonus, Critical Retention Bonus
or Incentive Bonus to any Plan Participant, the Plan Participant shall, prior to
or upon the date that a Retention Bonus, Critical Retention Bonus or Incentive
Bonus is paid 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 pay and shall not pay any Retention Bonus, Critical Retention
Bonus or Incentive Bonus 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:

Retention Pool
The Company will contribute $1,037,952 (the “Retention Pool”) to make retention
bonuses (the “Retention Bonuses”) to be paid under the Plan.

Incentive Pools
The amounts contributed (each a “Contribution”) by the Company, if any, to make
incentive bonuses (the “Incentive Bonuses”) under the Plan (the “Incentive
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
The Contribution, 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 $119,387. 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 $137,295 (115% of
$119,387).

Mortgage Assets Sale
The Contribution, 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 $43,044. If
the Mortgage Asset Sale Price is greater than $47,250,000, the Mortgage Assets
Sale Contribution will be equal to $43,044 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 $184,794
($43,044 + (($54,337,500 – $47,250,000) X 2%)).

Other Assets Sale

The Contribution, 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 $121,824. 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 $121,824 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 = ($121,824 + (($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 $121,824 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 = ($121,824 + 2.5% Contribution + (($Y –
$37,375,000) X 6%)).

Critical Retention Pool
The Company will contribute $175,000 (the “Critical Retention Pool”) to make
payments of bonuses (the “Critical Retention Bonuses”) under the Plan. The
Critical Retention Pool may be distributed by the Company in its sole
discretion, in addition to any Retention Bonuses or Incentive Bonuses, to
recognize contributions made by the Company’s employees receiving such Critical
Retention Bonuses toward increasing the liquidation value of the Company’s
assets; provided, however, that no Plan Participant will be eligible to receive
a Critical Retention Bonus greater than (i) $40,000 or (ii) 20% of such Plan
Participant’s current annual salary at the Company without the prior approval of
the creditors committee.

PLAN PAYMENTS:
Plan Participants shall be eligible to receive that portion of the Retention
Pool set forth opposite their name on Exhibit A. Retention Bonuses and Critical
Retention Bonuses, if any, for Plan Participants who are designated as servicing
employees on Exhibit A will be paid on June 15, 2007, and for all other Plan
Participants will be paid on July 9, 2007 (the applicable date as to a
particular Plan Participant is referred to as his or her “Release Date”) to all
such Plan Participants (i) then actively employed in his or her then currently
held position with the Company on a full-time basis in good standing (defined as
not, before or after adoption of the Plan, having violated the Company’s
policies and procedures or otherwise engaged in conduct warranting disciplinary
action, and performance and attendance at or above standards) or (ii) whose
employment was terminated other than “for cause.” If a Plan Participant is on
approved leave status during a portion of the period beginning on the Plan
implementation date and ending on the Release Date applicable to such Plan
Participant (the “Retention Period”), such Plan Participant will remain eligible
to receive a Retention Bonus, but the Retention Bonus will be pro-rated for the
portion(s) of the Retention Period during which he or she was employed on
active, full-time status in good standing. If a Plan Participant is on leave
status for the majority or the entirety of the Retention Period, such Plan
Participant will not be eligible to receive any portion of the Retention Bonus.

Additionally, Tier I Employees and Tier II Employees shall receive the share of
the Incentive Pools set forth opposite their name on Exhibit A. Incentive
Bonuses will be paid to Tier I Employees and Tier II Employees 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 bonuses being paid to the Plan Participants within 50 days
thereafter.

TERMINATION OF EMPLOYMENT:
Retention Bonuses and Critical Retention Bonuses under the Plan are offered as
discretionary incentive amounts. If a Plan Participant voluntarily terminates
employment or is involuntarily terminated “for cause” (as defined below) before
such Plan Participant’s Release Date, the Plan Participant will not receive any
Retention Bonus or Critical Retention Bonus under the Plan. 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 the full amount of
his or her Retention Bonus and Critical Retention Bonus, if any (and his or her
Release Date shall be deemed to be the date of such termination of employment).

Incentive Bonuses 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
Incentive Bonuses, including unpaid bonuses 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 Incentive Bonuses.

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 Retention Bonus, Critical Retention Bonus or 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.