exv10w8



 







Exhibit 10.8




NEW CENTURY FINANCIAL CORPORATION

2004 PERFORMANCE INCENTIVE PLAN

PERFORMANCE-ACCELERATED RESTRICTED STOCK AWARD AGREEMENT




     THIS PERFORMANCE-ACCELERATED RESTRICTED STOCK AWARD AGREEMENT (this “Award Agreement”) is
dated as of                      (the “Award Date”) by and between New Century Financial Corporation, a
Maryland corporation (the “Corporation”), and                      (the “Participant”).



WITNESSETH




     WHEREAS, pursuant to the New Century Financial Corporation 2004 Performance Incentive Plan
(the “Plan”), the Corporation hereby grants to the Participant, effective as of the Award Date, a
restricted stock award (the “Award”), upon the terms and conditions set forth herein and in the
Plan.



     NOW THEREFORE, in consideration of services rendered and to be rendered by the Participant,
and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties
agree as follows:



     1. Defined Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meaning assigned to such terms in the Plan.



     2. Grant. Subject to the terms of this Award Agreement, the Corporation hereby grants
to the Participant an Award with respect to an aggregate of ___restricted shares of Common
Stock of the Corporation (the “Restricted Stock”). The Corporation acknowledges that the
consideration for the Restricted Stock shall be the services rendered to the Corporation or any of
its Subsidiaries by the Participant prior to the applicable vesting date, the fair value of which
is not less than the par value per share of the Corporation’s Common Stock.



     3. Vesting. Subject to Section 8 below, the Award shall vest, and restrictions (other
than those set forth in Section 8.1 of the Plan) shall lapse, with respect to 100% of the total
number of shares of Restricted Stock (subject to adjustment under Section 7.1 of the Plan) on the
seventh (7th) anniversary of the Award Date; provided, however, that vesting of all or a
portion of the shares of Restricted Stock may be accelerated pursuant to Exhibit A attached
hereto.



     4. Continuance of Employment. The vesting schedule requires continued employment or
service through each applicable vesting date as a condition to the vesting of the applicable
portion of the Award and the rights and benefits under this Award Agreement. Partial employment or
service, even if substantial, during any vesting period will not entitle the Participant to any
proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a
termination of employment or services as provided in Section 8 below or under the Plan.



     Nothing contained in this Award Agreement or the Plan constitutes an employment or service
commitment by the Corporation, affects the Participant’s status as an employee at will who is
subject to termination without cause, confers upon the Participant any right to remain employed by
or in service to the Corporation or any of its Subsidiaries, interferes in any way



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with the right of the Corporation or any of its Subsidiaries at any time to terminate such
employment or services, or affects the right of the Corporation or any of its Subsidiaries to
increase or decrease the Participant’s other compensation or benefits. Nothing in this paragraph,
however, is intended to adversely affect any independent contractual right of the Participant
without his or her consent thereto.



     5. Dividend and Voting Rights. After the Award Date, the Participant shall be
entitled to cash dividends and voting rights with respect to the shares of Restricted Stock subject
to the Award even though such shares are not vested, provided that such rights shall terminate
immediately as to any shares of Restricted Stock that are forfeited pursuant to Section 8 below.



     6. Restrictions on Transfer. Prior to the time that they have become vested pursuant
to Section 3, neither the Restricted Stock, nor any interest therein, amount payable in respect
thereof, or Restricted Property (as defined in Section 9 hereof) may be sold, assigned,
transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a)
transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.



     7. Stock Issuance.



          (a) Book Entry Form. The Corporation shall issue the shares of Restricted Stock
subject to the Award in book entry form, registered in the name of the Participant with notations
regarding the applicable restrictions on transfer imposed under this Award Agreement; provided,
however, that the Corporation may, in its discretion, elect to issue such shares in certificate
form as provided in Section 7(b) below.




          (b) Certificates to be Held by Corporation; Legend. Any certificates representing
shares of Restricted Stock that may be delivered to the Participant by the Corporation prior to
vesting shall be redelivered to the Corporation to be held by the Corporation until the
restrictions on such shares shall have lapsed and the shares shall thereby have become vested or
the shares represented thereby have been forfeited hereunder. Such certificates shall bear the
following legend:





“The ownership of this certificate and the shares of stock evidenced hereby and any
interest therein are subject to substantial restrictions on transfer under an
Agreement entered into between the registered owner and New Century Financial
Corporation. A copy of such Agreement is on file in the office of the Secretary of
New Century Financial Corporation.”



          (c) Delivery of Certificates Upon Vesting. Promptly after the vesting of any shares
of Restricted Stock pursuant to Section 3, the Corporation shall, as applicable, either remove the
notations on any shares of Restricted Stock issued in book entry form which have vested or deliver
to the Participant a certificate or certificates evidencing the number of shares of Restricted
Stock which have vested (or, in either case, such lesser number of shares as may be permitted
pursuant to Section 8.5 of the Plan). The Participant (or the beneficiary or personal
representative of the Participant in the event of the Participant’s death or disability, as the
case may be) shall deliver to the Corporation any representations or other documents or assurances





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required pursuant to Section 8.1 of the Plan. The shares so delivered shall no longer be
restricted shares hereunder.




          (d) Stock Power; Power of Attorney. If the Corporation elects to issue share
certificates to the Participant, the Participant shall be required to execute a stock power, in a
form prescribed by the Corporation, with respect to such shares. The Corporation shall not deliver
any share certificates in accordance with this Award Agreement unless and until the Corporation
shall have received such stock power executed by such Participant. The Participant, by acceptance
of the Award, shall be deemed to appoint, and does so appoint by execution of this Award Agreement,
the Corporation and each of its authorized representatives as the Participant’s attorney(s)-in-fact
to effect any transfer of unvested forfeited shares (or shares otherwise reacquired by the
Corporation hereunder) to the Corporation as may be required pursuant to the Plan or this Award
Agreement and to execute such documents as the Corporation or such representatives deem necessary
or advisable in connection with any such transfer.




     8. Effect of Termination of Employment or Services.



          (a) General. Subject to earlier vesting as provided in Section 7 of the Plan and
other than as expressly provided below in this Section 8, if the Participant ceases to be employed
by or ceases to provide services to the Corporation or a Subsidiary, the Participant’s shares of
Restricted Stock (and related Restricted Property as defined in Section 9 hereof) shall be
forfeited to the Corporation to the extent such shares have not become vested pursuant to Section 3
upon the date the Participant’s employment or services terminate (regardless of the reason for such
termination, whether with or without cause, voluntarily or involuntarily).




          (b) Death or Disability. Notwithstanding Section 8(a), if the Participant ceases to
be employed by or ceases to provide services to the Corporation or a Subsidiary as a result of the
Participant’s death or Disability, the Participant’s shares of Restricted Stock that have not
become vested pursuant to Section 3 as of the date of such death or Disability shall vest on a
prorated basis determined in the following manner. For purposes of this Section 8(b) only, a
hypothetical vesting schedule shall be created in which the number of such unvested shares of
Restricted Stock shall be divided into eighty-four (84) substantially equal installments with each
such installment vesting on the last day of each month, commencing with the first month following
the month in which the Award Date occurs through and including the eighty-fourth (84th)
month following the month in which the Award Date occurs. Each such installment of shares of
Restricted Stock that would have vested pursuant to the foregoing schedule as of the date of the
Participant’s death or Disability shall automatically become vested as of such date. Fractional
share interests shall be disregarded, but may be cumulated. The Participant’s shares of Restricted
Stock (and related Restricted Property) that would not have vested pursuant to the foregoing
schedule as of the date of the Participant’s death or Disability shall be forfeited to the
Corporation as of such date. For purposes of the Award, “Disability” means a permanent disability
(within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the
Administrator).




          (c) Attainment of Age 65. Subject to earlier vesting as provided in Section 7 of the
Plan, if the Participant continues to be employed by or provide services to the Corporation or a
Subsidiary upon the date the Participant attains age sixty-five (65), the Participant’s shares




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of Restricted Stock that have not become vested pursuant to Section 3 as of such date shall
vest on a prorated basis determined in the following manner. For purposes of this Section 8(c)
only, a hypothetical vesting schedule shall be created in which the number of such unvested shares
of Restricted Stock shall be divided into eighty-four (84) substantially equal installments with
each such installment vesting on the last day of each month, commencing with the first month
following the month in which the Award Date occurs through and including the eighty-fourth
(84th) month following the month in which the Award Date occurs. Each such installment
of shares of Restricted Stock that would have vested pursuant to the foregoing schedule as of the
date the Participant attains age 65 shall automatically become vested as of such date. Subject to
earlier vesting as provided in Section 3 hereof or Section 7 of the Plan, the remaining shares of
Restricted Stock will continue to vest in monthly installments according to the foregoing schedule,
provided that the Participant continues to be employed by or provide services to the Corporation or
a Subsidiary through the applicable vesting date. In the event that the Participant becomes
entitled to performance-accelerated vesting of the Award pursuant to Section 3 hereof, the number
of shares of Restricted Stock that shall become vested as of the date of such acceleration shall
equal: (1) the total number of shares of Restricted Stock subject to the Award that would have
vested pursuant to Exhibit A hereto (assuming for this purpose that no shares had previously vested
pursuant to this Section 8(c)) after giving effect to such acceleration, less (2) the number of
shares of Restricted Stock subject to the Award that had previously vested (determined immediately
before giving effect to such acceleration, and including any shares that had previously vested
pursuant to this Section 8(c) and any shares that would otherwise vest as of the date of such
acceleration pursuant to this Section 8(c)). The shares of Restricted Stock that do not become
vested after giving effect to the foregoing sentence (if any) shall continue to vest in monthly
installments in accordance with the foregoing vesting schedule, and the number of shares subject to
each installment shall be adjusted accordingly so that the remaining unvested shares of Restricted
Stock are scheduled to vest in substantially equal installments. Fractional share interests that
result from any calculation pursuant to this Section 8(c) shall be disregarded, but may be
cumulated. Upon the date the Participant ceases to be employed by or provide services to the
Corporation and its Subsidiaries, any shares of Restricted Stock (and related Restricted Property)
that have not vested in accordance with this Section 8(c) (or any other provision of this Award
Agreement or the Plan) shall be forfeited to the Corporation as of such date.




          (d) Forfeiture of Shares. Upon the occurrence of any forfeiture of shares of
Restricted Stock under this Section 8, such unvested, forfeited shares and related Restricted
Property shall be automatically transferred to the Corporation, without any other action by the
Participant (or the Participant’s beneficiary or personal representative in the event of the
Participant’s death or disability, as applicable); no consideration shall be paid by the
Corporation with respect to such transfer. The Corporation may exercise its powers under Section
7(d) hereof and take any other action necessary or advisable to evidence such transfer. The
Participant (or the Participant’s beneficiary or personal representative in the event of the
Participant’s death or disability, as applicable) shall deliver any additional documents of
transfer that the Corporation may request to confirm the transfer of such unvested, forfeited
shares and related Restricted Property to the Corporation.




     9. Adjustments Upon Specified Events. Upon the occurrence of certain events relating
to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator



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shall make adjustments if appropriate in the number and kind of securities that may become
vested under the Award. If any adjustment shall be made under Section 7.1 of the Plan or an event
described in Section 7.3 of the Plan shall occur and the shares of Restricted Stock are not fully
vested upon such event or prior thereto, the restrictions applicable to such shares of Restricted
Stock shall continue in effect with respect to any consideration or other securities (the
“Restricted Property” and, for the purposes of this Award Agreement, “Restricted Stock” shall
include “Restricted Property”, unless the context otherwise requires) received in respect of such
Restricted Stock. Such Restricted Property shall vest at such times and in such proportion as the
shares of Restricted Stock to which the Restricted Property is attributable vest, or would have
vested pursuant to the terms hereof if such shares of Restricted Stock had remained outstanding.
To the extent that the Restricted Property includes any cash (other than regular cash dividends
provided for in Section 5 hereof), such cash shall be invested, pursuant to policies established by
the Administrator, in interest bearing, FDIC-insured (subject to applicable insurance limits)
deposits of a depository institution selected by the Administrator, the earnings on which shall be
added to and become a part of the Restricted Property. Furthermore, the Administrator shall adjust
the performance measures and performance goals referenced on Exhibit A hereto to the extent (if
any) it determines that the adjustment is necessary or advisable to preserve the intended
incentives and benefits to reflect (1) any material change in corporate capitalization, any
material corporate transaction (such as a reorganization, combination, separation, merger,
acquisition, or any combination of the foregoing), or any complete or partial liquidation of the
Corporation, (2) any change in accounting policies or practices, (3) the effects of any special
charges to the Corporation’s earnings, or (4) any other similar special circumstances.



     10. Tax Withholding. The Corporation (or any of its Subsidiaries last employing the
Participant) shall be entitled to require a cash payment by or on behalf of the Participant and/or
to deduct from other compensation payable to the Participant any sums required by federal, state or
local tax law to be withheld with respect to the vesting of any Restricted Stock. Alternatively,
the Participant or other person in whom the Restricted Stock vests may irrevocably elect, in such
manner and at such time or times prior to any applicable tax date as may be permitted or required
under Section 8.5 of the Plan and rules established by the Administrator (and subject to the
requirements of applicable law), to have the Corporation withhold and reacquire shares of
Restricted Stock at their fair market value at the time of vesting to satisfy any minimum
withholding obligations of the Corporation or its Subsidiaries with respect to such vesting. Any
election to have shares so held back and reacquired shall be subject to such rules and procedures,
which may include prior approval of the Administrator, as the Administrator may impose, and shall
not be available if the Participant makes or has made an election pursuant to Section 83(b) of the
Code with respect to such Award.



     11. Notices. Any notice to be given under the terms of this Award Agreement shall be
in writing and addressed to the Corporation at its principal office to the attention of the
Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s
payroll records. Any notice shall be delivered in person or shall be enclosed in a properly sealed
envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly maintained by the
United States Government. Any such notice shall be given only when received, but if the
Participant is no longer an Eligible Person, shall be deemed to have been duly given five (5)
business days after the date mailed in accordance with the foregoing provisions of this Section 11.



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     12. Plan. The Award and all rights of the Participant under this Award Agreement are
subject to the terms and conditions of the provisions of the Plan, incorporated herein by
reference. The Participant agrees to be bound by the terms of the Plan and this Award Agreement.
The Participant acknowledges having read and understanding the Plan, the Prospectus for the Plan,
and this Award Agreement. Unless otherwise expressly provided in other sections of this Award
Agreement, provisions of the Plan that confer discretionary authority on the Board or the
Administrator do not (and shall not be deemed to) create any rights in the Participant unless such
rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the
Administrator so conferred by appropriate action of the Board or the Administrator under the Plan
after the date hereof.



     13. Entire Agreement. This Award Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The Plan and this Award Agreement may be
amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Participant hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.



     14. Section Headings. The section headings of this Award Agreement are for
convenience of reference only and shall not be deemed to alter or affect any provision hereof.



     15. Governing Law. This Award Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland without regard to conflict of law
principles thereunder.



     16. Stockholder Approval. Notwithstanding anything else contained herein to the
contrary, the effectiveness of the Award is subject to approval by the Corporation’s stockholders
at the Corporation’s 2006 annual meeting of stockholders, or an adjournment thereof, of the
proposed Plan amendments submitted for stockholder approval at that meeting. If such stockholder
approval is not obtained, any shares issued with respect to the Award shall immediately be
forfeited and returned to the Corporation.



[Signature page follows.]




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     IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed on its
behalf by a duly authorized officer and the Participant has executed this Award Agreement by his or
her electronic acceptance hereof.



	 	 	 	 	 
	 	NEW CENTURY FINANCIAL CORPORATION,

a Maryland corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Brad Morrice 	 
	 	 	Title:  	Vice Chairman, President and Chief Operating


Officer 	 
	 



	 	 	 	 	 
	 	PARTICIPANT

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	 	 



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EXHIBIT A




PERFORMANCE-ACCELERATED VESTING





     Subject to Section 8 of this Award Agreement, the Award shall be subject to accelerated
vesting as follows:




	 	(a)	 	If the Corporation’s Before-Tax Net Income (as defined in Appendix A of the
Plan) equals or exceeds $500 million for any period of four (4) consecutive fiscal
quarters of the Corporation that commences on or after the Award Date, 33 1/3% of the
Restricted Shares shall become vested on the last day of such period.
	 
	 	(b)	 	If vesting of the Award accelerates pursuant to clause (a) above and the
Corporation’s Before-Tax Net Income equals or exceeds $600 million for any subsequent
period of four (4) consecutive fiscal quarters of the Corporation that commences after
the last day of the period referred to in clause (a), an additional 33 1/3% of the
Restricted Shares shall become vested on the last day of such subsequent period.
	 
	 	(c)	 	If vesting of the Award accelerates pursuant to clause (b) above and the
Corporation’s Before-Tax Net Income equals or exceeds $720 million for any subsequent
period of four (4) consecutive fiscal quarters of the Corporation that commences after
the last day of the period referred to in clause (b), the Award shall become fully
vested on the last day of such subsequent period.