Document:

Form of Nonqualified Stock Option Agreement

 EXHIBIT 10.3 
  
 SHILOH INDUSTRIES, INC. 
  
 NONQUALIFIED STOCK OPTION AGREEMENT 
  
 WHEREAS,
                                        
         (the “Optionee”) is an employee of
                                        
    , a corporation (“Employer”), and a wholly owned subsidiary of Shiloh Industries, Inc., a Delaware corporation (the “Company”); 
  
 WHEREAS, the execution of this Nonqualified Stock Option Agreement (the “Agreement”) in the form hereof has
been duly authorized by a resolution of the Compensation Committee of the Board of Directors (the “Committee”) of the Company duly adopted on
                            , 20     (the “Date of Grant”); and

  
 WHEREAS, the option granted hereunder is intended to be
a nonqualified stock option and shall not be treated as an “incentive stock option” within the meaning of that term under Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 NOW, THEREFORE, pursuant to the Company’s 1993 Key Employee Stock
Incentive Plan (As Amended) (the “Plan”), the Company hereby grants to the Optionee an option to purchase              shares (the “Option Shares”) of the
Company’s common stock, par value $.01 per share (the “Common Stock”), at              Dollars and
                     Cents ($            ) per share, which purchase price
equals the price per share at which shares of the Common Stock closed on the NASDAQ Stock Market on
                            , 20     (same as “Date of Grant”),
as reported in the Wall Street Journal (the “Exercise Price”) and agrees to cause certificates for any Option Shares purchased hereunder to be delivered to the Optionee under full payment of the aggregate Exercise Price, subject to the
terms and conditions of the Plan and the terms and conditions hereinafter set forth. 
  
 1. (a) Except as otherwise provided on Exhibit A attached hereto, this option for the Option Shares, shall vest ratably over a period of three (3) years according to the following schedule: 
  

	 	(i)	 	One-third (1/3) of the Option Shares shall vest upon the first (1st) anniversary of the Date of Grant; 

  

	 	(ii)	 	An additional one-third (1/3) of the Option Shares shall vest upon the second (2nd) anniversary of the Date of Grant; and 

  

	 	(iii)	 	The final one-third (1/3) of the Option Shares shall vest upon the third (3rd) anniversary of the Date of Grant. 

 Upon a “Change in Control” as hereinafter defined, all Option Shares not previously vested in
accordance with this Agreement shall immediately vest in full and shall be exercisable in whole or in part from time to time, in accordance with this Agreement. 
  

(b) For purposes of the Plan and this Agreement, a change in control (“Change in Control”) shall be deemed to have occurred if: 

 
 (i) any person (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding the Company, the Employer, any of their subsidiaries, MTD Products Inc., or any of its affiliates), should acquire direct or indirect ownership of twenty percent (20%) or more of the
combined voting power of the then outstanding securities of the Company; provided, however, that for purposes of this Section, any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company shall not
constitute a Change of Control; or 
  
 (ii) the
consummation of any one of the following transactions: 
  

	 	(A)	 	any consolidation or merger of the Company in which the Company is not the surviving corporation, other than (i) a merger of the Company in which the holders of the Common Stock of
the Company immediately prior to the merger, have the same proportionate ownership of the surviving corporation immediately after the merger; or (ii) a merger or consolidation of the Company with MTD Products Inc or any of its affiliates; or

  

	 	(B)	 	any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company except for a sale, lease
or exchange to MTD Products Inc or any of its affiliates; or (iii) during any period of two (2) consecutive years, the individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were
directors at the beginning of the period. 

  
 2. The
aggregate Exercise Price may be paid (a) in cash, (b) by check acceptable to the Company, (c) by actual or constructive transfer to the Company of nonforfitable, nonrestricted shares of Common Stock that shall have been owned by the Optionee for at
least 
  

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 six (6) months prior to the date of exercise and have a fair market value, as determined by the Committee, at the time of
exercise equal to the aggregate Exercise Price, or (d) by a combination of any of the foregoing methods of payment. Payment of the aggregate Exercise Price shall be deemed to have been made in cash if the Optionee shall have made arrangements
satisfactory to the Company with a broker who is a member of the National Association of Securities Dealers, Inc. to sell on the date of exercise a sufficient number of the Option Shares being acquired pursuant to the exercise so that the net
proceeds of the sale transaction will at least equal the full amount of the aggregate Exercise Price and pursuant to which the broker undertakes to deliver the full amount of the aggregate Exercise Price to the Company not later than the date on
which the sale transaction will settle in the ordinary course of business. 
  
 3. This option shall terminate on the earliest of the following dates: 
  
 (a) Thirty (30) days after the Optionee ceases to be an employee of the Company, the Employer, or any subsidiary thereof for any reason
other than death or permanent and total disability or as described in Section 3(b) below; 
  
 (b) Ninety (90) days after the Optionee ceases to be an employee of the Company, the Employer, or any subsidiary thereof for any reason of
(i) termination of employment under circumstances determined by the Committee to be for the convenience of the Company, the Employer or any subsidiary thereof, or (ii) retirement under a retirement plan of the Company, the Employer or any subsidiary
thereof at or after the earliest voluntary retirement age provided for therein or retirement at an earlier age with the consent of the Committee; 
  
 (c) One (1) year after the death or permanent and total disability of the Optionee, if the Optionee dies or becomes permanently and
totally disabled (i) while an employee of the Company, the Employer or any subsidiary thereof, or (ii) within the ninety (90) day period referred to in Section 3(b) above; 
  
 (d) Ten (10) years from the Date of Grant; 
  
 (e) In the event that the Optionee commits an act that the Committee determines to have been intentionally
committed and materially inimical to the interests of the Company, the Employer or any subsidiary thereof, this option shall terminate as of the time of the commission of that act, notwithstanding any other provision of this Agreement. Nothing
contained in this Agreement shall limit in any way whatsoever any right that the Company, the Employer or any subsidiary thereof may otherwise have to terminate the employment of the Optionee at any time. 
  
 4. This option may not be transferred by the Optionee except by will or the
laws of descent and distribution and may not be exercised during the lifetime of the Optionee except by the Optionee or, in the event of his or her legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the
Optionee in a fiduciary capacity under state law and court supervision. 
  

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 5. This option may not be exercised if the exercise would involve a violation of any applicable federal
or state securities law in the opinion of the Committee. 
  
 6. If
the Company shall be required to withhold any federal, state, local or foreign tax in connection with an exercise of this option, it shall be a condition to the exercise that the Optionee pay or make provision satisfactory to the Company for the
payment of any such taxes. 
  
 7. For the purposes of this
Agreement, (a) the term “subsidiary” means a corporation, joint venture, partnership, unincorporated association or other entity in which the Company or the Employer, directly or indirectly, owns or controls more than fifty percent (50%)
of the total combined voting or other decision-making power, and (b) the continuous employment of the Optionee with the Company, the Employer or any subsidiary thereof shall not be deemed interrupted, and the Optionee shall not be deemed to have
ceased to be an employee of the Company, the Employer or any subsidiary thereof, by reason of the transfer of employment among the Company, the Employer or any subsidiary thereof. 
  
 8. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern. 
  
 Executed at Cleveland, Ohio this      day of                     , 20    .

  

					
	 SHILOH INDUSTRIES, INC.

		
	 By:
	 	  

	 	 	 Name:
	 	  

	 	 	 Title:
	 	  

	 	 	Company

  
 The undersigned
Optionee hereby acknowledges receipt of an executed original of this Nonqualified Stock Option Agreement and accepts the option granted hereunder, subject to the terms and conditions set forth herein and the terms and conditions of the Plan.

  

	
	 OPTIONEE

	  

  

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 Exhibit A 
  

	Vesting	 	Schedule: 

  

	 	(i)	One-third (1/3) of the Option Shares shall vest upon the first (1st) anniversary of the Date of Grant; 

  

	 	(ii)	An additional one-third (1/3) of the Option Shares shall vest upon the second (2nd) anniversary of the Date of Grant; and 

  

	 	(iii)	The final one-third (1/3) of the Option Shares shall vest upon the third (3rd) anniversary of the Date of Grant, unless otherwise specified as follows: 

  

 - 5 -Employment Agmt., Dated as of Dec. 16, 2004

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  

This Employment Agreement (the “Agreement”) is effective as of December 16, 2004, between New Century Financial Corporation, a Maryland
corporation (the “Company”), and Patti M. Dodge (the “Executive”). In consideration of the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 
  
 ARTICLE I 
 EMPLOYMENT 
  
 The Company hereby employs Executive and Executive accepts employment with the Company upon the terms and conditions herein set forth. 
  
 1.1 Employment. The Company hereby employs Executive, and Executive agrees to serve, as Executive Vice President,
Chief Financial Officer of New Century Financial Corporation, during the term of this Agreement. Executive agrees to perform such duties as may be assigned to Executive from time to time by the Executive Management of the Company and the Board of
Directors. Executive agrees to devote substantially her full business time and attention and best efforts to the affairs of the Company during the term of this Agreement. 
  
 1.2 Term. Where used, “Term” shall refer to entire period of employment of Executive by the Company
beginning on the Effective Date of this Agreement, and ending immediately upon the earliest to occur of the following and ending on the earliest of: 
  

	 	(a)	June 30, 2007; 

  

	 	(b)	The date of termination of Executive’s employment in accordance with Article IV of this Agreement, 

  

	 	(c)	The date of Executive’s voluntary retirement in accordance with the Company’s plans and policies; or 

  

	 	(d)	The date of Executive’s death. 

  
 1.3 Extension of Agreement: Unless this Agreement has been terminated pursuant to Section 1.2 above (and the corresponding provisions of this
Agreement), the Term of this Agreement shall be automatically extended for additional one year periods unless and until 30 days’ written notice is given either by Executive or the Company to cease the automatic renewal of this Agreement (the
“Notice of Non-Renewal”). The parties agree, covenant and represent that Executive and the Company each may decide, in either party’s sole and unfettered discretion, to issue the Notice of Non-Renewal with or without cause, and with
or without prior notice. In the event either party issues a Notice of Non-Renewal, this Agreement will continue in full force and effect until the expiration of the Agreement, and the giving of such notice shall not itself constitute a termination
of this Agreement or a basis for resignation with Good Reason. 
  

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 ARTICLE II 
 COMPENSATION 
  
 2.1
Base Salary. Effective June 1, 2004 and during the employment of Executive, the Company shall pay to Executive a base salary at the rate of $250,000.00 per year during 2004, and thereafter at a rate determined by the Company’s Board of
Directors (the “Base Salary”); provided, however, that Executive’s Base Salary shall be increased by a minimum of 5.0% per year commencing February 1, 2005. The Base Salary shall be payable in substantially equal semi-monthly
installments, less all applicable withholdings and deductions. 
  
 2.2 Bonuses. Executive shall be eligible to participate in a Bonus Plan (the “Plan”) as established and modified by the Company from time to time. Any bonus payment is not earned by Executive until the date it is paid.
Accordingly, notwithstanding any other provision of this Agreement or the Plan, it is a mandatory condition precedent to any bonus payment to which Executive may from time to time become entitled, that Executive be actively employed by the Company
on a continuing full-time basis, in good standing on the date the bonus is actually paid to earn and receive the bonus. Executive acknowledges that, among other things, the bonus is designed primarily as an incentive for Executive to remain in the
Company’s employ during succeeding bonus periods. Bonuses shall not be prorated or apportioned regardless of the manner in which Executive’s employment terminates. 
  
 2.3 Reimbursement of Expenses. Executive shall be entitled to receive prompt reimbursement of all reasonable expenses
incurred by Executive in performing services hereunder, including all expenses of travel, telephone, entertainment and living expenses while away from home on business at the request of, or in the service of, the Company, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures established by the Company. 
  
 2.4 Automobile Expenses. The Company shall provide Executive with an automobile allowance of $500 per month, less applicable taxes and deductions.

  
 2.5 Benefits. Executive shall be entitled to
participate in and be covered by all health, insurance, pension, disability insurance, and other employee plans and benefits established by the Company (collectively referred to herein as the “Company Benefit Plans”) on the same terms as
are generally applicable to other senior executives of the Company, subject to meeting applicable eligibility requirements. 
  
 2.6 Vacations and Holidays. During Executive’s employment with the Company, Executive shall be entitled to an annual vacation leave at full
pay, such vacation to be four (4) weeks in each year of the term hereof or such greater vacation benefits as may be provided for by the Company’s vacation policies applicable to senior executives. Executive shall be entitled to such holidays as
are established by the Company for all employees. 
  
 2.7
Withholdings. The Company shall deduct from all payments made to Executive pursuant to this Agreement all federal and state withholding taxes, old age and survivors and other social security payments, state disability and other insurance
premium payments required to be withheld by applicable law or as otherwise agreed between the Company and Executive. 
  

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 ARTICLE III 
 NON-COMPETITION, CONFIDENTIALITY AND NONDISCLOSURE 
  
 3.1 Confidentiality. Executive will not during Executive’s employment by the Company or thereafter at any time disclose, directly or
indirectly, to any person or entity or use for Executive’s own benefit any trade secrets or confidential information relating to the Company’s business operations, marketing data, business plans, strategies, employees, negotiations and
contracts with other companies, or any other subject matter pertaining to the business of the Company or any of its clients, customers, consultants, licensees, or affiliates, known, learned, or acquired by Executive during the period of
Executive’s employment by the Company (collectively “Confidential Information”), except as may be necessary in the ordinary course of performing Executive’s particular duties as an employee of the Company. 
  
 3.2 Return of Confidential and Trade Secret Material. Executive shall
promptly deliver to the Company upon termination of Executive’s employment with the Company, whether or not for cause and whatever the reason, or at any time the Company may so request, all originals and copies in written form and on computer
disks, of memoranda, notes, records, reports, manuals, and/or any other documents or data of a confidential nature belonging to the Company, in addition to delivering and agreeing not to disclose the following trade secret material and information:

  

	 	(a)	All non-public Financial Information and strategic planning materials. All computer programs and databases belonging to the Company, including, but not limited to:

  

	 	(i)	New Century’s AE Lounge; 

  

	 	(ii)	New Century’s database applications for integrating data for marketing, sales, and loan origination systems into a real-time data system, including applications to map brokers
and applications for Account Executives to manage their territories; 

  

	 	(iii)	Loan pricing models; 

  

	 	(iv)	Automated systems for underwriting and appraisal; and 

  

	 	(v)	Information contained in New Century’s data warehouse and marketing databases. 

  

	 	(b)	All Company loan characteristics reports for production by product and credit grade. 

  

	 	(c)	All preferences of investors for purchasing loan pools. 

  

	 	(d)	All employee lists and employee contact information (including, but not limited to, positions held and home telephone numbers). 

  

	 	(e)	All information regarding borrowers of the Company. 

  

	 	(f)	All sales and marketing programs and strategies of the Company. 

  

	 	(g)	All information regarding the compensation structure for, and amounts paid to, Company employees. 

  

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	 	(h)	All information on the productivity of Company employees, including, but not limited to, information regarding the highest producing Account Executives and Loan Advisors.

  

	 	(i)	All account retention programs for the Company’s Account Executives and Loan Advisors. 

  

	 	(j)	All business practices and methodologies of the Company, which include, but are not limited to: 

  

	 	(i)	The flow used to process loans; 

  

	 	(ii)	Organizational structure and practices within the production groups; 

  

	 	(iii)	Operational practices to ensure proper handling of risks associated with appraisals and loan originations; and 

  

	 	(iv)	New Century’s flash report and other informational reports designed to track the performance of New Century’s products. 

  

	 	(k)	All business studies performed by the Company to: 

  

	 	(i)	Improve marketing strategies and techniques; and 

  

	 	(ii)	Improve market awareness and concentration. 

  

	 	(l)	All broker lists and broker information, including, but not limited to: 

  

	 	(i)	Identities of current and prospective brokers; 

  

	 	(ii)	Broker reports; 

  

	 	(iii)	Broker contact information, including identities of contact persons for brokers; 

  

	 	(iv)	Broker fundings; 

  

	 	(v)	Broker affiliations with Account Executives; 

  

	 	(vi)	Broker business volume; 

  

	 	(vii)	Broker pricing specials; 

  

	 	(viii)	Preferences and requirements of brokers with respect to products, services, terms, pricing information, and other matters; and 

  

	 	(ix)	Broker status information. 

  
 3.3 No Competing Employment. During the term of this Agreement and, (i) if Executive terminates this Agreement, for a period ending one year
thereafter, or, (ii) if longer, for any period during which Executive receives any compensation from the Company hereunder (the “Restricted Period”), Executive shall not, unless she receives the prior written consent of the Company,
directly or indirectly own an interest in, manage, operate, join, control, lend money or render financial assistance to, as an officer, employee, partner, stockholder, consultant or otherwise, any individual, partnership, firm, corporation or
other business organization or entity that, at such time directly competes with, or intends to compete with, the Company or its affiliates in the business of, underwriting, purchasing, securitizing, selling or servicing subprime credit grade secured
loans or any other principal line of business engaged in by the Company at the time of such termination (a “Competing Company”). Notwithstanding the foregoing, 
  

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 Executive shall be entitled to own up to 5% of the outstanding securities of any entity if such securities are registered
under Section 12(b) or (g) of the Securities Exchange Act of 1934, as amended, and, upon approval of the Company’s Board of Directors, Executive shall be entitled to purchase securities of a Competing Company entity if such securities are
offered to investors irrespective of any employment or other participation in the entity by the investor. 
  
 3.4 Prohibition on Solicitation of Customers. During the term of Executive’s employment with the Company and for a period of one year
thereafter or, if longer, for any period during which Executive receives any compensation from the Company hereunder, Executive shall not, directly or indirectly, either for Executive or for any other person or entity, solicit any person or entity
to terminate such person’s or entity’s contractual and/or business relationship with the Company, nor shall Executive interfere with or disrupt or attempt to interfere with or disrupt any such relationship. Executive also shall not solicit
or interfere with the contractual relationship with vendors of the Company. 
  
 3.5 Prohibition on Solicitation of the Company’s Employees or Independent Contractors After Termination. During the term of Executive’s employment with the Company and for a period of one year
thereafter or, if longer, for any period during which Executive receives any compensation from the Company hereunder, Executive will not directly or indirectly solicit any of the Company’s employees, agents, or independent contractors to leave
the employ of the Company for a competitive company or business. 
  
 3.6 Right to Injunctive and Equitable Relief. Executive’s obligations not to disclose or use Confidential Information and to refrain from the solicitations described in this Article III are of a special and unique character,
which gives them a peculiar value. The Company cannot be reasonably or adequately compensated in damages in an action at law in the event Executive breaches such obligations, and the breach of such obligations would cause irreparable harm to the
Company. Therefore, Executive expressly agrees that the Company shall be entitled to injunctive and other equitable relief without bond or other security in the event of such breach in addition to any other rights or remedies which the Company may
possess. Furthermore, the obligations of Executive and the rights and remedies of the Company under this Article III are cumulative and in addition to, and not in lieu of, any obligations, rights, or remedies created by applicable law relating to
misappropriation or theft of trade secrets or confidential information. 
  
 3.7 No Violation of Other Agreements. Executive represents that her performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to (i) not compete or interfere with the
business of a former employer (which term for purposes of this Section 3.7 shall also include persons, firms, corporations and other entities for which Executive has acted as an independent contractor or consultant), (ii) not solicit employees,
customers or vendors of any former employer or (iii) keep in confidence proprietary information acquired by Executive in confidence or in trust prior to Executive’s employment with the Company. Executive represents and warrants to and covenants
with the Company that Executive will not bring to the Company any materials or documents of a former employer containing confidential or proprietary information that is not generally available to the public, unless Executive shall have obtained
express written authorization from any such former employer for their possession and use. 
  

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 ARTICLE IV 
 TERMINATION 
  
 4.1
Definitions. For purposes of this Article IV, the following definitions shall apply to the terms set forth below: 
  
 (a) Cause. “Cause” shall be defined as follows: 
  

	 	(i)	Executive’s conviction for, indictment regarding (or its procedural equivalent), or the entering of a guilty plea (or plea of nolo contendere) to, any crime with respect
to which imprisonment is a possible punishment (whether or not actually imposed), which involves moral turpitude or which might, in the opinion of the Company, cause embarrassment to the Company; 

  

	 	(ii)	Actions by Executive during the term of this Agreement involving willful malfeasance or gross negligence in the performance of Executive’s duties hereunder which could be
materially and demonstrably injurious to the Company; 

  

	 	(iii)	Executive’s refusal to perform the duties of her position as proscribed by the Executive Management of the Company, and/or Executive’s failure to perform the duties of her
position in a manner deemed satisfactory by the Executive Management of the Company; 

  

	 	(iv)	Executive’s commission of an act of fraud, embezzlement, theft or dishonesty against the Company or any of its affiliates, or the discovery that such misconduct has occurred in
the past, 

  

	 	(v)	Executive’s breach of any material term of this Agreement or failure or refusal to perform any material obligation or duty as required by this Agreement; and/or

  

	 	(vi)	Executive’s violation of any reasonable rule or regulation of the Company applicable to Executive. 

  
 (b) Disability. “Disability” shall mean a physical or mental incapacity as a result of which Executive
becomes unable to continue the proper performance of her duties hereunder in substantially a full time capacity (reasonable absences because of sickness for up to ninety (90) consecutive days excepted, provided, however, that any new period of
incapacity or absences shall be deemed to be part of a prior period of incapacity or absences if the prior period terminated within ninety (90) days of the beginning of the new period of incapacity or absence and the new capacity or absence is
determined by the Company’s Board of Directors, in good faith, to be related to the prior incapacity or absence.) 
  
 (c) Good Reason. “Good Reason” shall mean any of the following: 
  

	 	(i)	Any assignment of duties to Executive by the Company’s Board of Directors that constitutes a substantial diminution of Executive’s position, duties, responsibilities or
status with the Company from those in effect as of the date of this Agreement; 

  

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	 	(ii)	Any substantial diminution in Executive’s titles or offices with the Company, except in connection with a termination of Executive’s employment for Cause, Disability,
retirement or Executive’s death; and/or 

  

	 	(iii)	Any failure by the Company to comply with any material provision of this Agreement which has not been cured within 30 days after written notice of such noncompliance has been given
by Executive to the Company. 

  
 4.2 Termination
by Company. The Company may terminate Executive’s employment hereunder immediately for Cause. Subject to the other provisions contained in this Agreement, the Company may terminate this Agreement for any reason other than Cause upon 30
days’ written notice to Executive. 
  
 4.3 Termination by
Executive. Executive may terminate this Agreement upon 30 days’ written notice to the Company. 
  
 4.4 Benefits Received Upon Termination.  
  
 (a) If Executive’s employment is terminated by the Company for Cause, or if this Agreement is terminated by Executive without Good Reason, then the
Company shall pay Executive (i) her Base Salary through the effective date of such termination, and (ii) any vacation earned but not taken through the effective date of such termination (collectively referred to as “Accrued Obligations”).
The Company shall thereafter have no further obligations to Executive under this Agreement and specifically, has no obligation to pay any unearned bonus or other benefit of employment 
  
 (b) If Executive’s employment is terminated by the Company without Cause, or if this Agreement is terminated by
Executive for Good Reason, or if Executive’s employment is terminated as a result of a Change in Control, then the Company shall: 
  

	 	(i)	pay to Executive within two business days following the date of termination all Accrued Obligations through the end of the month during which such termination occurs;

  

	 	(ii)	pay to Executive as severance pay (a) the Executive’s Base Salary in effect as of the date of termination for a period equal to the sum of one (1) year, such payments to be
made in equal installments in accordance with the Company’s usual payroll practices until expiration of the severance period, plus (b) the equivalent amount of Executive’s bonus received in the prior six-month period. Such payments are to
be made in accordance with the Company’s usual payroll practices. During any period of severance pay hereunder, Executive shall not be entitled to receive any bonus, health insurance, life insurance or other benefit of employment.

  

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 (c) Termination Because of Employee Disability. Should Executive become disabled from performing
her duties hereunder as defined above, Executive acknowledges that her employment may be terminated anytime thereafter if such disability continues; provided that, during the period of the disability prior to such termination of employment,
Executive shall continue to receive all compensation and benefits as if she were actively employed less any sums received directly by the Executive, if any, under any policy or policies of disability income insurance purchased by the Company. In the
event of such termination, Executive’s rights to receive any salary or payments under this Agreement shall terminate but Executive shall have the right to continue to receive any and all payments made by an insurance company under any and all
policies of disability insurance purchased by the Company. Executive’s rights under any Company Benefit Plans will be those rights accorded to any terminated employee under the plan provisions and applicable law. Executive will remain entitled
to receive any benefits under state disability or worker’s compensation laws. 
  
 (d) Termination Because of Executive’s Death. In the event of Executive’s death during the term of this Agreement, this Agreement shall automatically terminate. The Company shall pay to
Executive’s estate all Accrued Obligations through the date of death, and Executive’s estate shall be entitled to receive any vested benefits under the terms of any Company Benefit Plans. 
  
 4.5 Notwithstanding the foregoing, if prior to expiration of the period of
salary continuation referred to in section 4.4, subsection (b)(ii) above, Executive commences employment that the Board of Directors deems to be in competition with the Company’s business, or Executive fails to comply with the Non-Competition,
Confidentiality and Nondisclosure terms listed in Article III, the payments and benefits described in section 4.4, subsection (b)(ii) shall cease immediately upon Executive’s commencement of such competing employment or actions in violation of
Executive’s obligations under Article III. 
  
 ARTICLE V

 ASSUMPTION OF OBLIGATIONS BY SUCCESSOR TO COMPANY 
  
 5.1 Assumption of Obligations. The Company will advise any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, of the obligations arising from this Agreement. If the nature of the transaction does not already obligate the successor to
assume all obligations under this Agreement, then the Company will utilize its best efforts to obtain the agreement of the successor or assign to assume all the obligations arising from this Agreement expressly, absolutely and unconditionally, and
to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness
of any such succession or assignment shall be deemed to be a material breach of this Agreement. The Executive, may, at Executive’s sole option, refuse any such assignment of this Agreement, and such refusal will be treated as a voluntary
resignation of employment. The obligations of this Article shall apply equally to the Company as herein before defined, and any future successor or assign to its business which executes and delivers the agreement provided by the Company pursuant to
this Article or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law (i.e. the obligation to obtain the agreement of a potential second successor is assumed by the first successor when it assumes the
obligations of 
  

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 this Agreement). The obligations of this Article shall also apply to any corporation (i.e. subsidiary or affiliated
company) where the Company owns the majority of the voting securities of the corporation and the corporation becomes the employer for Executive at any time during the term of this Agreement. 
  
 5.2 Beneficial Interests. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts are still payable to her hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate. 
  
 ARTICLE VI 
 GENERAL PROVISIONS 
  
 6.1 Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, as follows: 
  

			
	 If to the Company:
	    	New Century Financial Corporation
	 	    	18400 Von Karman, Suite 1000
	 	    	Irvine, CA 92612
	 	    	Attn: General Counsel, Legal Department
		
	 If to the Executive:
	    	Patti M. Dodge
	 	    	26 Oroville
	 	    	Irvine, CA 92602

  
 or such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
  
 6.2 No Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing signed by Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
  
 6.3 Governing Law. This agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the
principles of conflict of laws. 
  
 6.4 Severability or Partial
Invalidity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  

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 6.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and the same instrument. 
  
 6.6 Captions. The captions and paragraph numbers appearing in this Agreement are inserted for the reader’s convenience, and in no way define,
limit, construe or describe the scope or intent of the provisions of this Agreement 
  
 6.7 Legal Fees and Expenses. Should any party institute any action or proceeding to enforce this Agreement or any provision hereof, or for damages by reason of any alleged breach of this Agreement or of any
provision hereof, or for a declaration of rights hereunder, the prevailing party in any such action or proceeding shall be entitled to receive from the other party all costs and expenses, including reasonable attorneys’ fees, incurred by the
prevailing party in connection with such action or proceeding. 
  
 6.8 Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the parties with respect
to the subject matter hereof, except that the parties acknowledge that they have in the past and may in the future enter into Stock Option Agreement(s) reflecting stock option awards to Executive. This Agreement is intended by the parties as the
final expression of their agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement constitutes the
complete and exclusive statement of its terms and that no extrinsic evidence may be introduced in any judicial proceeding involving this Agreement. 
  
 6.9 Assignment. This Agreement and the rights, duties, and obligations hereunder may not be assigned or delegated by any party without the prior
written consent of the other party and any such attempted assignment and delegation shall be void and be of no effect. Notwithstanding the foregoing provisions of this Section 6.9, the Company may assign or delegate its rights, duties, and
obligations hereunder to any person or entity which succeeds to all or substantially all of the business of the Company through merger, consolidation, reorganization, or other business combination or by acquisition of all or substantially all of the
assets of the Company; provided that such person assumes the Company’s obligations under this Agreement in accordance with Section 5. 1. 
  
 6.10 Arbitration. All disputes, controversies, and claims between Executive and the Company, or any of its officers, directors, employees, or
agents in their capacity as such, that arise under or are related to this Agreement or Executive’s employment shall be submitted to binding arbitration pursuant to the Arbitration Agreement attached hereto as Exhibit “A” and
incorporated herein by reference. 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the effective date first written
above. 
  

					
	 Dated: December 16, 2004.
	 	 /s/ Patti M. Dodge

	 	 	 Executive

	 	 	 Patti M. Dodge

	 	 	 26 Oroville

	 	 	 Irvine, CA 92602

		
	 Dated: December 16, 2004.
	 	NEW CENTURY FINANCIAL CORPORATION
			
	 	 	By:	 	 /s/ Edward Gotschall

	 	 	 	 	Edward Gotschall

  

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 EXHIBIT “A” 
  
 AGREEMENT TO ARBITRATE 
  

As an express condition of employment at New Century Financial Corporation (the “Company”), the Company and Patti M. Dodge
(“Executive”) hereby mutually agree that any Claims or Controversies arising out of or relating to this Employment Agreement or Executive’s employment, termination of employment or receipt of employment benefits, including but not
limited to, restricted stock or stock options, that Executive may have in the future against the Company or its officers, directors, employees, or agents in their capacity as such, or that the Company may have against Executive, whether based upon
common law or federal, state, or local statutes or regulations, shall be resolved through binding arbitration. Executive and the Company acknowledge that this Agreement to Arbitrate means that Executive and the Company are relinquishing their rights
to either a jury trial or court trial for the resolution of any claims that Executive and the Company may have against the other. 
  
 Claims or Controversies arising out of Executive’s employment, or its termination, means and includes all claims of harassment and/or discrimination
(including sexual harassment and harassment or discrimination based on race, color, religion, age, sex, sexual orientation, ancestry, national origin, marital status, military service, pregnancy, physical or mental disability, medical condition or
any other protected class or condition), breach of any contract or covenant (express or implied), tort claims, wrongful termination, whistle-blowing and all other claims relating to or stemming from Executive’s employment, or its termination,
except as excluded in the following paragraph. 
  
 Claims not
covered by this Agreement to Arbitrate are (1) claims covered by the Workers’ Compensation Act, (2) claims for unemployment benefits, and (3) claims for injunctive and/or other equitable relief, including but not limited to those orders sought
pursuant to (a) the California Code of Civil Procedure Sections 527.6 and 527.8 to restrain further violence or harassment or threats of violence or harassment, and (b) the Uniform Trade Secrets Act and related laws to stop or prevent unfair
competition and/or the use or improper disclosure of trade secrets or confidential information. 
  
 The party desiring to initiate arbitration shall do so by sending written notice of an intention to arbitrate by registered or certified mail to the other
party. The written notice shall contain a description of the nature of all Claims or Controversies asserted and the facts upon which such claims are based. 
  
 All Claims or Controversies shall be submitted to a single neutral arbitrator. The arbitration shall take place before JAMS/ENDISPUTE in Orange County,
California, unless otherwise mutually agreed. The arbitrator shall be mutually agreed-upon by Executive and the Company pursuant to JAMS’s rules. If Executive and the Company cannot agree upon an arbitrator, the selection process shall be
governed by the rules and procedures of JAMS/ENDISPUTE . Regardless of the arbitrator chosen, the arbitration proceedings shall be governed by the then current procedural rules of JAMS/ENDISPUTE governing the resolution of employment disputes,
except that if a contrary rule exists: (1) all monetary or provisional remedies available under applicable 
  

 A-1 

 state or federal statutory law or common law will remain available to both parties, (2) except as mutually agreed upon by
the parties, there will be no limitation on discovery beyond that which exists in cases litigated in Orange County Superior Court, and (3) the California Rules of Evidence shall apply to the arbitration hearing. 
  
 The arbitration fees will be borne exclusively by the Company; however, each
party to the arbitration shall pay that party’s own costs, attorneys’ fees and witness fees, if any. The arbitrator may, in his or her discretion, award attorneys’ fees and costs, in whole or part, to the prevailing party in a manner
consistent with applicable law and the terms of the Agreement. 
  
 The arbitrator may grant any remedy or relief available under law, without limitation, that the arbitrator determines to be just and equitable based on the evidence introduced at the hearing and any logical and reasonable inferences
therefrom. The decision shall be made in writing and contain a concise statement of the reasons in support of the decision. The decision shall be signed by the arbitrator and mailed to each party. The decision may be judicially enforced (confirmed,
corrected or vacated) pursuant to California Code of Civil Procedure Section 1285 et seq. The decision is final and binding and there is no direct appeal from the decision on the grounds of error in the application of law. 
  
 This Agreement to Arbitrate and arbitration procedure is intended to be the
exclusive method of resolving all Claims or Controversies as described above between Executive and the Company. Should either party pursue any other legal or administrative action against the other regarding any matter subject to this arbitration
clause, the other party shall be entitled to recover its costs, including reasonable attorneys’ fees, incurred in defending such action. 
  
 If any provision of this Agreement is adjudged to be void or otherwise unenforceable, in whole or in part, such adjudication shall not affect the validity
of the remainder of the Agreement. 
  
 This is the complete
agreement between the parties on the subject of arbitration of the described Claims or Controversies and supersedes any prior or contemporaneous oral or written understandings on the subject. 
  

 A-2 

 I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT TO 
 ARBITRATE, THAT I UNDERSTAND ITS TERMS AND THAT BY SIGNING THIS 
 AGREEMENT, I AM GIVING UP MY RIGHT TO A JURY TRIAL. I HAVE 
 ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT
IN RELIANCE 
 ON ANY PROMISE OR REPRESENTATIONS OF THE COMPANY OTHER THAN 
 THOSE CONTAINED IN THIS AGREEMENT. 
  

					
	 Dated: December 16, 2004.
	 	 /s/ Patti M. Dodge

	 	 	 Executive

	 	 	 Patti M. Dodge

		
	 Dated: December 16, 2004.
	 	 NEW CENTURY FINANCIAL CORPORATION

			
	 	 	 By:
	 	 /s/ Edward Gotschall

	 	 	 	 	 Edward Gotschall

  

 A-3

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