As filed with the Securities and Exchange Commission on
September 22, 1997.
Registration No. ___-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
New Century Financial Corporation
(Exact name of registrant as specified in its charter)
___________________
Delaware 33-0683629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612
(714) 440-7030
______________________________
(Address of principal executive offices)
NEW CENTURY FINANCIAL CORPORATION EMPLOYEE STOCK PURCHASE
PLAN
(Full title of the plan)
Brad A. Morrice
New Century Financial Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(714) 440-7030
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, par 2,000,000<1> $16.50<2> $33,000,000<2> $10,000<2>
value $0.01 shares
per share
<FN>
<1> This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options
and other rights to purchase or acquire the shares of
Common Stock covered by the Prospectus and, pursuant to
Rule 416(c) under the Securities Act of 1933, an
indeterminate number of shares which by reason of certain
events specified in the Plan may become subject to the
Plan.
<2> Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on September 15, 1997, as
reported on the Nasdaq National Market System.
The Exhibit Index for this Registration Statement is at
page S-3.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant
information) will be sent or given to optionees as specified
by Rule 428(b)(1) of the Securities Act of 1933, as amended
(the "Securities Act"). Such documents need not be filed with
the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 of
the Securities Act. These documents, which include the
statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of New Century Financial
Corporation (the "Company") filed with the Commission are
incorporated herein by reference:
(a) The Company's Registration Statement on Form S-1,
filed with the Commission on June 2, 1997, which
contains audited financial statements for the
Company's year ended December 31, 1996 and quarter
ended March 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the
Company's quarterly period ended June 30, 1997; and
(c) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, filed
with the Commission on June 2, 1997.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into the prospectus
and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
amended, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock is registered pursuant to Section 12
of the Exchange Act. Therefore, the description of the
securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Certain matters relating to this offering are being
passed upon for the Company by O'Melveny & Myers LLP, Newport
Beach, California. A partner of such firm owns 211,032 shares
of the Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation provides
that to the fullest extent permitted by applicable law a
director of the Company shall not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary
duty as a director. Under the Delaware General Corporation
Law, liability of a director may not be limited (i) for any
breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or
stock redemptions or repurchases, and (iv) for any transaction
from which the director derives an improper personal benefit.
The effect of the provisions of the Company's Certificate of
Incorporation is to eliminate the rights of the Company and
its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a
director for breach of the fiduciary duty of care as a
director (including breaches resulting from negligent or
grossly negligent behavior), except as provided in the
situations described in clauses (i) through (iv) above. This
provision does not limit or eliminate the rights of the
Company or any stockholder to seek nonmonetary relief such as
an injunction or rescission in the event of a breach of a
director's duty of care.
The Bylaws of the Company provide that the Company will
indemnify its directors and officers to the fullest extent
permitted by the Delaware General Corporation Law. In
addition, the Company has entered into agreements with each of
the directors and officers of the Company pursuant to which
the Company has agreed to indemnify, subject to certain
limitations, such director or officer from claims,
liabilities, damages, expenses, losses, costs, penalties or
amounts paid in settlement incurred by such director or
officer in or arising out of his capacity as a director,
officer, employee and/or agent of the Company or any other
corporation of which such person is a director or officer at
the request of the Company to the maximum extent provided by
applicable law. In addition, such director or officer is
entitled to an advance of expenses to the maximum extent
authorized or permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index on page S-3.
<PAGE>
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus
required by Section 10(a)(3) of the Securities
Act;
(ii) To reflect in the prospectus
any facts or events arising after the effective
date of this Registration Statement (or the most
recent post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in this
Registration Statement or any material change to
such information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
with or furnished to the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated
by reference in this Registration Statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-
effective amendment shall be deemed to be a new regis-
tration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized,
in the City of Irvine, State of California, on September 17,
1997.
By: /s/ Brad A. Morrice
Brad A. Morrice, Vice Chairman
of the Board and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints Robert K. Cole and Brad A. Morrice his true and
lawful attorney-in-fact and agent, with full powers of
substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities and on the dates
indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Robert K. Cole Chairman of the Board, September 17, 1997
Robert K. Cole Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ Brad A. Morrice Vice Chairman of the Board, September 17, 1997
Brad A. Morrice President, General Counsel,
Secretary and Director
/s/ Edward F. Gotschall Vice Chairman of the Board, September 17, 1997
Edward F. Gotschall Chief Operating Officer -
Finance/Administration
and Director (Principal
Financial and Accounting
Officer)
/s/ Steven G. Holder Vice Chairman of the Board, September 17, 1997
Steven G. Holder Chief Operating Officer -
Loan Production/Operations
and Director
/s/ John C. Bentley Director September 17, 1997
John C. Bentley
/s/ Sherman I. Chu Director September 17, 1997
Sherman I. Chu
_________________ Director
Harlan W. Smith
/s/ Martin F. Ryan Director September 17, 1997
Martin F. Ryan
/s/ Michael M. Sachs Director September 17, 1997
Michael M. Sachs
/s/ Fredric Forster Director September 17, 1997
Fredric Forster
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 New Century Financial Corporation Employee
Stock Purchase Plan.
4.2 Form of New Century Financial Corporation
Employee Stock Purchase Plan Subscription
Agreement.
5. Opinion of Counsel (opinion re legality).
23.1 Consent of KPMG Peat Marwick LLP (consent
of independent auditors).
23.2 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
</TABLE>
NEW CENTURY FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
Page
1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
3. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . 3
4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS . . . . . . 3
5. OFFERING PERIODS. . . . . . . . . . . . . . . . . . . . . 3
6. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . 4
7. METHOD OF PAYMENT OF CONTRIBUTIONS. . . . . . . . . . . . 4
8. GRANT OF OPTION . . . . . . . . . . . . . . . . . . . . . 5
9. EXERCISE OF OPTION. . . . . . . . . . . . . . . . . . . . 6
10. DELIVERY. . . . . . . . . . . . . . . . . . . . . . . . . 6
11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS. . . 6
12. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . 7
13. DESIGNATION OF BENEFICIARY. . . . . . . . . . . . . . . . 7
14. TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . 8
15. USE OF FUNDS; INTEREST. . . . . . . . . . . . . . . . . . 8
16. REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . 9
17. ADJUSTMENTS OF AND CHANGES IN THE STOCK . . . . . . . . . 9
18. TERM OF PLAN; AMENDMENT OR TERMINATION. . . . . . . . . . 9
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 10
20. CONDITIONS UPON ISSUANCE OF SHARES. . . . . . . . . . . . 10
21. PLAN CONSTRUCTION . . . . . . . . . . . . . . . . . . . . 10
22. EMPLOYEES' RIGHTS . . . . . . . . . . . . . . . . . . . . 11
23. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
NEW CENTURY FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the New Century
Financial Corporation Employee Stock Purchase Plan.
1. PURPOSE
The purpose of this Plan is to provide Eligible Employees
with an incentive to advance the best interests of the
Corporation (and those Subsidiaries which may be designated
by the Committee as "Participating Corporations") by
providing a method whereby they may voluntarily purchase
Common Stock at a favorable price and upon favorable terms.
2. DEFINITIONS
Capitalized terms used herein which are not otherwise
defined shall have the following meanings.
"Account" shall mean the bookkeeping account maintained
by the Corporation, or by a recordkeeper on behalf of the
Corporation, for a Participant pursuant to Section 7(a).
"Board" shall mean the Board of Directors of the
Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the committee appointed by the
Board to administer this Plan pursuant to Section 12.
"Common Stock" shall mean the common stock of the
Corporation.
"Company" shall mean the Corporation and its
Subsidiaries.
"Compensation" shall mean an Eligible Employee's
regular earnings, overtime pay, sick pay, commissions,
vacation pay, incentive compensation and bonuses.
Compensation also includes any amounts contributed as salary
reduction contributions to a plan qualifying under Section
401(k), 125 or 129 of the Code. Any other form of
remuneration is excluded from Compensation, including (but
not limited to) the following: prizes, awards, housing
allowances, stock option exercises, stock appreciation
rights, restricted stock exercises, performance awards, auto
allowances, tuition reimbursement and other forms of imputed
income.
"Contributions" shall mean all bookkeeping amounts
credited to the Account of a Participant pursuant to Section
7(a).
"Corporation" shall mean New Century Financial
Corporation, a Delaware corporation.
"Eligible Employee" shall mean any employee of the
Corporation, or of any Subsidiary which has been designated
in writing by the Committee as a "Participating Corporation"
(including any Subsidiaries which have become such after the
date that this Plan is approved by shareholders).
Notwithstanding the foregoing, "Eligible Employee" shall not
include any employee who (i) has not as of the Grant Date
completed at least 90 days of continuous full-time
employment with the Company, (ii) whose customary employment
is for less than 20 hours per week, or (iii) whose customary
employment is for not more than five months in a calendar
year.
"Effective Date" shall mean October 13, 1997.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exercise Date" shall mean, with respect to an Offering
Period, the last day of that Offering Period.
"Fair Market Value" shall mean the closing price of a
Share on The New York Stock Exchange on such date (or, in
the event that the Common Stock is not traded on such date,
on the immediately preceding trading date), as reported in
The Wall Street Journal or, in the event the Common Stock is
not listed on The New York Stock Exchange, the "Fair Market
Value" shall be the closing price of the Common Stock for
such date (or, in the event that the Common Stock is not
traded on such date, on the immediately preceding trading
date), as reported by the National Association of Securities
Dealers Automated Quotation ("NASDAQ") or, if such price is
not reported, the mean of the bid and asked prices per Share
as reported by NASDAQ or, if such prices are not so listed
or reported, as determined by the Committee (or its
delegate), in its discretion
"Grant Date" shall mean the first day of each Offering
Period.
"Offering Period" shall mean the six-consecutive month
period commencing on each January 1 and July 1; provided,
however, that the initial Offering Period shall be a short
Offering Period which shall commence on the Effective Date
and end on December 31, 1997.
"Option" shall mean the stock option to acquire Shares
granted to a Participant pursuant to Section 8.
"Option Price" shall mean the per share exercise price
of an Option as determined in accordance with Section 8(b).
"Participant" shall mean an Eligible Employee who has
elected to participate in this Plan and who has filed a
valid and effective Subscription Agreement to make
Contributions pursuant to Section 6.
"Plan" shall mean this New Century Financial
Corporation Employee Stock Purchase Plan, as amended from
time to time.
"Rule 16b-3" shall mean Rule 16b-3 promulgated under
Section 16.
"Section 16" shall mean Section 16 of the Exchange Act.
"Share" shall mean a share of Common Stock.
"Subscription Agreement" shall mean the written
agreement filed by an Eligible Employee with the Corporation
pursuant to Section 6 to participate in this Plan.
"Subsidiary" shall mean any corporation in an unbroken
chain of corporations (beginning with the Corporation) in
which each corporation (other than the last corporation)
owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one or more of the
other corporations in the chain.
3. ELIGIBILITY
Any person employed as an Eligible Employee as of a Grant
Date shall be eligible to participate in this Plan during
the Offering Period in which such Grant Date occurs, subject
to the Eligible Employee satisfying the requirements of
Section 6.
4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
The total number of Shares to be made available under this
Plan is 2,000,000 authorized and unissued or treasury shares
of Common Stock, or Shares repurchased on the open market,
subject to adjustments pursuant to Section 17. In the event
that all of the Shares made available under this Plan are
subscribed prior to the expiration of this Plan, this Plan
may be terminated in accordance with Section 18.
5. OFFERING PERIODS
During the term of this Plan, the Corporation will offer
Options to purchase Shares to all Participants during each
Offering Period. Each Option shall become effective on the
Grant Date. The term of each Option shall be six months
(except with respect to those Options granted during the
first Offering Period) and shall end on the Exercise Date.
The first Offering Period shall commence on or after the
Effective Date. Offering Periods shall continue until this
Plan is terminated in accordance with Section 18, or, if
earlier, until no Shares remain available for Options
pursuant to Section 4.
6. PARTICIPATION
An Eligible Employee may become a participant in this Plan
by completing a Subscription Agreement on a form approved by
and in a manner prescribed by the Committee (or its
delegate). To become effective, Subscription Agreements
must be filed with the Corporation prior to the applicable
Grant Date and must set forth the amount or whole percentage
of the Eligible Employee's Compensation (which shall not be
less than 1% and not more than 10% of such Eligible
Employee's Compensation) to be credited to the Participant's
Account as Contributions each pay period. The Committee may
permit Eligible Employees to make separate Contribution
elections with respect to the bonus portion of their
Compensation, on such terms and conditions as the Committee
may prescribe. Subscription Agreements shall contain the
Eligible Employee's authorization and consent to the
Corporation's withholding from his or her Compensation the
amount of his or her Contributions. A Subscription
Agreement shall remain valid only for the Offering Period
for which it relates.
7. METHOD OF PAYMENT OF CONTRIBUTIONS
(a) The Corporation shall maintain on its books, or cause
to be maintained by a recordkeeper, an Account in the
name of each Participant. The percentage of
Compensation elected to be applied as Contributions by
a Participant shall be deducted from such Participant's
Compensation on each payday during the period for
payroll deductions set forth below and such payroll
deductions shall be credited to that Participant's
Account as soon as administratively practicable after
such date. A Participant may not make any additional
payments to his or her Account. A Participant's
Account shall be reduced by any amounts used to pay the
Option Price of Shares acquired, or by any other
amounts distributed pursuant to the terms hereof.
(b) Payroll deductions with respect to an Offering Period
shall commence as of the first day of the payroll
period which coincides with or immediately follows the
applicable Grant Date and shall end on the last day of
the payroll period which coincides with or immediately
precedes the applicable Exercise Date, unless sooner
terminated by the Participant as provided in this
Section or until his or her participation terminates
pursuant to Section 11.
(c) A Participant may terminate his or her Contributions
during an Offering Period by completing and filing with
the Corporation, in such form and on such terms as the
Committee (or its delegate) may prescribe, a written
withdrawal form which shall be signed by the
Participant. Such termination shall be effective as
soon as administratively practicable after its receipt
by the Corporation.
(d) A Participant may discontinue or otherwise change the
level of his or her Contributions (within Plan limits)
during an Offering Period by completing and filing with
the Corporation, in such form and on such terms as the
Committee (or its delegate) may prescribe, a written
change in Contributions election which shall be signed
by the Participant. Such change shall be effective as
soon as administratively practicable after its receipt
by the Corporation. A Participant shall make no more
than two elections pursuant to this Section 7(d) in any
one Offering Period and any elections in excess of such
limit shall be invalid.
8. GRANT OF OPTION
(a) On each Grant Date, each Eligible Employee who is a
participant during that Offering Period shall be
granted an Option to purchase a number of Shares. The
Option shall be exercised on the Exercise Date. The
number of Shares subject to the Option shall be
determined by dividing the Participant's Account
balance as of the applicable Exercise Date by the
Option Price.
(b) The Option Price per Share of the Shares subject to an
Option shall be the lesser of: (i) 90% of the Fair
Market Value of a Share on the applicable Grant Date;
or (ii) 90% of the Fair Market Value of a Share on the
applicable Exercise Date.
(c) Notwithstanding anything else contained herein, a
person who is otherwise an Eligible Employee shall not
be granted any Option or other right to purchase Shares
under this Plan to the extent (i) it would, if
exercised, cause the person to own "stock" (as such
term is defined for purposes of Section 423(b)(3) of
the Code) possessing 5% or more of the total combined
voting power or value of all classes of stock of the
Corporation, or any Subsidiary, or (ii) such Option
causes such individual to have rights to purchase stock
under this Plan and any other plan of the Company
qualified under Section 423 of the Code which accrue at
a rate which exceeds $25,000 of the fair market value
of the stock of the Corporation or of a Subsidiary
(determined at the time the right to purchase such
Stock is granted) for each calendar year in which such
right is outstanding. For this purpose a right to
purchase Shares accrues when it first become
exercisable during the calendar year. In determining
whether the stock ownership of an Eligible Employee
equals or exceeds the 5% limit set forth above, the
rules of Section 424(d) of the Code (relating to
attribution of stock ownership) shall apply.
9. EXERCISE OF OPTION
Unless a Participant's Plan participation is terminated as
provided in Section 11, his or her Option for the purchase
of Shares shall be exercised automatically on the Exercise
Date for that Offering Period, without any further action on
the Participant's part, and the maximum number of Shares
subject to such Option shall be purchased at the Option
Price with the balance of such Participant's Account. The
Committee, in its discretion and prior to the applicable
Offering Period, may limit the purchase of fractional Shares
under the Plan; provided that if any amount (which is not
sufficient to purchase a whole Share) remains in a
Participant's Account after the exercise of his or her
Option on the Exercise Date: (i) such amount shall be
credited to such Participant's Account for the next Offering
Period, if he or she is then a Participant; or (ii) if such
Participant is not a Participant in the next Offering
Period, or if the Committee so elects, such amount shall be
refunded to such Participant as soon as administratively
practicable after such date.
10. DELIVERY
As soon as administratively practicable after the Exercise
Date, the Corporation shall deliver to each Participant a
certificate representing the Shares purchased upon exercise
of his or her Option. The Corporation may make available an
alternative arrangement for delivery of Shares to a
recordkeeping service. The Committee (or its delegate), in
its discretion, may either require or permit the Participant
to elect that such certificates be delivered to such
recordkeeping service. In the event the Corporation is
required to obtain from any commission or agency authority
to issue any such certificate, the Corporation will seek to
obtain such authority. Inability of the Corporation to
obtain from any such commission or agency authority which
counsel for the Corporation deems necessary for the lawful
issuance of any such certificate shall relieve the
Corporation from liability to any Participant except to
return to the Participant the amount of the balance in his
or her Account.
11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
(a) Upon a Participant's termination from employment with
the Company for any reason or in the event that a
Participant is no longer an Eligible Employee or if the
Participant elects to terminate Contributions pursuant
to Section 7(c), at any time prior to the last day of
an Offering Period in which he or she participates,
such Participant's Account shall be paid to him or her
or in cash, or, in the event of such Participant's
death, paid to the person or persons entitled thereto
under Section 13, and such Participant's Option for
that Offering Period shall be automatically terminated.
(b) A Participant's termination from Plan participation
precludes the Participant from again participating in
this Plan during that Offering Period. However, such
termination shall not have any effect upon his or her
ability to participate in any succeeding Offering
Period, provided that the applicable eligibility and
participation requirements are again then met. A
Participant's termination from Plan participation shall
be deemed to be a revocation of that Participant's
Subscription Agreement and such Participant must file a
new Subscription Agreement to resume Plan participation
in any succeeding Offering Period.
12. ADMINISTRATION
(a) The Board shall appoint the Committee, which shall be
composed of not less than two members of the Board.
Each member of the Committee, in respect of any
transaction at a time when an affected Participant may
be subject to Section 16 of the Exchange Act, shall be
a "non-employee director" within the meaning of Rule
16b-3 promulgated under Section 16. The Board may, at
any time, increase or decrease the number of members of
the Committee, may remove from membership on the
Committee all or any portion of its members, and may
appoint such person or persons as it desires to fill
any vacancy existing on the Committee, whether caused
by removal, resignation, or otherwise. The Board may
also, at any time, assume or change the administration
of this Plan.
(b) The Committee shall supervise and administer this Plan
and shall have full power and discretion to adopt,
amend and rescind any rules deemed desirable and
appropriate for the administration of this Plan and not
inconsistent with the terms of this Plan, and to make
all other determinations necessary or advisable for the
administration of this Plan. The Committee shall act
by majority vote or by unanimous written consent. No
member of the Committee shall be entitled to act on or
decide any matter relating solely to himself or herself
or any of his or her rights or benefits under this
Plan. The Committee shall have full power and
discretionary authority to construe and interpret the
terms and conditions of this Plan, which construction
or interpretation shall be final and binding on all
parties including the Corporation, Participants and
beneficiaries. The Committee may delegate ministerial
non-discretionary functions to third parties, including
officers of the Corporation.
(c) Any action taken by, or inaction of, the Corporation,
the Board or the Committee relating to this Plan shall
be within the absolute discretion of that entity or
body. No member of the Board or Committee, or officer
of the Corporation shall be liable for any such action
or inaction.
13. DESIGNATION OF BENEFICIARY
(a) A Participant may file, in a manner prescribed by the
Committee (or its delegate), a written designation of a
beneficiary who is to receive any Shares or cash from
such Participant's Account under this Plan in the event
of such Participant's death. If a Participant's death
occurs subsequent to the end of an Offering Period but
prior to the delivery to him or her of any Shares
deliverable under the terms of this Plan, such Shares
and any remaining balance of such Participant's Account
shall be paid to such beneficiary (or such other person
as set forth in Section 13(b)) as soon as
administratively practicable after the Corporation
receives notice of such Participant's death and any
outstanding unexercised Option shall terminate. If a
Participant's death occurs at any other time, the
balance of such Participant's Account shall be paid to
such beneficiary (or such other person as set forth in
Section 13(b)) in cash as soon as administratively
practicable after the Corporation receives notice of
such Participant's death and such Participant's Option
shall terminate. If a Participant is married and the
designated beneficiary is not his or her spouse,
spousal consent shall be required for such designation
to be effective.
(b) Beneficiary designations may be changed by the
Participant (and his or her spouse, if required) at any
time on forms provided and in the manner prescribed by
the Committee (or its delegate). If a Participant dies
with no validly designated beneficiary under this Plan
who is living at the time of such Participant's death,
the Corporation shall deliver all Shares and/or cash
payable pursuant to the terms hereof to the executor or
administrator of the estate of the Participant, or if
no such executor or administrator has been appointed,
the Corporation, in its discretion, may deliver such
Shares and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the
Corporation, then to such other person as the
Corporation may designate.
14. TRANSFERABILITY
Neither Contributions credited to a Participant's Account
nor any Options or rights with respect to the exercise of
Options or right to receive Shares under this Plan may be
anticipated, alienated, encumbered, assigned, transferred,
pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution, or as provided
in Section 13) by the Participant. Any such attempt at
anticipation, alienation, encumbrance, assignment, transfer,
pledge or other disposition shall be without effect and all
amounts shall be paid and all shares shall be delivered in
accordance with the provisions of this Plan. Amounts
payable or Shares deliverable pursuant to this Plan shall be
paid or delivered only to the Participant or, in the event
of the Participant's death, to the Participant's beneficiary
pursuant to Section 13.
15. USE OF FUNDS; INTEREST
All Contributions received or held by the Corporation under
this Plan will be included in the general assets of the
Corporation and may be used for any corporate purpose. No
interest will be paid to any Participant or credited to his
or her Account under this Plan.
16. REPORTS
Statements shall be provided to Participants as soon as
administratively practicable following each Exercise Date.
Each Participant's statement shall set forth, as of such
Exercise Date, that Participant's Account balance
immediately prior to the exercise of his or her Option, the
Fair Market Value of a Share, the Option Price, the number
of Shares purchased and his or her remaining Account
balance, if any.
17. ADJUSTMENTS OF AND CHANGES IN THE STOCK
In the event that the Shares shall be changed into or
exchanged for a different number or kind of shares of stock
or other securities of the Corporation or of another
corporation (whether by reason of merger, consolidation,
recapitalization, stock split, combination of shares, or
otherwise), or if the number of Shares shall be increased
through a stock split or the payment of a stock dividend,
then there shall be substituted for or added to each Share
theretofore reserved for sale under this Plan, the number
and kind of shares of stock or other securities into which
each outstanding Share shall be so changed, or for which
each such Share shall be exchanged, or to which each such
Share is entitled, as the case may be, or the number or kind
of securities which may be sold under this Plan and the
purchase price per Share shall be appropriately adjusted
consistent with such change in such manner as the Committee
(or its delegate) may deem equitable to prevent substantial
dilution or enlargement of rights granted to, or available
for, Eligible Employees under this Plan.
18. TERM OF PLAN; AMENDMENT OR TERMINATION
(a) This Plan shall become effective as of the Effective
Date. No new Offering Periods shall commence on or
after the tenth anniversary of the Effective Date and
this Plan shall terminate on such date unless sooner
terminated pursuant to this Section 18.
(b) The Board may amend, modify or terminate this Plan at
any time without notice. Shareholder approval for any
amendment or modification shall not be required, except
to the extent required by Section 423 of the Code or
other applicable law, or deemed necessary or advisable
by the Board. No amendment, modification, or
termination pursuant to this Section 18(b) shall,
without written consent of the Participant, affect in
any manner materially adverse to the Participant any
rights or benefits of such Participant or obligations
of the Corporation under any Option granted under this
Plan prior to the effective date of such change.
Changes contemplated by Section 17 shall not be deemed
to constitute changes or amendments requiring
Participant consent. Notwithstanding the foregoing,
the Committee shall have the right to designate from
time to time the Subsidiaries whose employees may be
eligible to participate in this Plan and such
designation shall not constitute any amendment to this
Plan requiring shareholder approval.
19. NOTICES
All notices or other communications by a Participant to the
Corporation contemplated by this Plan shall be deemed to
have been duly given when received in the form and manner
specified by the Committee (or its delegate) at the
location, or by the person, designated by the Committee (or
its delegate) for that purpose.
20. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Option unless
the exercise of such Option and the issuance and delivery of
such Shares complies with all applicable provisions of law,
domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, any
applicable state securities laws, the rules and regulations
promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed.
As a condition precedent to the exercise of any Option, if,
in the opinion of counsel for the Corporation such a
representation is required under applicable law, the
Corporation may require any person exercising such Option to
represent and warrant that the Shares subject thereto are
being acquired only for investment and without any present
intention to sell or distribute such Shares.
21. PLAN CONSTRUCTION
(a) It is the intent of the Corporation that transactions
in and affecting Options in the case of Participants
who are or may be subject to the prohibitions of
Section 16 satisfy any then applicable requirements of
Rule 16b-3 so that such persons (unless they otherwise
agree) will be entitled to the exemptive relief of Rule
16b-3 in respect of those transactions and will not be
subject to avoidable liability thereunder.
Accordingly, this Plan shall be deemed to contain and
the Shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions
as may be required by Rule 16b-3 to qualify for the
maximum exemption from Section 16 with respect to Plan
transactions.
(b) This Plan and Options are intended to qualify under
Section 423 of the Code.
(c) If any provision of this Plan or of any Option would
otherwise frustrate or conflict with the intents
expressed above, that provision to the extent possible
shall be interpreted so as to avoid such conflict. If
the conflict remains irreconcilable, the Committee may
disregard the provision if it concludes that to do so
furthers the interest of the Corporation and is
consistent with the purposes of this Plan as to such
persons in the circumstances.
22. EMPLOYEES' RIGHTS
Nothing in this Plan (or in any agreement related to this
Plan) shall confer upon any Eligible Employee or Participant
any right to continue in the service or employ of the
Company or constitute any contract or agreement of service
or employment, or interfere in any way with the right of the
Company to reduce such person's compensation or other
benefits or to terminate the services or employment or such
Eligible Employee or Participant, with or without cause, but
nothing contained in this Plan or any document related
hereto shall affect any other contractual right of any
Eligible Employee or Participant. No Participant shall have
any rights as a shareholder until a certificate for Shares
has been issued in the Participant's name following exercise
of his or her Option. No adjustment will be made for
dividends or other rights as a shareholder for which a
record date is prior to the issuance of such Share
certificate. Nothing in this Plan shall be deemed to create
any fiduciary relationship between the Corporation and any
Participant.
23. MISCELLANEOUS
(a) This Plan and related documents shall be governed by,
and construed in accordance with, the laws of the State
of California. If any provision shall be held by a
court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan
shall continue to be fully effective.
(b) Captions and headings are given to the sections of this
Plan solely as a convenience to facilitate reference.
Such captions and headings shall not be deemed in any
way material or relevant to the construction of
interpretation of this Plan or any provision hereof.
(c) The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the
Company. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any
other forms of incentives or compensation for employees
of the Company, or (ii) to grant or assume options
(outside the scope of and in addition to those
contemplated by this Plan) in connection with any
proper corporate purpose.
NEW CENTURY FINANCIAL CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
Attached to this Subscription Agreement as Exhibits A and B
are copies of the New Century Financial Corporation Employee
Stock Purchase Plan (the "Plan") and related Prospectus. The
Plan is voluntary and provides Eligible Employees the opportunity
to purchase shares of the Company's Common Stock at a discount.
You should complete this form if you want to participate in the
Plan commencing with the ___________________ to _______________
Offering Period. IN ORDER TO BE VALID, THIS SUBSCRIPTION
AGREEMENT MUST BE PROPERLY EXECUTED AND RECEIVED BY THE
CORPORATION ON OR BEFORE ______________.
DEFERRAL ELECTION. If you are an Eligible Employee (as defined
in the Plan) as of _________________, you may participate in the
Plan for the ________________ to _______________ Offering Period.
To commence participation in the Plan, initial the box below and
indicate the level of Contributions that are to be deducted from
your Compensation. You should indicate the level of
Contributions that are to be deducted from your Compensation
(excluding bonuses) and from your bonuses (if any).
___ I hereby authorize the Company to deduct from my paycheck
each pay period __________% (designate a whole number from
1% to 10%, or zero) of my Compensation (excluding bonuses)
and __________% (designate a whole number from 1% to 10%, or
zero) of my bonuses, for the purchase of Common Stock under
the Plan. My Contributions will be deducted from each one
of my paychecks beginning with the first full pay period
commencing on _____________ and will continue for the entire
Offering Period (unless my Plan participation terminates or
until I file a Withdrawal Form or a Change in Contributions
Form with the Corporation pursuant to the terms of the
Plan). My Contributions are subject to certain limits under
the Plan and any Contributions in excess of these limits
will be refunded to me. I must file a new Subscription
Agreement for each Offering Period in which I am eligible
and wish to participate in the Plan.
BENEFICIARY DESIGNATION. (Please initial the following box if
you have attached a Designation of Beneficiary form. If you have
already filed a Designation of Beneficiary form under the Plan,
you do not need to file a new form unless you wish to change your
beneficiary.)
___ I hereby acknowledge that I have read and completed the
Designation of Beneficiary attached hereto as Exhibit C.
SIGNATURE. I hereby agree to be bound by the terms of the Plan,
acknowledge receipt of a copy of the Plan and Prospectus, and
authorize the election, payroll deductions, and beneficiary
designation (if applicable) specified above.
________________________ __________________________
Signature Date
________________________ __________________________
Print Name Social Security Number
________________________ __________________________
Street Address City, State, Zip Code
<PAGE>
[O'Melveny & Myers LLP Letterhead]
September
19th
1 9 9 7
619,481-007
NB1-325508.V1
New Century Financial Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612
Re: Registration on Form S-8 of New Century
Financial Corporation (the "Company")
Ladies and Gentlemen:
At your request, we have examined the Registration
Statement on Form S-8 to be filed with the Securities and
Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of 2,000,000
shares of Common Stock, $0.01 par value per share, of the
Company (the "Common Stock"), to be issued pursuant to the
New Century Financial Corporation 1995 Stock Option Plan
(the "Plan"). We have examined the proceedings heretofore
taken and to be taken in connection with the authorization
of the Plan and the Common Stock to be issued pursuant to
and in accordance with the Plan.
Based upon such examination and upon such matters of
fact and law as we have deemed relevant, we are of the
opinion that the Common Stock has been duly authorized by
all necessary corporate action on the part of the Company
and, when issued in accordance with such authorization, the
provisions of the Plan and relevant agreements duly
authorized by and in accordance with the terms of the Plan,
will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit
to the Registration Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
The Board of Directors
New Century Financial Corporation:
We consent to incorporation by reference in the
registration statement of Form S-8 of New Century
Financial Corporation of our report dated March
7, 1997, except for note 4 to the consolidated
financial statements, which is as of March 28, 1997,
with respect to the consolidated balance sheets of
New Century Financial Corporation and subsidiary as
of December 31, 1996 and 1995 and the related
consolidated statements of operations, changes
in stockholders' equity and cash flows for the year ended
December 31, 1996 and the period from November 17, 1995
(inception) to December 31, 1995, which report appears
in the registration statement on Form S-1 dated June 25,
1997 of New Century Financial Corporation.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Orange County, California
September 22, 1997
