As filed with the Securities and Exchange Commission on
December 7, 1998.
Registration No. 333-_____
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
(949) 440-7030
(Address of principal executive offices)
___________________
New Century Financial Corporation Deferred Compensation Plan
(Full title of the plan)
___________________
Brad A. Morrice
Vice Chairman, President and Secretary
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: (949) 440-7030
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<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
Deferred
Compensation $5,000,000 100% $5,000,000(2) $1,390
Obligations(1)
(1) The Deferred Compensation Obligations being registered are
general unsecured obligations of New Century Financial Corporation
(the "Company") to pay deferred
compensation in the future to participating members of a
select group of management or highly compensated employees in
accordance with the terms of the New Century Financial
Corporation Deferred Compensation Plan (the "Plan").
(2) Estimated solely for purposes of determining
the registration fee.
The Exhibit Index for this Registration Statement is on page 9.
</TABLE>
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 employees 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.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of the Company filed with the
Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the
Company's fiscal year ended December 31, 1997;
(b) The Company's Quarterly Reports on Forms 10-Q for the
quarterly periods ended March 31, 1998, June 30, 1998,
and September 30, 1998; and
(c) The Company's Current Report on Form 8-K dated January
12, 1998.
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 Plan provides a select group of management or highly
compensated employees (the "Eligible Employees") of the Company
and certain of its affiliates with the opportunity to defer the
receipt of certain pre-tax cash compensation. The obligations
of the Company under the Plan (the "Deferred Compensation
Obligations") will be general unsecured obligations of the
Company to pay deferred compensation in the future to
participating Eligible Employees (the "Participants") in
accordance with the terms of the Plan from the general assets of
the Company, and will rank pari passu with other unsecured and
unsubordinated indebtedness of the Company from time to time
outstanding. The Deferred Compensation Obligations will be
denominated and payable in United States dollars.
Each Participant may elect to defer under the Plan a
portion of his or her cash compensation that may otherwise be
payable in a calendar year. A Participant's compensation
deferrals are credited to the Participant's bookkeeping account
("Account") maintained under the Plan. Each Participant's
Account is credited on a periodic basis with a deemed rate of
earnings.
With certain exceptions, Deferred Compensation Obligations
will be paid after: (i) the Participant's retirement from the
Company, or if later and elected by the Participant, the
Participant's attainment of age 65; or (ii) the year specified
by the Participant (an "In-Service Distribution"); as elected by
the Participant at the time of the deferral. The Company may,
however, pay Deferred Compensation Obligations in the year
following a participant's termination of employment with the
Company (for reasons other than retirement) or in connection
with the termination of the Plan. Participants may generally
elect that payments be made in a lump sum or installments,
although the Company may mandate payment in the form of a lump
sum in certain circumstances.
No amount payable under the Plan shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, voluntary or involuntary. Any attempt
to dispose of any rights to benefits payable under the Plan
shall be void.
The Deferred Compensation Obligations are not subject to
redemption, in whole or in part, prior to the individual payment
dates selected by the Participants, except that Participants may
withdraw all or a portion of the value of their Plan accounts
under certain specified circumstances. However, the Company
reserves the right to amend or terminate the Plan at any time.
The total amount of the Deferred Compensation Obligations
is not determinable because the amount will vary depending upon
the level of participation by Eligible Employees and the amounts
of their compensation. The duration of the Plan is indefinite
(subject to the Company's ability to terminate the Plan). The
Deferred Compensation Obligations are not convertible into
another security of the Company. The Deferred Compensation
Obligations will not have the benefit of a negative pledge or
any other affirmative or negative covenant on the part of the
Company. Each Participant will be responsible for acting
independently with respect to, among other things, the giving of
notices, responding to any requests for consents, waivers or
amendments pertaining to the Deferred Compensation Obligations,
enforcing covenants and taking action upon a default by the
Company.
Item 5. Interests of Named Experts and Counsel
The validity of the original issuance of the Deferred
Compensation Obligations registered hereby is passed on for the
Company by Stergios Theologides. Mr. Theologides is the Vice
President and General Counsel of the Company, is compensated as
an employee of the Company, is the holder of options to acquire
shares of the Company's Common Stock and is expected to be
eligible to participate in the Plan.
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 9.
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 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; 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.
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 December 4, 1998.
By: /s/ Brad A. Morrice
Brad A. Morrice
Vice Chairman, President and
Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Robert K. Cole and Brad A. Morrice, or each of them
individually, 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 attorneys-in-fact and
agents, 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 attorneys-in-fact and agents, or either of them
individually, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, 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, Chief December 4, 1998
Robert K. Cole Executive Officer and
Director (Principal Executive Officer)
/s/ Brad A. Morrice Vice Chairman, December 4, 1998Brad A.
Morrice Secretary
and Director
/s/ Edward F. Gotschall Vice Chairman, Chief December 4, 1998Edward F.
Gotschall Financial Officer and
Director (Principal
Financial and
Accounting Officer)
/s/ Steven G. Holder Vice Chairman, Chief December 4, 1998
Steven G. Holder Operating Officer -
Lending Operation and
Director
/s/ John C. Bentley Director December 4, 1998
John C. Bentley
/s/ Sherman I. Chu Director December 4, 1998
Sherman I. Chu
/s/ Martin F. Ryan Director December 4, 1998
Martin F. Ryan
Director
Michael M. Sachs
Director
Fredric Forster
Director
Francis J. Partel, Jr.
</TABLE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4. New Century Financial Corporation Deferred
Compensation Plan.
5. Opinion of Company 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").
NEW CENTURY FINANCIAL CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE 1
In recognition of the services provided by certain key employees,
the Board of Directors of New Century Financial Corporation hereby
adopts a deferred compensation plan (the "Plan") to make additional
retirement benefits and increased financial security, on a tax favored
basis, available to those individuals effective January 1, 1999.
ARTICLE 2
DEFINITIONS
Affiliate. "Affiliate" means any firm, partnership, or
corporation that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control
with the Company. "Affiliate" also includes any other organization
similarly related to the Company that is designated as such by the
Board.
Beneficiary. "Beneficiary" means the person or persons
designated as such in accordance with Section 12.3.
Board. "Board" means the Board of Directors of New Century
Financial Corporation.
Code. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
Committee. "Committee" means the persons appointed by the Plan
Administrator, and which also may act for the Company or the Board in
making decisions and performing specified duties under the Plan.
Company. "Company" means New Century Financial Corporation and
any Affiliate which is authorized by the Plan Administrative Committee
to adopt the Plan and cover its Eligible Employees and whose
designation as such has become effective upon acceptance of such
status by the board of directors of the Affiliate. An Affiliate may
revoke its acceptance of such designation at any time, but until such
acceptance has been revoked, all the provisions of the Plan and
amendments thereto shall apply to the Eligible Employees of the
Affiliate. In the event the designation is revoked by the board of
directors of an Affiliate, the Plan shall be deemed terminated only
with respect to such Affiliate.
Compensation. "Compensation" means the total amount of cash
remuneration paid by the Company to an Eligible Employee for any
calendar year of employment as wages, commissions, bonuses and other
monetary incentives, including the Participant's contributions under
this Plan and under any other plan of deferred compensation maintained
by the Company or an Affiliate but not taking into account any Company
contributions to benefit plans, all fringe benefits, moving and
relocation expenses and other forms of welfare benefits.
Compensation Deferral. "Compensation Deferral' means that
portion of Compensation as to which a Participant has made an annual
irrevocable election to defer receipt until the date specified under
the In-Service Distribution Option or the Retirement Option.
Disabled. "Disabled" means a mental or physical condition which
qualifies a Participant for benefits under the New Century Financial
Corporation Long Term Disability Plan.
Distribution Option. "Distribution Option" means the two
distribution options which are available under the Plan, consisting of
the Retirement Distribution Option and the In-Service Distribution
Option.
Distribution Option Account. "Distribution Option Account" or
"Accounts" means, with respect to a Participant, the Retirement
Distribution Account and/or the In-Service Distribution Account
established on the books of account of the Company, pursuant to
Section 5.1, for each Distribution Option Period.
Distribution Option Period. "Distribution Option Period" means a
period of five Plan Years for which an Eligible Employee elects, in
the Enrollment Agreement, the time and manner of payment of amounts
credited to the Eligible Employee's In-Service Distribution Option
Account for such Plan Years.
Earnings Crediting Options. "Earnings Crediting Options" means
the deemed investment options selected by the Participant from time to
time pursuant to which deemed earnings are credited to the
Participant's Distribution Option Accounts.
Effective Date. "Effective Date" means the effective date of the
Plan which is January 1, 1999.
Eligible Employee. "Eligible Employee" means an Employee who is
a member of the group of selected management and/or highly compensated
Employees of the Company and who is designated by the Committee as
eligible to participate in the Plan for a Plan Year.
Employee. "Employee" means any individual employed by the
Company on a regular, full time basis (in accordance with the
personnel policies and practices of the Employer), including citizens
of the United States employed outside of their home country and
resident aliens employed in the United States; provided, however, that
to qualify as an "Employee" for purposes of the Plan, the individual
must be a member of a group of "key management or other highly
compensated employees" within the meaning of Sections 201, 301 and 401
of the Employee Retirement Income Security Act of 1974, as amended.
End Termination Date. "End Termination Date" means the date of
termination of a Participant's Service with the Company and its
Affiliates and shall be determined without reference to any
compensation continuation arrangement or severance benefit
arrangement that may be applicable.
Enrollment Agreement. "Enrollment Agreement" means the
authorization form, approved by the Committee, which an Eligible
Employee files with the Committee to participate in the Plan.
In-Service Distribution Account. "In-Service Distribution
Account" means the Account maintained for a Participant for each
Distribution Option Period to which compensation Deferrals are
credited pursuant to the In-Service Distribution Option.
In-Service Distribution Option. "In-Service Distribution Option"
means the Distribution Option pursuant to which benefits are payable
in accordance with Section 7.2.
Matching Contribution. "Matching Contributions" are those
credited to the Participant's Retirement Distribution Account by the
Company.
Participant. "Participant" means an Eligible Employee who has
filed a completed and executed Enrollment Agreement with the Committee
or its designee and is participating in the Plan in accordance with
the provisions of Article 4. In the event of the death or
incompetency of a Participant, the term shall mean his personal
representative or guardian. An individual shall remain a Participant
until that individual has received full distribution of any amount
credited to the Participant's Account.
Plan. "Plan" means this plan, called the New Century Financial
Corporation Deferred Compensation Plan, as amended from time to time.
Plan Administrator. "Plan Administrator" means the Compensation
Committee of the New Century Financial Corporation Board of Directors
when acting as the administrator of the Plan.
Plan Year. "Plan Year" means the 12 month period beginning on
each January 1 and ending on the following December 31, except that
the first Plan Year shall begin on the Effective Date, and end on
December 31.
Retirement. "Retirement" means the termination of the
Participant's Service with the Employer (for reasons other than death)
at or after age 65, or, if the Participant has 5 or more years of
Service, at or after age 55.
Retirement Distribution Account. "Retirement Distribution
Account" means the Account maintained for a Participant to which
compensation Deferrals and Company Matching Contributions are credited
pursuant to the Retirement Distribution Option.
Retirement Distribution Option. "Retirement Distribution Option"
means the Distribution Option pursuant to which benefits are payable
in accordance with Section 7.1.
Savings Plan. "Savings Plan" means the New Century Financial
Corporation Employee 401(k) Plan, as it may be amended from time to
time.
Service. "Service" means the period of time during which an
employment relationship exists between an Employee and the Company,
including any period during which the Employee is on an approved leave
of absence, whether paid or unpaid. "Service" also includes
employment with an Affiliate if an Employee transfers directly between
the Company and the Affiliate.
Voting Securities. "Voting Securities" means any securities of
New Century Financial Corporation which carry the right to vote
generally in the election of directors.
ARTICLE 3
ADMINISTRATION OF THE PLAN AND DISCRETION
3.1 The Plan Administrator shall have full power and
authority to interpret the Plan, to prescribe, amend and rescind any
rules, forms and procedures as it deems necessary or appropriate for
the proper administration of the Plan and to make any other
determinations and to take any other such actions as it deems necessary
or advisable in carrying out its duties under the Plan. All action
taken by the Plan Administrator arising out of, or in connection with,
the administration of the Plan or any rules adopted thereunder, shall,
in each case, lie within its sole discretion, and shall be final,conclusive
and binding upon the Company, the Board, the Committee, all
Employees, all Beneficiaries of Employees and all persons and entities
having an interest therein.
3.2 Members of the Committee and the Plan Administrator shall
serve without compensation for their services unless otherwise
determined by the Board. All expenses of administering the Plan
shall be paid by the Company.
3.3 The Company shall indemnify and hold harmless each member of the
Committee and the Plan Administrator from any and all claims,
losses, damages, expenses (including counsel fees) and liability
(including any amounts paid in settlement of any claim or any other
matter with the consent of the Board) arising from any act or omission
of such member, except when the same is due to gross negligence or
willful misconduct.
3.4 Any decisions, actions or interpretations to be made under the
Plan by the Company, the Board or Committee shall be made in itsrespective
sole discretion, not as a fiduciary and need not be
uniformly applied to similarly situated individuals and shall be
final, binding and conclusive on all persons interested in the Plan.
ARTICLE 4
PARTICIPATION
4.1 Election to Participate. Each Employee who is an Eligible
Employee for a Plan Year will be offered the opportunity to defer
Compensation to be earned in that Plan Year. Any Eligible Employee may
enroll in the Plan effective as of the first day of that Plan Year by
filing a completed and fully executed Enrollment Agreement
with the Committee by a date set by the Committee but in any event
prior to the first day of that Plan Year. Pursuant to said Enrollment
Agreement, the Eligible Employee shall irrevocably elect (a) the
percentages, in whole percentages, by which (as a result of payroll
reduction) an amount equal to any whole percentage of the Participant's
Compensation to be earned during that Plan Year, in each case after
Required nondeferrable payroll tax deductions, will be deferred, and
(b) the Distribution Option Accounts to which such amounts will be
credited, and shall provide such other information as the Plan
Administrator shall require. The first Enrollment Agreement filed by
an Eligible Employee during any Distribution Option Period must also
set forth the Participant's election as to the time and manner of
distribution from the Retirement Distribution Account and In-Service
Distribution Account and of amounts credited for that Distribution
Option Period and related earnings. The Committee may establish
minimum or maximum amounts that may be deferred under this Section and
may change such standards from time to time. Any such limits shall be
communicated by the Committee to the Plan Administrator and by the Plan
administrator to the Participants prior to the commencement of a Plan
Year.
4.2 New Eligible Employees. The Committee may, in its discretion,
permit individuals who first become Employees after the
beginning of a Plan Year and who are selected as Eligible Employees to
enroll in the Plan for that Plan Year by filing a completed and fully
executed Enrollment Agreement, in accordance with Section 4.1, as soon
as practicable following the date the individual first becomes an
Eligible Employee but, in any event, within 30 days after such date.
Notwithstanding the foregoing, however, any election by an Eligible
Employee, pursuant to this Section, to defer Compensation shall apply
only to such amounts as are earned by the Eligible Employee after the
date on which such Enrollment Agreement is filed.
4.3 Matching Contributions. If a Participant has
deferredCompensation during any Plan Year, the Company shall reserve the
rightto credit to such Participant's Retirement Distribution Account and/or
In-Service Distribution Account a Matching Contribution, as defined
above. Any Matching Contributions approved by the Company will be
credited as frequently as determined by the Committee, acting on
behalf of the Company, but in any event at least monthly.
ARTICLE 5 DISTRIBUTION
OPTION ACCOUNTS 5.1 Distribution Option Accounts. The Committee shall
establish
and maintain separate Distribution Option Accounts with respect to a
Participant for each Distribution Option Period.
A Participant's Distribution Option Accounts shall consist
of the Retirement Distribution Account and/or one or more In-Service
Distribution Accounts. The amount of Compensation deferred pursuant
to Section 4.1 or Section 4.2 shall be credited by the Company to the
Participant's Distribution Option Accounts as soon as administratively
practicable after such Compensation would otherwise have been paid,
but in no event later than the fifteenth day of the month following
the month in which such Compensation would otherwise have been paid,
in accordance with the Distribution Option irrevocably elected by the
Participant in the Enrollment Agreement. Any amount once taken into
account as Compensation for purposes of this Plan shall not be taken
into account thereafter. The Participant's Distribution Option
Accounts shall be reduced by the amount of the payments made by the
Company to the Participant or the Participant's Beneficiary pursuant
to this Plan.
5.2 Earnings on Distribution Option Accounts. A Participant's
Distribution Option Accounts shall be credited with earnings according
to the Earnings Crediting Options elected by the Participant.
Participants may allocate their Retirement Distribution Account and/or
each of their In-Service Distribution Accounts among the Earnings
Crediting Options available under the Plan only in whole percentages of
not less than ten percent for any one Earnings Crediting Option and
provided that allocations must total 100%. The deemed rate of return,
positive or negative, credited under each Earnings Crediting Option
based upon the actual investment performance of the corresponding
investment portfolios of the Hudson River Trust and/or EQ Advisers
Trust, open-end investment management companies under the Investment
Company Act of 1940, as amended from time to time, or such other
investment fund(s) as the Company may designate from time to time, and
shall equal the total return of such investment fund net of asset
based charges, including, without limitation, money management fees
and fund expenses. The Company reserves the right, at any time and on
a prospective basis, to add, modify, or delete Earnings Crediting
Options.
5.3 Earnings Crediting Options. Except as otherwise provided
pursuant to Section 5.2, the Earnings Crediting Options available
under the Plan shall consist of options which correspond to certain
investment portfolios of both the Hudson River Trust and the EQ
Advisers Trust.
Notwithstanding that the rates of return credited toParticipants'
Distribution Option Accounts under the EarningsCrediting Options are based
upon the actual performance of the
corresponding portfolios to these Trusts, or such other investment
funds as the Company may designate, the Company shall not be obligated
to invest any Compensation deferred by Participants under this Plan,
Matching Contributions, or any other amounts, in such portfolios or in
any other investment funds.
5.4 Changes in Earnings Crediting Options. A Participant may
change the Earnings Crediting Options to which his Distribution Option
Accounts are deemed to be allocated, in the manner prescribed by the
Committee, with whatever frequency is determined by the Committee
which shall be as many as four times per Plan Year. Each such change
may include (a) reallocation of Participant's existing Accounts in
whole percentages of not less than ten percent, and/or (b) change in
investment allocation of amounts to be credited to the Participant's
Accounts in the future, as the Participant may elect, provided that
the allocations remain in whole percentages of not less than ten
percent.
5.5 Valuation of Accounts. The value of a Participant's Distribution
Option Accounts as of any date shall equal the amounts
therefore credited to such Accounts, including any earnings (positive
or negative) deemed to be earned on such Accounts in accordance with
Section 5.2 through the day preceding such date, less the amounts
therefore deducted from such Accounts.
5.6 Statement of Accounts. The Committee shall provide to each
Participant, not less frequently than quarterly, a statement in such
form as the Committee deems desirable setting forth the balance
standing to the credit of each Participant in each of his Distribution
Option Accounts as of the end of the preceeding calendar quarter.
5.7 Distribution from Accounts. Any distribution made to or on
behalf of a Participant from one or more of his Distribution Option
Accounts in an amount which is less than the entire balance of any
such Account shall be made pro rata from each of the Earnings
Crediting Options to which such Account is then allocated.
ARTICLE 6
DISTRIBUTION OPTIONS
6.1 Election of Distribution Option. In the first completed and
fully executed Enrollment Agreement filed with the Committee for each
Distribution Option Period, an Eligible Employee shall elect the time
and manner of payment pursuant to which the Eligible Employee's
Distribution Option Accounts for that Distribution Option Period will
be distributed. Annually, the Eligible Employee shall allocate his or
her deferrals between the Distribution Options in increments of five
percent, provided, however that 100 percent of such deferrals must be
allocated to one or the other of the Distribution Options.
6.2 Retirement Distribution Option. Subject to Section 7.1
distribution of the Participant's Retirement Distribution Account, if
any, shall commence upon (a) the Participant's Retirement, or (b) if
later, the Participant's attainment of age 65, as elected by the
Participant in the Enrollment Agreement pursuant to which such
Retirement Distribution Account was established or otherwise as
permitted under Section 7.1(a).
6.3 In-Service Distribution Option. Subject to Section 7.2, the
Participant's In-Service Distribution Account for any Distribution
Option Period shall be distributed commencing in the year elected by
the Participant in the Enrollment Agreement pursuant to which such In-
Service Distribution Account was established. Notwithstanding the
foregoing, a Participant shall not be entitled to allocate any
deferrals to an In-Service Distribution Account for two Plan Years
preceding the Plan Year which includes the date on which such Account
is to be distributed and such additional deferrals shall instead be
allocated to the Retirement Distribution Account.
ARTICLE 7
BENEFITS TO PARTICIPANTS
7.1 Benefits Under the Retirement Distribution Option. Benefits
under the Retirement Distribution Option shall be paid to a
Participant as follows.
(a) Benefits Upon Retirement. In the case of a Participant
whose Service with the Employer terminates on account of his
Retirement, the Participant's Retirement Distribution Account shall be
distributed in the following methods, as elected by the Participant in
writing either in the Enrollment Agreement or in a separate election
made prior to the first day of the Plan Year immediately preceeding
the Plan Year in which the Participant's Retirement occurs: (i) in a
lump sum; (ii) in annual installments; or (iii) by any other formula
that is mathematically derived and is acceptable to the Committee.
Any lump- sum benefit payable in accordance with this paragraph shall
be paid in, but not later than January 31 of, the Plan Year following
the Plan Year in which occurs the Participant's Retirement or, if
later, attainment of age 65 as elected by the Participant in
accordance with this Section or Section 6.2, in an amount equal to the
value of such Retirement Distribution Account as of the last business
day of the Plan Year preceding the date of payment. Annual
installment payments, if any, shall commence no later than January 31
of the Plan Year following the Plan Year in which occurs the
Participant's Retirement or if later, attainment of age 65, as elected
by the Participant in accordance with this Section or Section 6.2, in
an amount equal to (i) the value of such Retirement Distribution
Account as of the last business day of the Plan Year preceding the
date of payment, divided by (ii) the number of annual installment
payments elected by the Participant in the Enrollment Agreement
pursuant to which such Retirement Distribution Account was
established. The remaining annual installments shall be paid not
later than January 31 of each succeeding Plan Year in an amount equal
to (i) the value of such Retirement Distribution Account as of the
last business day of the immediately preceding Plan Year divided by
(ii) the number of installments remaining. A Participant may change
the election regarding the manner of payments as described in Section
6.1 of the Participant's account at any time prior to the first day of
the Plan Year immediately preceeding the Plan Year in which the
Participant's Retirement occurs, and elected as the distribution date
by the Participant in accordance with Section 6.1.
(b) Benefits Upon Termination of Employment. In the case of a
Participant whose Service with the Employer terminates prior to the
earliest date on which the Participant is eligible for Retirement,
other than on account of becoming Disabled or by reason of death, the
vested portion of a Participant's Retirement Distribution Account
shall be distributed (i) in a lump sum by February 28 of the year
following the Participant's End Termination Date or (ii) beginning at
age 65, as irrevocably elected by the Participant in the Enrollment
Agreement pursuant to which such Retirement Distribution Account was
established; provided, however, that the Company may override
Participant's election and cause a distribution under clause (i)
notwithstanding any other election by the Participant.
7.2 Benefits Under the In-Service Distribution Option. Benefits
under the In-Service Distribution Option shall be paid to a
Participant as follows:
(a) In-Service Distributions. In the case of a Participant
who continues in Service with the Employer, the Participant's In
- -Service Distribution Account for any Distribution Option Period shall
be paid to the Participant commencing no later than January 31 of the
Plan Year irrevocably elected by the Participant in the Enrollment
Agreement pursuant to which such In-Service Distribution Account was
established, which may be no earlier than the third Plan Year
following the end of the last Plan Year in the Distribution Option
Period in which deferrals are to be credited to the In-Service
Distribution Account for that Distribution Option Period in one lump
sum or in annual installments payable over 2, 3, 4 or 5 years. Any
lump-sum benefit payable in accordance with this paragraph shall be
paid not later than January 31 of the Plan Year elected by the
Participant in accordance with Section 6.3, in an amount equal to the
value of such In-Service Distribution Account as of the last business
day of the Plan Year preceding the date of the payment. Annual
installment payments, if any, shall commence not later than January 31
of the Plan Year as elected by the Participant in accordance with
Section 6.3, in an amount equal (i) the value of such In-Service
Distribution Account as of the last business day of the Plan Year
preceding the date of payment, divided by (ii)the number of
installments remaining.
(b) Benefits Upon Termination of Employment. In the case of a
Participant whose Service with the Employer terminates prior to the
date on which the Participant's In-Service Distribution Account would
otherwise be distributed, other than on account of becoming Disabled
or by reason of death, such In-Service Distribution Account shall be
distributed (i) in a lump sum by February 28 of the year following the
Participant's End Termination Date; (ii) in annual installments
commencing on the date such In-Service Distribution Account would have
been distributed; or (iii) in a lump sum on the date such In-Service
Distribution Account would otherwise have been distributed, all as
irrevocably elected by the Participant in the Enrollment Agreement
pursuant to which such In-Service Distribution Account was
established; provided, however, that the Company may override a
Participant's election and cause a distribution under clause (i)
notwithstanding any other election by the Participant.
ARTICLE 8
DISABILITY
In the event a Participant become Disabled, the
Participant's right to make any further deferrals under this Plan
shall terminate as of the date for which the Participant first
receives benefits under the Company's Long-Term Disability Benefit
Plan, as amended from time to time. The Participant's Distribution
Option Accounts shall continue to be credited with earnings in
accordance with Section 5.2 until such Accounts are fully distributed.
For purposes of this Plan, a Disabled Participant will not be treated
as having terminated Service. The Participant's Retirement
Distribution Account, if any, shall be distributed to the Participant
in accordance with Section 7.1(a), provided, however, that
distribution of the Participant's Retirement Distribution Accounts,
if any, shall commence not later than January 31 of the Plan Year
immediately following the later of (a) the Plan Year in which the
Participant first becomes eligible for Retirement, or (b) the Plan
Year in which the Participant first received benefits under the
Company's Long-Term Disability Plan, as amended from time to time.
The Participant's In-Service Distribution Accounts, if any, will be
distributed to the Participant in accordance with Section 7.2(a)
without regard to the fact that the Participant became Disabled.
ARTICLE 9
SURVIVOR BENEFITS
9.1 Death of Participant Prior to the Commencement of Benefits.
In the event of a Participant's death prior to the commencement of
benefits in accordance with Article 7, benefits shall be paid to the
Participant's Beneficiary, as determined under Section 12.3, pursuant
to Section 9.2 or 9.3, whichever is applicable, in lieu of any
benefits otherwise payable under the Plan to or on behalf of such
Participant.
9.2 Survivor Benefits Under the Retirement Distribution Option.
In the case of a Participant with respect to whom the Company has
established a Retirement Distribution Account, and who dies prior to
the commencement of benefits under such Retirement Distribution
Account pursuant to Section 7.1, distribution of such Retirement
Distribution Account shall be made (a) in a lump sum as soon as
practicable following the Participant's death, or (b) in the manner
and at such time as such Retirement Distribution Account would
otherwise have been distributed in accordance with Section 7.1 had the
Participant lived, as elected by the Participant in the Enrollment
Agreement pursuant to which such Retirement Distribution Account was
established or as may have been changed by the Participant. The
amount of any lump sum benefit payable in accordance with this Section
shall equal the value of such Retirement Distribution Account as of
the last business day of the calendar month immediately preceding the
date on which such benefit is paid. The amount of any annual
installment benefit payable in accordance with this Section shall
equal (a) the value of such Retirement Distribution Account as of the
last business day of the calendar month immediately preceding the date
on which such installment is paid, divided by (b) the number of annual
installments remaining to be paid pursuant to the election of the
Participant in the Enrollment Agreement pursuant to which such
Retirement Distribution Account was established or as may have been
changed by the Participant.
9.3 Survivor Benefits Under the In-Service Distribution Option.
In the case of a Participant with respect to whom the Company has
established one or more In-Service Distribution Accounts, and who dies
prior to the date on which such In-Service Distribution Accounts are
to be paid pursuant to Section 7.2, distribution of such In-Service
Distribution Accounts shall be made (a) in a lump sum as soon as
practicable following the Participant's death, or (b) at such time and
in such form as such In-Service Distribution Accounts would otherwise
have been distributed in accordance with Section 7.2 had the
Participant lived, as irrevocably elected by the Participant in the
Enrollment Agreement pursuant to which such In-Service Distribution
Accounts were established. The amount of any lump sum benefit payable
in accordance with this Section shall equal the value of such In-
Service Distribution Accounts as of the last business day of the
calendar month immediately preceding the date on which such benefit is
paid.
9.4 Death of Participant After Benefits Have Commenced. In the
event a Participant who elected the Retirement Distribution Option dies
after annual installment benefits payable under Section 7.1 from the
Participant's Retirement Distribution Account has commenced, but
before the entire balance of such Retirement Distribution Account has
been paid, any remaining installments shall continue to be paid to the
Participant's Beneficiary, as determined under Section 11.3, at such
times and in such amounts as they would have been paid to the
Participant had he survived.
ARTICLE 10
EMERGENCY BENEFIT
In the event that the Committee, upon written request of a
Participant, determines, in its sole discretion, that the Participant
has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant from the vested portion of his Distribution
Option Account, as soon as practicable following such determination,
an amount necessary to meet the emergency, after deduction of any and
all taxes as may be required pursuant to Section 12.9 (the "Emergency
Benefit"). For purposes of this Plan, an unforeseeable financial
emergency is an unexpected need for cash arising from an illness,
casualty loss, sudden financial reversal, or other such unforeseeable
occurrence. Cash needs arising from foreseeable events such as the
purchase of a house or education expenses for children shall not be
considered to be the result of an unforeseeable financial emergency.
Emergency Benefits shall be paid first from the Participant's In-
Service Distribution Accounts, if any, to the extent the balance of
one or more of such In-Service Distribution Accounts is sufficient to
meet the emergency, in the order in which such Accounts would
otherwise be distributed to the Participant. If the distribution
exhausts the In-Service Distribution Accounts, the Retirement
Distribution Account may be accessed. With respect to that portion of
any Distribution Option Account which is distributed to a Participant
as an Emergency Benefit, in accordance with this Article, no further
benefit shall be payable to the Participant under this Plan.
Notwithstanding anything in this Plan to the contrary, a Participant
who receives an Emergency Benefit in any Plan Year shall not be
entitled to make any further deferrals for the remainder of such Plan
Year or the following Plan Year. It is intended that the Committee's
determination as to whether a Participant has suffered an
"unforeseeable financial emergency" shall be made consistent with the
requirements under section 457(d) of the Code.
ARTICLE 11
ACCELERATED DISTRIBUTION
11.1 Availability of Withdrawal Prior to Retirement. Upon the
Participant's written election, the Participant may elect to withdraw
all or a portion of the Participant's Distribution Option Account at
any time prior to the time such Distribution Option Account otherwise
becomes payable under the Plan, provided the conditions specified in
Section 11.3, Section 11.4, and Section 11.5 are satisfied.
11.2 Acceleration of Periodic Distributions. Upon the
Participant's written election, the Participant or Participant's
Beneficiary who is receiving installment payments under the Plan may
elect to have all or a percentage of the remaining installments
distributed in the form of an immediately payable lump sum, provided
the condition specified in Section 11.3 is satisfied.
11.3 Forfeiture Penalty. In the event of a withdrawal pursuant to
Section 11.1, or an accelerated distribution pursuant to Section 11.2,
the Participant shall forfeit from his Distribution Option Account
from which the withdrawal is made an amount equal to 10% of the amount
of the withdrawal or accelerated distribution, as the case may be.
The forfeited amount shall be deducted from the applicable
Distribution Option Account prior to giving effect to the requested
withdrawal or acceleration. The Participant and the Participant's
Beneficiary shall not have any right or claim to the forfeited amount,
and the Company shall have no obligation whatsoever to the
Participant, the Participant's Beneficiary or any other person with
regard to the forfeited amount.
11.4 Minimum Withdrawal. In no event shall the amount withdrawn
in accordance with Section 11.1 be less than 25% of the amount credited
to the Participant's Distribution Option Account immediately prior to
the withdrawal.
11.5 Suspension from Deferrals. In the event of a withdrawal
pursuant to Section 11.1, a Participant who is otherwise eligible to
make deferrals under Article 4 shall be prohibited from making any
deferrals with respect to the Plan Year immediately following the Plan
Year during which the withdrawal was made, and any election previously
made by the Participant with respect to deferrals for the Plan Year of
the withdrawal shall be void and of no effect with respect to
subsequent deferrals for such Plan Year.
ARTICLE 12
MISCELLANEOUS
12.1 Amendment and Termination. The Plan may be amended,
suspended, discontinued or terminated at any time by the Committee;
provided, however, that no such amendment, suspension, discontinuance
or termination shall reduce or in any manner adversely affect the
rights of any Participant with respect to benefits that are payable or
may become payable under the Plan based upon the balance of the
Participant's Accounts as of the effective date of such amendment,
suspension, discontinuance or termination. Notwithstanding anything
else contained herein or in the New Century Financial Corporation
Supplemental Benefit and Deferred Compensation Trust Agreement to the
contrary, the Company may at any time terminate the Plan and pay out
the account balances in the form of lump sum payments.
12.2 Claims Procedure.
(a) Claim
A person who believes that he is being denied a benefit to
which he is entitled under the Plan (hereinafter referred to as a
"Claimant") may file a written request for such benefit with the Plan
Administrator, setting forth the claim.
(b) Claim Decision
Upon receipt of a claim, the Plan Administrator shall advise
the Claimant that a reply will be forthcoming within ninety (90) days
and shall, in fact, deliver such reply within such period. The Plan
Administrator may, however, extend the reply period for an additional
ninety (90) days for reasonable cause.
If the claim is denied in whole or in part, the Claimant
shall be provided a written opinion, using language calculated to be
understood by the Claimant, setting forth:
(1) The specific reason or reasons for such denial;
(2) The specific reference to pertinent provisions of this
Agreement on which such denial is based;
(3) A description of any additional material or information
necessary for the Claimant to perfect his claim and an explanation why
such material or such information is necessary;
(4) Appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review; and
(5) The time limits for requesting a review under subsection
(c) and for review under subsection (d) hereof.
(c) Request for Review
Within sixty (60) days after the receipt by the Claimant of
the written opinion described above, the Claimant may request in
writing that the Committee review the determination of the Plan
Administrator. The Claimant or his duly authorized representative
may, but need not, review the pertinent documents and submit issues
and comment in writing for consideration by the Committee. If the
Claimant does not request a review of the initial determination within
such sixty (60) day period, the Claimant shall be barred and estopped
from challenging the determination .
(d) Review of Decision
Within sixty (60) days after the Committee's receipt of a
request for review, it will review the initial determination. After
considering all materials presented by the Claimant, the Committee
will render a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth the specific reasons for the
decision and containing specific references to the pertinent
provisions of this Agreement on which the decision is based. If
special circumstances require that the sixty (60) day time period be
extended, the Committee will so notify the Claimant and will render
the decision as soon as possible, but no later than one hundred twenty
(120) days after receipt of the request for review.
12.3 Designation of Beneficiary. Each Participant may designate a
Beneficiary or Beneficiaries (which Beneficiary may be an entity other
than a natural person) to receive any payments which may be made
following the Participant's death. Such designation may be changed or
canceled at any time without the consent of any such Beneficiary . Any
such designation, change or cancellation must be made in a form
approved by the Committee and shall not be effective until received by
the Committee, or its designee. If no Beneficiary has been named, or
the designated Beneficiary or Beneficiaries shall have predeceased the
Participant, the Beneficiary shall be the Participant's estate. If a
Participant designates more than one Beneficiary, the interests of
such Beneficiaries shall be paid in equal shares, unless the
Participant has specifically designated otherwise.
12.4 Limitation of Participant's Right. Nothing in this Plan
shall be construed as conferring upon any Participant any right to
continue in the employment of the Company, nor shall it interfere with
the rights of the Company to terminate the employment of any
Participant and/or to take any personnel action affecting any
Participant without regard to the effect which such action may have
upon such Participant as a recipient or prospective recipient of
benefits under the Plan. Any amounts payable hereunder shall not be
deemed salary or other compensation to a Participant for the purposes
of computing benefits to which the Participant may be entitled under
any other arrangement established by the Employer for the benefit of
its employees.
12.5 No Limitation on Company Actions. Nothing contained in the
Plan shall be construed to prevent the Company from taking any action
which is deemed by it to be appropriate or in its best interest. No
Participant, Beneficiary, or other person shall have any claim against
the Employer as a result of such action.
12.6 Obligations to Company. If a Participant becomes entitled to
a distribution of benefits under the Plan, and if at such time the
Participant has outstanding any debt, obligation, or other liability
representing an amount owing to the Employer, then the Employer may
offset such amount owed to it against the amount of benefits otherwise
distributable. Such determination shall be made by the Committee.
12.7 Nonalienation of Benefits. Except as expressly provided
herein, no Participant or Beneficiary shall have the power or right to
transfer (otherwise than by will or the laws of descent and
distribution), alienate, or otherwise encumber the Participant's
interest under the Plan. The Company's obligations under this Plan
are not assignable or transferable except to (a) any corporation or
partnership which acquires all or substantially all of the Company's
assets or (b) any corporation or partnership into which the Company
may be merged or consolidated. The provisions of the Plan shall inure
to the benefit of each Participant and the Participant's
Beneficiaries, heirs, executors, administrators or successors in
interest.
12.8 Protective Provisions. Each Participant shall cooperate with
the Employer by furnishing any and all information requested by the
Employer in order to facilitate the payment of benefits hereunder,
taking such physical examinations as the Employer may deem necessary
and taking such other relevant action as may be requested by the
Employer. If a Participant refuses to cooperate, the Employer shall
have no further obligation to the Participant under the Plan, other
than payment to such Participant of the then current balance of the
Participant's Distribution Option Accounts in accordance with his
prior elections.
12.9 Withholding Taxes. The Company may make such provisions
and take such action as it may deem necessary or appropriate for the
withholding of any taxes which the Company is required by any law or
regulation of any governmental authority, whether Federal, state or
local, to withhold in connection with any benefits under the Plan,
including, but not limited to, the withholding of appropriate sums
from any amount otherwise payable to the Participant (or his
Beneficiary). Each Participant, however, shall be responsible for
The payment of all individual tax liabilities relating to any such
benefits.
12.10 Unfunded Status of Plan. The Plan is intended to
constitute an "unfunded" plan of deferred compensation for
Participants. Benefits payable hereunder shall be payable out of
the general assets of the Company, and no segregation of any assets
whatsoever for such benefits shall be made. Notwithstanding any
segregation of assets or transfer to a grantor trust, with respect to
any payments not yet made to a Participant, nothing contained herein
shall give any such Participant any rights to assets that are greater
than those of a general creditor of the Company.
12.11 Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force
and effect without regard to such unenforceable provision and shall be
applied as though the unenforceable provision were not contained in
the Plan.
12.12 Governing Law. The Plan shall be construed in accordance
with and governed by the laws of the State of California, without
reference to the principles of conflict of laws.
12.13 Headings. Headings are inserted in this Plan for
convenience of reference only and are to be ignored in the
construction of the provisions of the Plan.
12.14 Gender, Singular and Plural. All pronouns and any
variations thereof shall be deemed to refer to the masculine,
feminine, or neuter, as the identity of the person or persons may
require. As the context may require, the singular may read as the
plural and the plural as the singular.
12.15 Notice. Any notice or filing required or permitted to be
given to the Plan Administrator or the Committee under the Plan shall
be sufficient if in writing and hand delivered, or sent by registered
or certified mail, to the Human Resources Department, or to such other
entity as the Plan Administrator or the Committee may designate from
time to time. Such notice shall be deemed given as to the date of
delivery, or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
Dated at Irvine, State of California, on November 19, 1998.
/s/ Brad A. Morrice
(Signature of Representative of New Century Financial Corp.)
Witness: /s/ Stergios Theologides
[New Century Financial Corporation Letterhead]
December 4, 1998
New Century Financial Corporation
18400 Von Karman Avenue, Suite 1000
Irvine, California 92612
Re: Registration Statement on Form S-8 of
New Century Financial Corporation (the "Company")
Ladies and Gentlemen:
At your request, I 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 $5,000,000.00 of Deferred Compensation Obligations of the
Company (the "Obligations") to be issued pursuant to the New Century
Financial Corporation Deferred Compensation Plan (the "Plan"). I have
examined the proceedings heretofore taken and to be taken in connection
with the authorization of the Plan and the Obligations to be issued
pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and law
as I have deemed relevant, I am of the opinion that the Obligations
have 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, the Obligations will be
validly issued, legally binding obligations of the Company.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted,
/s/ Stergios Theologides
Stergios Theologides
Vice President and General Counsel
The Board of Directors
New Century Financial Corporation
We consent to the incorporation by reference in the registration
statement on Form S-8 of New Century Financial Corporation of our
report dated February 9, 1998, with respect to the consolidated balance
sheets of New Century Financial Corporation and subsidiary as of
December 31, 1997 and 1996 and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the
years ended December 31, 1997 and 1996 and the period from November 17,
1995 (inception) through December 31, 1995, which appears in the
December 31, 1997, annual report on Form 10-K dated March 30, 1998 of
New Century Financial Corporation.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Orange County, California
December 4, 1998
