UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
August 9, 2011
Date of Report (Date of earliest event reported)
NOVASTAR FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
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Maryland
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001-13533
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74-2830661
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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2114 Central Street, Suite 600, Kansas City, MO 64108
(Address of principal executive offices) (Zip Code)
(816) 237-7000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01 Other Events.
On August 9, 2011, the Company established a revised supplemental compensation arrangement for its independent directors under the NovaStar Financial, Inc. 2004 Incentive Stock Plan, as amended. A description of the supplemental compensation arrangement is being filed as Exhibit 10.1 to this current report on Form 8-K.
Item 9.01
Financial Statements and Exhibits
The following exhibit is filed with this report as required by Item 601 of Regulation S-K:
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Exhibit Number
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Description
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10.1
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2011 Compensation Plan for Independent Directors
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NOVASTAR FINANCIAL, INC.
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DATE: August 15, 2011
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/s/ Rodney E. Schwatken
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Rodney E. Schwatken
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Chief Financial Officer
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Exhibit 10.1
NOVASTAR FINANCIAL, INC.
2011 COMPENSATION PLAN FOR INDEPENDENT DIRECTORS
Effective August 9, 2011
The following sets forth the 2011 Compensation Plan for the members of the Board of Directors (the “Board”) of Novastar Financial, Inc. (the “Company”) who are not employees of the Company (the “Independent Directors”), as approved by the Board in accordance with the Novastar Financial, Inc. 2004 Incentive Stock Plan, as amended (the “2004 Plan”), which shall be effective for 2011 and subsequent calendar years unless and until it is modified or terminated:
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Amount
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Payable
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Annual Retainer:
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$50,000
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Quarterly at the beginning of each Quarter during the year of service
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Annual Lead Independent Director Retainer:
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$10,000
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Quarterly at the beginning of each Quarter during the year of service
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Annual Audit Committee Chairperson Retainer:
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$10,000
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Quarterly at the beginning of each Quarter during the year of service
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Annual Compensation Committee and Nominating and Corporate Governance Committee Chairperson Retainer:
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$5,000
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Quarterly at the beginning of each Quarter during the year of service
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One-time Restricted Stock Grant for Current Independent Directors:
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180,000 shares of restricted common stock of the Company
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Vests in equal annual installments of 30,000 shares over six years and commencing August 9, 2012
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In addition to the compensation described above, the Independent Directors shall be reimbursed for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings, payable within ten (10) business days after the Company receives a written statement and documentation of such expenses.
After carefully considering the effects of the recapitalization of the Company's preferred stock in June 2011 and in accordance with Section 3(6) of the 2004 Plan, the Board, acting as the Plan Administrator, adjusted the awards under Section 5A of the 2004 Plan to preserve the benefits of the awards thereunder. Upon approving the compensation plan above, the Board determined the Independent Directors would forgo the 2011 annual stock option grant to which each Independent Director would otherwise be entitled. Future annual stock option grants are not part of the new compensation plan.