Exhibit 10.1

April 8, 2008

BY HAND AND U.S. MAIL

Mr. Timothy C. Shoyer

17 Kress Farm Road

Hingham, MA 02043

Dear Mr. Shoyer:

This letter confirms our agreement relating to your separation from employment
with NewStar Financial, Inc. (the “Company”).

1. In consideration of the terms of this agreement (the “Separation Agreement”),
your employment with the Company shall end effective as of the close of
business, April 10, 2008 (the “Separation Date”). Any position you hold as an
executive, officer or director of the Company or any of its subsidiaries or
affiliates, and/or any position as a member of any committees of the Board of
the Company or any of its subsidiaries or affiliates shall end by your
resignation effective as of the Separation Date. You agree to sign such
documents as the Company may reasonably request to effectuate such resignations.

2. In addition to any salary payments owing for the final payroll period through
the Separation Date and whatever vested rights you may have under the Company
401(k) plan, you shall receive the following payment(s) and benefits for the
periods indicated, less any payroll deductions required by law, which shall be
in lieu of any other payments or benefits (including vacation or other paid
leave time) to which you otherwise might be entitled:

a. Continuation of your annual base salary, payable in accordance with the
Company’s regular payroll practices, commencing after the Separation Date and
continuing until six months from the Separation Date (the “Severance Period”),
which each such payment hereby designated as a separate payment;

b. Payment of a one-time lump sum amount of $225,000, to be paid within thirty
days (30) days after this Separation Agreement is signed and returned to the
Company;

c. Accrued but unused vacation time and any unreimbursed expenses incurred by
you through the Separation Date which would be owing in accordance with Company
policies, to be paid within thirty (30) days after this Separation Agreement is
signed and returned to the Company;

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d. Continuation of your eligibility and your dependents’ eligibility (to the
extent they participated immediately prior to the Separation Date) to
participate in the Company’s health care benefits plan (subject to the same
terms and conditions as other employees of the Company including all employee
contributions, co-pays and deductibles) until the earlier of (i) April 10, 2009
or (ii) the date on which you commence other employment and become eligible to
participate in that employer’s health care benefits plans; and

e. Reimbursement by the Company for up to $10,000 for the cost of outplacement
services during the Severance Period, to be paid in a lump sum during the second
payroll period after the Separation Agreement is signed and returned to the
Company;

f. Accelerated vesting of the Restricted Stock and RSA Options, each as defined
and granted to you in the Amended and Restated Restricted Stock Agreement dated
December 13, 2006 (the “Amended and Restated RSA”), such that all Restricted
Stock and RSA Options granted under that agreement that have a vesting date of
no later than April 10, 2009, shall be deemed, respectively, Non-Forfeitable
Shares (as defined in the Amended and Restated RSA) and fully vested as of the
Separation Date; and

g. Accelerated vesting of the Restricted Stock, as defined and granted to you in
the Restricted Stock Agreement dated December 13, 2006 (the “IPO RSA”), such
that the Restricted Stock granted pursuant to that agreement, which has a
vesting date no later than April 10, 2011, shall be deemed Non-Forfeitable
Shares (as defined in the IPO RSA) as of the Separation Date; and

h. Accelerated vesting of the stock options granted to you on February 12, 2008,
pursuant to the 2008 Stock Option Award Agreement under the 2006 Incentive Plan,
such that one-third of the options granted to you shall vest and become
exercisable in thirty (30) days after you sign and return this Separation
Agreement.

i. A period of ninety (90) days following the expiration of the Severance Period
to exercise any vested options (or, if earlier, up to the original term of the
vested options).

Unless otherwise expressly provided herein, any payment of compensation by the
Company to you, whether pursuant to this letter agreement or otherwise, shall be
made within two and one-half months (2 1/2 months) after the later of the end of
the calendar year or the Company’s fiscal year in which your right to such
payment vests (i.e., is not subject to a “substantial risk of forfeiture” for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”)). To the extent that any amounts come within the definition of
“involuntary separation” under Code Section. 409A, such amounts up to the lesser
of two times your annual compensation for the year preceding the year of
termination or two times the 401(a)(17) limit for the year of termination, shall
be excluded from “deferred compensation” as allowed under Code Section 409A, and
shall not be subject to the Code Section 409A compliance requirements set forth
herein. Neither party individually or in combination with each other (or any
other party) may accelerate any such deferred payment, except in compliance with
Code Section 409A, and no amount shall be paid prior to the earliest date on
which it is permitted to be paid under Code Section 409A. In the event that you
are determined by the Company (such determination to be

 

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conclusive and binding as between the parties) to be a “specified employee” (as
defined in Code Section 409A(a)(2)(B)(i) and determined in accordance with Code
Section 416(i) (without regard to paragraph (5) thereof)) of the Company at a
time when its stock is deemed to be publicly traded on an established securities
market, payments determined to be “nonqualified deferred compensation” payable
following termination of employment shall be made no earlier than the earlier of
(i) the first day of the seventh (7th) month following such termination of
employment, or (ii) your death, consistent with the provisions of Code
Section 409A. Any payment delayed by reason of the prior sentence shall be paid
out in a single lump sum at the end of such required delay period and any other
payments shall be paid in accordance with the original payment schedule.

3. On April 10, 2009, until which you and your covered dependents will continue
to be eligible to participate in the Company’s health care benefits plan, or
such earlier date when you become eligible to participate in the health care
benefits plans of a new employer, the Company will afford you and your covered
dependents the opportunity, at your own expense, to receive “continuation
coverage” under COBRA, continuing for so long as required by law. The Company
shall provide you and your covered dependents with a separate notice describing
your rights under COBRA.

4. In consideration of the terms hereof, you have agreed to and do waive any
claims you may have for employment by the Company, and have agreed not to seek
such employment or reemployment by the Company in the future. You have further
agreed to and do release and forever discharge the Company, its parent,
subsidiaries and affiliates and their respective past and present officers,
directors, shareholders, employees and agents from any and all claims and causes
of action, known or unknown, arising out of or relating to your employment by
the Company or the termination thereof, including, but not limited to claims
arising under federal, state or local laws prohibiting employment
discrimination, including specifically the Age Discrimination in Employment Act
of 1967, as amended (“ADEA”), 29 U.S.C. § 621 et seq., and including but not
limited to claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101
et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the
Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., the Uniformed Services
Employment and Reemployment Rights Act, 38 U.S.C. § 4301 et seq., the
Massachusetts Fair Employment Practices Act, M.G.L. c.151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c.12, §§ 11H and 11I, the Massachusetts
Equal Rights Act, M.G.L. c.93 § 102 and M.G.L. c.214, § 1C, the Massachusetts
Privacy Act, M.G.L. c.214, § 1B, the Massachusetts Maternity Leave Act, M.G.L.
c.149, § 105(d), all as amended, and all claims arising out of the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq. and the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., all as amended, and
all common law claims including, but not limited to, actions in tort, defamation
and breach of contract, all claims to any non-vested ownership interest in the
Company, contractual or otherwise, including, but not limited to, claims to
stock or stock options, and any claim or damage arising out of your employment
with and/or separation from the Company (including a claim for retaliation)
under any common law theory or any federal, state or local statute or ordinance
not expressly referenced above or any statute, regulation or ordinance
prohibiting employment discrimination or giving rise to a claim of wrongful
termination and/or defamation of any type, or claims growing out of any legal
restrictions on the Company’s right to terminate its employees. This release
does not include (i) your right to

 

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enforce the terms of this agreement, (ii) any right you may have to
indemnification by the Company for actions taken prior to the Separation Date,
and (iii) any right you have under any Company employee benefit plan (as such
term is defined under Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended).

5. You agree to return to the Company on or prior to the Separation Date all
Company property and documents in your possession, custody or control,
including, without limitation, automobiles, credit cards, computers and
telecommunication equipment, keys, instructional and policy manuals, mailing
lists, computer software, financial and accounting records, reports and files,
and any other physical or personal property which you obtained in the course of
your employment by the Company, and you further agree not to retain copies of
any such Company documents, excluding publicly available documents and documents
relating directly to your own compensation and employee benefits.

6. You acknowledge that your contractual obligations set forth in Section 7 of
the employment agreement between you and the Company dated December 8, 2006 (the
“Employment Agreement”) regarding Confidential Information, as defined therein,
shall continue in full force and effect after the Separation Date. You
acknowledge that in the course of your employment with the Company, you acquired
Confidential Information and you agree that you will keep such Confidential
Information confidential at all times after your employment terminates, and you
will not make use of such Confidential Information on your own behalf, or on
behalf of any third party.

7. You acknowledge and confirm that you have continuing obligations to the
Company that survive the termination of your employment pursuant to Sections 7
and 8(a) of the Employment Agreement, the Amended and Restated RSA (other than
Section 6(a)(A) of such agreement), the IPO RSA (other than Section 6(a)(A) of
such agreement) and the Lock Up Agreement dated December 13, 2006 (the “Lock Up
Agreement”). The Company acknowledges and confirms that it has continuing
obligations to you that survive the termination of your employment pursuant to
Section 9 of the Employment Agreement to the extent that a claim arises for
actions taken prior to the Separation Date.

8. You agree that following your execution of this agreement you will not
disparage or induce or encourage others to disparage the Company, its services,
its products or any of its current or former affiliates, members, offices,
directors, employees or agents.

9. You agree to maintain the terms of this agreement confidential unless
otherwise required by law; provided, however, that you may disclose the terms of
this agreement to your immediate family members and to your attorneys,
accountants, financial or tax advisors.

10. You agree that following your execution of this agreement, at the Company’s
reasonable request, you shall assist and advise the Company in any investigation
which may be performed by the Company or any governmental agency and any
litigation in which the Company may become involved. Such assistance shall
include you making yourself reasonably available for interviews by the Company
or its counsel, deposition and/or court appearances at the Company’s request.
The Company shall attempt to schedule such assistance at mutually convenient
times and places, taking into account any employment constraints that you may
have. The Company shall promptly reimburse you for reasonable expenses, such as
telephone, travel, lodging and meal expenses, incurred by you at the Company’s
request, consistent with

 

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the Company’s generally applicable policies for employee expenses. To the
maximum extent permitted by law, you agree that you will notify Head of Human
Resources if you are contacted by any governmental agency, or by any person
contemplating or maintaining any claim or legal action against the Company, or
by any agent or attorney of such person, within three business days of such
contact.

11. Neither by offering to make nor by making this agreement does either party
admit any failure of performance, wrongdoing, or violation of law. In addition,
you shall not have any duty to find new employment following the Separation Date
and, other than with respect to the continuation of your health care benefits
pursuant to paragraph 2(d), any payment made to you by the Company under this
agreement shall not be reduced by any compensation or benefits received by you
from a third party for the providing of personal services (whether by employment
or by functioning as an independent contractor) following the Separation Date.

12. This agreement sets forth the entire understanding of the parties and
supersedes any and all prior agreements, oral or written, relating to your
employment by the Company or the termination thereof; provided, however, that
Sections 7 and 8(a) of the Employment Agreement, regarding Confidential
Information and Restrictive Covenants, respectively, the Amended and Restated
RSA (other than Section 6(a)(A) of such agreement), the IPO RSA (other than
Section 6(a)(A) of such agreement), and the Lock Up Agreement shall continue in
full force and effect. This agreement may not be modified except by a writing,
signed by you and by a duly authorized officer of the Company. This agreement
shall be binding upon your heirs and personal representatives, and the
successors and assigns of the Company.

13. This agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without regard to its choice of law
rules.

14. You agree that any controversy or claim arising out of or relating to this
letter agreement, the employment relationship between you and the Company, or
the breach thereof, including the arbitrability of any controversy or claim,
which cannot be resolved amicably after a reasonable attempt to negotiate such a
resolution, shall be submitted to arbitration in the Commonwealth of
Massachusetts in accordance with the Commercial Dispute Resolution Rules of the
American Arbitration Association, as such rules may be amended from time to
time. The award of the arbitrator shall be final and binding upon you and the
Company, and judgment may be entered with respect to such award in any court of
competent jurisdiction. All references to judicial enforcement or relief in the
Amended and Restated RSA, the IPO RSA and the Lock Up Agreement shall be deemed
to reference enforcement or relief in arbitration.

15. You acknowledge that before entering into this agreement, you have had the
opportunity to consult with any attorney or other advisor of your choice, and
you are hereby advised to do so if you choose. You further acknowledge that you
have entered into this agreement of your own free will, and that no promises or
representations have been made to you by any person to induce you to enter into
this agreement other than the express terms set forth herein. You further
acknowledge that you have read this agreement and understand all of its terms,
including the waiver and release of claims set forth in Paragraph 4 above.

 

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If the foregoing is acceptable to you, please sign the annexed copy of this
agreement and return it to me. You may take up to twenty-one (21) days from
today to consider, sign and return this agreement. In addition, you may revoke
the agreement after signing it, but only by delivering a signed revocation
notice to me within seven (7) days of your signing this agreement. This
agreement shall not become effective or enforceable until this seven-day
revocation period expires without you having revoked this agreement.

 

Very truly yours

/s/ Colleen M. Banse

Colleen M. Banse Head of Human Resources

 

Accepted and Agreed:

/s/ Timothy C. Shoyer

Timothy C. Shoyer Date: April 9, 2008

 

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