Exhibit 10 (d)

TRANSITION AGREEMENT AND GENERAL RELEASE

This Transition Agreement and General Release (“Agreement”) is made by and
between NewStar Financial, Inc., on behalf of itself and all of its
predecessors, successors and affiliated entities (collectively, “NewStar”), and
Robert T. Clemmens, on behalf of himself, his executors, heirs, administrators,
agents, attorneys, administrators, beneficiaries and assigns (collectively,
“Clemmens”). In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, NewStar and Clemmens agree as follows:

 

1. Retirement. Clemmens shall retire from NewStar effective as of June 30, 2013
(the “Retirement Date”). Except as expressly modified by this Agreement, the
Employment Agreement between NewStar and Clemmens dated December 11, 2009
(“Employment Agreement”), a copy of which is attached as Exhibit A, shall
continue to govern the terms and conditions of Clemmens’ employment with NewStar
until Clemmens’ Retirement Date, or until such time as either party terminates
the Employment Agreement as provided in Section 5 of the Employment Agreement.

 

2. Separation Benefits Upon Retirement. Provided that Clemmens remains an
employee of NewStar in good standing through the Retirement Date, and provided
further that Clemmens executes this Agreement on or after the Retirement Date
(and does not, and may no longer, revoke this Agreement), the parties agree that
Clemmens’s separation from the Company shall be deemed to be termination of
employment at the option of Clemmens for Retirement under the Employment
Agreement, and therefore Clemmens shall be eligible for the payments and
benefits set forth in Section 6(f) of the Employment Agreement. Those payments
and benefits are as follows:

 

  (a) Accrued but unpaid Base Salary for work performed through the Retirement
Date;

 

  (b) Accrued but unpaid vacation pay for ten (10) unused days in the amount of
$13,461.54;

 

  (c) Payment of the Pro Rated Bonus in the amount of $279,167.67;

 

  (d) A period equal to the full length of the remaining term, as set forth in
applicable grant documents, to exercise any vested stock options.

Clemmens has waived his right to participate in the Retiree Health program set
forth in Section 6(f)(iv) of the Employment Agreement and further acknowledges
that as all outstanding Incentive Equity will be vested prior to the Retirement
Date, no additional acceleration of vesting conditions shall be required under
Section 6(f)(v) of the Employment Agreement.

All payments and benefits are to be provided as soon as practicable after the
Effective Date of this Agreement, unless Clemmens is a “specified employee” as
of such date under Section 409A of the Internal Revenue Code of 1986, as
amended, in which case payments under clause (c) of this section shall commence
on the date that is 6 months and one day following his “separation of service”
within the meaning of Section 409A.

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3. Insurance and Other Benefits. Except as provided by applicable law or as
expressly provided in this Agreement, all benefits provided by NewStar to
Clemmens will cease as of the Retirement Date, including but not limited to the
accrual of vacation time. Clemmens’s coverage, if any, under NewStar’s group
health and dental insurance plans shall cease as of the Retirement Date, however
if eligible, Clemmens may elect to continue coverage under NewStar’s group
health and dental insurance plans pursuant to federal COBRA law. Any continued
coverage will be at Clemmens’s sole expense, as provided by law. At all times,
any group health and dental insurance coverage for Clemmens, if any, shall be
subject to the terms and conditions of the applicable insurance plans and
applicable law.

 

4. General Release. Except with respect to any rights, obligations or duties
arising out of this Agreement, and in consideration of the payments and benefits
set forth in this Agreement, Clemmens hereby releases and discharges NewStar and
anyone acting by, through or on behalf of NewStar, including but not limited
NewStar’s directors, officers, employees, representatives and agents
(collectively, the “Releasees”), to the fullest extent permitted by law, of and
from any and all complaints, charges, lawsuits or claims for relief of any kind
by Clemmens that Clemmens now has, ever had or ever may have against the
Releasees, or any of them, whether known or unknown, arising out of any matter
or thing that has happened before the signing of this Agreement, including but
not limited to (i) claims for tort or contract; (ii) claims arising out of,
based on, or connected with Clemmens’s employment, including terms and
conditions of employment, by NewStar and the cessation of that employment; and
(iii) claims arising under any federal, state or local labor, employment or
discrimination laws, including but not limited to the following (all as
amended): Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act (“ADA”),
the Equal Pay Act of 1963, the Genetic Information Non-Discrimination Act, the
Family and Medical Leave Act, the Massachusetts Fair Employment Practices Act
(G.L. c. 151B), the Massachusetts Civil Rights Act, the Massachusetts Equal
Rights Act, the Massachusetts Wage Act, and any other local, state or federal
law, policy, order, regulation or guideline affecting or relating to claims or
rights of employees. The release contained herein is a GENERAL RELEASE,
including of statutory claims. Nothing in this Agreement shall be construed to
preclude Clemmens from participating or cooperating in any investigation or
proceeding conducted by the Equal Employment Opportunity Commission, or any
other local, state or federal administrative agency, including with respect to a
challenge to this General Release. However, in the event that a charge or
complaint is filed against the Releasees, or any of them, with any
administrative agency or in the event of an authorized investigation, charge or
lawsuit filed against the Releasees by any administrative agency, Clemmens
expressly waives and shall not accept any award or damages therefrom.

 

5. No Pending Claims; Non-admissions. Clemmens represents and warrants that he
has not filed any complaints, charges, or claims for relief against the
Releasees, or any one of them, with any local, state or federal court or
administrative agency, any professional or regulatory board, or any other agency
or entity. Clemmens further warrants that he has not previously assigned or
transferred any of the claims that are the subject of the General Release
contained in this Agreement.

 

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It is further understood and agreed that this Agreement does not constitute any
admission by NewStar that any action taken with respect to Clemmens was unlawful
or wrongful, or that any action by it constituted a breach of contract or
violated any federal, state or local law, policy, rule or regulation.

 

6. Part-time Employment. Following the Retirement Date, Clemmens shall assume
the title of Managing Director – Special Situations, reporting to Peter
Schmidt-Fellner, or such other person as NewStar may direct, and shall perform
the duties and responsibilities inherent in such position and such other tasks
as directed by NewStar from time to time. In this role, Clemmens shall be
eligible for and covered by all customary protections and indemnification
extended under NewStar’s Directors and Officers liability insurance policy.

The terms of the Employment Agreement shall not apply to this position. In this
position it is expected Clemmens will be asked to work approximately 20 hours
per week on average, generally not to exceed 30 hours in any given week.
Clemmens shall be paid at a gross rate of $170 per hour for any work performed,
and Clemmens shall report his hours worked to NewStar on at least a semi-monthly
basis.

During the part-time employment period, Clemmens shall be entitled to incur on
behalf of NewStar reasonable and necessary expenses in connection with his
duties and NewStar shall pay for or reimburse all such expenses in accordance
with its policies upon presentation of proper receipts.

In this role, Clemmens will act as an employee-at-will and either NewStar or
Clemmens may terminate the part-time employment upon at least thirty (30) days
written notice, provided that (i) if NewStar is the party giving notice of
termination, it may, in its sole discretion, direct Clemmens not to report to
work or otherwise perform services during part or all of the 30-day period; and
(ii) if Clemmens is the party giving notice of termination, NewStar, in its sole
discretion, may elect to waive part or all of the 30-day notice period and
accelerate the termination date. NewStar shall be obligated to pay Clemmens the
compensation and expenses due up to the date of the termination. Clemmens
acknowledges that he shall not be entitled to any additional compensation or
benefits in this position other than that which is set forth in this Section 6.

 

7. Return of Property. Within two business days after the termination of
Part-time Employment as outlined in Section 6 above, if and as requested by the
Company, Clemmens shall:

 

  (a) return all property belonging to NewStar, including but not limited to
computers, papers, files, documents, reference guides, equipment, keys, access
key tag/card, identification cards, credit cards, software, computer access
codes, disks, supplies and institutional manuals. Clemmens shall not retain any
copies, summaries, reproductions or excerpts of any of the foregoing, whether in
hardcopy or electronic format, and further;

 

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  (b) to the extent Clemmens has stored any NewStar property on any personal
home computer(s) or other personal electronic storage device(s), Clemmens shall
first forward a copy of any such property to Peter Schimdt-Fellner
(pschmidt-fellner@newstarfin.com) and then shall irretrievably delete all
NewStar property from any personal home computer(s) and any other personal
electronic storage device(s) within two business days after the completion of
tasks described in Section 6 above.

 

8. Nondisclosure of this Agreement. Clemmens agrees that the nature and terms of
this Agreement are confidential, and further agrees not to discuss or disclose
them, without the prior written consent of NewStar, with or to any person,
except to federal and state tax authorities, Clemmens’s accountants or tax
advisors, attorneys and spouse, or as required by law. Nothing in this Agreement
shall prohibit or restrict Clemmens from cooperating with, or disclosing
information or this Agreement to, the Equal Employment Opportunity Commission,
or any other federal, state or local administrative agency.

 

9. Continuation of Prior Covenants. Clemmens acknowledges and agrees that,
following the Retirement Date or any other cessation of his employment with
NewStar (whether initiated by Clemmens or by NewStar), he will remain bound by
the terms of the Employment Agreement to the extent that such terms survive the
cessation of Clemmens’s employment under the Employment Agreement, including
without limitation the covenants contained in Sections 7 (Confidentiality) and 8
(Restrictive Covenants) of the Employment Agreement and all related enforcement
provisions.

For purposes of clarity, Clemmens obligations under Section 7 (Confidentiality)
shall survive the expiration or termination of this or any other Agreement
between Clemmens and the Company. Clemmens obligations under Section 8
(Restrictive Covenants) shall commence on the Retirement Date (June 30, 2013)
and shall remain in effect for a period of one (1) year thereafter (the
“Restricted Period”).

During the Restricted Period, Clemmens’ obligations under Lock-Up Agreements by
and between NewStar and Clemmens dated December 13, 2006 and March 18, 2009
respectively (copies of which are attached as Exhibits B and C) remain in
effect. Specifically, in accordance with the Lock-Up Agreement dated
December 13, 2006, during the Restricted Period and for a period of ninety
(90) days thereafter, Clemmens shall hold and not transfer 67,125 shares, which
represents twenty-five percent (25%) of Vested Incentive Securities subject to
lock-up under the Lock-Up Agreement (the “Restricted Securities”).

Further, in accordance with the Lock-Up Agreement dated March 18, 2009, during
the Restricted Period and for a period of 90 days thereafter Clemmens shall not
transfer more than fifty percent (50%) of the proceeds from the exercise of any
options granted on March 18, 2009 (the “Restricted Proceeds”).

The Restricted Securities and Restricted Proceeds shall be held, in Clemmens
name, by Merrill Lynch in its capacity as the administrator of the Company’s
equity award programs, until the Restricted Period expires. If the Board of
Directors of the Company,

 

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in its sole discretion, at any time during the Restricted Period and for a
period of ninety (90) days thereafter, determines that Clemmens has violated or
breached the Restrictive Covenants at any time prior to the expiration of the
Restricted Period, then all of such Restricted Securities and Restricted
Proceeds, as of the date of breach shall be forfeited for no consideration.

 

10. Nondisparagement. Clemmens agrees not to disparage or make negative
statements about NewStar or any of NewStar’s officers, directors, employees, or
programs. Nothing in this Agreement shall bar Clemmens from providing truthful
testimony in any legal proceeding, or in responding to any request from any
governmental agency, or as required by law, or by court order or other legal
process.

 

11. Breach. Clemmens acknowledges that any breach of this Agreement and/or the
Employment Agreement may cause irreparable damage to NewStar and that in the
event of such breach, NewStar shall be entitled, in addition to monetary damages
and to any other remedies available to NewStar under this Agreement and/or the
Employment Agreement and at law, to equitable relief, including injunctive
relief. In the event that Clemmens institutes legal proceedings to enforce this
Agreement or the Employment Agreement, Clemmens agrees that the sole remedy
available to Clemmens shall be enforcement of the terms of this Agreement or the
Employment Agreement and/or a claim for damages resulting from the breach of
this Agreement or the Employment Agreement, but that under no circumstances
shall Clemmens be entitled to receive or collect any damages for claims that
Clemmens has released under this Agreement.

 

12. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of NewStar and Clemmens and their respective successors and assigns.

 

13. Severability. If any provision of this Agreement is held to be excessively
broad, it shall be reformed and construed by limiting and reducing it so as to
be enforceable to the maximum extent permitted by law. Should any part, term or
provision of this Agreement be determined by any tribunal, administrative agency
or court of competent jurisdiction to be illegal, invalid or unenforceable, even
after all attempts at reformation or construction have been exhausted as
provided in the prior sentence, the validity of the remaining parts, terms or
provisions shall not be affected thereby, and the illegal, invalid or
unenforceable part, term or provision shall be deemed not to be part of this
Agreement.

 

14. Entire Agreement. This Agreement, including its attached exhibits,
constitutes the entire agreement between the parties about or relating to the
cessation of Clemmens’s employment with NewStar, or NewStar’s obligations to
Clemmens with respect to Clemmens’s cessation of employment, and fully
supersedes any and all prior and contemporaneous agreements or understanding
between the parties concerning the subject matter of this Agreement, except that
the Employment Agreement shall remain in effect as set forth in Sections 1 and 9
above, and the terms of the applicable grant documents for any stock options or
other equity rights shall remain in effect. The terms of this Agreement are
contractual in nature and not a mere recital, and they shall take effect as a
sealed document. This Agreement may be changed or amended only by agreement in
writing signed by both parties.

 

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15. Time to Consider Agreement; Revocation.

 

  (a) Clemmens acknowledges that he has been advised in writing to, and has been
given the opportunity to, consult an attorney of his choice before signing this
Agreement.

 

  (b) Clemmens acknowledges that he has been given the opportunity to review and
consider this Agreement for at least twenty-one (21) days before signing it and
that, if Clemmens has signed this Agreement in less than that time, he has done
so voluntarily in order to obtain sooner the benefits of this Agreement.

 

  (c) Clemmens further acknowledges that he may revoke this Agreement within
seven (7) days of signing it, provided that this Agreement will not become
effective until such seven day period has expired. To be effective, any such
revocation must be in writing and delivered to NewStar’s principal office, to
the attention of Peter Schmidt-Fellner, by close of business on the seventh day
after signing and must expressly state Clemmens’s intention to revoke the
Agreement. The eighth day following Clemmens’s execution hereof shall be deemed
the “Effective Date” of this Agreement.

 

  (d) The parties also agree that the release provided by Clemmens in this
Agreement does not include claims under the Age Discrimination in Employment Act
arising after the date Clemmens signs this Agreement.

 

16. Representations. Clemmens acknowledges that the benefits afforded to him
under the terms of this Agreement exceed any legal obligation of NewStar and
provide valid consideration for the General Release contained in this Agreement,
and the parties attest that no other representations were made regarding this
Agreement other than those contained herein.

 

17. Counterparts. This Agreement may be executed in two or more counterparts,
each of which when executed and delivered constitutes an original of this
Agreement, but all the Counterparts shall together constitute one and the same
agreement. No counterpart shall be effective until each party has executed at
least one counterpart. For the convenience of the parties, facsimile and pdf
signatures shall be accepted as originals.

 

18. Choice of Law. This Agreement shall be governed by, and shall be construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
regard to its conflict of laws principles. The parties hereby expressly consent
to the personal jurisdiction of the state and federal courts located in
Massachusetts for any lawsuit permitted to be filed arising from or relating to
this Agreement and expressly waive any and all objections to venue, including,
without limitation, the inconvenience of such forum.

IN WITNESS WHEREOF, NewStar and Clemmens have duly executed this Agreement as of
the dates written below.

 

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NewStar Financial, Inc.     Robert T. Clemmens By:  

/s/    JOHN KIRBY BRAY

   

/s/    ROBERT T. CLEMMENS

  Name: John Kirby Bray         Title: Chief Financial Officer       Date:  

July 23, 2013

    Date:  

July 1, 2013

 

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Exhibit A

RESTATED EMPLOYMENT AGREEMENT

of

ROBERT T. CLEMMENS

EMPLOYMENT AGREEMENT (this “Agreement”), dated as of December 11, 2009 (the
“Effective Date”), between NEWSTAR FINANCIAL, INC., a Delaware corporation (the
“Company”), and Robert T. Clemmens (“Executive”). This Agreement fully
supersedes the Employment Agreement that Executive executed on December 13,
2006.

In consideration of the mutual agreements set forth below and for other good and
valuable consideration given by each party to this Agreement to the other, the
receipt and sufficiency of which are hereby acknowledged, the Company agrees to
employ Executive and Executive agrees to serve the Company as an employee
pursuant to the terms and subject to the conditions that follow.

Employment. The Company hereby agrees to employ Executive, and Executive hereby
agrees to accept employment with the Company, upon the terms and conditions
contained in this Agreement, effective as of the Effective Date. Executive’s
employment with the Company shall continue, subject to earlier termination of
such employment pursuant to the terms hereof, until the third (3rd) anniversary
of the Effective Date and thereafter shall automatically renew for one
additional one (1) year period, unless a notice of intent not to renew shall be
delivered in accordance with Section 14 by either the Company or Executive, as
the case may be, at least ninety (90) days prior to the third (3rd) anniversary
date (such term, as and when so extended, the “Employment Period”), provided
that either party may make any renewal contingent upon the parties’ agreement to
add to, delete, or modify the terms of this Agreement by providing a notice to
the other party at least ninety (90) days prior to the third (3rd) anniversary
date. The parties shall have a 30-day window to agree to any additional, deleted
or modified terms and, if no agreement can be reached, then the initial
contingent notice of renewal shall be deemed a notice of non-renewal unless the
parties agree otherwise. Executive represents to the Company that he has no
present intention to terminate employment with the Company.

Duties. During the Employment Period, Executive shall serve on a full-time basis
as Chief Credit Officer of the Company. Executive’s duties and responsibilities
as the Chief Credit Officer of the Company shall include those duties
customarily associated with an officer with a similar title or as may be
assigned to him from time to time by the Chief Executive Officer of the Company.
Executive shall devote his full business time attention and energies and use his
best efforts in his employment with the Company; provided, however, that this
Agreement shall not be interpreted as prohibiting Executive from managing his
personal affairs or engaging in charitable or civic activities, so long as, in
each case, such activities do not interfere in any material respect with the
performance of Executive’s duties and responsibilities hereunder and are in
accordance with the policies and procedures of the Company.

Compensation and Benefits. In consideration of entering into this Agreement and
as full compensation for Executive’s services hereunder, during the Employment
Period, Executive shall receive the following compensation and benefits:

 

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Base Salary. The Company shall pay to Executive a base salary (“Base Salary”) at
a rate of $350,000 per annum, payable in accordance with the payroll policies
from time to time in effect at the Company. Executive’s Base Salary may be
subject to increase (but shall not be subject to decrease) on an annual basis as
the Board of Directors of the Company or any committee thereof (the “Board of
Directors”) shall determine.

Incentive Bonuses. Executive shall be entitled to participate in such incentive
bonus programs as the Board of Directors may adopt from time to time for members
of senior management of the Company (“Incentive Bonus”).

Vacation. Executive shall be entitled to five (5) weeks of paid vacation per
calendar year, accrued in accordance with the usual vacation policies in effect
at the Company.

Other Benefits. Executive shall participate in and be eligible to receive, but
without duplication, all other benefits (i.e., benefits other than those of the
types covered in Sections 3(a)—(c)) offered to senior executives of the Company,
including, without limitation, retirement income plans and health and welfare
plans, under and in accordance with the provisions of any employee benefit plan
adopted or to be adopted by the Company (collectively, the “Benefit Plans”)other
than any severance benefits offered to senior executives in accordance with any
such plan. Except as set forth herein, Executive shall not be entitled to any
other benefits.

Retiree Health Program. For purposes of Section 6 hereof, the “Retiree Health
Program” shall mean a health insurance plan, with a reputable insurance provider
that is sponsored by the Company and provides benefits that are substantially
similar to those provided to then current employees, participation in which is
paid for solely by Executive. The Company will use its reasonable best efforts
to ensure that any Retiree Health Program provides coverage for Executive if, as
of the date hereof, Executive is eligible for insurance under the Company’s
current health insurance plan.

Reimbursement for Expenses. During the Employment Period, Executive shall be
entitled to incur on behalf of the Company reasonable and necessary expenses in
connection with his duties in accordance with Company’s policies and the Company
shall pay for or reimburse Executive for all such expenses upon presentation of
proper receipts therefor. Executive shall comply with such reasonable
limitations and reporting requirements with respect to such expenses as the
Board of Directors may establish from time to time.

Termination. Executive’s employment hereunder may be terminated as follows
(each, a “Termination Event”):

Automatically in the event of the death of Executive;

At the option of the Company, by the Board of Directors (acting through the
Chairman or Secretary) or by written notice to Executive in the event of the
Permanent Disability of Executive. As used herein, the term “Permanent
Disability” shall mean a physical or mental incapacity or disability which
renders Executive unable, with or without a reasonable accommodation, to render
the services required hereunder (A) for one hundred eighty (180) days in any
twelve (12) month period or (B) for a period of ninety (90) consecutive days.

At the option of the Company for Cause (as defined in Section 6(e));

 

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At the option of the Company at any time without Cause, subject to the Company’s
obligations under Section 6(c) hereof;

At the option of Executive for Good Reason (as defined in Section 6(j));

At the option of Executive, at any time, for any reason, on ninety (90) days
prior written notice to the Company;

At the option of Executive upon Early Retirement (as defined in Section 6(h)) of
Executive or upon Retirement (as defined in Section 6(l)) of Executive; or

At the option of Executive for Company Failure to Renew (as defined in
Section 6(m)).

Payments.

Death. If the Termination Event is due to Executive’s death, Executive’s legal
representatives shall be entitled to receive, as soon as practicable following
the date of termination:

any accrued but unpaid Base Salary through the date of termination, plus

an amount equal to the average Incentive Bonus paid or earned but unpaid to
Executive in respect of the three (3) previous fiscal years, pro-rated for the
period from the beginning of the then current fiscal year and ending on the date
of termination (the “Pro Rated Bonus”), plus

any accrued and unpaid vacation pay or other benefits which may be owing in
accordance with the Company policies and applicable law, plus

acceleration of vesting and exercisability of all equity incentive awards (the
“Incentive Equity”) issued to Executive under the Company’s Equity Incentive
Award Plan (the “Plan”). For purposes of this Agreement, “vesting” shall mean,
in the case of any restricted stock issued under the Plan, ceasing to be subject
to forfeiture, plus

a period of two (2) years following the date of termination to exercise any
vested stock options.

Permanent Disability. If the Termination Event is due to Executive’s Permanent
Disability, Executive or his legal representatives shall be entitled to receive,
as soon as practicable following the date of termination:

any accrued but unpaid Base Salary payable through the date of termination, plus

the Pro Rated Bonus, plus

any accrued and unpaid vacation pay or other benefits which may be owing in
accordance with Company policies and applicable law, plus

acceleration of vesting and exercisability of all Incentive Equity, plus

a period of one (1) year following the date of termination to exercise any
vested stock options.

 

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Termination Without Cause or for Good Reason. If the Termination Event is
termination by the Company at any time during the Employment Period without
Cause or by Executive at any time during the Employment Period for Good Reason,
Executive shall be entitled to:

any accrued but unpaid Base Salary through the date of termination, plus

the Pro Rated Bonus payable as soon as practicable following the date of
termination, plus

any accrued and unpaid vacation pay, unreimbursed expenses or other benefits
which may be applicable to and owing in accordance with Company policies or
applicable law, plus

the Base Salary (which shall be the Base Salary as of the date of termination)
during the Severance Period (as defined in Section 6(k)), payable in accordance
with the payroll practices then in effect at the Company, plus

an amount equal to the average Incentive Bonus paid or earned but unpaid to
Executive in respect of the three (3) previous fiscal years, payable as soon as
practicable following the date of termination, plus

the continuation of all health benefits during the Severance Period at the same
cost to Executive as though Executive continued his employment with the Company,
plus

the acceleration of vesting and exercisability of all Incentive Equity, plus

a period equal to the full length of the remaining term (as set forth in the
applicable grant notice) to exercise any vested stock options;

provided, however, that if Executive’s employment is terminated pursuant to this
Section following the completion of Liquidation Event, the amounts payable in
subsection 6(c)(iv) shall be doubled, and shall be paid out in a lump sum within
sixty (60) days of the date of termination, and no amount will be paid under
subsection 6(c)(v); provided further, once the Company makes the required
payment following a Liquidation Event, Executive shall be released from the
non-competition provisions set forth in Section 8 of this Agreement; provided,
further, the Company’s obligations under Section 6(c)(vi) shall terminate prior
to the end of the Severance Period if, during the Severance Period, Executive
obtains health benefits from a new employer that are substantially equivalent to
those provided by the Company; provided, further, if Executive is a “specified
employee” as defined in Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”), and the payments described above do not satisfy any
applicable exemptions, then such payments shall not be made prior to the first
day following the six-month period beginning on the date of termination of
employment if such payments would otherwise violate Section 409A, Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date (“Section 409A Guidance”) and such payments
shall instead be accumulated and paid to Executive

 

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on the first day of the seventh month following his termination of employment.
All payments due Executive under this Section 6(c) after the six-month period
following Executive’s termination of employment shall be paid in accordance with
the terms of this Section 6(c). For purposes of this Agreement, a “Liquidation
Event” shall mean the approval by the Board of Directors and/or the Company’s
stockholders of a plan to liquidate materially all of the Company’s assets.

Termination for Cause or Voluntary Termination by Executive. If the Termination
Event is termination by the Company for Cause pursuant to Section 5(c) or
termination by Executive pursuant to Section 5(f), except for Base Salary
through the day on which Executive’s employment was terminated and any accrued
and unpaid vacation pay or other benefits which may be owing in accordance with
the Company’s policies or applicable law, Executive shall not be entitled to
receive severance or any other compensation or benefits after the last date of
employment with the Company. If termination is for Cause, all of (i) the
Incentive Equity that is unvested as of the date of termination and (ii) the
stock options that remain unexercised as of the date of termination, shall be
forfeited for no consideration. If termination is by Executive pursuant to
Section 5(f), (i) all of the Incentive Equity that is unvested as of the date of
termination shall be forfeited for no consideration and (ii) Executive shall
have one (1) year following the date of termination to exercise any vested stock
options.

Cause Defined. For the purpose of this Agreement, the term “Cause” shall mean
(i) the willful and continued failure of Executive to perform substantially
Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to Executive by the
Board of Directors, which specifically identifies the manner in which the Board
of Directors believes that Executive has not substantially performed Executive’s
duties, or (ii) willful engaging by Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company or its
affiliates, or (iii) conviction of or made a plea of guilty or nolo contendere
to, a felony, or (iv) a material breach of his or her obligations under
Section 7 or Section 8 hereof. For purposes of this definition of “Cause”, no
act or failure to act on the part of Executive shall be considered “willful”
unless it is done, or omitted to be done, by Executive in bad faith or without
reasonable belief that Executive’s actions or omission was in the best interests
of the Company. Any act, or failure to act, based upon express authority given
pursuant to a resolution duly adopted by the Board of Directors with respect to
such act or omission or upon the instructions of the Chief Executive Officer of
the Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Notwithstanding the foregoing,
Executive cannot be terminated for “Cause” unless the Company unless the Company
has notified Executive in writing that his or her employment is being terminated
for Cause which notice shall specify the Cause event and Executive is given an
opportunity, at least 30 days after receipt of such written notice from the
Company, to make a presentation to the Board of Directors that Executive should
not be terminated for Cause.

Termination Upon Retirement. If the Termination Event is due to the Retirement
of Executive, Executive shall be entitled to receive, as soon as practicable
following the date of termination:

any accrued but unpaid Base Salary through the date of termination, plus

 

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the Pro Rated Bonus, plus

any accrued and unpaid vacation pay or other benefits which may be owing in
accordance with Company policies and applicable law, plus

the right to participate in the Retiree Health Program, plus

acceleration of vesting of all Incentive Equity, plus

a period equal to the full length of the remaining term (as set forth in the
applicable grant notice) to exercise any vested stock options;

provided, however, that the Company’s obligations under Section 6(f)(iv) shall
terminate if at any time Executive obtains retiree health benefits from a
different employer and provided, further, if Executive is a “specified employee”
as defined in Section 409A, and the payments described above do not satisfy any
applicable exemptions, then such payments shall not be made prior to the first
day following the six-month period beginning on the date of termination of
employment if such payments would otherwise violate Section 409A Guidance and
such payments shall instead be paid to Executive on the first day of the seventh
month following his termination of employment.

Company Failure to Renew. If the Termination Event is Company Failure to Renew,
Executive shall be entitled to receive:

any accrued but unpaid Base Salary through the date of termination, plus

the Pro Rated Bonus, payable as soon as practicable following the date of
termination, plus

any accrued and unpaid vacation pay or other benefits which may be owing in
accordance with Company policies and applicable law, plus

once Executive reaches the age of 55, the right to participate in the Retiree
Health Program, plus

acceleration of vesting of all Incentive Equity

provided, however, that the Company’s obligations under Section 6(g)(iv) shall
terminate if at any time Executive obtains retiree health benefits from a
different employer and provided, further, if Executive is a “specified employee”
as defined in Section 409A, and the payments described above do not satisfy any
applicable exemptions, then such payments shall not be made prior to the first
day following the six-month period beginning on the date of termination of
employment if such payments would otherwise violate Section 409A Guidance and
such payments shall instead be paid to Executive on the first day of the seventh
month following his termination of employment. Notwithstanding anything to the
contrary in this subsection, if the Company provides notice of its intent not to
renew this Agreement following a Liquidation Event, Executive’s potential
severance benefits shall be calculated as set forth in subsection 6(c), and not
as set forth in this subsection.

 

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Termination Upon Early Retirement. If the Termination Event is by Executive due
to Early Retirement, Executive shall be entitled to receive:

any accrued but unpaid Base Salary through the date of termination, plus

any accrued and unpaid vacation pay or other benefits which may be owing in
accordance with Company policies and applicable law, plus

the right to participate in the Retiree Health Program, plus

a period equal to the lesser of (x) three years or (y) the full length of the
remaining term (as set forth in the applicable grant notice) to exercise any
vested Options, provided, however, that all of the Incentive Equity that is
unvested as of the date of termination shall be forfeited for no consideration;

provided, however, that the Company’s obligations under Section 6(h)(iii) shall
terminate if at any time Executive obtains retiree health benefits from a
different employer. For purposes of this subsection, “Early Retirement” shall
mean when Executive’s age plus his years of employment with the Company equal
fifty-five (55).

Change of Control.

Special Payment. If, at any time during the two (2) year period following a
Change of Control (as defined in Section 6(i)(ii)), Executive’s employment is
terminated without Cause or by Executive for Good Reason, then instead of the
payment set forth in subsection 6(c) Executive will receive (A) his Base Salary
through the date of termination, plus (B) an amount equal to the Base Salary
(which shall be the Base Salary as of the date of termination), payable in a
lump sum as soon as practicable following the date of termination, plus (C) the
Pro Rated Bonus, payable as soon as practicable following the date of
termination, plus (D) an amount equal to the average Incentive Bonus paid or
earned but unpaid to Executive in respect of the three (3) previous fiscal
years, payable as soon as practicable following the date of termination, plus
(E) any accrued and unpaid vacation pay, unreimbursed expenses or other benefits
which may be applicable to and owing in accordance with Company policies or
applicable law, plus (F) the continuation of all health benefits during the
Severance Period, plus (G) acceleration of vesting and exercisability of all
Incentive Equity, plus (H) a period equal to the full length of the remaining
term (as set forth in the applicable grant notice) to exercise any vested stock
options; provided, however, if Executive is a “specified employee” as defined in
Section 409A and the payments described above do not satisfy any applicable
exemptions, then such payments shall not be made prior to the first day
following the six-month period beginning on the date of termination of
employment if such payments would otherwise violate 409A Guidance and such
payments shall instead be accumulated and paid to Executive on the first day of
the seventh month following his termination of employment. All payments due
Executive under this Section 6(i) after the six-month period following
Executive’s termination of employment shall be paid in accordance with the terms
of this Section 6(i).

Change of Control Defined. For purposes of this Section, the term “Change of
Control” shall mean the occurrence of one or more of the following events:

(A) the consummation of a merger or consolidation of the Company with or into
any other corporation or other entity in which holders of the Company’s voting
securities immediately prior to such merger or consolidation will not, directly
or indirectly, continue to hold at least a majority of the outstanding voting
securities of the Company;

 

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(B) a sale, lease, exchange or other transfer (in one transaction or a related
series of transactions) of all or substantially all of the Company’s assets;

(C) the acquisition by any person or any group of persons, acting together in
any transaction or related series of transactions, of such quantity of the
Company’s voting securities as causes such person, or group of persons, to own
beneficially, directly or indirectly, as of the time immediately after such
transaction or series of transactions, 50% or more of the combined voting power
of the voting securities of the Company other than as a result of (X) an
acquisition of securities directly from the Company or (Y) an acquisition of
securities by the Company which by reducing the voting securities outstanding
increases the proportionate voting power represented by the voting securities
owned by any such person or group of persons to 50% or more of the combined
voting power of such voting securities; or

(D) a change in the composition of the Board within a two (2) year period such
that a majority of the members of the Board are not Continuing Directors. As
used herein, the term “Continuing Directors” shall mean as of any date of
determination, any member of the Board of Directors of the Company who (i) was a
member of Board of Directors of the Company immediately after the Effective Date
of this Agreement, or (ii) was nominated for election or elected to the
Company’s Board of Directors with the approval of, or whose election to the
Board of Directors was ratified by, at least a majority of the Continuing
Directors who were members of the Company’s Board of Directors at the time of
that nomination or election;

provided, however, that in no case shall (1) the public offering and sale of the
Company’s Common Stock by its stockholders pursuant to a registered secondary
offering or (2) the voluntary or involuntary bankruptcy of the Company
constitute a Change of Control.

Good Reason Defined. For purposes of this Agreement, “Good Reason” shall mean in
the absence of written consent of Executive (i) a reduction in Executive’s
annual Base Salary from such Executive’s annual base salary then in effect, or
(ii) a forced relocation by the Company of Executive’s place of employment to a
location greater than thirty (30) miles from his or her initial place of
employment. Notwithstanding the foregoing, in the event that Executive provides
written notice of termination for Good Reason in reliance upon this provision,
the Company shall have the opportunity to cure such circumstances within thirty
(30) days of receipt of such notice.

Severance Period Defined. For purposes of this Agreement, “Severance Period”
shall mean the period beginning on the date of termination of Executive’s
employment and ending on the date which is one (1) year thereafter.

Retirement Defined. For the purposes of this Agreement, the term “Retirement”
shall mean when Executive is fifty-five (55) years of age or older and such
Executive terminates employment for no reason other than the expiration of the
three-year Employment Period, or the one-year renewal thereof, provided that
neither party shall be obligated to renew the Employment Period as provided in
Section 1 above.

Company Failure to Renew Defined. For purposes of this Agreement, the term
“Company Failure to Renew” shall mean the delivery by the Company of a notice of
intent not to renew pursuant to Section 1 and the notification by Executive
within ninety (90) days after receipt of a notice of intent not to renew that
Executive intends to terminate his employment.

 

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Condition to Payment. All payments and benefits due to Executive under this
Section 6 which are not otherwise required by law shall be contingent upon
(i) execution by Executive (or Executive’s beneficiary or estate) of a
separation agreement in such form as determined by the Company in its sole
discretion, including a general release of all claims to the maximum extent
permitted by law against the Company, its affiliates and its and their current
and former stockholders, directors, employees and agents, and (ii) compliance by
Executive with his obligations under any stockholders, restricted stock or other
agreement to which the Company and Executive are a party.

No Other Severance. Executive hereby acknowledges and agrees that, other than
the severance payments described in this Section 6, upon termination, Executive
shall not be entitled to any other severance under any Company benefit plan or
severance policy generally available to the Company’s employees or otherwise.

Survival; Conflicting Terms. Any provision in this Section 6 regarding Incentive
Equity or the right to participate in the Retiree Health Program shall survive
any termination or expiration of this Agreement. Section 6(i) shall survive a
Change of Control regardless of whether this Agreement is terminated in
connection with a Change of Control or expires by its terms following a Change
of Control. In the event of a conflict between the terms of this Agreement and
any Incentive Equity documentation, the terms of this Agreement regarding the
Incentive Equity shall prevail.

Confidentiality.

Executive agrees that Confidential Information was and shall be made available
in connection with Executive’s employment by or consultancy with the Company.
Executive acknowledges that the Confidential Information that he or she develops
or invents in connection with his or her employment by the Company or has
obtained or will obtain in connection therewith is the property of the Company.
Executive agrees that he or she will not disclose any Confidential Information
to any other Person, except that Confidential Information may be disclosed:
(i) to the extent required by applicable law, rule or regulation (including
complying with any oral or written questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process to which Executive is subject); provided that Executive gives the
Company prompt notice of such requests, to the extent practicable, so that the
Company may seek an appropriate protective order or similar relief (and
Executive shall cooperate with such efforts by the Company at the Company’s
expense, and shall in any event make only the minimum disclosure required by
such law, rule or regulation unless Executive reasonably believes that other
disclosure is necessary or advisable in order to avoid adverse consequences to
Executive), (ii) if the prior written consent of the Board of Directors shall
have been obtained, or (iii) to such Persons to the extent necessary in the
reasonable judgment of Executive to perform his duties as an employee of the
Company and, in his reasonable judgment, such disclosure is not harmful to the
Company.

“Confidential Information” shall mean any information relating to the business
or affairs of the Company or, as provided below, any of its affiliates,
including, but not limited to, customer identities, potential customers,
employees, business and financial strategies, methods or practices, business
plans, financial models, proposals, documents or materials owned, developed or
possessed by the Company, profit margins or other proprietary information used
by the Company or any of its affiliates; provided that Confidential Information
shall not include (i) information that is

 

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or becomes generally known to the public other than as a result of a disclosure
by Executive in violation of this Agreement, (ii) information that was known to
Executive prior to becoming an employee of the Company or (iii) information
which becomes known to Executive following a Termination Event, through no
wrongful act of Executive, by disclosure from a third party unless Executive has
reason to believe that such third party is under an obligation or duty of
confidentiality or secrecy with respect to such information or is an employee,
officer, director or stockholder of the Company; and provided, further, that
(A) in such case where any affiliate has a separate confidentiality requirement
or agreement to which the Company is subject, such confidentiality requirement
or agreement shall supersede the requirements herein and (B) unless a
confidentiality requirement or agreement referred to in the preceding clause
(A) exists with respect to an affiliate, Confidential Information for purposes
of this definition as it relates to affiliates shall be deemed to include only
Confidential Information of affiliates, the employees or consultants of which,
are participants or observers at meetings of the Board of Directors of the
Company.

Restrictive Covenants.

During the Employment Period and for a period of one (1) year after the
effective date of the Termination Event, Executive shall not, directly or
indirectly (i) cause, solicit, induce or encourage any employees, consultants or
contractors of the Company to leave such employment or service, or hire, employ
or otherwise engage any such individual, or (ii) cause, induce or encourage any
customer, supplier or licensor of the Company, or any other Person who has a
material business relationship with the Company, to terminate or modify any such
relationship.

During the Employment Period and for a period of one (1) year after the
effective date of the Termination Event, Executive shall not, directly or
indirectly alone or as a partner, officer, director, shareholder, member, sole
proprietor, employee or consultant of any other firm or entity, personally
engage or participate in any Restricted Business, as such term is defined below,
as a material portion of his or her responsibilities.

The parties hereto agree that, if any court of competent jurisdiction in a final
nonappealable judgment determines that a specified time period, a specified
business limitation or any other relevant feature of this Section 8 is
unreasonable, arbitrary or against public policy, then a lesser time period,
business limitation or other relevant feature which is determined to be
reasonable, not arbitrary and not against public policy may be enforced against
the applicable party.

“Restricted Business” shall mean any of the following: (i) the business of
extending senior, subordinated or asset-based loans to middle-market companies
as targeted by the Company at the effective date of the Termination Event,
(ii) providing real estate financing of the types offered by the Company at the
effective date of the Termination Event, (iii) extending asset-backed loans or
investing in asset-backed securities with financial products of the types then
offered by the Company at the effective date of the Termination Event or
(iv) any other material line of business engaged in by the Company at the
effective date of the Termination Event.

The Board of Directors shall, in its sole discretion, have the authority and
discretion to waive any provision of this Section 8 or to make a determination
that a business is not a Restricted Business for purposes hereof.

 

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Injunctive Relief. The parties acknowledge and agree that restrictions contained
in Sections 7 and 8 of this Agreement are necessary for the protection of the
business and goodwill of the Company and are considered by Executive to be
reasonable for such purpose. Executive agrees that any breach or threatened
breach of Sections 7 or 8 will cause the Company substantial and irrevocable
damage that is difficult to measure. Therefore, in the event of any such breach
or threatened breach, Executive agrees that the Company, in addition to such
other remedies which may be available, shall have the right to obtain an
injunction from a court restraining such a breach or threatened breach and the
right to specific performance of the provisions of Sections 7 and 8 of this
Agreement and Executive hereby waives the adequacy of a remedy at law as a
defense to such relief.

Indemnification. If Executive is a party to any action, suit or proceeding by
reason of the fact that Executive is or was an officer or agent of the Company,
the Company will indemnify Executive to the fullest extent permitted by the laws
of the state of the Company’s incorporation, in effect at that time, or the
certificate of incorporation and bylaws of the Company, whichever affords the
greater protection to Executive.

Withholding Taxes. Executive acknowledges and agrees that the Company may
directly or indirectly withhold from any payments under this Agreement all
federal, state, city or other taxes that will be required pursuant to any law or
governmental regulation.

Section 409A. To the extent applicable, this Agreement shall be interpreted in
accordance with 409A Guidance. Notwithstanding any provision of the Agreement to
the contrary, (i) if, at the time of Executive’s termination of employment with
the Company, Executive is a “specified employee” as defined in 409A Guidance and
the deferral of the commencement of any payments or benefits otherwise payable
hereunder as a result of such termination of employment is necessary in order to
prevent any accelerated or additional tax under 409A Guidance, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to Executive) until the date that is six months following Executive’s
termination of employment with the Company (or the earliest date as is permitted
under Section 409A) and (ii) if any other payments of money or other benefits
due to Executive hereunder could cause the application of an accelerated or
additional tax under Section 409A, the Company may (a) adopt such amendments to
the Agreement, including amendments with retroactive effect, that the Company
determines necessary or appropriate to preserve the intended tax treatment of
the benefits provided by the Agreement and/or (b) take such other actions as the
Company determines necessary or appropriate to comply with the requirements of
409A Guidance. The Company shall consult with Executive in good faith regarding
the implementation of this Section 12; provided that none of the Company, any of
its affiliates, or any of their employees or representatives shall have any
liability to Executive with respect thereto.

Effect of Prior Agreements. This Agreement constitutes the sole and entire
agreement and understanding between Executive and the Company with respect to
the matters covered hereby and thereby, and there are no other promises,
agreements, representations, warranties or other statements between Executive
and the Company in respect to such matters not expressly set forth in this
Agreement. This Agreement supersede all prior and contemporaneous agreements,
understandings or other arrangements, whether written or oral, concerning the
subject matter thereof.

 

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Notices. Any notice required, permitted, or desired to be given pursuant to any
of the provisions of this Agreement shall be deemed to have been sufficiently
given or served for all purposes when telecopied, when delivered by hand or
received by registered or certified mail, postage prepaid, or by nationally
reorganized overnight courier service addressed to the party to receive such
notice at the following address or any other address substituted therefor by
notice pursuant to these provisions:

If to the Company, at:

NewStar Financial, Inc.

500 Boylston Street

Suite 1600

Boston, MA 02116

Attention: Colleen M. Banse

Facsimile: (617) 830-0010

If to Executive, at:

Robert T. Clemmens

13 Ridgecrest Road

Stamford, CT 06903

Assignability. The obligations of Executive may not be delegated and Executive
may not, without the Company’s written consent thereto, assign, transfer,
convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or
any interest herein. Any such attempted delegation or disposition shall be null
and void and without effect. The Company and Executive agree that this Agreement
and all of the Company’ rights and obligations hereunder may be assigned or
transferred by the Company to and may be assumed by and become binding upon and
may inure to the benefit of any affiliate of or successor to the Company. The
term “successor” shall mean, with respect to the Company, any other corporation
or other business entity which, by merger, consolidation, purchase of the
assets, or otherwise, acquires all or a material part of its assets. Any
assignment by either of the Company of its rights or obligations hereunder to
any affiliate of or successor of the Company shall not be a termination of
employment for purposes of this Agreement.

 

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Modification. This Agreement may not be modified or amended except in writing
signed by the parties. No term or condition of this Agreement will be deemed to
have been waived except in writing by the party charged with waiver. A waiver
will operate only as to the specific term or condition waived and will not
constitute a waiver for the future or act on anything other than that which is
specifically waived.

Governing Law. This Agreement has been executed and delivered in the
Commonwealth of Massachusetts and its validity, interpretation, performance and
enforcement will be governed by the laws of that state applicable to contacts
made and to be performed entirely within that state.

Severability. All provisions of this Agreement are intended to be severable. In
the event any provision or restriction contained herein is held to be invalid or
unenforceable in any respect, in whole or in part, such finding will in no way
affect the validity or enforceability of any other provision of this Agreement.
The parties hereto further agree that any such invalid or unenforceable
provision will be deemed modified so that it will be enforced to the greatest
extent permissible under law, and to the extent that any court of competent
jurisdiction determines any restriction herein to be unreasonable in any
respect, such court may limit this Agreement to render it reasonable in the
light of the circumstances in which it was entered into and specifically enforce
this Agreement as limited.

No Waiver. No course of dealing or any delay on the part of the Company or
Executive in exercising any rights hereunder shall operate as a waiver of any
such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver of any other breach or default.

Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original by the party executing the same but
all of which together will constitute one and the same instrument. For the
convenience of the parties, facsimile and pdf signatures shall be accepted as
originals.

Binding Arbitration.

Generally. Except with respect to the Company’s right to seek injunctive relief
pursuant to Section 9, Executive and the Company hereby agree that any
controversy or claim arising out of or relating to this Agreement, the
employment relationship between Executive and the Company, or the termination
thereof, including the arbitrability of any controversy or claim, which cannot
be settled by mutual agreement will be finally settled by binding arbitration in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state arbitration law) as follows: Any party who is aggrieved will
deliver a notice to the other party setting forth the specific points in
dispute. Any points remaining in dispute twenty (20) days after the giving of
such notice may, upon ten (10) days’ notice to the other party, be submitted to
arbitration in Boston, Massachusetts, to the American Arbitration Association,
before a single arbitrator appointed in accordance with the Commercial Dispute
Resolution Procedures and Rules of the American Arbitration Association, as such
procedures and rules may be amended from time to time and modified only as
herein expressly provided. The arbitrator may enter a default decision against
any party who fails to participate in the arbitration proceedings.

Binding Effect. The decision of the arbitrator on the points in dispute will be
final, unappealable and binding, and judgment on the award may be entered in any
court having jurisdiction thereof. The parties agree that this provision has
been adopted by the parties to rapidly

 

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and inexpensively resolve any disputes between them and that this provision will
be grounds for dismissal of any court action commenced by either party with
respect to this Agreement, other than post-arbitration actions seeking to
enforce an arbitration award. In the event that any court determines that this
arbitration procedure is not binding, or otherwise allows any litigation
regarding a dispute, claim, or controversy covered by this Agreement to proceed,
the parties hereto hereby waive any and all right to a trial by jury in or with
respect to such litigation.

Fees and Expenses. Executive or his beneficiaries shall pay all attorney’s fees
and expenses incurred by Executive or his beneficiaries in resolving any claim
or dispute arising out of or relating to this Agreement. If it is finally
determined that Executive or his beneficiaries prevailed with respect to such
claim or dispute, the Company shall reimburse all attorney’s fees and expenses
incurred by Executive.

Confidentiality. The parties will keep confidential, and will not disclose to
any person, except as may be required by law, the existence of any controversy
under this Section 21, the referral of any such controversy to arbitration or
the status or resolution thereof. In addition, the confidentiality restrictions
set forth in the Non-Competition Agreement shall continue in full force and
effect.

Waiver. Executive acknowledges that this agreement to submit to arbitration
includes all controversies or claims of any kind (e.g., whether in contract or
in tort, statutory or common law, legal or equitable) now existing or hereafter
arising under any federal, state, local or foreign law (except for any claims
for injunctive relief that the Company may bring pursuant to Section 9),
including, but not limited to, the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Employee
Retirement Income Security Act, the Family and Medical Leave Act, the Americans
With Disabilities Act and all similar federal, state and local laws, and
Executive hereby waives all rights thereunder to have a judicial tribunal and/or
a jury determine such claims.

Acknowledgment. Executive acknowledges that before entering into this Agreement,
Executive has had the opportunity to consult with any attorney or other advisor
of Executive’s choice, and that this provision constitutes advice from the
Company to do so if Executive chooses. Executive further acknowledges that
Executive has entered into this Agreement of Executive’s own free will, and that
no promises or representations have been made to Executive by any person to
induce Executive to enter into this Agreement other than the express terms set
forth herein. Executive further acknowledges that Executive has read this
Agreement and understands all of its terms, including the waiver of rights set
forth in Section 21(e).

 

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Exhibit B

LOCK UP AGREEMENT (the “Agreement”), dated as of December 13, 2006, among
NewStar Financial, Inc., a Delaware corporation (together with its subsidiaries,
the “Company”) and the management stockholders signatory hereto (the “Management
Stockholders” and each a “Management Stockholder”).

WHEREAS, each of the Management Stockholders has been issued shares of the
Company’s restricted stock (“Restricted Stock”) pursuant to a restricted stock
agreement (a “Restricted Stock Agreement”) and granted options to purchase
shares of the Company’s common stock (“Options” and, together with the
Restricted Stock, “Incentive Securities”);

WHEREAS, each of the Management Stockholders is bound by the terms of a covenant
not to compete and a covenant not to solicit as set forth in the applicable
Restricted Stock Agreement (the “Restrictive Covenants”);

NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:

 

1. Definitions.

(a) “Transfer” means to sell, assign, dispose of, exchange, pledge, encumber,
hypothecate or otherwise transfer, whether directly or indirectly, or agree or
commit to do any of the foregoing.

(b) “Vested Incentive Securities” means Incentive Securities that, in the case
of Restricted Stock, are no longer subject to forfeiture pursuant to a
Restricted Stock Agreement and, in the case of Options, are vested.

 

2. Prohibited Transfers.

(a) For a period of one (1) year following the expiration of the underwriter’s
lock-up in connection with the Company’s initial public offering, such
Management Stockholder shall not Transfer more than ten percent (10%) of the
Vested Incentive Securities then held by such Management Stockholder and, after
such one (1) year period and during the Restricted Period (as defined below),
shall not Transfer more than seventy-five percent (75%) of the Vested Incentive
Securities then held by such Management Stockholder. For purposes of this
agreement, the ten percent (10%) or seventy-five percent (75%), as applicable,
of Vested Incentive Securities that may be Transferred shall be referred to as
the “Transferable Vested Incentive Securities”. The number of shares
constituting Transferable Vested Incentive Securities shall be calculated after
giving effect to any transfer by a Management Stockholder to the Company of any
Incentive Securities for the purpose of satisfying withholding taxes, as
permitted by and in accordance with, the Restricted Stock Agreement.

 

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(b) In connection with the termination of such Management Stockholder’s
employment with the Company, such Management Stockholder hereby agrees that, if
the Board of Directors of the Company, in its sole discretion, at any time
during the one year period following the date of termination of employment (the
“Restricted Period”) and for a period of ninety (90) days thereafter, determines
that the Management Stockholder has violated or breached the Restrictive
Covenants at any time prior to the expiration of the Restricted Period, then all
of such Management Stockholder’s Vested Incentive Securities that, as of the
date of breach of such Restrictive Covenants, are not Transferable Vested
Incentive Securities, shall be forfeited for no consideration.

3. Administration. The Incentive Securities constituting the ninety percent
(90%) or twenty-five percent (25%), as applicable, of Incentive Securities that
cannot be transferred by a Management Stockholder pursuant to this Agreement
shall be held, for such Management Stockholder’s account, by Merrill Lynch in
its capacity as the administrator of the Company’s equity award programs, until
the termination of this Agreement.

 

4. Miscellaneous.

(a) Termination of Agreement. This Agreement and the Management Stockholder’s
obligations hereunder shall terminate and have no further force and effect upon
a Change of Control (as defined in the applicable Restricted Stock Agreement).

(b) Successor and Assigns. This Agreement is intended to bind and inure to the
benefit of each of the Management Stockholders and their respective successors,
assigns, heirs, executors, administrators and representatives.

(c) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.

(d) Severability. Whenever possible, each provision or portion of any provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.

(e) Amendments. This Agreement may not be modified, amended or supplement except
in writing signed by each of the parties hereto.

(f) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law of the
State of Delaware.

 

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Exhibit C

LOCK UP AGREEMENT (the “Agreement”), dated as of March 18, 2009 among NewStar
Financial, Inc., a Delaware corporation (together with its subsidiaries, the
“Company”) and the management stockholders signatory hereto (the “Management
Stockholders” and each a “Management Stockholder”).

WHEREAS, on the date hereof each of the Management Stockholders has been granted
options to purchase shares of the Company’s common stock (“Options”), and as a
condition to such grant, the Compensation Committee of the Company has imposed
certain restrictions on the transfer of the proceeds of the Options upon
exercise;

WHEREAS, each of the Management Stockholders is bound by the terms of a covenant
not to compete and a covenant not to solicit as set forth in the Management
Stockholder’s applicable Employment Agreement (the “Restrictive Covenants”);

NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:

 

5. Definitions.

(a) “Proceeds” means proceeds received from an exercise of all or a portion of
Options at the time of such exercise, net of all taxes.

(b) “Restricted Period” means the period from the date hereof until the date one
year after the date of termination of employment of the Management Stockholder.

(c) “Transfer” means to sell, assign, dispose of, exchange, pledge, encumber,
hypothecate or otherwise transfer, whether directly or indirectly, or agree or
commit to do any of the foregoing.

 

6. Prohibited Transfers.

(a) During the Restricted Period, each Management Stockholder shall not Transfer
more than fifty percent (50%) of the Proceeds from Options exercised by such
Management Stockholder during such period (the “Restricted Proceeds”).
Notwithstanding the foregoing, nothing in this agreement shall limit a
Management Stockholder’s ability to Transfer the Transferable Proceeds. For
purposes of this agreement, the remaining 50% of Proceeds from Options exercised
by such Management Stockholder during such period that may be Transferred shall
be referred to as the “Transferable Proceeds”.

(b) In connection with the termination of such Management Stockholder’s
employment with the Company, such Management Stockholder hereby agrees that, if
the Board of Directors of the Company, in its sole discretion, at any time
during the Restricted Period and for a period of

 

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ninety (90) days thereafter, determines that the Management Stockholder has
violated or breached the Restrictive Covenants at any time prior to the
expiration of the Restricted Period, then all of such Management Stockholder’s
Restricted Proceeds shall be forfeited for no consideration.

7. Administration. The Restricted Proceeds that cannot be Transferred by a
Management Stockholder pursuant to this Agreement shall be held, for such
Management Stockholder’s account, by Merrill Lynch in its capacity as the
administrator of the Company’s equity award programs, until the termination of
this Agreement.

 

8. Miscellaneous.

(a) Termination of Agreement. This Agreement and the Management Stockholder’s
obligations hereunder shall terminate and have no further force and effect with
respect to each Management Stockholder upon the earlier of (i) ninety (90) days
after such Management Stockholder’s Restricted Period ends, or (ii) upon a
Change of Control (as defined in the applicable Management Stockholder’s
Employment Agreement).

(b) Successor and Assigns. This Agreement is intended to bind and inure to the
benefit of each of the Management Stockholders and their respective successors,
assigns, heirs, executors, administrators and representatives.

(c) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.

(d) Severability. Whenever possible, each provision or portion of any provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.

(e) Amendments. This Agreement may not be modified, amended or supplement except
in writing signed by each of the parties hereto.

(f) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law of the
State of Delaware.

 

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