Exhibit
10.16


 





 


May 6, 2008 (As amended on May 29, 2008.)


 


Sandra
Stark


[address]


 


Dear
Sandy:


 


In
connection with the termination of your employment with The First Marblehead
Education Resources, Inc. (the “Company”) on June 30, 2008, you are
eligible to receive the severance benefits described in the “Description of
Severance Benefits” attached to this letter agreement as Attachment A if you
sign and return this letter agreement to me no earlier than June 30, 2008
and it becomes binding between you and the Company. By signing and returning
this letter agreement and not revoking your acceptance, you will be entering
into a binding agreement with the Company and will be agreeing to the terms and
conditions set forth in the numbered paragraphs below, including the release of
claims set forth in paragraph 3. Therefore, you are advised to consult with an
attorney before signing this letter agreement and you may take up to forty-five
(45) days to do so. If you sign this letter agreement, you may change your mind
and revoke your agreement during the seven (7) day period after you have
signed it. If you do not so revoke, this letter agreement will become a binding
agreement between you and the Company upon the expiration of the seven (7) day
revocation period.


 


If
you choose not to sign and return this letter agreement by June 30, 2008
or if you revoke your acceptance of this letter agreement during the revocation
period, you shall not receive any severance benefits from the Company. You
will, however, receive payment on your termination for your final wages and any
unused vacation time accrued through the Termination Date (as defined herein).
Also, regardless of signing this letter agreement, if eligible, you may elect
to continue receiving group medical insurance pursuant to the federal “COBRA”
law, 29 U.S.C. § 1161 et seq. All premium
costs for “COBRA” shall be paid by you on a monthly basis for as long as, and
to the extent that, you remain eligible for COBRA continuation. You should
consult the COBRA materials to be provided by the Company for details regarding
these benefits. All other benefits, including life insurance and long-term
disability, will cease upon your Termination Date.


 


The
following numbered paragraphs set forth the terms and conditions which will
apply if you timely sign and return this letter agreement and do not revoke it
within the seven (7) day revocation period:


 


1.                                       Termination
Date  - Your effective date of termination from the
Company is June 30, 2008 (the “Termination Date”).


 


2.                                       Description
of Severance Benefits  - The severance benefits paid
to you if you timely sign, return, and do not revoke this letter agreement are
described in the “Description of Severance Benefits” attached as Attachment A
(the “severance benefits”).


 


The First Marblehead Corporation


806 Boylston Street, 34th Floor


Boston, MA 02199


Phone 800 895.4283


www.firstmarblehead.com


 


Creating Solutions for Education Finance


 

















 


3.                                       Release - In consideration of the
payment of the severance benefits, which you acknowledge you would not
otherwise be entitled to receive, you hereby fully, forever, irrevocably and
unconditionally release, remise and discharge the Company, its officers,
directors, stockholders, corporate affiliates, subsidiaries, parent companies,
successors and assigns, agents and employees (each in their individual and
corporate capacities) (hereinafter, the “Released Parties”) from any and all
claims, charges, complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys’ fees and costs), of every kind
and nature which you ever had or now have against the Released Parties, including,
but not limited to, those claims arising out of your employment with and/or
separation from the Company, including, but not limited to, all claims under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. § 621 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 Worker
Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., Section 806
of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. §
1514(A), the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive
Order 11246, Executive Order 11141, the Fair Credit Reporting Act, 15 U.S.C. §
1681 et seq., the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 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 Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the
Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts Maternity
Leave Act, M.G.L. c. 149, § 105D, all as amended; 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 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; provided, however, that nothing in this Agreement
prevents you from filing, cooperating with, or participating in any proceeding
before the EEOC or a state Fair Employment Practices Agency (except that you
acknowledge that you may not be able to recover any monetary benefits in
connection with any such claim, charge or proceeding).


 


4.                                       Invention, Non-Disclosure, Non-Competition and Non-Solicitation
Obligations - You acknowledge and reaffirm your obligation to
keep confidential and not to disclose any and all non-public information
concerning the Company which you acquired during the course of your employment
with the Company, including, but not limited to, any non-public information
concerning the Company’s business affairs, business prospects and financial
condition, as is stated more fully in the Invention, Non-Disclosure,
Non-Competition and Non-Solicitation Agreement you executed on December 5,
2005.


 


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5.                                       Return of Company Property - You confirm
that you have returned to the Company all keys, files, records (and copies
thereof), equipment (including, but not limited to, computer hardware, software
and printers, wireless handheld devices, cellular phones, pagers, etc.),
Company identification, Company vehicles and any other Company-owned property
in your possession or control and have left intact all electronic Company
documents, including but not limited to, those that you developed or helped to
develop during your employment. You further confirm that you have cancelled all
accounts for your benefit, if any, in the Company’s name, including but not
limited to, credit cards, telephone charge cards, cellular phone and/or pager
accounts and computer accounts.


 


6.                                       Business Expenses and Compensation - You acknowledge
that you have been reimbursed by the Company for all business expenses incurred
in conjunction with the performance of your employment and that no other
reimbursements are owed to you. You further acknowledge that you have received
payment in full for all services rendered in conjunction with your employment
by the Company and that no other compensation is owed to you except as provided
herein.


 


7.                                       Non-Disparagement - You understand
and agree that, as a condition for payment to you of the consideration herein
described, you shall not make any false, disparaging or derogatory statements
to any media outlet, industry group, financial institution or current or former
employee, consultant, client or customer of the Company regarding the Company or
any of its directors, officers, employees, agents or representatives or about
the Company’s business affairs and financial condition.


 


8.                                       Amendment - This letter
agreement shall be binding upon the parties and may not be modified in any
manner, except by an instrument in writing of concurrent or subsequent date
signed by duly authorized representatives of the parties hereto. This letter
agreement is binding upon and shall inure to the benefit of the parties and
their respective agents, assigns, heirs, executors, successors and
administrators.


 


9.                                       Waiver of Rights - No delay or
omission by the Company in exercising any right under this letter agreement
shall operate as a waiver of that or any other right. A waiver or consent given
by the Company on any one occasion shall be effective only in that instance and
shall not be construed as a bar or waiver of any right on any other occasion.


 


10.                                 Validity - Should any
provision of this letter agreement be declared or be determined by any court of
competent jurisdiction to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby and said illegal or
invalid part, term or provision shall be deemed not to be a part of this letter
agreement.


 


11.                                 Confidentiality
- To the extent permitted by law, you understand and agree that as a
condition for payment to you of the severance benefits herein described, the
terms and contents of this letter agreement, and the contents of the
negotiations and discussions resulting in this letter agreement, shall be
maintained as confidential by you and your agents and representatives and shall
not be disclosed to any third party except to the extent required by federal or
state law or as otherwise agreed to in writing by the Company.


 


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12.                                 Cooperation - You agree to
cooperate with the Company in the investigation, defense or prosecution of any
claims or actions now in existence or which may be brought in the future
against or on behalf of the Company. Your cooperation in connection with such
claims or actions shall include, but not be limited to, being available to meet
with the Company’s counsel to prepare for discovery or any mediation,
arbitration, trial, administrative hearing or other proceeding or to act as a
witness when reasonably requested by the Company at mutually agreeable times
and at locations mutually convenient to you and the Company. You also agree to
cooperate with the Company in the transitioning of your work, and will be available
to the Company for this purpose or any other purpose reasonably requested by
the Company.


 


13.                                 Tax Provision - In connection
with the severance benefits provided to you pursuant to this letter agreement,
the Company shall withhold and remit to the tax authorities the amounts
required under applicable law, and you shall be responsible for all applicable
taxes with respect to such severance benefits under applicable law. You
acknowledge that you are not relying upon advice or representation of the Company
with respect to the tax treatment of any of the severance benefits set forth in
Attachment A.


 


14.                                 Nature of Agreement
- You understand and agree that this letter agreement is a severance
agreement and does not constitute an admission of liability or wrongdoing on
the part of the Company.


 


15.                                 Eligibility for Severance Program. Attached to this letter agreement as
Attachment B is a description of (i) any class, unit or group of
individuals covered by the program of severance benefits which the Company has
offered to you, and any applicable time limits regarding such severance benefit
program; and (ii) the job title and ages of all individuals eligible or
selected for such severance benefit program, and the ages of all individuals in
the same job classification or organizational unit who are not eligible or who
were not selected for such severance benefit program.


 


16.                                 Acknowledgments - You acknowledge
that you have been given at least forty-five (45) days to consider this letter
agreement, including Attachments A and B, and that the Company advised you to
consult with an attorney of your own choosing prior to signing this letter
agreement. You understand that you may revoke this letter agreement for a
period of seven (7) days after you sign this letter agreement, and the
letter agreement shall not be effective or enforceable until the expiration of
this seven (7) day revocation period. You understand and agree that by
entering into this letter agreement you are waiving any and all rights or
claims you might have under The Age Discrimination in Employment Act, as
amended by The Older Workers Benefit Protection Act, and that you have received
consideration beyond that to which you were previously entitled.


 


17.                                 Voluntary Assent - You affirm that
no other promises or agreements of any kind have been made to or with you by
any person or entity whatsoever to cause you to sign this letter agreement, and
that you fully understand the meaning and intent of this letter agreement. You
state and represent that you have had an opportunity to fully discuss and
review the terms of this letter agreement, including Attachments A and B, with
an attorney. You further state and represent that you have carefully read this
letter


 


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agreement,
including Attachments A and B, understand the contents herein, freely and
voluntarily assent to all of the terms and conditions hereof, and sign your
name of your own free act.


 


18.                                 Applicable Law - This letter agreement shall be interpreted and
construed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions. You hereby irrevocably submit to and acknowledge
and recognize the jurisdiction of the courts of the Commonwealth of
Massachusetts, or if appropriate, a federal court located in Massachusetts
(which courts, for purposes of this letter agreement, are the only courts of
competent jurisdiction), over any suit, action or other proceeding arising out
of, under or in connection with this letter agreement or the subject matter
hereof.


 


19.                                 Entire Agreement - This letter agreement, including Attachments
A and B, contains and constitutes the entire understanding and agreement
between the parties hereto with respect to your severance benefits and the
settlement of claims against the Company and cancels all previous oral and
written negotiations, agreements, commitments and writings in connection
therewith. Nothing in this paragraph, however, shall modify, cancel or
supersede your obligations set forth in paragraph 4 herein.


 


If
you have any questions about the matters covered in this letter agreement,
please call me at (617) 638-2079.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  The
  First Marblehead Education Resources, Inc.

  
	
   

  	
   

  
	
   

  	
  /s/ Robin Camara

  
	
   

  	
  Robin
  Camara

  
	
   

  	
  Senior
  Vice President, Human Resources

  



 


 


I
hereby agree to the terms and conditions set forth above and in Attachments A
and B. I have been given at least forty-five (45) days to consider this letter
agreement (including Attachments A and B) and I have chosen to execute this on
the date below. I intend that this letter agreement become a binding agreement
between me and the Company if I do not revoke my acceptance in seven (7) days.


 


	
  /s/ Sandra Stark

  	
   

  	
  Date

  	
  June 30, 2008

  
	
  Sandra Stark

  	
   

  	
   

  



 


To be returned no earlier than June 30,
2008.


 


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ATTACHMENT A


 


DESCRIPTION OF SEVERANCE BENEFITS


 


Severance: The Company
will pay you severance pay in the form of continuation of your base salary,
less all applicable state and federal taxes, for six (6) months (the
“Severance Pay Period”). This severance will begin on July 1, 2008 and
will conclude on December 31, 2008. This severance pay will be paid in
accordance with the Company’s normal payroll procedures but in no event earlier
than the eighth (8th) day after execution of this letter
agreement and provided that you do not revoke this agreement.


 


Benefits: Effective as
of the Termination Date, you shall be considered to have elected to continue
receiving group medical insurance pursuant to the federal “COBRA” law, 29
U.S.C. § 1161 et seq. During the six
(6) months following your Termination Date, from July 1, 2008 to December 31,
2008, the Company shall continue to pay the share of the premium for such
coverage that is paid by the Company for active and similarly-situated
employees who receive the same type of coverage. The remaining balance of any
premium costs, and all premium costs after December 31, 2008, shall be
paid by you on a monthly basis for as long as, and to the extent that, you remain
eligible for COBRA continuation. You should consult the COBRA materials to be
provided by the Company for details regarding these benefits.


 


Restricted Stock Units: Per the terms
of your Restricted Stock Agreement granted under the 2003 Stock Incentive Plan,
The Company will vest 10,500 Restricted Stock Units on July 1, 2008, the
day following your Termination Date. This includes 4,500 units that would have
vested on August 15, 2008, and 6,000 units that would have vested on January 24,
2009. No shares will be delivered pursuant to the vesting of RSU’s unless and
until you pay to the Company, or make provisions satisfactory to the Company
for payment of any federal, state or local withholding taxes required by law to
be withheld in respect of this option.


 


Outplacement: Executive
outplacement services will be arranged for you with Keystone/Essex Partners.
The use of the outplacement services must occur within the twelve (12) month
period following your Termination Date. The cost of these outplacement services
will be paid by the Company.


 


All
other benefits, including life insurance and long-term disability, will cease
upon the Termination Date.


 


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