FMD First Marblehead Corp. (The)

PROXY STATEMENT

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Company stockholder. Please refer to the “Summary” and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 102.

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Effective as of immediately prior to the effective time of the merger, each Company restricted stock unit that is then outstanding and unvested will vest in full, and each Company stock unit for which shares of Company common stock have not been delivered as of immediately prior to the effective time of the merger will, as of the effective time of the merger, be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of the total number of shares of Company common stock then underlying such Company stock unit multiplied by the per share merger consideration.

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Because the affirmative vote required to approve the proposal to adopt the merger agreement is based upon the total number of outstanding shares of Company common stock, if you fail to submit a proxy or to vote in person at the special meeting, or if you vote “ ABSTAIN ”, or if you do not provide your bank, brokerage firm or other nominee with voting instructions, it will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement.

Under the company stockholders agreement and the parent stockholder agreement, the respective stockholders who are parties thereto have agreed to vote in favor of the proposal to adopt the merger agreement shares of Company common stock representing in the aggregate approximately 24% of the issued and outstanding shares of Company common stock, subject to specified exceptions. See “ Stockholders Agreements ” beginning on page 88. A copy of the full text of each of the company stockholders agreement and the parent stockholder agreement is attached hereto as Annex B and Annex C , respectively.

If you vote “ ABSTAIN ” on the proposal regarding “golden parachute” compensation or the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, this will have no effect on these proposals. If you fail to submit a proxy or to vote in person at the special meeting, or if you do not provide your bank, brokerage firm or other nominee with voting instructions, your shares of Company common stock will not be voted on these proposals, and thus will have no effect on these proposals.

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If you hold your shares of Company common stock in “street name,” please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner of shares of Company common stock held in “street name” and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.

A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy for your shares of Company common stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone.

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If your shares of Company common stock are held through a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares of Company common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of Company common stock, the stockholder of record. As the beneficial owner of shares of Company common stock held in “street name,” you have the right to direct your bank, brokerage firm or other nominee how to vote your shares of Company common stock by following their instructions for voting.

If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares represented by your properly signed proxy will be

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voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

With respect to the proposal regarding “golden parachute” compensation and the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, you may vote “ FOR ”, “ AGAINST ” or “ ABSTAIN .” Abstentions and broker non-votes will have no effect on these proposals.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us, contain a number of “forward-looking statements,” including all statements relating directly or indirectly to the timing or likelihood of completing the merger to which this proxy statement relates, litigation and other information with respect to our plans and strategies. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “intends,” “anticipates,” “plans,” “estimates,” “expects” and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause actual events or our actual results to differ materially from those indicated by such forward-looking statements, including the occurrence of any event or proceeding that could give rise to the termination of the merger agreement; the inability to complete the merger due to the failure of the closing conditions to be satisfied; the outcome of any legal proceedings that may be instituted in connection with the merger; and the other factors described in the Company’s Annual Report on Form 10-K for the year ended June 30, 2015 and its most recent quarterly report filed with the SEC. In addition, any forward-looking statements represent our estimates only as of the date they were made and should not be relied upon as representing our estimates as of any subsequent date. Except to the extent otherwise required by law, while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

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THE SPECIAL MEETING

Time, Place and Purpose of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the board of directors for use at the special meeting to be held on [—], 2016, starting at [—], local time, at the offices of WilmerHale LLP, 60 State Street, Boston, Massachusetts 02109, or at any adjournment thereof. At the special meeting, holders of Company common stock will be asked to approve the proposal to adopt the merger agreement, to approve the nonbinding advisory proposal regarding “golden parachute” compensation and to approve the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Our stockholders must approve the proposal to adopt the merger agreement in order for the merger to be consummated. If our stockholders fail to approve the proposal to adopt the merger agreement, the merger will not be consummated. A copy of the merger agreement is attached as Annex A to this proxy statement, which we encourage you to read carefully in its entirety.

Record Date and Quorum

We have fixed the close of business on [—], 2016 as the record date for the special meeting, and only holders of record of Company common stock on the record date are entitled to vote at the special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of Company common stock at the close of business on the record date. On the record date, there were [—] shares of Company common stock outstanding and entitled to vote. Each share of Company common stock entitles its holder to one vote on all matters properly coming before the special meeting.

A majority of the shares of Company common stock that are issued and outstanding at the close of business on the record date, present in person or represented by proxy, at the special meeting constitutes a quorum for the purposes of the special meeting. Shares of Company common stock represented at the special meeting but not voted, including shares of Company common stock for which a stockholder directs voting “ ABSTAIN ”, as well as broker non-votes, will be counted for purposes of establishing a quorum. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting. A quorum is necessary to adopt the merger agreement and approve the proposal regarding “golden parachute” compensation at the special meeting. Once a share of Company common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any recess or adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will have to be established. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or recessed.

Attendance

Only stockholders of record or their duly authorized proxies have the right to attend the special meeting. If your shares of Company common stock are held through a bank, brokerage firm or other nominee, please bring to the special meeting a copy of your brokerage statement evidencing your beneficial ownership of Company common stock. If you are the representative of a corporate or institutional stockholder, you must present proof that you are the representative of such stockholder.

Vote Required

Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares of Company common stock that are issued and outstanding as of the record date. For the proposal to

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adopt the merger agreement, you may vote “ FOR ”, “ AGAINST ” or “ ABSTAIN .” Voting “ ABSTAIN ” will not be counted as a vote cast in favor of the proposal to adopt the merger agreement but will count for the purpose of determining whether a quorum is present. If you fail to submit a proxy or to vote in person at the special meeting, or if you vote “ABSTAIN”, it will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

If your shares of Company common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares of Company common stock, the “stockholder of record.” This proxy statement and proxy card have been sent directly to you by the Company.

If your shares of Company common stock are held through a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares of Company common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of Company common stock, the stockholder of record. As the beneficial owner of shares of Company common stock held in “street name,” you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following their instructions for voting. If you hold your shares of Company common stock in “street name,” please contact your bank, brokerage firm or other nominee for their instructions on how to vote your shares. Please note that if you are a beneficial owner of shares of Company common stock held in “street name” and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.

Under the rules of the NYSE, banks, brokerage firms or other nominees who hold shares in “street name” for customers have the authority to vote on “discretionary” proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-discretionary matters, such as the proposal to adopt the merger agreement, the proposal to approve the nonbinding advisory proposal regarding “golden parachute” compensation and the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-discretionary matters, which we refer to generally as “broker non-votes.” These broker non-votes will be counted for purposes of determining a quorum, but will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting.

Approval of the advisory proposal regarding “golden parachute” compensation and approval of the proposal to adjourn the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies, require a majority of the votes cast on each of these proposals. For the nonbinding advisory proposal regarding “golden parachute” compensation and the proposal to adjourn the special meeting, if necessary or appropriate, you may vote “ FOR ”, “ AGAINST ” or “ ABSTAIN .” For purposes of each of these proposals, if you fail to submit a proxy or to vote in person at the special meeting, or if you have given a proxy and vote “ ABSTAIN ”, the shares of Company common stock will not be counted in respect of, and will not have any effect on, the proposal.

If you are a stockholder of record, you may vote your shares of Company common stock on matters presented at the special meeting in any of the following ways:

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If you are a beneficial owner of Company common stock held in “street name,” you will receive instructions from your bank, brokerage firm or other nominee that you must follow in order to have your shares of Company common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. Please note that if you are a beneficial owner of Company common stock held in “street name” and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee.

A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy for your shares of Company common stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone.

Please refer to the instructions on your proxy or voting instruction card to determine the deadlines for submitting a proxy over the Internet or by telephone. If you choose to submit your proxy by mailing a proxy card, your proxy card must be received by our Secretary by the time the special meeting begins. Please do not send in your stock certificates with your proxy card . Following the consummation of the merger, a separate letter of transmittal will be mailed to you that will enable you to surrender your stock certificates and receive the per share merger consideration.

If you vote by proxy, regardless of the method you choose to submit a proxy, the individuals named as your proxies on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone proxy processes or the enclosed proxy card, you may specify whether your shares of Company common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares of Company common stock represented by your properly signed proxy will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

If you have any questions or need assistance voting your shares, please contact MacKenzie Partners, Inc., our proxy solicitor, by telephone toll-free at (800) 322-2885 or collect at (212) 929-5500 or by email to proxy@mackenziepartners.com.

IT IS IMPORTANT THAT YOU SUBMIT A PROXY FOR YOUR SHARES OF COMPANY COMMON STOCK PROMPTLY. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.

Shares Owned by Our Directors and Executive Officers

As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [—] shares of Company common stock, representing [—]% of the outstanding shares of Company common stock on the record date. The directors and executive officers have informed the Company that they currently intend to vote all of their shares of Company common stock “ FOR ” the proposal to adopt the merger agreement, “ FOR ” approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

In addition, pursuant to (a) the company stockholders agreement entered into by Messrs. Meyers and Gelber with Parent, and (b) the parent stockholder agreement entered into by Parent with the Company, each applicable

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stockholder has agreed to vote all shares of Company common stock held by him or it in favor of the adoption of the merger agreement and the other transactions contemplated thereby, representing in the aggregate approximately 24% of the issued and outstanding shares of Company common stock, subject to specified exceptions. See “ Stockholders Agreements ” beginning on page 88. A copy of the full text of each of the company stockholders agreement and the parent stockholder agreement is attached hereto as Annex B and

Annex C , respectively.

Proxies and Revocation

Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, or by returning the enclosed proxy card in the accompanying prepaid reply envelope, or may vote in person at the special meeting. If your shares of Company common stock are held in “street name” by your bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of Company common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote in person at the special meeting, or if you vote “ ABSTAIN ”, or if you do not provide your bank, brokerage firm or other nominee with voting instructions, your shares of Company common stock will not be voted on the proposal to adopt the merger agreement, which will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement.

You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Secretary, which must be received by the Company at One Cabot Road, Suite 200, Medford, Massachusetts 02155 by the time the special meeting begins, or by attending the special meeting and voting in person.

Adjournments and Recesses

Although it is not currently expected, the special meeting may be adjourned or recessed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or if a quorum is not present at the special meeting. Other than an announcement to be made at the special meeting of the time, date and place of an adjourned meeting, an adjournment generally may be made without notice. Any adjournment or recess of the special meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or recessed.

Anticipated Date of Completion of the Merger

We are working towards completing the merger as soon as possible. Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the proposal to adopt the merger agreement, we currently anticipate that the merger will be consummated during the third calendar quarter of 2016.

Appraisal Rights

If the merger is effected, record holders of our common stock as of the record date who submit a written demand for appraisal before the vote is taken on the adoption of the merger agreement, who do not vote in favor of the proposal to adopt the merger agreement, who hold their shares of Company common stock continuously through the effective time of the merger and who otherwise comply with the procedures set forth in Section 262 of the DGCL may elect to exercise their appraisal rights to receive, in lieu of the $5.05 per share merger consideration, an amount in cash equal to the judicially determined “fair value” of their shares, which fair value will be determined as of the effective time of the merger and could be more or less than, or the same as, the per share merger consideration for the common stock. For a summary of the procedures set forth in Section 262 of the DGCL, see “ Appraisal Rights ” beginning on page 96. An executed proxy that is not marked “ AGAINST ” or “ ABSTAIN ” will be voted “ FOR ” the adoption of the merger agreement and the stockholder submitting that proxy will lose the right to seek an appraisal of his, her or its shares of Company common stock.

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A copy of Section 262 of the DGCL is included as Annex E to this proxy statement. Failure to follow the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights. We encourage you to read these provisions carefully and in their entirety.

ANY COMPANY STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD REVIEW ANNEX E CAREFULLY AND SHOULD CONSULT HIS, HER OR ITS LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND FULLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

Solicitation of Proxies; Payment of Solicitation Expenses

The Company has engaged MacKenzie Partners, Inc. to assist in the solicitation of proxies for the special meeting. The Company estimates that it will pay MacKenzie Partners, Inc. a fee of approximately $17,000. The Company will also reimburse MacKenzie Partners, Inc. for reasonable out-of-pocket expenses and will indemnify MacKenzie Partners, Inc. and its affiliates against certain claims, expenses, losses, damages, liabilities and judgments. The Company may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares of Company common stock for their expenses in forwarding soliciting materials to beneficial owners of Company common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Questions and Additional Information

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact MacKenzie Partners, Inc., our proxy solicitor, by telephone toll-free at (800) 322-2885 or collect at (212) 929-5500 or by email to proxy@mackenziepartners.com.

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PARTIES TO THE MERGER

THE COMPANY

The First Marblehead Corporation

One Cabot Road, Suite 200

Medford, Massachusetts 02155

(800) 895-4283

We are a Delaware corporation with our headquarters in Medford, Massachusetts. We are a specialty finance company focused on the education financing marketplace in the United States. We offer our clients the opportunity to outsource key components of their education financing programs through various product and service offerings, including loan origination, tuition and refund management, loan processing and disbursement and portfolio management services.

Specifically, we design, develop and manage loan programs on behalf of our lender clients for undergraduate and graduate students and for college graduates seeking to refinance private education loan obligations. We offer a fully integrated suite of services through our Monogram ^® loan product service platform, which we refer to as our Monogram platform. We partner with lenders to design and administer education loan programs through our Monogram platform, which are typically school-certified. These programs are designed to be marketed through educational institutions or to prospective borrowers and their families directly and to generate portfolios intended to be held by the originating lender or financed in the capital markets. We may provide credit enhancements for a Monogram-based loan program by funding participation interest accounts, or participation accounts, to serve as a first-loss reserve for defaulted program loans. In consideration for funding participation accounts, we are entitled to receive a share of the interest income generated on the loans. We are paid for our origination and marketing services at the time approved education loans are disbursed and receive monthly payments for portfolio management services, credit enhancement and administrative services throughout the life of the loan. We also earn fees for the processing and disbursement of education loans on behalf of the credit union and other lender clients of our subsidiary Cology LLC.

In addition, we offer outsourced tuition planning, tuition billing, refund management and payment technology services for universities, colleges and secondary schools through our subsidiary Tuition Management Systems LLC, or TMS. TMS provides such services on behalf of approximately 650 educational institutions.

For more information about the Company, see “ Where You Can Find More Information ” beginning on page 102. The Company common stock is publicly traded on the NYSE under the symbol “FMD.”

PARENT

FP Resources USA Inc.

c/o Clearwater Fine Foods Incorporated

757 Bedford Highway

Bedford, Nova Scotia, Canada B4A 3Z7

(707) 478-4827

FP Resources USA Inc., or Parent, is a Delaware corporation that was formed by Mr. John Carter Risley and his affiliates solely for the purpose of holding the shares of the Company beneficially owned by Mr. Risley and his affiliated entities. Parent has not engaged in any business except for activities incidental to its formation, its purchases and sales of stock of the Company, and as contemplated by the merger agreement.

Mr. Risley is the co-founder, Chairman and President of Clearwater Fine Foods Incorporated, a Nova Scotia, Canada based, privately-held active investment/holding company with major investments in seafood harvesting and processing.

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Parent is owned by FP Resources Holdings LLP, a Delaware limited liability partnership, or FP LLP. FP LLP is owned by Lobster Point Properties Ltd., a Nova Scotia limited company, or Lobster Point, and FP Acquisition Holdings LLC, a Delaware limited liability company, or FP LLC. We refer to FP LLC, Parent, Lobster Point and FP LLP collectively as the controlled entities. Lobster Point is owned by Mr. Risley. FP LLC is owned by Lobster Point. The controlled entities function as holding company vehicles for Mr. Risley. Upon completion of the merger, the Company will be a direct wholly-owned subsidiary of Parent.

Mr. Risley, as the beneficial owner of Parent, beneficially owned approximately 14.9% of the outstanding shares of the Company’s common stock as of June 6, 2016. Due to his beneficial ownership of Parent and the voting rights granted to Parent under the company stockholders agreement, as of June 6, 2016, Mr. Risley may be deemed to beneficially own an additional approximately 9.2% of the outstanding shares of the Company’s common stock.

TRANSITORY SUBSIDIARY

FP Resources Acquisition Corp.

c/o Clearwater Fine Foods Incorporated

757 Bedford Highway

Bedford, Nova Scotia, Canada B4A 3Z7

(707) 478-4827

FP Resources Acquisition Corp., or Transitory Subsidiary, is a Delaware corporation that was formed solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Transitory Subsidiary is a wholly-owned subsidiary of Parent and has not engaged in any business except for activities incidental to its formation and as contemplated by the merger agreement. Upon the completion of the merger, Transitory Subsidiary will cease to exist and the Company will continue as the surviving corporation.

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THE MERGER

This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A . You should read the entire merger agreement carefully as it is the legal document that governs the merger.

The merger agreement provides that Transitory Subsidiary will merge with and into the Company. The Company will be the surviving corporation in the merger and will continue to do business following the merger. As a result of the merger, the Company will cease to be a publicly traded company. You will not own any shares of the capital stock of the surviving corporation.

Overview of the Merger

The Company, Parent and Transitory Subsidiary entered into the merger agreement on June 2, 2016. Under the terms of the merger agreement, Transitory Subsidiary will be merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. Parent is beneficially owned by Mr. Risley, who, as of June 6, 2016 may be deemed to beneficially own approximately 24% of the outstanding shares of the Company’s common stock due to his beneficial ownership of approximately 14.9% of the outstanding shares of the Company’s common stock held by his affiliated entities and certain voting rights with respect to an additional approximately 9.2% of the outstanding shares of the Company’s common stock granted to Parent under the company stockholders agreement. The following will occur in connection with the merger:

Following and as a result of the merger:

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Directors and Officers of the Surviving Corporation

The directors of Transitory Subsidiary immediately prior to the effective time of the merger will be the initial directors of the surviving corporation. The officers of the Company immediately prior to the effective time of the merger will be the initial officers of the surviving corporation.

Background of the Merger

The board of directors has from time to time in recent years engaged with senior management in strategic reviews and considered ways to enhance First Marblehead’s performance and prospects in light of the general business and economic environment and significant changes in the consumer lending market. These reviews have included consideration of potential strategic transactions with various parties that would further First Marblehead’s strategic objectives, including consideration of the potential benefits and risks of those transactions. These strategic reviews have on several occasions included both formal and informal exploratory discussions regarding potential strategic transactions, including possible mergers, acquisitions, other business combinations and licensing, marketing and distribution and/or joint development arrangements, involving various companies within and outside the student loan industry.

In June 2015, the board of directors formed a committee of independent directors, consisting of Thomas P. Eddy (Chair), Nancy Y. Bekavac, Peter S. Drotch and William D. Hansen, to consider strategic alternatives in response to challenges in First Marblehead’s business and the private student loan market. This committee retained Sandler O’Neill as its financial advisor and, with its assistance, identified 11 third parties that the committee believed would be most likely to be interested in pursuing a strategic transaction with First Marblehead. At the direction of this committee, Mr. Meyers contacted each of these 11 third parties. This process did not result in any indications of interest to pursue a strategic transaction with First Marblehead, and, on October 5, 2015, the committee terminated the process and Sandler O’Neill’s engagement.

During this process, First Marblehead executed nondisclosure agreements with nine parties, including the nondisclosure agreements with the companies that we refer to below as Companies A, D and F. Each of these nondisclosure agreements included a standstill provision that prohibited the applicable counterparty from making, or otherwise attempting to effectuate, any unsolicited proposal to acquire First Marblehead until a date raging from nine months to 24 months after the date of the applicable nondisclosure agreement, depending on the nondisclosure agreement, or the earlier public announcement by First Marblehead of the execution of a definitive agreement with respect to a party’s acquisition of more than 50% of the Company common stock or First Marblehead’s assets. During the terms of these standstill provisions, the applicable counterparty was not permitted to request that First Marblehead amend or waive the applicable standstill provision. Each of these standstill provisions terminated in accordance with its terms upon the announcement of First Marblehead’s execution of the merger agreement with Parent.

On November 9, 2015, all of the members of the board of directors attended an informal dinner in Boston, Massachusetts prior to the regular meeting of the board of directors scheduled for November 10, 2015. At the dinner, Mr. Meyers proposed that he contact John Carter Risley, of Nova Scotia, Canada, the principal and founder of Clearwater Fine Foods Incorporated, which we refer to in this section as Clearwater, as well as two other third parties, to assess whether any of these three third parties might have any interest in considering a strategic transaction with First Marblehead. Each of these three third parties, including Mr. Risley, is a personal and professional acquaintance of Mr. Meyers, and neither Mr. Risley nor one of the other two third parties was contacted as part of the June 2015 process.

On the morning of November 10, 2015, prior to the regularly scheduled meeting of the board of directors, Ms. Bekavac, as lead director, convened an in-person special meeting of the board of directors. The special meeting was attended only by the independent directors, consisting of Ms. Bekavac and Messrs. Eddy, Drotch and Hansen and, at the request of the independent directors, a representative of Wilmer Cutler Pickering Hale and

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Dorr LLP, First Marblehead’s outside counsel, which we refer to as WilmerHale. At the meeting, the independent directors discussed Mr. Meyers’s proposal, and the representative of WilmerHale reviewed the fiduciary duties of the directors.

Later in the day on November 10, 2015, at the regularly scheduled in-person meeting of the board of directors, it was the consensus of the independent directors that Mr. Meyers should contact on an informal basis the three third parties to assess whether such third parties might have an interest in considering a strategic transaction with First Marblehead.

Also at the November 10, 2015 board meeting, the board of directors reconstituted a committee of independent directors, which we refer to as the independent committee, consisting of Ms. Bekavac and Messrs. Eddy, Drotch and Hansen, each of whom was deemed to be an independent director and each of whom was a member of the committee formed in June 2015. The board of directors delegated authority to the independent committee to, among other things, establish, approve, monitor and direct the process and procedures related to the review and evaluation of any strategic transaction involving First Marblehead; respond to any communications, inquiries or proposals regarding any strategic transaction; review, evaluate, investigate, pursue and negotiate the terms and conditions of any strategic transaction; solicit expressions of interest or proposals for any strategic transaction; and investigate any prospective acquirers as it deemed appropriate. Mr. Eddy was elected chair of the independent committee.

During the week of November 16, 2015, Mr. Meyers separately reached out to each of Mr. Risley and the other two third parties, pursuant to the authorization granted to him by the independent directors on November 10, 2015, to discuss whether the applicable party might be interested in pursuing a strategic transaction with First Marblehead.

On January 14, 2016, Clearwater sent to First Marblehead a preliminary non-binding indication of interest requesting confidential discussions regarding a possible strategic transaction. At the time of this indication of interest, Mr. Risley beneficially owned approximately 16% of the outstanding shares of Company common stock. Neither of the other two third parties contacted by Mr. Meyers sought to initiate conversations about a possible strategic transaction with First Marblehead.

On January 14, 2016, in response to the indication of interest from Clearwater, Mr. Eddy called a telephonic meeting of the independent committee, which was held later that day. Representatives of WilmerHale participated in the meeting at the invitation of the independent committee. The representatives of WilmerHale advised the board of directors on the fiduciary duties of directors in considering a preliminary indication of interest in connection with a possible strategic transaction. The independent committee then discussed the preliminary indication of interest from Clearwater and the possibility of a strategic transaction. The independent committee directed Mr. Eddy, as Chair of the independent committee, to contact Stanley W.L. Spavold, Executive Vice President of Clearwater, to discuss the preliminary indication of interest. The preliminary indication of interest identified Mr. Spavold as Mr. Risley’s personal advisor and as the appropriate contact for discussing the preliminary indication of interest. The independent committee also resolved to retain Sandler O’Neill as its financial advisor, based on Sandler O’Neill’s work for the committee of independent directors in June 2015, industry experience and knowledge of First Marblehead and its business.

On January 20, 2016, Mr. Eddy and Mr. Spavold discussed Clearwater’s January 14, 2016 preliminary indication of interest. Topics of discussion included Mr. Risley’s beneficial ownership interest in First Marblehead and Clearwater’s relationship to Mr. Risley, its investment portfolio and its interest in a possible strategic transaction with First Marblehead.

Later in the day on January 20, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. At the meeting, Mr. Eddy summarized his conversation with Mr. Spavold regarding Clearwater’s January 14, 2016

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indication of interest. The representatives of WilmerHale discussed certain disclosure considerations in light of Mr. Risley’s beneficial ownership of more than 5% of the outstanding shares of Company common stock. After a discussion of First Marblehead’s strategic alternatives, the independent committee authorized Mr. Eddy to continue discussions with Clearwater, subject to execution of a nondisclosure agreement including a standstill provision between the parties in anticipation of sharing information regarding a potential strategic transaction, and discussed possible next steps.

On January 29, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. At the meeting, the representatives of WilmerHale reviewed discussions with Choate, Hall & Stewart LLP, counsel to Clearwater and Parent, which we refer to as Choate, concerning a proposed nondisclosure agreement between the parties. In addition, the representatives of WilmerHale noted that, according to Choate, Parent now owned all of the shares of Company common stock that were beneficially owned by Mr. Risley.

On February 3, 2016, the independent committee held a telephonic meeting. Representatives of WilmerHale participated in the meeting at the invitation of the independent committee. At the meeting, the independent committee approved an engagement letter between the independent committee and Sandler O’Neill on the same terms as the June 2015 engagement letter with Sandler O’Neill. In addition, the representatives of WilmerHale reviewed the discussions with Choate regarding the proposed nondisclosure agreement between First Marblehead and Parent, including the independent committee’s request that the agreement include a standstill provision and Parent’s request for exclusivity.

On March 3, 2016, the independent committee held an in-person meeting. Representatives of WilmerHale participated in the meeting at the invitation of the independent committee. At the meeting, the representatives of WilmerHale (a) informed the independent committee that Parent had sold some of its shares of Company common stock, as indicated in filings made pursuant to the Exchange Act, and (b) reported that Choate indicated that it was Parent’s intention to submit a non-binding indication of interest, based on publicly available information, to acquire First Marblehead.

On March 9, 2016, Parent submitted to First Marblehead, based on publicly available information, a non-binding indication of interest, dated as of March 8, 2016, to acquire First Marblehead at a price of between $4.50 and $6.00 per share in cash, representing an implied equity value of First Marblehead of approximately $56.3 million to approximately $75.1 million, based on Parent’s assumption of approximately 12.51 million fully diluted outstanding shares.

On March 9, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. The independent committee determined that it would review and assess Parent’s March 8, 2016 indication of interest following a review of First Marblehead’s five-year financial plan, which was in the process of being revised to reflect the forecasted financial impact of a delay in the anticipated introduction of a new loan program, and a preliminary financial analysis from Sandler O’Neill.

On March 15, 2016, the board of directors held a telephonic special meeting, in which representatives of WilmerHale participated at the invitation of the board of directors. At the meeting, management presented, and the board of directors discussed and approved, an updated five-year financial plan for First Marblehead, which had been revised to reflect the impact of a delay in First Marblehead’s anticipated introduction of a new loan program.

The independent committee held two telephonic meetings on March 21, 2016. Representatives of Sandler O’Neill and WilmerHale participated in both meetings at the invitation of the independent committee. At the first meeting, Sandler O’Neill presented a preliminary financial analysis of First Marblehead based on First Marblehead’s updated business plan, which had been approved by the board of directors on March 15, 2016. The

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members of the independent committee then discussed a possible strategic transaction with Parent. The representatives of WilmerHale advised the independent committee of the fiduciary duties of directors when considering an indication of interest in connection with a possible strategic transaction. There was consensus among the members of the independent committee to engage in further discussions with Parent about a possible strategic transaction, subject to execution of a nondisclosure agreement and further discussion of several other provisions in Parent’s letter, including Parent’s expectations with respect to the financing of any transaction and its plans with respect to due diligence if Parent and First Marblehead were to execute a nondisclosure agreement.

After the first March 21, 2016 meeting was adjourned, Mr. Eddy and Mr. Spavold discussed by telephone Parent’s March 8, 2016 indication of interest, including First Marblehead’s willingness to discuss a possible strategic transaction, provided such transaction was not conditioned on receipt of financing. They also discussed Parent’s intentions with respect to due diligence. At the second meeting of the independent committee held later on March 21, 2016, Mr. Eddy reported on his conversation with Mr. Spavold regarding a possible strategic transaction with Parent.

On March 23, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. At the meeting, the representatives of WilmerHale reviewed the proposed nondisclosure agreement between First Marblehead and Parent, including the terms of the proposed standstill provision, and the independent committee approved the agreement on the terms discussed at the meeting.

On March 25, 2016, First Marblehead and Parent entered into a nondisclosure agreement, which included a standstill provision that prohibits Parent from making, or otherwise attempting to effectuate, any unsolicited proposal to acquire First Marblehead until 12 months after the date of the nondisclosure agreement or the earlier public announcement by First Marblehead of the execution of a definitive agreement with respect to a party’s acquisition of more than 50% of the Company common stock or First Marblehead’s assets. During the term of the standstill provision, Parent may not request that First Marblehead amend or waive the standstill provision. The nondisclosure agreement did not include the exclusivity provision that had been requested by Parent.

On March 28, 2016, representatives of Parent were given access to an electronic data room for purposes of conducting a due diligence review of First Marblehead. In addition, Mr. Risley filed with the SEC Amendment No. 1 to his Schedule 13D to reflect the change in his beneficial ownership of, and Parent’s execution of a nondisclosure agreement with, First Marblehead and to disclose that Mr. Risley and First Marblehead were engaged in exploratory discussions regarding Mr. Risley’s potential acquisition of First Marblehead.

Also on March 28, 2016, the independent committee held a telephonic meeting. At the invitation of the independent committee, representatives of Sandler O’Neill and WilmerHale participated in the meeting, and Mr. Gelber participated in a portion of the meeting. At the meeting, representatives of Sandler O’Neill and WilmerHale reviewed with the members of the independent committee the potential risks and benefits of conducting a market check, which would involve contacting the parties that the independent committee believed would be most likely to be interested in pursuing a strategic transaction with First Marblehead to determine their interest. Sandler O’Neill reviewed with the independent committee a preliminary list of nine potential strategic and eight potential financial sponsor third parties that, based on Sandler O’Neill’s knowledge of First Marblehead’s business and the student loan industry or prior conversations directly with such parties, might be approached in a market check process. Mr. Gelber, speaking for himself and Mr. Meyers, who did not attend the meeting, offered recommendations regarding the parties to be contacted and responded to questions from members of the independent committee regarding the parties on Sandler O’Neill’s preliminary list and their potential interest in pursuing, and their ability to complete, a strategic transaction with First Marblehead. Mr. Gelber recommended that two of the strategic third parties be eliminated from the list because of his view that they would be unlikely to complete or pursue a strategic transaction with First Marblehead. Mr. Gelber did not recommend that any additional third parties be added to the list. Mr. Gelber then left the meeting. After a discussion, the independent committee directed Sandler O’Neill to conduct a market check of 15 potential

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buyers, consisting of seven potential strategic buyers and eight potential financial buyers, that, based on their business activities, financial capabilities and, in some cases, their previous discussions with First Marblehead, as well as the recommendation of Sandler O’Neill and the comments by Mr. Gelber, the independent committee believed would be most likely to be interested in pursuing a strategic transaction with First Marblehead. Eight of these 15 potential buyers had been contacted as part of the June 2015 process.

On or about March 31, 2016, representatives of Sandler O’Neill reached out to the 15 potential buyers approved by the independent committee to solicit their interest in a possible strategic transaction with First Marblehead. From March 31, 2016 until May 11, 2016, representatives of First Marblehead and its advisors responded to various due diligence questions and requests from a number of the third parties.

On April 4, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. In addition, Messrs. Meyers and Gelber, Alan Breitman, First Marblehead’s Managing Director, Chief Financial Officer and Chief Accounting Officer, and Raymond Morel, First Marblehead’s Managing Director, Credit Risk Management and Corporate Finance, participated for a portion of the meeting at the invitation of the independent committee. The members of the independent committee reviewed with management a corporate overview prepared by First Marblehead and intended for use in management due diligence sessions with Parent and other interested parties, if any, that entered into nondisclosure agreements with First Marblehead. After Messrs. Meyers, Gelber, Breitman and Morel left the meeting, Sandler O’Neill updated the independent committee on the market check process, reporting that it had reached out to several of the 15 parties approved by the independent committee and that as of April 4, 2016, four parties, which we refer to as Company A, Company B, Company C and Company F, indicated an interest in further discussions about a possible strategic transaction, and three indicated that they had no interest in pursuing a strategic transaction with First Marblehead.

On April 5, 2016 and April 6, 2016, Messrs. Meyers, Gelber, Eddy, Spavold and other representatives of First Marblehead, Parent, Sandler O’Neill, Houlihan Lokey, Inc., financial advisor to Parent, which we refer to as Houlihan Lokey, Ernst & Young, transaction advisors to Parent, WilmerHale and Choate met in Boston as part of Parent’s due diligence review of First Marblehead.

From April 5, 2016 through May 31, 2016, representatives of Parent and First Marblehead and their advisors engaged in a number of teleconferences and responded to various documentation requests as part of Parent’s due diligence review of First Marblehead.

On April 8, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. The representatives of Sandler O’Neill provided an update on the market check process, noting that WilmerHale was negotiating extensions of existing nondisclosure agreements with Company A and an additional third party, which we refer to as Company D. Company B, Company C and an additional third party, which we refer to as Company E, were in the process of reviewing First Marblehead’s public filings to determine whether they might have an interest in further discussions concerning a possible strategic transaction. In addition, the independent committee approved “rules of the road” letters with each of Messrs. Meyers and Gelber, which prohibited each of them from initiating or otherwise engaging in any discussions or negotiations with any third party with respect to any transaction in which he or other members of First Marblehead management could be asked to become equity participants or be offered managerial positions in a successor entity, except to the extent such third party was approved by the independent committee and then only in accordance with directions from the independent committee.

On April 11, 2016 and April 13, 2016, Company B and Company E, respectively, informed Sandler O’Neill that it did not wish to pursue a strategic transaction with First Marblehead.

On April 13, 2016, First Marblehead and Company D entered into an amendment to a nondisclosure agreement that they had executed on July 1, 2015 to extend the duration of the confidentiality, standstill and employee non-solicitation obligations of Company D. The amended nondisclosure agreement included a standstill provision and

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was substantially similar to the nondisclosure agreement between the Company and Parent. Thereafter, Company D was granted access to an electronic data room for purposes of conducting a due diligence review of First Marblehead.

On April 14, 2016, First Marblehead and Company A entered into an amendment, dated as of April 10, 2016, to a nondisclosure agreement that they had executed on July 14, 2015 to extend the duration of the confidentiality, standstill and employee non-solicitation obligations of Company A. The amended nondisclosure agreement included a standstill provision and was substantially similar to the nondisclosure agreement between First Marblehead and Parent. Thereafter, Company A was granted access to an electronic data room for purposes of conducting a due diligence review of First Marblehead.

On April 18, 2016, First Marblehead and an additional third party, which we refer to as Company F, entered into an amendment, dated as of April 14, 2016, to a nondisclosure agreement that they had executed on July 2, 2015 to extend the duration of the confidentiality, standstill and employee non-solicitation obligations of Company F. The amended nondisclosure agreement included a standstill provision and was substantially similar to the nondisclosure agreement between First Marblehead and Parent, except that the standstill provision survived until 18 months after the date of the amendment or until the earlier public announcement by First Marblehead of the execution of a definitive agreement with respect to a party’s acquisition of more than 50% of the Company common stock or First Marblehead’s assets. Thereafter, Company F was granted access to an electronic data room for purposes of conducting a due diligence review of First Marblehead.

On April 19, 2016, Parent sent a revised indication of interest to the independent committee indicating that Parent would consider an offer of $5.10 in cash for each share of First Marblehead’s common stock, and requesting an exclusivity arrangement. The April 19, 2016 indication of interest noted that the $5.10 per share price implied an equity value of First Marblehead of approximately $63.8 million, based on Parent’s assumption of approximately 12.51 million fully diluted outstanding shares.

On April 20, 2016, the independent committee held a telephonic meeting. Representatives from Sandler O’Neill and WilmerHale joined the meeting at the invitation of the independent committee. Sandler O’Neill reported on the market check process. The independent committee discussed the terms of Parent’s revised indication of interest and a possible strategic transaction. The representatives of WilmerHale reviewed the fiduciary duties of directors engaged in negotiations concerning a strategic transaction including the potential implications of exclusivity arrangements. A representative of Sandler O’Neill noted that the $5.10 price appeared to be based on an incorrect calculation by Parent of the number of fully diluted outstanding shares of Company common stock and that the number of fully diluted outstanding shares of Company common stock likely was higher than the number on which the $5.10 offer price was based. The independent committee determined that First Marblehead management should analyze the capitalization information reflected in Parent’s indication of interest. The independent committee also determined that First Marblehead would not grant Parent’s request for exclusivity.

Also on April 20, 2016, Mr. Eddy sent a letter on behalf of the independent committee to Messrs. Risley and Spavold responding to the April 19, 2016 indication of interest. In his letter, Mr. Eddy informed Messrs. Risley and Spavold that First Marblehead would continue to engage in discussions with Parent but would not grant Parent’s request for exclusivity. In addition, on April 20, 2016, representatives of Sandler O’Neill provided to representatives of Houlihan Lokey a calculation of the number of fully diluted outstanding shares of Company common stock, which was higher than the than the number of fully diluted shares on which Parent’s $5.10 offer price was based.

On April 22, 2016, Company D informed Sandler O’Neill that it did not wish to pursue a strategic transaction with First Marblehead.

On April 25, 2016, based on the calculation provided by Sandler O’Neill, Parent sent a revised indication of interest to Mr. Eddy reducing its offer to acquire First Marblehead to $5.00 per share of Company common stock,

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subject to continued diligence and negotiation and execution of a definitive merger agreement. The April 25, 2016 indication of interest noted that the $5.00 offer price implied an equity value of First Marblehead of approximately $64.75 million, based on approximately 12.949 million fully diluted outstanding shares. The indication of interest also noted that Parent was interested in discussing reinvestment opportunities with certain First Marblehead stockholders.

On April 25, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale joined the meeting at the invitation of the independent committee. Representatives of Sandler O’Neill provided an updated preliminary financial analysis and a summary of the market check process, noting that Company A, Company C and Company F continued to express interest in a possible strategic transaction with First Marblehead and all other parties had either declined to participate or withdrawn from the process. The representatives of Sandler O’Neill noted that Company A and Company F were in the process of conducting due diligence on First Marblehead. The independent committee directed WilmerHale to negotiate a nondisclosure agreement with Company C following its review of First Marblehead’s public filings. The representatives of WilmerHale reviewed once again the fiduciary duties of directors when considering a possible strategic transaction. The members of the independent committee discussed Parent’s April 25, 2016 indication of interest and next steps. In addition, at this meeting Mr. Eddy informed the independent committee that the Massachusetts Supreme Judicial Court had rendered a judgment against Mr. Meyers in a civil lawsuit between Mr. Meyers and another party. The independent committee discussed how, if at all, this judgment might affect any potential strategic transaction and noted the directors’ fiduciary duties to act in the best interests of First Marblehead and its stockholders in their evaluation of any potential strategic transaction.

Later in the day on April 25, 2016, Mr. Eddy sent a letter to Parent on behalf of the independent committee indicating that First Marblehead would provide a draft merger agreement to Parent and indicated that the proposed price of $5.00 per share remained subject to further negotiation. The letter also stated that only if and when First Marblehead and Parent agreed on valuation and other material terms of any proposed strategic transaction would the independent committee expect to permit discussions between Parent and First Marblehead management about potential reinvestment opportunities. In accordance with Mr. Eddy’s letter, WilmerHale sent an initial draft of the merger agreement to Choate on the evening of April 25, 2016.

On April 28, 2016, each of Company A and Company F informed Sandler O’Neill that it did not wish to pursue a strategic transaction with First Marblehead.

On May 3, 2016, a representative of Choate sent a revised draft of the merger agreement to representatives of WilmerHale.

On May 4, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. The representatives of Sandler O’Neill summarized for the independent committee the results of the market check. They noted that at the direction of the independent committee, they had reached out to 15 third parties, including eight potential financial buyers and seven potential strategic buyers. Of the eight potential financial buyers, five had declined the opportunity to discuss a possible strategic transaction and three (Companies A, D and F) entered into nondisclosure agreement extensions, initiated due diligence and subsequently withdrew from the process. Six of the potential strategic buyers declined the opportunity to discuss a possible strategic transaction. The representatives of Sandler O’Neill noted that only Company C continued to discuss a possible strategic transaction with First Marblehead and that WilmerHale was negotiating a nondisclosure agreement with counsel to Company C. The representatives of Sandler O’Neill reported that the third parties declined to pursue a strategic transaction for a variety of reasons, including lack of interest in acquiring a company in the student loan industry, the size of First Marblehead, an interest in only a portion of First Marblehead’s business, and concerns with First Marblehead’s strategy, business, results of operations, financial condition or prospects. The representatives of WilmerHale then updated the independent committee on the status of negotiations with Choate on the merger agreement. There was consensus among the members of the independent committee that Parent’s proposed $5.00 price required further discussion with Parent.

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Also on May 4, 2016, Mr. Eddy and Mr. Spavold discussed a number of issues in the draft merger agreement, including Parent’s objection to First Marblehead’s proposal that the merger be conditioned on holders of a majority of the outstanding shares of Company common stock held by First Marblehead stockholders other than Parent and First Marblehead’s directors and executive officers and their respective affiliates voting to adopt the merger agreement, which we refer to as the disinterested stockholder vote.

On May 6, 2016, First Marblehead and Company C entered into a nondisclosure agreement. The nondisclosure agreement included a standstill provision and was substantially similar to the nondisclosure agreement between First Marblehead and Parent. Company C was then provided with certain non-public information regarding First Marblehead.

On May 7, 2016, a representative of WilmerHale sent a revised draft of the merger agreement to representatives of Choate.

On May 11, 2016, Company C, which was at that time the only party contacted as part of the market check that remained engaged in the process, informed representatives of Sandler O’Neill that it did not wish to pursue a strategic transaction with First Marblehead.

Also on May 11, 2016, representatives of First Marblehead and WilmerHale held a teleconference with representatives of Choate to negotiate the terms of the merger agreement. The points negotiated included: whether completion of the merger would be conditioned on the disinterested stockholder vote; the conditions to the obligation of Parent to complete the merger, including the standards for the accuracy of First Marblehead’s representations and warranties and whether receipt of specified third party consents and regulatory approvals would be conditions to Parent’s obligation to complete the merger; the scope of First Marblehead’s representations and warranties and the use of materiality, Company Material Adverse Effect and knowledge qualifications and the definitions of Company Material Adverse Effect and knowledge; limitations on First Marblehead’s conduct of its business between the execution of the merger agreement and the effective time of the merger; the scope and duration of, and exceptions to, First Marblehead’s obligation not to solicit acquisition proposals; the scope of, and exceptions to, the board of directors’ obligation not to change its recommendation that First Marblehead stockholders vote to adopt the merger agreement; the respective termination rights of Parent and First Marblehead, including the circumstances in which First Marblehead would have the right to terminate the merger agreement to accept a superior proposal and the circumstances in which a termination of the merger agreement would result in the payment by First Marblehead of a termination fee and/or an obligation of First Marblehead to reimburse Parent’s transaction expenses; and the parties to the company stockholders agreement.

On May 12, 2016, Messrs. Eddy and Gelber informed Mr. Spavold by telephone that First Marblehead had received a Notice and Opportunity to Respond and Advise, or NORA, from the CFPB on May 11, 2016, as disclosed in First Marblehead’s Current Report on Form 8-K filed with the SEC on May 13, 2016. The NORA indicated that the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against First Marblehead for practices allegedly employed by First Marblehead and its affiliates in connection with the collection and litigation of delinquent and defaulted student loans and that the CFPB may seek injunctive relief, damages, restitution and civil penalties against First Marblehead. Later on May 12, 2016, representatives of First Marblehead, WilmerHale, Choate and First Marblehead’s and Parent’s respective regulatory counsel participated in a due diligence teleconference regarding the NORA.

On May 13, 2016, Mr. Eddy and representatives of First Marblehead and WilmerHale met with Mr. Spavold and representatives of Choate to negotiate the terms of the merger agreement. In addition to the points that were negotiated by representatives of First Marblehead, WilmerHale and Choate on May 11, 2016, the points negotiated during the May 13, 2016 meeting included: the amount of the termination fee payable by First Marblehead if the merger agreement were terminated in certain circumstances; the identity of the entity that

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would act as the acquiring entity under the merger agreement; and First Marblehead’s request that Parent’s obligations under the merger agreement be guaranteed by an entity with substantial financial resources.

On May 13, 2016, the independent committee held a telephonic meeting. Representatives of WilmerHale participated in the meeting at the invitation of the independent committee. Mr. Eddy summarized the status of negotiations with Parent and Choate on the merger agreement.

On May 16, 2016, a representative of Choate sent a revised draft of the merger agreement to representatives of WilmerHale.

On May 17, 2016, a representative of WilmerHale sent a further revised draft of the merger agreement to representatives of Choate. In response to the revised draft of the merger agreement, a representative of Choate confirmed, at the request of a representative of WilmerHale, that, apart from price, the only unresolved issues in the merger agreement were First Marblehead’s proposal that the merger be conditioned on the disinterested stockholder vote and Parent’s related proposal that First Marblehead reimburse Parent for its transaction expenses if the merger agreement were terminated due to the nonsatisfaction of such condition.

On May 17, 2016, Messrs. Eddy and Spavold discussed the unresolved issues on the merger agreement in several telephone conversations. Mr. Spavold stated that Parent planned to lower its offer price from $5.00 to $4.75 per share of Company common stock due in large part to the NORA that the Company received from the CFPB on May 11, 2016 and First Marblehead’s continued insistence that the merger be conditioned on the disinterested stockholder vote. After a discussion, Mr. Spavold offered to forgo a price reduction and maintain the $5.00 offer price, and to potentially increase the offer price if and to the extent members of First Marblehead management agreed to participate in an equity rollover, if the independent committee would agree that the proposed merger not be conditioned on the disinterested stockholder vote. Mr. Eddy indicated that he would present this proposal to the independent committee for its consideration.

On May 19, 2016, the independent committee held a telephonic meeting. Representatives of Sandler O’Neill and WilmerHale participated in the meeting at the invitation of the independent committee. The representatives of WilmerHale reviewed the status of negotiations on the merger agreement, including the unresolved issues, and the fiduciary duties of directors in the context of a strategic transaction. Representatives of Sandler O’Neill informed the independent committee of Company C’s May 11, 2016 indication that it would not pursue a strategic transaction with First Marblehead and also informed the independent committee that, accordingly, each of the 15 parties contacted as part of the market check had decided not to pursue a strategic transaction with First Marblehead. Representatives of Sandler O’Neill then provided an update of their financial analysis. At the conclusion of the meeting, based on the progress to date on the negotiation of price and merger agreement terms, the members of the independent committee also agreed to authorize Parent to discuss with members of First Marblehead management a possible equity rollover and their potential post-merger roles with First Marblehead. On May 19, 2016, a representative of WilmerHale sent to representatives of Choate a revised draft of the merger agreement reflecting the elimination of the disinterested stockholder vote provision and the related expense reimbursement provision and, at the request of a representative of WilmerHale, a representative of Choate confirmed that the merger agreement was in substantially final form, subject to approval by the independent committee, apart from inserting the final per share merger consideration, which would be a minimum of $5.00 and subject to increase in accordance with the discussions between Messrs. Eddy and Spavold if and to the extent members of First Marblehead management agreed to participate in an equity rollover.

From May 20, 2016 to June 2, 2016, Parent discussed with members of First Marblehead management a possible equity rollover and potential post-merger roles with First Marblehead.

On May 31, 2016, Mr. Eddy and Mr. Spavold spoke by telephone to discuss the proposed purchase price. Mr. Spavold informed Mr. Eddy that members of First Marblehead management would not participate in an equity rollover and instead would elect to receive the same merger consideration as other First Marblehead

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stockholders for their common stock and equity awards in any merger transaction. Accordingly, there would be no price increase based on management participation in an equity rollover. After a lengthy discussion, Mr. Spavold informed Mr. Eddy that Parent’s best and final offer was $5.05 per share of Company common stock. They then discussed timing for the upcoming meetings of the independent committee and the board of directors and logistics for executing the merger agreement, if approved by the independent committee and the board of directors.

On May 31, 2016, Messrs. Eddy and Spavold discussed the identity of and the assets and operations of Clearwater, as the guarantor of Parent’s payment obligations under the merger agreement, and on May 31, 2016 and June 1, 2016, WilmerHale and Choate worked to finalize the form of merger agreement, subject to the approval of the independent committee and the board of directors.

On June 2, 2016, the independent committee held an in-person meeting at the Boston office of WilmerHale. Representatives of Sandler O’Neill and WilmerHale attended the meeting at the invitation of the independent committee. At the meeting, representatives of WilmerHale reviewed with the independent committee their fiduciary duties in connection with considering and approving the merger agreement and summarized the terms of the proposed merger agreement and related agreements. Representatives of Sandler O’Neill reviewed with the members of the independent committee its analysis of the financial terms of the proposed transaction and delivered to the independent committee Sandler O’Neill’s oral opinion to the effect that, as of June 2, 2016, and based upon and subject to various considerations and assumptions set forth in its written opinion, the merger consideration to be paid to the holders of common stock in the proposed transaction with Parent was fair to such holders (other than Parent and its affiliates) from a financial point of view. Sandler O’Neill subsequently confirmed its oral opinion by delivering its written opinion, dated June 2, 2016, to the independent committee. The written opinion of Sandler O’Neill is attached hereto as Annex D . Representatives of WilmerHale and Sandler O’Neill also responded to a number of questions from members of the independent committee regarding the fiduciary duties of directors, the financial terms of the proposed transaction and the terms of the merger agreement. Following these discussions, and review and discussion among the members of the independent committee, including the relative merits of executing a strategic transaction versus remaining a standalone company, the independent committee, among other actions, unanimously (a) determined that the merger is fair to, and in the best interests of, First Marblehead and its stockholders and declared the merger agreement advisable, (b) approved the merger and the merger agreement and the other transactions contemplated thereby, (c) authorized First Marblehead to enter into and perform its obligations under the merger agreement, (d) resolved that the merger agreement be submitted for consideration by the stockholders at the special meeting, (e) recommended that First Marblehead stockholders vote to adopt the merger agreement and (f) approved the company stockholders agreement and the parent stockholder agreement for purposes of Section 203 of the DGCL.

On June 2, 2016, the board of directors held an in-person special meeting at the Boston office of WilmerHale immediately following the meeting of the independent committee. Representatives of Sandler O’Neill and WilmerHale attended the meeting at the invitation of the board of directors. At the meeting, representatives of WilmerHale reviewed with the directors their fiduciary duties in connection with considering and approving the merger agreement and summarized the terms of the proposed merger agreement and related agreements. Representatives of Sandler O’Neill reviewed with the directors its analysis of the financial terms of the proposed transaction and the oral opinion it had delivered to the independent committee to the effect that, as of June 2, 2016, and based upon and subject to various considerations and assumptions set forth in its written opinion, the merger consideration to be paid to the holders of common stock in the proposed transaction with Parent was fair to such holders (other than Parent and its affiliates) from a financial point of view. Representatives of WilmerHale and Sandler O’Neill also responded to a number of questions from the directors regarding the proposed transaction, including the financial terms of the proposed transaction, timing considerations and the terms of the merger agreement. Following these discussions, and review and discussion among the members of the board of directors, including the relative merits of executing the merger agreement versus remaining a standalone company, the board of directors, among other actions, unanimously (a) determined that the merger is

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fair to, and in the best interests of, First Marblehead and its stockholders and declared the merger agreement advisable, (b) approved the merger and the merger agreement and the other transactions contemplated thereby, (c) authorized First Marblehead to enter into and perform its obligations under the merger agreement, (d) resolved that the merger agreement be submitted for consideration by the stockholders at the special meeting, (e) recommended that First Marblehead stockholders vote to adopt the merger agreement and (f) approved the company stockholders agreement and the parent stockholder agreement for purposes of Section 203 of the DGCL.

Following the adjournment of the meeting of the board of directors on June 2, 2016, First Marblehead, Parent and Transitory Subsidiary signed the merger agreement. The signing of the merger agreement was publicly announced on June 2, 2016, following the closing of trading of First Marblehead’s common stock on the NYSE.

Reasons for the Merger; Recommendation of the Board of Directors and the Independent Committee

At a meeting held on June 2, 2016, the independent committee, by a unanimous vote of all of its members, (a) determined that the merger is fair to, and in the best interests of, the Company and its stockholders and declared the merger agreement advisable, (b) approved the merger and the merger agreement and the other transactions contemplated thereby, (c) authorized the Company to enter into and perform its obligations under the merger agreement, (d) resolved that the merger agreement be submitted for consideration by the stockholders at the special meeting, (e) recommended that our stockholders vote to adopt the merger agreement and (f) approved the company stockholders agreement and the parent stockholder agreement for purposes of Section 203 of the DGCL.

At a meeting held immediately thereafter on June 2, 2016, the board of directors, acting upon the unanimous recommendation of the independent committee, by a unanimous vote of all directors, (a) determined that the merger is fair to, and in the best interests of, the Company and its stockholders and declared the merger agreement advisable, (b) approved the merger and the merger agreement and the other transactions contemplated thereby, (c) authorized the Company to enter into and perform its obligations under the merger agreement, (d) resolved that the merger agreement be submitted for consideration by the stockholders at the special meeting, (e) recommended that our stockholders vote to adopt the merger agreement and (f) approved the company stockholders agreement and the parent stockholder agreement for purposes of Section 203 of the DGCL.

Before making its recommendation, the board of directors considered the unanimous recommendation of the independent committee and consulted with the independent committee and its outside legal and financial advisors, with the board of directors’ outside legal advisors and with our senior management team. In reaching their recommendations, the board of directors and the independent committee each considered the following material factors that the board of directors and the independent committee believe support such determinations, recommendations, approvals, and resolutions:

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The independent committee and the board of directors also weighed the factors described above against the following factors and risks that generally weighed against entering into the merger agreement:

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In considering the recommendation of the board of directors with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, yours. The independent committee and the board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in their recommendations with respect to the merger agreement. See the section entitled “ The Merger—Interests of Certain Persons in the Merger ” beginning on page 54.

The foregoing discussion of the information and factors considered by the independent committee and the board of directors in reaching their conclusions and recommendations is not intended to be exhaustive, but includes the material factors considered by the directors. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the board of directors did not find it practicable to, and did not attempt, to quantify, rank or assign any relative or specific weights to the various factors considered in reaching its determination and making its recommendation. In addition, individual directors may have given different weights to different factors. The board of directors considered all of the foregoing factors as a whole and based its recommendation on the totality of the information presented.

The board of directors recommends that you vote “FOR” approval of the proposal to adopt the merger agreement, “FOR” approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “FOR” approval of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

Opinion of Sandler O’Neill & Partners, L.P.

By letter dated February 2, 2016, the independent committee retained Sandler O’Neill to act as its financial advisor in connection with First Marblehead’s consideration of a possible business combination involving First Marblehead and a second party. Sandler O’Neill is a nationally recognized investment banking firm whose

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principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

Sandler O’Neill acted as financial advisor in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the June 2, 2016 meeting at which the independent committee considered and discussed the terms of the merger agreement and the merger, Sandler O’Neill delivered to the independent committee its oral opinion, which was subsequently confirmed in writing, to the effect that, as of such date, the merger consideration was fair to the holders of Company common stock (other than Parent and its affiliates) from a financial point of view . The full text of Sandler O’Neill’s opinion is attached as Annex D to this proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of Company common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Sandler O’Neill’s opinion speaks only as of the date of the opinion. The opinion was directed to the independent committee in connection with its consideration of the merger and is directed only to the fairness of the merger consideration to the holders of Company common stock (other than Parent and its affiliates) from a financial point of view. It does not address the underlying business decision of First Marblehead to engage in the merger, or any other aspect of the merger, and is not a recommendation to any holder of First Marblehead’s common stock as to how such stockholder should vote at the special meeting with respect to the merger or any other matter. Sandler O’Neill’s opinion does not address the relative merits of the merger as compared to any other alternative business strategies that might exist for First Marblehead or the effect of any other transaction in which First Marblehead might engage. Sandler O’Neill did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any First Marblehead officer, director or employee, or class of such persons, if any, relative to the amount of compensation to be received by any other stockholder. Sandler O’Neill’s opinion was approved by Sandler O’Neill’s fairness opinion committee.

In connection with rendering its opinion, Sandler O’Neill reviewed and considered, among other things:

Sandler O’Neill also discussed with certain members of senior management of First Marblehead the business, financial condition, results of operations and prospects of First Marblehead.

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In performing its review, Sandler O’Neill relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by First Marblehead, or that was otherwise reviewed by it, and Sandler O’Neill assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Sandler O’Neill further relied on the assurances of the senior management of First Marblehead that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading in any material respect. Sandler O’Neill was not asked to and did not undertake an independent verification of any such information and did not assume any responsibility or liability for the accuracy or completeness thereof. Sandler O’Neill did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of First Marblehead or Parent, or any of their respective subsidiaries, nor was Sandler O’Neill furnished with any such evaluations or appraisals. Sandler O’Neill did not render an opinion or evaluation on the collectability of any assets or the future performance of any loans of First Marblehead or Parent or any of their respective subsidiaries.

In preparing its analyses, Sandler O’Neill used internal financial projections for First Marblehead for the fiscal years ending June 30, 2016 through June 30, 2020, as provided by the senior management of First Marblehead. With respect to those projections, the senior management of First Marblehead confirmed to Sandler O’Neill that those projections reflected the best currently available projections of the senior management of the future financial performance of First Marblehead and Sandler O’Neill assumed that such performance would be achieved. Sandler O’Neill expressed no opinion as to such projections, or the assumptions on which they were based. Sandler O’Neill also assumed that there was no material change in First Marblehead’s assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to Sandler O’Neill. Sandler O’Neill assumed in all respects material to its analyses that First Marblehead would remain as a going concern for all periods relevant to its analyses.

Sandler O’Neill also assumed, with First Marblehead’s consent, that (a) each of the parties to the merger agreement would comply in all material respects with all material terms of the merger agreement and all related agreements, that all of the representations and warranties contained in the merger agreement were true and correct in all material respects, that each of the parties to the merger agreement would perform in all material respects all of the covenants and other obligations required to be performed by such party under the merger agreement and that the conditions precedent in the merger agreement were not waived, (b) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on First Marblehead or the merger or any related transactions, and (c) the merger and any related transactions would be consummated in accordance with the terms of the merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Finally, with First Marblehead’s consent, Sandler O’Neill relied upon the advice that First Marblehead received from its legal, accounting and tax advisors which was provided to, or discussed with, Sandler O’Neill as to all legal, accounting and tax matters relating to the merger and the other transactions contemplated by the merger agreement.

Sandler O’Neill’s analyses were necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Sandler O’Neill as of, the date thereof. Events occurring after the date thereof could materially affect Sandler O’Neill’s opinion. Sandler O’Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof.

In rendering its opinion, Sandler O’Neill performed a variety of financial analyses. The summary below is not a complete description of the analyses underlying Sandler O’Neill’s opinion or the presentation made by Sandler O’Neill to the independent committee, but is a summary of all material analyses performed and presented by Sandler O’Neill. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a

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complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to First Marblehead and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of First Marblehead and the companies to which they are being compared. In arriving at its opinion, Sandler O’Neill did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler O’Neill made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O’Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion; rather, Sandler O’Neill made its determination as to the fairness of the merger consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of First Marblehead and Sandler O’Neill. The analyses performed by Sandler O’Neill are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of determining whether it could render its opinion and provided such analyses to the independent committee at its June 2, 2016 meeting. Estimates of valuation ranges of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of Company common stock or the price at which Company common stock may be sold at any time. See “ The Merger—Reasons for the Merger; Recommendation of the Board of Directors and the Independent Committee ” beginning on page 40 for information on the factors the board of directors considered in reaching its decision to approve the merger agreement.

Summary of Proposed Merger Consideration and Implied Transaction Metrics. Sandler O’Neill reviewed the financial terms of the proposed merger. Pursuant to the terms of the merger agreement, each share of Company common stock issued and outstanding immediately prior to the effective time of the merger, except for certain shares of Company common stock as specified in the merger agreement, shall become and be converted into the right to receive, without interest and subject to deduction for any required withholding tax, cash in the amount of $5.05. Based upon 12,975,303 shares of Company common stock outstanding, which included outstanding Company restricted stock units and Company director stock units, Sandler O’Neill calculated an aggregate transaction value of approximately $65.5 million. Based upon financial information for First Marblehead as of and for the twelve months ended March 31, 2016 (unless otherwise noted), Sandler O’Neill calculated the following implied transaction metrics:

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Stock Trading History. Sandler O’Neill reviewed the history of the publicly reported trading price of Company common stock for the one-year and three-year periods ended June 2, 2016. Sandler O’Neill then compared the relationship between the movements in the price of Company common stock, respectively, to certain stock indices selected by Sandler O’Neill based on its professional judgment.

Comparable Company Analyses. Sandler O’Neill used publicly available information to compare selected financial information for First Marblehead with two groups of companies selected by Sandler O’Neill. The first group consisted of the publicly traded specialty finance companies known by Sandler O’Neill to specialize in the niche consumer lending space of private educational lending, or the First Marblehead Educational Lender Peer Group. The First Marblehead Educational Lender Peer Group consisted of the following companies:

The analysis compared publicly available financial information for First Marblehead with the corresponding data for the First Marblehead Educational Lender Peer Group as of or for the twelve months ended March 31, 2016 (unless otherwise noted), with pricing data as of June 2, 2016. The table below sets forth the data for First Marblehead and the median and mean data for the First Marblehead Educational Lender Peer Group.

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Sandler O’Neill used publicly available information to perform a similar analysis for First Marblehead and a group of the publicly traded and established companies known by Sandler O’Neill to specialize in providing financial technology, payment processing and other information technology services for the business offices of colleges, universities and kindergarten through twelfth grade educational institutions, or the IT Business Service Providers to Educational Institutions Peer Group. The IT Business Service Providers to Educational Institutions Peer Group consisted of the following companies:

The analysis compared publicly available financial information for First Marblehead with the corresponding data for the IT Business Service Providers to Educational Institutions Peer Group as of or for the twelve months ended March 31, 2016 (unless otherwise noted), with pricing data as of June 2, 2016. The table below sets forth the data for First Marblehead and the median and mean data for the IT Business Service Providers to Educational Institutions Peer Group.

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Analysis of Selected Merger Transactions . Sandler O’Neill reviewed a nationwide group of merger and acquisition transactions. The group consisted of the transactions known by Sandler O’Neill to have been announced between January 1, 2013 and June 2, 2016 involving targets engaged in payment processing and educational technology services with publicly reported deal values, or the Precedent Transactions. The Precedent Transactions group was composed of the following transactions:

Using the latest publicly available financial information prior to the announcement of the relevant transaction, Sandler O’Neill reviewed the following multiples: Transaction Value / Sales, Transaction Value / Earnings before Interest and Taxes, Transaction Value / LTM Earnings per Share and Transaction Value / LTM Earnings before Interest, Taxes, Depreciation and Amortization. Sandler O’Neill compared the indicated transaction metrics for the merger to the median metrics of the Precedent Transactions group.

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Net Present Value Analyses. Sandler O’Neill performed an analysis that estimated the net present value per share of Company common stock assuming First Marblehead performed in accordance with internal financial projections for First Marblehead for the years ending June 30, 2016 through June 30, 2020, as provided by the senior management of First Marblehead and summarized below under “ —Financial Forecasts .” To approximate the terminal value of a share of Company common stock at June 30, 2020, Sandler O’Neill applied price to 2020 sales multiples ranging from 1.30x to 1.80x and price to 2020 net income multiples ranging from 8.0x to 18.0x. The terminal values and the Company’s estimated free cash flows for 2016 through 2020, calculated based on the financial forecasts summarized below under “ —Financial Forecasts ”, were then discounted to present values using discount rates ranging from 12.0% to 15.0%, which were chosen to reflect the Company’s cost of capital based on assumptions regarding required rates of return of holders or prospective buyers of Company common stock. As illustrated in the following tables, the analysis indicates an imputed range of values per share of Company common stock of $3.03 to $5.44 when applying multiples of sales and $(0.21) to $1.57 when applying multiples of net income.

The following table describes the discount rate calculation for Company common stock prepared by Sandler O’Neill. In its normal course of business, Sandler O’Neill employs the Duff & Phelps valuation handbook in determining an appropriate discount rate in which the discount rate equals the sum of the risk free rate, the equity risk premium, the size premium and the industry premium.

Sandler O’Neill’s Relationship. Sandler O’Neill is acting as financial advisor to the independent committee in connection with the merger and will receive a transaction fee in an amount equal to 1.25% of the aggregate

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merger consideration, approximately $568,750 of which will become payable at the time of closing of the merger. In addition, Sandler O’Neill received a fee in an amount equal to $250,000 upon rendering its fairness opinion to the independent committee, which fairness opinion fee will be credited in full towards the portion of the transaction fee which will become payable to Sandler O’Neill on the day of closing of the merger. First Marblehead has also agreed to reimburse Sandler O’Neill for its reasonable out-of-pocket expenses incurred in connection with its engagement, including the reasonable fees and disbursements of its legal counsel, up to a maximum of $25,000 without First Marblehead’s prior approval. First Marblehead has also agreed to indemnify Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees and agents against certain expenses and liabilities, including liabilities under applicable federal or state law.

Sandler O’Neill did not provide any other investment banking services to First Marblehead in the two years preceding the date of Sandler O’Neill’s opinion, nor did Sandler O’Neill provide any investment banking services to Parent during the two years immediately preceding the date of Sandler O’Neill’s opinion. In the ordinary course of Sandler O’Neill’s business as a broker-dealer, Sandler O’Neill may purchase securities from and sell securities to First Marblehead and its affiliates. Sandler O’Neill may also actively trade the equity and debt securities of First Marblehead or its affiliates for its own account and for the accounts of its customers.

Financial Forecasts

The Company does not, as a matter of course, publicly disclose financial forecasts as to future financial performance, earnings or other results and is especially cautious of making financial forecasts because of unpredictability of the underlying assumptions and estimates. However, in connection with the evaluation of a possible transaction, we provided projections to our directors and their advisors as well as to prospective bidders in connection with their due diligence review of the Company. These projections contained certain non-public financial forecasts that were prepared by our management.

A summary of the financial forecasts included in the projections has been included below. This summary is not being included in this document to influence your decision whether to vote for or against the proposal to adopt the merger agreement, but is being included because these financial forecasts were made available to our directors and their advisors as well as to prospective bidders. The inclusion of this information should not be regarded as an indication that our directors or their advisors, or any other person, considered, or now considers, such financial forecasts to be material or to be necessarily predictive of actual future results, and these forecasts should not be relied upon as such. Our management’s internal financial forecasts, upon which the summary financial forecasts included below were based, are subjective in many respects. There can be no assurance that these financial forecasts will be realized or that actual results will not be significantly higher or lower than forecasted.

In addition, the financial forecasts were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles, which we refer to as GAAP, the published guidelines of the SEC regarding projections or the use of non-GAAP financial measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither our independent registered public accounting firm, nor any other independent accountants, have audited, compiled, examined or performed any procedures with respect to the financial forecasts contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability.

These financial forecasts were based on numerous variables and assumptions that are inherently uncertain and may be beyond our control. We believe the assumptions that our management used as a basis for this projected financial information were reasonable at the time our management prepared these financial forecasts, given the information our management had at the time. Important factors that may affect actual results and cause these financial forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to our business (including our ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, general business and economic conditions, the regulatory environment and other factors described in or referenced under “ Cautionary Statement Concerning Forward-Looking Information ” beginning on page 21. In addition, the forecasts also reflect assumptions that are subject to change and do not reflect revised

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prospects for our business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the financial forecasts were prepared. Accordingly, there can be no assurance that these financial forecasts will be realized or that our future financial results will not materially vary from these financial forecasts.

No one has made or makes any representation to any stockholder regarding the information included in the financial forecasts set forth below. We have made no representation to Parent or Transitory Subsidiary in the merger agreement concerning these financial forecasts.

Readers are cautioned not to rely on the forecasted financial information. We have not updated and do not intend to update or otherwise revise the financial forecasts to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions on which such forecasts were based are shown to be in error.

In preparing the financial forecasts our management made the following material assumptions:

The following is a summary of the financial forecasts for the Company prepared by our management and provided to our directors and their advisors as well as to prospective bidders:

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Source of Funds for the Merger

Parent, Mr. Risley and the controlled entities anticipate that the total funds needed to complete the merger, including the funds needed to:

will be funded through a combination of some or all of:

The obligations of Parent and Transitory Subsidiary under the merger agreement are not conditioned upon their ability to obtain financing and the payment obligations of Parent and Transitory Subsidiary under the merger agreement are guaranteed by Clearwater Fine Foods Incorporated. Clearwater Fine Foods Incorporated is a Nova Scotia, Canada based, privately-held active investment/holding company with major investments in seafood harvesting and processing. See “ The Merger Agreement—Guarantee of Payment Obligations ” beginning on page 66.

Closing and Effective Time of the Merger

The closing of the merger will occur no later than the second business day following the satisfaction or waiver of all of the closing conditions set forth in the merger agreement (described under “ The Merger Agreement—Conditions to the Merger ” beginning on page 83) or at such other date as the parties may agree in writing.

Assuming timely satisfaction of the necessary closing conditions, we currently anticipate that the merger will be consummated during the third calendar quarter of 2016. The merger will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such subsequent time or date as Parent and the Company may agree and specify in the certificate of merger.

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Payment of Merger Consideration and Surrender of Stock Certificates

Promptly, and in any event within five business days, after the effective time of the merger, a letter of transmittal will be mailed to each record holder of shares of Company common stock (other than the excluded shares) describing how such holder should surrender its shares of Company common stock for the per share merger consideration.

You should not return your stock certificates with the enclosed proxy card, and you should not forward your stock certificates to the paying agent (described in “ The Merger Agreement—Payment Procedures ” beginning on page 66) without a letter of transmittal.

If your shares of Company common stock are certificated, you will not be entitled to receive the per share merger consideration until you deliver a duly completed and executed letter of transmittal to the paying agent and you must also surrender your stock certificate or certificates to the paying agent. If your shares of Company common stock are held in book entry, which we refer to as uncertificated shares, surrender of any uncertificated shares will be effected in accordance with the paying agent’s customary procedures with respect to securities that are uncertificated or represented by book entry and no holder of uncertificated shares will be required to deliver a certificate or an executed letter of transmittal to the paying agent in order to receive the merger consideration to which such holder is otherwise entitled under the merger agreement. If ownership of your shares is not registered in the transfer records of the Company, a check for any cash to be delivered will only be issued if the applicable letter of transmittal is accompanied by all documents reasonably required by the Company to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid.

If you have lost a certificate, or if it has been stolen or destroyed, then before you will be entitled to receive the merger consideration, you will have to make an affidavit of the loss, theft or destruction and, if required by the paying agent, Parent or the surviving corporation, post a bond, in such reasonable amount as Parent may reasonably direct, as indemnity against any claim that may be made against Parent or the surviving corporation with respect to such certificate. These procedures will be described in the letter of transmittal that you will receive, which you should read carefully in its entirety.

Interests of Certain Persons in the Merger

In considering the recommendation of the board of directors with respect to the merger agreement, you should be aware that the Company’s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally, as more fully described below. The board of directors and the independent committee were aware of these interests and considered them, among other matters, in reaching the determination that the terms and conditions of the merger and the merger agreement were fair to, advisable and in the best interests of the Company and its stockholders and in making their recommendations regarding approval and adoption of the merger and the merger agreement as described in “ The Merger—Reasons for the Merger; Recommendation of the Board of Directors and the Independent Committee” beginning on page 40.

Please see the section of this proxy statement entitled “ The Merger—Golden Parachute Compensation ” beginning on page 60 for additional information with respect to the compensation that our named executive officers may receive in connection with the merger.

Interests With Respect to Company Equity

Treatment of Company Stock Awards and Employee Stock Purchase Plan

Effective as of immediately prior to the effective time of the merger, each then-outstanding and unexercised option to purchase shares of Company common stock will vest in full and, as of the effective time of the merger, automatically be canceled and converted into the right to receive from the surviving corporation an amount of

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cash equal to the product of the total number of shares of Company common stock then underlying such Company stock option multiplied by the excess, if any, of the per share merger consideration over the exercise price per share of such Company stock option, without any interest thereon. In the event that the exercise price of any Company stock option is equal to or greater than the per share merger consideration, such Company stock option will be canceled, without any consideration being payable in respect thereof, and have no further force or effect. Because the current exercise price of each Company stock option is equal to or greater than the merger consideration, all such Company stock options will be canceled, without receiving any consideration therefor.

Pursuant to the merger agreement, effective as of immediately prior to the effective time of the merger, each Company restricted stock unit that is then outstanding and unvested will vest in full, and each Company stock unit for which shares of Company common stock have not been delivered as of immediately prior to the effective time of the merger will, as of the effective time of the merger, be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of the total number of shares of Company common stock then underlying such Company stock unit multiplied by the per share merger consideration.

The board of directors will terminate the Company’s employee stock purchase plan, which has been suspended indefinitely since fiscal 2008, prior to the effective time of the merger. During the period from the date of the merger agreement until the termination of the Company’s employee stock purchase plan in accordance with the merger agreement, we will not permit any offering periods to occur.

Security Holdings of Certain Persons

The following table sets forth, as of June 6, 2016, for each person who has served as a director or executive officer of the Company since the beginning of our last fiscal year: (a) the aggregate number of outstanding shares of Company common stock held; (b) the pre-tax value of such outstanding shares of Company common stock at the $5.05 per share merger consideration; (c) the aggregate number of Company stock units held that will vest or otherwise be delivered in connection with the merger; (d) the pre-tax value of such Company stock units at the $5.05 per share merger consideration; and (e) the aggregate pre-tax value of such shares of Company common stock and such Company stock units (which is the sum of columns (b) and (d)):

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As of June 6, 2016, Parent beneficially owned approximately 14.9% of the outstanding shares of the Company’s common stock (excluding certain voting rights with respect to certain shares of Company common stock granted to Parent under the company stockholders agreement (described in more detail on page 88)). Pursuant to the merger agreement, at the effective time of the merger, all shares of Company common stock owned by Parent, Transitory Subsidiary or any other wholly owned subsidiary of Parent or Transitory Subsidiary immediately prior to the effective time of the merger will automatically be canceled and no consideration will be paid or delivered in exchange therefor.

Employment Agreements and Severance/Change in Control Benefits

Pursuant to employment agreements and employment letters, as applicable, the Company has entered into with its executives, restricted stock unit agreements entered into with the Company’s executives pursuant to the Company’s 2003 stock incentive plan, as amended and restated, or the 2003 plan, and the Company’s 2011 stock incentive plan, as amended, or the 2011 plan, and stock option agreements entered into with Mr. Meyers pursuant to the Company’s 2008 Meyers’s option plan, certain of the Company’s executives are entitled to specified benefits in the event of the termination of their employment under specified circumstances, including termination following a change in control of the Company.

In addition, the Company has followed a practice of providing severance benefits to employees, including executive officers, terminated without cause. These benefits have generally been structured based on the employees’ job grade or classification and length of service. The Company believes providing these benefits helps it compete for executive talent and may help it retain current key employees. While the Company believes that the provisions of a severance package would not be a determinative factor in an executive’s decision to join or leave the Company, the Company also believes that the absence of such package would present a competitive disadvantage in the market for talented executives.

Generally, the Company’s practice in the case of change in control benefits has been to structure these as “double trigger” benefits. In other words, the change in control does not itself trigger benefits; rather, benefits are paid only if the employment of the executive is terminated after the change in control. The Company’s restricted stock unit agreements under the 2003 plan and the 2011 plan generally provide that such award will become immediately vested in full if, on or prior to the second anniversary of the consummation of a reorganization event, as defined in the 2003 plan and the 2011 plan, as applicable, the executive’s employment is terminated for good reason by the executive or is terminated without cause by the Company or its successor. We believe a “double trigger” benefit maximizes stockholder value because it prevents an unintended windfall to executives in the event of a friendly change in control, while still providing them appropriate incentives to cooperate in negotiating any change in control in which they believe they may lose their jobs.

Please see the section of this proxy statement entitled “ The Merger—Golden Parachute Compensation ” beginning on page 60 for an estimate of the value of the amounts that would be payable to each of our named executive officers pursuant to the arrangements listed above, assuming that the closing of the merger occurred on June 6, 2016 and each named executive officer’s employment terminated on such date.

Employee Benefits

Pursuant to the merger agreement, from and after the effective time of the merger, Parent must carry out all employer responsibilities under all Company employee benefit plans and all employment, severance and termination plans and agreements, in each case in accordance with their terms as in effect immediately before the

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effective time of the merger. Subject to the foregoing, for a period of one year following the effective time of the merger, Parent must provide to each then-current employee of the Company or its subsidiaries (a) a total compensation package no less favorable than the total compensation package provided to such employees immediately before the effective time of the merger and (b) other employee benefits that are substantially comparable, in the aggregate, to the other benefits provided to such employees immediately before the effective time of the merger. For a more detailed description of these provisions of the merger agreement, please see the section of this proxy statement entitled “ The Merger Agreement—Additional Agreements of the Parties to the Merger Agreement—Employee Benefits Matters ” on page 80.

Discussions and Agreements with Parent

As described under the “ The Merger—Background of the Merger ” above, Daniel Meyers, our Chairman and Chief Executive Officer, and Seth Gelber, our Managing Director, President and Chief Operating Officer, held discussions with Parent shortly before the execution of the merger agreement (after all price and substantially all other negotiations were completed) regarding employment and equity participation agreements for the period following the closing of the merger. In connection with the execution of the merger agreement, each of Messrs. Meyers and Gelber entered into an employment agreement with Parent regarding the terms of his employment with the Company following the completion of the merger.

Mr. Meyers’s Employment Agreement

Mr. Meyers’s Employment Agreement, dated as of June 2, 2016, provides that, commencing on completion of the merger, he will serve as chief executive officer of the surviving corporation.

Salary . Pursuant to Mr. Meyers’s employment agreement, his annual base salary will be $1.0 million, effective as of completion of the merger. Mr. Meyers will be reimbursed by the surviving corporation for all reasonable travel, entertainment and other expenses incurred or paid by Mr. Meyers in connection with the performance of his duties. Mr. Meyers also has the opportunity to participate in the surviving corporation’s customary employee benefit plans, to the extent eligible.

Severance Benefits . Mr. Meyers’s employment is terminable by either the surviving corporation or Mr. Meyers. If Mr. Meyers’s employment is terminated by the surviving corporation without cause (as defined below) or if Mr. Meyers terminates his employment for good reason (as defined below), subject to signing a general release of claims, (a) he will receive $1.0 million if the surviving corporation has achieved positive cash flow from operations and profit from operations during the fiscal quarter in which termination occurs or cumulatively for such fiscal quarter and any prior fiscal quarters in such year, (b) his stock-based awards will immediately accelerate and become non-forfeitable, (c) he will be eligible to continue to participate in the surviving corporation’s group health, dental and vision program for 18 months, which shall reduce and count against Mr. Meyers’s rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or COBRA, and (d) he will be entitled to receive a $1.0 million lump sum payment. “Cause” is defined in Mr. Meyers’s employment agreement as:

“Good reason” is defined in Mr. Meyers’s employment agreement as the persistence of any of the following conditions after a notice and cure process specified in the employment agreement:

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Tax Gross-Up . In the event that any payment or distribution by the surviving corporation to or for the benefit of Mr. Meyers would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by him with respect to such excise tax, then Mr. Meyers will be entitled to receive a gross-up payment such that the net amount retained by Mr. Meyers, after deduction of any excise tax, any federal, state and local income tax, employment tax and excise tax upon any payment made, together with any interest and/or penalties assessed, will be equal to the pre-tax amount of such payments.

Non-Competition and Non-Solicitation . Mr. Meyers’s employment agreement provides that, during the term of his employment and for a period of one (1) year following termination of his employment, he cannot (a) compete with, or engage in any activity that intends to compete with, the surviving corporation or its subsidiaries, (b) solicit the surviving corporation’s or its subsidiaries’ customers, suppliers or other business relations to cease doing business with, to reduce the level of business done with, or to divert marketing resources away from the surviving corporation or its subsidiaries, (c) solicit or hire the surviving corporation’s or its subsidiaries’ employees or (d) solicit or accept any financial services-related business from any current client or customer of the surviving corporation or its subsidiaries or any prospect of the surviving corporation or its subsidiaries.

Mr. Gelber’s Employment Agreement

Mr. Gelber’s Employment Agreement, dated as of June 2, 2016, provides that, commencing on completion of the merger, he will serve as president and chief operating officer of the surviving corporation.

Salary . Pursuant to Mr. Gelber’s employment agreement, his annual base salary will be $700,000, effective as of completion of the merger. Mr. Gelber will be eligible to receive annual cash bonuses of up to 75% of his base salary as determined by the chief executive officer of the surviving corporation, such amount to be based 75% on achievement of objectives of the surviving corporation and 25% on achievement of Mr. Gelber’s personal objectives. Parent and Mr. Gelber agreed to negotiate in good faith to establish a long term incentive program pursuant to which Mr. Gelber would receive an incentive equity package granting Mr. Gelber an equity interest in Parent or its parent. Mr. Gelber will be reimbursed by the surviving corporation for all reasonable travel, entertainment and other expenses incurred or paid by Mr. Gelber in connection with the performance of his duties, responsibilities and services for the surviving corporation. Mr. Gelber also has the opportunity to participate in the surviving corporation’s customary employee benefit plans, to the extent eligible.

Severance Benefits . Mr. Gelber’s employment is terminable by either the surviving corporation or Mr. Gelber. If Mr. Gelber’s employment is terminated by the surviving corporation without cause (as defined below) or if Mr. Gelber terminates his employment for good reason (as defined below), subject to signing a general release of claims, (a) he will receive a payment equal to the sum of one (1) year of his base salary plus the annual incentive compensation Mr. Gelber would have received upon completion of such year assuming 100% achievement of all objectives, (b) his stock-based awards will immediately accelerate and become non-forfeitable and (c) he will be eligible to continue to participate in the surviving corporation’s group health, dental and vision program for 18 months, which shall reduce and count against Mr. Gelber’s rights under COBRA. “Cause” is defined in Mr. Gelber’s employment agreement as:

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“Good reason” is defined in Mr. Gelber’s employment agreement as the persistence of any of the following conditions after a notice and cure process specified in the employment agreement:

Tax Gross-Up . In the event that any payment or distribution by the surviving corporation to or for the benefit of Mr. Gelber would be subject to the excise tax imposed by Section 4999 of the Code (other than with respect to the transactions contemplated by the merger agreement), or any interest or penalties are incurred by him with respect to such excise tax, then Mr. Gelber will be entitled to receive a gross-up payment such that the net amount retained by Mr. Gelber, after deduction of any excise tax, any federal, state and local income tax, employment tax and excise tax upon any payment made, together with any interest and/or penalties assessed, will be equal to the pre-tax amount of such payments.

Non-Competition and Non-Solicitation . Mr. Gelber’s employment agreement provides that, during the term of his employment and for a period of one (1) year following termination of his employment, he cannot (a) compete with, or engage in any activity that intends to compete with, the surviving corporation or its subsidiaries, (b) solicit the surviving corporation’s or its subsidiaries’ customers, suppliers or other business relations to cease doing business with, to reduce the level of business done with, or to divert marketing resources away from the surviving corporation or its subsidiaries, (c) solicit or hire the surviving corporation’s or its subsidiaries’ employees or (d) solicit or accept any financial services-related business from any current client or customer of the surviving corporation or its subsidiaries or any prospect of the surviving corporation or its subsidiaries.

Indemnification of Directors and Officers

All rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger and rights to advancement of expenses relating thereto now existing in favor of any person who is now, or has been at any time prior to the date of the merger agreement, or who becomes prior to the effective time of the merger, an officer, director, employee or agent of the Company or any of its subsidiaries, who we refer to as an indemnified party, whether provided in the certificate of incorporation or by-laws (or comparable organizational documents) of the Company or any of its subsidiaries or in any indemnification agreement between any indemnified party and the Company or any of its subsidiaries, will survive the merger and continue in full force and effect, and may not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any indemnified party.

For six years following the effective time of the merger, Parent and the surviving corporation have agreed to maintain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of the Company and its subsidiaries as contained in the Company’s certificate of incorporation and by-laws in effect on the date of the merger agreement.

Parent has also agreed to either (a) maintain in effect for six years after the effective time of the merger directors’ and officers’ liability insurance on terms at least as favorable to these individuals as the Company’s existing directors’ and officers’ liability insurance policies with respect to events occurring at or prior to the effective time of the merger, provided that Parent is not obligated to pay more than 300% of the current annual premium paid by the Company for its directors’ and officers’ liability insurance policy, which we refer to as the Maximum Premium, or (b) purchase a “tail” policy and maintain such endorsement for six years after the closing of the

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merger. Notwithstanding the foregoing, the Company may, prior to the effective time of the merger, elect to purchase its own “tail” policy under its existing directors’ and officers’ liability insurance policy, as long as the tail policy does not cost more than the Maximum Premium.

For a more detailed description of these provisions of the merger agreement, please see the section of this proxy statement entitled “ The Merger Agreement—Additional Agreements of the Parties to the Merger Agreement—Indemnification ” on page 79.

Intent to Vote in Favor of the Merger

As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [—] shares of Company common stock, representing [—]% of the outstanding shares of Company common stock on the record date. The directors and executive officers have informed the Company that they currently intend to vote all of their shares of Company common stock “ FOR ” the proposal to adopt the merger agreement, “ FOR ” approval of the nonbinding advisory proposal regarding “golden parachute” compensation and “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

In addition, pursuant to (a) the company stockholders agreement entered into by Messrs. Meyers and Gelber with Parent, and (b) the parent stockholder agreement entered into by Parent with the Company, each applicable stockholder has agreed to vote all shares of Company common stock held by him or it in favor of the adoption of the merger agreement and the other transactions contemplated thereby, representing in the aggregate approximately 24% of the issued and outstanding shares of Company common stock, subject to specified exceptions. See “ Stockholders Agreements ” beginning on page 88. A copy of the full text of each of the company stockholders agreement and the parent stockholder agreement is attached hereto as Annex B and Annex C , respectively.

Golden Parachute Compensation

The following table sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for our named executive officers that is based on or otherwise relates to the merger, assuming that the merger was consummated on June 6, 2016, and that the named executive officer’s employment was terminated on the same day (a) in the case of each of Messrs. Meyers and Gelber, by the Company without “cause” or by the named executive officer for “good reason” (as such terms are defined in his employment agreement with Parent), (b) in the case of each of Messrs. Breitman and Heneghan and Ms. Murray, by the Company for a reason other than “cause” (as such term is defined in his or her letter agreement with the Company), and (c) in the case of Mr. Neely, by the Company without cause such that, in accordance with the Company’s past practice, the Company expects that it would provide Mr. Neely with severance benefits.

The table below describes the estimated potential payments to each of our named executive officers under the terms of their respective letter or employment agreements or, in the case of Mr. Neely, in accordance with the Company’s past practice, together with the value of the unvested restricted stock units that will be accelerated in accordance with the terms of the merger agreement. The amounts shown in the table do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would vest pursuant to their terms, on or prior to the effective date of the merger or the value of payments or benefits that are not based on or otherwise related to the merger.

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For purposes of calculating the potential payments set forth in the table below, we have assumed that (a) the merger shall become effective on, and the date of termination is, June 6, 2016, (b) the stock price is $5.05 per share, which is the per share merger consideration and (c) in the case of Messrs. Meyers and Gelber, the terms of their severance will be governed by their respective employment agreements with Parent, which agreements will become effective on the closing date of the merger. The amounts shown in the table are estimates only and are based on assumptions and information available to date. The actual amounts that may be paid upon an individual’s termination of employment can only be determined at the actual time of such termination.

The base salary, and, with respect to Mr. Gelber only, the annual incentive compensation, for each named executive officer other than Mr. Meyers effective as of the closing date of the merger is:

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Accounting Treatment

The merger will be accounted for as a “purchase transaction” for financial accounting purposes.

U.S. Federal Income Tax Consequences of the Merger

The following is a summary of the U.S. federal income tax consequences of the merger to “U.S. holders” and certain “non-U.S. holders” (both terms defined below) whose shares of our common stock are converted into the right to receive cash pursuant to the merger. This summary is for information purposes only and is not tax advice. It does not purport to consider all aspects of U.S. federal income taxation that might be relevant for holders of our common stock. This summary is based on the Internal Revenue Code of 1986, as amended, which we refer to as the Code, the applicable U.S. Treasury regulations promulgated under the Code, published rulings by the Internal Revenue Service, which we refer to as the IRS, and judicial authorities and administrative decisions, all as in effect as of the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change could alter the tax consequences to the holders described herein. This summary is not binding on the IRS or a court, and there can be no assurance that the tax consequences described in this summary will not be challenged by the IRS or that they would be sustained by a court if so challenged. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger.

For purposes of this summary, the term “U.S. holder” means a beneficial owner of shares of our common stock that is, for U.S. federal income tax purposes:

As used herein, a “non-U.S. holder” means a beneficial owner of shares of our common stock that is neither a U.S. holder nor an entity or arrangement treated as a partnership for U.S. federal income tax purposes.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. A partner of a partnership holding our common stock should consult the partner’s tax advisor regarding the U.S. federal income tax consequences of the merger to such partner.

This summary applies only to holders who hold shares of our common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address or consider all of the U.S. federal income tax consequences that may be applicable to holders of our common stock in light of their particular circumstances. For instance, this summary does not address the alternative minimum tax or the tax consequences to stockholders who validly exercise dissenters’ rights under the DGCL. In addition, this summary does not address the U.S. federal income tax consequences of the merger to holders who are subject to special treatment under U.S. federal income tax rules, including, for example, banks and other financial institutions; insurance companies; securities dealers or broker-dealers; mutual funds; traders in securities who elect to use the mark-to-market method of accounting; tax-exempt investors; S corporations; holders classified as partnerships or

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other flow-through entities under the Code; U.S. expatriates; holders who hold their shares of our common stock as part of a hedge, straddle, conversion transaction, or other integrated investment or constructive sale transaction; holders whose functional currency is not the U.S. dollar; holders who acquired their shares of our common stock through the exercise of Company stock options or otherwise as compensation; and, except to the extent described below, holders who actually or constructively own 5% or more of the outstanding shares of our common stock. In addition, this summary does not address the impact of the Medicare contribution tax, any aspects of foreign, state, local, estate, gift, or other tax laws (or any U.S. federal tax laws other than those pertaining to income tax) that may be applicable to a particular holder in connection with the merger.

Further, this summary does not address any tax consequences of the merger to holders of options or restricted stock units whose options or restricted stock units are cancelled in exchange for cash pursuant to the merger. Such option and restricted stock unit holders should consult their tax advisors regarding the tax consequences of the merger to them. Moreover, this summary does not discuss any other matters relating to equity compensation or benefit plans (including our 401(k) plan).

U.S. Holders

A U.S. holder’s receipt of the per share merger consideration in exchange for shares of our common stock will generally be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of common stock are converted into the right to receive cash pursuant to the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) with respect to such shares and the U.S. holder’s adjusted tax basis in such shares. A U.S. holder’s adjusted tax basis will generally equal the price the U.S. holder paid for such shares. The amount of gain or loss must be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered by the U.S. holder in the merger. Such gain or loss will generally be long-term capital gain or loss if the U.S. holder’s holding period for such shares is more than 12 months at the effective time of the merger. Long-term capital gains recognized by individual and certain other non-corporate U.S. holders are generally taxed at preferential U.S. federal income tax rates. A U.S. holder’s ability to deduct capital losses may be limited.

Non-U.S. Holders

Cash received in the merger by a non-U.S. holder generally will not be subject to U.S. withholding tax (other than potentially to backup withholding tax, as discussed below) and will not be subject to U.S. federal income tax unless:

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Non-U.S. holders should consult their own tax advisors regarding the tax consequences to them of the merger.

Backup Withholding and I n formation Reporting

A U.S. holder may be subject to backup withholding on all payments to which such U.S. holder is entitled in connection with the merger, unless the U.S. holder provides its correct taxpayer identification number and complies with applicable certification procedures or otherwise establishes an exemption from backup withholding. In addition, if the paying agent is not provided with a U.S. holder’s correct taxpayer identification number or other adequate basis for exemption, the U.S. holder may be subject to certain penalties imposed by the IRS. Each U.S. holder should complete and sign the IRS Form W-9 included as part of the letter of transmittal and timely return it to the paying agent in order to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the paying agent.

Certain non-U.S. holders may also be subject to backup withholding unless they establish an exemption from backup withholding in a manner satisfactory to the paying agent (such as by completing and signing an appropriate IRS Form W-8) and otherwise comply with the backup withholding rules. Non-U.S. holders should consult their own tax advisors regarding these matters.

Backup withholding is not an additional tax. Rather, any amounts withheld under the backup withholding rules will generally be allowable as a refund or credit against a holder’s U.S. federal income tax liability, provided that certain required information is timely furnished to the IRS.

Payments made pursuant to the merger will also be subject to information reporting unless an exemption applies.

This summary is provided for general information only and is not tax advice. The U.S. federal income tax consequences described above are not intended to constitute a complete description of all tax consequences relating to the merger. Because individual circumstances may differ, each stockholder should consult the stockholder’s tax advisor regarding the applicability of the rules discussed above to the stockholder and the particular tax effects to the stockholder of the merger in light of such stockholder’s particular circumstances and the application of state, local, foreign, estate, gift and other tax laws (or any U.S. federal tax laws other than those pertaining to income tax).

Regulatory Approvals

The merger is not subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and we are not aware of any other material regulatory consents that are required in connection with the merger. Under the terms of the merger agreement, the merger cannot be consummated if any governmental entity of competent jurisdiction has enacted, issued, promulgated, enforced or entered any order, executive order, stay, decree, judgment or injunction (preliminary or permanent) or statute, rule or regulation which has the effect of making the merger illegal or otherwise prohibiting consummation of the merger.

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