8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 28, 2011

The First Marblehead Corporation

(Exact name of registrant as specified in charter)

Delaware	001-31825	04-3295311
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

The Prudential Tower 800 Boylston Street, 34th Floor Boston, Massachusetts	02199-8157
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (800) 895-4283

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of New Chief Accounting Officer

On April 28, 2011, the Board of Directors of The First Marblehead Corporation (the “Corporation”) appointed Ryan R. Brenneman as the Corporation’s Chief Accounting Officer (principal accounting officer), succeeding Kenneth Klipper in the position.  Mr. Brenneman, who was also designated an executive officer of the Corporation, will serve as the Corporation’s Chief Accounting Officer until his successor has been duly elected and qualified or until his earlier resignation or removal.  Mr. Klipper continues to serve as the Corporation’s Chief Financial Officer.

Mr. Brenneman, 50, has served as a  Managing Director of the Corporation since March 2011.  From March 2009 to April 2010, Mr. Brenneman served as Controller, Multifamily Accounting for the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, a financial services company that provides liquidity to the U.S. housing market.  From March 2007 to March 2009, Mr. Brenneman served as Controller, Investments and Capital Markets Accounting, at Freddie Mac.  From August 2005 to March 2007, Mr. Brenneman was a Principal at Booz Allen Hamilton Inc., a strategy and systems consulting firm.  From 2003 to 2005, he held positions at Protiviti, Inc., a consulting and internal audit firm, including as a senior project manager for Sarbanes-Oxley Section 404 compliance, internal controls and IT improvement projects for Fortune 500 financial services companies.  Mr. Brenneman also previously served as the Chief Financial Officer of two privately-held technology companies, as an accountant for PricewaterhouseCoopers LLP, a registered public accounting firm, and as an associate in the tax departments of Sonnenschein, Nath & Rosenthal LLP and Baker & McKenzie, each of which are law firms. He currently serves as Adjunct Professor of Accounting and Business Law at The George Washington University School of Business.  Mr. Brenneman received an A.B. from Bowdoin College, a M.S. from the London School of Economics, a M. Acct. from The George Washington University and a J.D. from Georgetown University.  He is licensed in Washington, D.C. as a Certified Public Accountant.

Letter Agreement.  On January 28, 2011, the Corporation entered into a letter agreement with Mr. Brenneman (the “Letter Agreement”) in connection with his hiring as a Managing Director.  The Letter Agreement provides that Mr. Brenneman will receive an annual base salary of $260,000 and may be eligible for an annual discretionary bonus award of up to 50% of his base salary earned during the applicable performance year.

The Letter Agreement also provides that the Corporation will provide Mr. Brenneman with specified assistance in connection with his relocation from the Washington, D.C. area, including reimbursement of up to $25,000 in expenses related to moving and his search for permanent housing and up to $60,000 in real estate broker’s fees.  Mr. Brenneman would be required to repay the Corporation in full for such reimbursement if his employment were terminated voluntarily, or by the Corporation for “cause” as determined by the Corporation in its good faith discretion, prior to March 7, 2012.  In addition, for up to six months from his commencement of employment on March 7, 2011, the Corporation will reimburse Mr. Brenneman for pre-approved rental expenses in the Boston area as he searches for permanent housing as well as reasonable weekly travel expenses between Boston and Washington, D.C.

In the event Mr. Brenneman is involuntarily terminated by the Corporation without “Cause” (as defined in Section 9(d) of the Letter Agreement), the Corporation will provide Mr. Brenneman with continuation of salary and medical and dental benefits for a period of six months immediately following Mr. Brenneman’s termination date.

The foregoing summary of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Letter Agreement, a copy of which is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

RSU Agreement.  Pursuant to the terms of the Letter Agreement, on March 7, 2011, the Corporation granted Mr. Brenneman 25,000 restricted stock units (“RSUs”) under the Corporation’s 2003 stock incentive plan, as amended and restated (the “2003 Plan”).  Each RSU represents a contingent right to receive one share of the Corporation’s common stock on the applicable vesting date.  Under the restricted stock unit agreement dated March 7, 2011 between the Corporation and Mr. Brenneman (the “RSU Agreement”), the RSUs will vest in four annual installments beginning on March 7, 2012, the first anniversary of the date of grant, and ending on March 7, 2015.

Pursuant to the RSU Agreement, the vesting of the RSUs would accelerate in full if Mr. Brenneman’s employment with the Corporation is terminated:

· by reason of death or “disability,” as defined in the RSU Agreement; or

· for “Good Reason” by Mr. Brenneman or without “Cause” by the Corporation, as defined in Section 6 of the RSU Agreement, on or prior to the second anniversary of the consummation of a “Reorganization Event,” as defined in the 2003 Plan.

In addition, if Mr. Brenneman’s employment is terminated for a reason other than unsatisfactory job performance, willful misconduct, fraud, gross negligence, disobedience or dishonesty, in each case as determined by the Corporation, then the number of RSUs which will vest will be determined as though Mr. Brenneman’s employment had terminated on the day following the anniversary of the grant date that next follows the date of actual termination.

2

The summary of the RSU Agreement does not purport to be complete and is qualified in its entirety by reference to the form of RSU Agreement filed as Exhibit 10.9 to the Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, which is incorporated herein by reference.

Non-Competition Agreement.  Mr. Brenneman has entered into an invention, non-disclosure, non-competition and non-solicitation agreement with the Corporation dated March 7, 2011 (the “Non-Competition Agreement”) pursuant to which he has agreed, among other things, to refrain from competing with the Corporation or soliciting its employees for a period of one year after the termination of his employment for any reason.

The foregoing summary of the Non-Competition Agreement does not purport to be complete and is qualified in its entirety by reference to the Non-Competition Agreement, a copy of which is attached as Exhibit 99.2 to this current report on Form 8-K and is incorporated herein by reference.

No Family Relationships or Related Person Transactions.  Mr. Brenneman is not related by blood, marriage or adoption to any of the Corporation’s directors or other executive officers.  There are no related person transactions between the Corporation, on the one hand, and Mr. Brenneman or his immediate family members, on the other hand, reportable under Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended.

Item 9.01                      Financial Statements and Exhibits.

(d)           Exhibits.

99.1 Letter Agreement, dated January 28, 2011, between the Corporation and Ryan R. Brenneman

99.2 Invention, Non-Disclosure, Non-Competition and Non-Solicitation Agreement, dated March 7, 2011, between the Corporation and Ryan R. Brenneman

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE FIRST MARBLEHEAD CORPORATION
Date:  May 4, 2011	By:	/s/ Kenneth Klipper
		Kenneth Klipper Managing Director and Chief Financial Officer

4

EXHIBIT INDEX

Exhibit No.	Description of Exhibits
99.1	Letter Agreement, dated January 28, 2011, between the Corporation and Ryan R. Brenneman
99.2	Invention, Non-Disclosure, Non-Competition and Non-Solicitation Agreement,  dated March 7, 2011, between the Corporation and Ryan R. Brenneman

EX-99.1

Exhibit 99.1

January 28, 2011

Ryan Brenneman

[address]

Dear Ryan:

On behalf of The First Marblehead Corporation (the "Company"), I am very pleased to offer you employment with the Company.  The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer.

1.           Employment.  You will be employed, effective March 1, 2011, to serve on a full-time basis in the position of Managing Director, reporting to Kenneth Klipper, the Chief Financial Officer and Chief Accounting Officer of the Company. As a Managing Director, you will be responsible for managing the preparation of the Company’s consolidated financial statements. In addition, you will be responsible for other duties as may from time to time be assigned to you by the Company.

2.           Exclusivity.  In return for the compensation payments set forth in this letter, you agree to devote your full business time, best efforts, skill, knowledge, attention, and energies to the advancement of the Company's business and interests and to the performance of your duties and responsibilities as an employee of the Company and not to engage in any other business activities without prior approval from the Company.

3.           Compensation.  Your annualized base salary will be $260,000.00, less all applicable federal, state and local taxes and withholdings, to be paid in semi-monthly installments in accordance with the Company's standard payroll practices.  Such base salary may be adjusted from time to time in accordance with normal business practices and in the sole discretion of the Company.

4.           Bonus.  In addition to your base compensation, you may be eligible for an annual discretionary bonus award of up to 50% of your base salary earned during the bonus year, subject to the terms of the applicable bonus plan.  The bonus award, if any, will be based on both individual and the Company’s performance, and shall be determined by the Company in its sole discretion.  You must be an active employee of the Company on the date the bonus is distributed in order to be eligible for a bonus award because it also serves as an incentive to remain employed by the Company.

5.           Benefits.  You shall be eligible to participate in any and all benefit programs that the Company establishes and makes generally available to its employees from time to time, provided that you are eligible under (and subject to all provisions of) the plan documents governing those programs.  Such benefits may include participation in group medical and dental insurance programs, term life insurance, long-term disability insurance, paid time off and participation in a 401(k) plan.  The benefits made available by the Company, and the rules, terms, and conditions for participation in such benefit plans, may be changed by the Company at any time and from time to time without advance notice.  Enclosed is a comprehensive benefits summary.

6.           Equity. You will also be eligible to receive awards under the Company’s long-term incentive plans. It is our intention to initially award you 25,000 restricted stock units, subject to board approval and to the terms and conditions of the Company’s 2003 stock incentive plan, as amended, and a restricted stock unit agreement between the Company and you. Each restricted stock unit will represent the right to receive one share of common stock of the Company upon vesting. Your initial grant of restricted stock units is expected to vest ratably over four years, beginning on the first anniversary of the grant date. Your restricted stock unit agreement and plan documents will be provided to you following your start date.

7.           Relocation Assistance.   To assist you with your relocation to the Boston area, the Company will provide you with the following relocation assistance (which may constitute taxable income to you):

                      a.           The Company will reimburse you up to $20,000.00 for third-party moving expenses actually and reasonably incurred by you, provided that you furnish receipts satisfactory to the Company for any such expenses.  In addition, the Company will reimburse you up to $5,000.00 in travel and other expenses related to your search for permanent housing, provided that you furnish receipts satisfactory to the Company for any such expenses.  To the extent the reimbursement of any expenses pursuant to this Section 7(a) qualifies for tax-free status, the Company will treat such reimbursement as tax-free.

                      b.           The Company will reimburse you up to $60,000.00 for third-party broker’s fees actually and reasonably incurred by you and due upon the sale of your current house, provided that you furnish receipts or other documentation satisfactory to the Company for any such broker’s fees. To the extent the reimbursement of any broker’s fees qualifies for tax-free status, the Company will treat such reimbursement as tax-free.

                      c.           The Company will reimburse you for rental expenses actually and reasonably incurred by you for temporary housing as you search for permanent housing.  The Company will provide such reimbursement for up to six months immediately following your start date.  The amount of such reimbursement must be pre-approved by the Company. You will be required to provide documentation acceptable to the Company in connection with reimbursement for the temporary housing you select.

                      d.           The Company will reimburse you for expenses actually and reasonably incurred by you for weekly travel between the Washington, D.C. area and the Boston area until the earlier of: (i) six months immediately following your start date or (ii) your permanent relocation to the Boston area. You will be required to provide documentation acceptable to the Company in connection with reimbursement for such travel expenses.

e.           You agree to repay the Company in full for any moving, travel and other expenses incurred pursuant to subpart (a) above, and any broker’s fees incurred pursuant to subpart (b) above, reimbursed to you by the Company, if you leave your employment voluntarily or are involuntarily terminated for “cause”, prior to the first anniversary of your start date.  A determination of whether “cause” exists will be made by the Company in its good faith discretion and any such finding will be binding and conclusive. In the event that you fail to timely repay any portion of the moving expenses and broker’s fee you agree that (i) the Company will have all the rights of a creditor in seeking to obtain repayment of any unpaid amount; (ii) the Company will have the right to deduct or set-off the amount of such unpaid amount from any cash compensation otherwise payable to you (to the extent permitted by law); and (iii) you will reimburse the Company for any and all damages, losses, costs, and expenses (including, but not limited to, attorneys' fees, court costs, and collection costs) incurred or sustained by the Company as a result of your failure to timely repay such amounts.

f.           All reimbursements and in-kind benefits provided under this offer letter shall be made or provided in accordance with the requirements of Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”) to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this letter), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

8.           At-Will Employment.  If you accept the Company's offer of employment, your employment with the Company will be on an "at-will" basis, meaning that either you or the Company may terminate the employment relationship at any time, for any reason or no reason, with or without cause and with or without notice.  Although your job duties, title, compensation and benefits, as well as the Company's personnel policies and procedures, may change from time to time, the "at-will" nature of your employment may only be changed by a written agreement signed by you and the Managing Director of Human Resources which expressly states the intention to modify the at-will nature of your employment.

9.           Severance Benefits.

a.           In the event that your employment is involuntarily terminated by the Company without Cause (as defined below) the Company will pay you severance in the form of continuation of your annual base salary, less all lawful deductions, for a period of six months commencing on the Payment Date (as defined below) (the “Severance Pay Period”).  Payments will be made consistent with the Company’s usual payroll practices.

b.           In the event that your employment is involuntarily terminated by the Company without Cause, the Company will provide you with the continuations of medical and dental benefits (at then active rates) during the Severance Pay Period, provided that you properly elect to continue your health and dental coverage under COBRA.

2

c.           Except as otherwise set forth in this Section 9, the Release or any restricted stock unit or stock option agreement between the Company and you, you shall not be eligible to participate in any other severance program, plan or policy of the Company, and you waive any right to receive any severance monies or benefits other than those set forth in this Section 9.

d.           The term “Cause” shall mean, as determined by the Company in its good faith discretion, (i) the willful failure by you to perform your employment duties that has continued more than thirty days following written notice from the Company of such non-performance, (ii) any act of dishonesty, fraud, willful misconduct, gross negligence or disobedience on your part in the performance of your employment duties, or (iii) your conviction of a felony involving moral turpitude.

e.           The payment of any severance amounts pursuant to this offer letter shall be subject to the terms and conditions set forth in Exhibit A.  In addition, any distribution, acceleration, vesting or payment of benefits to you pursuant to this offer letter or otherwise, is and shall be subject to and conditioned upon prior compliance with all applicable regulatory provisions and requirements, including without limitation any applicable approval requirements of the U.S. Office of Thrift Supervision (or any successor thereof) and the Federal Deposit Insurance Corporation.  Should any provision of this offer letter be declared or be determined by the U.S. Office of Thrift Supervision (or any successor thereof), the Federal Deposit Insurance Corporation or any court of competent jurisdiction to be illegal, invalid, impermissible, void or contrary to public policy or safe and sound banking practices, the validity of the remaining parts, terms or provisions shall not be affected thereby and said part, term or provision declared or determined to be illegal, invalid, impermissible, void or contrary to public policy or safe and sound banking practices shall be deemed not to be a part of this offer letter.

f.           Notwithstanding anything herein to the contrary, no severance or benefits shall be paid or provided under this offer letter unless you first execute and do not revoke a waiver and release of claims in a form satisfactory to the Company (the “Release”) within 60 days following the date of termination, which provides for a release of any and all claims that you have or might have against the Company.  The severance payments shall be paid or commence on the first payroll period following the date the Release becomes effective (the “Payment Date”).  Notwithstanding the foregoing, if the 60th day following the date of termination occurs in the calendar year following the termination, then the Payment Date shall be no earlier than January 1 of such subsequent calendar year.

10.           Invention, Non-Disclosure, Non-Solicitation and Non-Compete Agreement.  As a condition of your employment, you will be required to execute the Company's Invention, Non-Disclosure, Non-Solicitation and Non-Compete Agreement, a copy of which is enclosed with this offer letter.

11.           Proof of Legal Right to Work.  For purposes of federal immigration law, you will be required to provide the Company with documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to the Company within three (3) business days of your date of hire, or our employment relationship with you may be terminated.  You may need to obtain a work visa in order to be eligible to work in the United States.  If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.

12.           Background and Reference Checks.  The Company’s offer of at-will employment is contingent upon your authorization and successful completion of background and reference checks.  You will be required to execute authorizations for the Company to obtain consumer reports and/or investigative consumer reports and use them in conducting background checks as a condition to your employment. The Company may obtain background reports both pre-employment and from time to time during your employment with the Company, as determined by the Company in its discretion to be necessary, appropriate or desirable.

13.           Company Policies and Procedures.  As an employee of the Company, you will be required to comply with all Company policies and procedures.  Violations of the Company's policies may lead to immediate termination of your employment.  Further, the Company's premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time.  Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.

3

14.           Other Agreements and Governing Law.  You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.  Please note that this offer letter is your formal offer of employment and supersedes any and all prior or simultaneous contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company.  The resolution of any disputes under this letter will be governed by Massachusetts law. Any claims or causes of action which arise out of this offer letter or your employment shall be instituted and litigated before a judge in a court of competent jurisdiction located within the Commonwealth of Massachusetts.  You expressly agree to waive your right to a jury trial in any claim initiated by you, on your behalf, or brought against you, based upon this offer letter or otherwise based upon your employment with the Company or termination thereof

If this letter correctly sets forth the initial terms under which you will be employed by the Company, please sign the enclosed duplicate of this letter in the space provided below along with the attached forms, and return them to me in the attached envelope.

Sincerely,

/s/ Jo-Ann Burnham

Jo-Ann Burnham

Managing Director, Human Resources

Enclosures

My signature below indicates my acceptance of this offer of at-will employment from The First Marblehead Corporation and that I understand the terms of our employment relationship.  I further acknowledge that this letter sets forth the Company’s entire offer of employment, and that I have not relied upon any other written or verbal discussions concerning employment with the Company.

  /s/ Ryan Brenneman                                                        02/01/2011                                           

Ryan Brenneman                                                                                              Date

4

Exhibit A

Compliance with Section 409A

Subject to the provisions in this Exhibit A, any severance payments or benefits under your offer letter shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the date of termination of your employment.  The following rules shall apply with respect to distribution of the severance payments and benefits, if any, to be provided to you under your offer letter.

1.           It is intended that each installment of the severance payments and benefits provided under your offer letter shall be treated as a separate “payment” for purposes of Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”).  Neither you nor the Company shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

2.           If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments and benefits shall be made on the dates and terms set forth in your offer letter.

3.           If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:

a.           Each installment of the severance payments and benefits due under your offer letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined in Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be payable on the dates and terms set forth in your offer letter; and

b.            Each installment of the severance payments and benefits due under your offer letter that is not described in paragraph 3(a) above and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of severance payments and benefits if and to the maximum extent that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service).  Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of the second taxable year following the taxable year in which the separation from service occurs.

4.           The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this paragraph 4, “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-1(h)(3).

5.           All reimbursements and in-kind benefits provided under your offer letter shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in your offer letter), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

6.           Notwithstanding anything herein to the contrary, the Company shall have no liability to you or to any other person if the payments and benefits provided in your offer letter that are intended to be exempt from or compliant with Section 409A are not so exempt or compliant.

EX-99.2

Exhibit 99.2

 INVENTION, NON-DISCLOSURE, NON-COMPETITION AND NON-SOLICITATION AGREEMENT

This Agreement is made this 7th day of March, 2011 between The First Marblehead Corporation, a Delaware corporation (hereinafter referred to collectively with its direct and indirect subsidiaries and affiliates as the “Company”), and Ryan Brenneman (the “Employee”).

In consideration of the initial and continued employment of the Employee by the Company, the receipt and sufficiency of which is hereby acknowledged by the Employee, the Company and the Employee agree as follows:

1. Confidential Information

a)   The Employee agrees that his or her employment with the Company has created a relationship of trust and confidence between the Employee and the Company, and the protection of the Company’s proprietary and Confidential Information (as defined in Section 1(b) below) and its goodwill is critical to the Company’s survival and success.  The Employee further represents and agrees that he/she (i) has held and will hold all Confidential Information in strict trust and confidence, and (ii) has not disclosed or used, and will not disclose or use at any time, any Confidential Information without the prior written consent of an authorized officer of the Company, except to the extent necessary in the ordinary course of performing his/her duties as an employee of the Company and solely in furtherance of the interests of the Company.

b)   For purposes of this Agreement, the term “Confidential Information” means all information, knowledge or data, in any form or media, belonging or relating to the Company (including securitization trusts) or clients of the Company, which is of value to the Company and the disclosure of which could result in competitive or other disadvantage to the Company. Confidential Information is and shall be the exclusive property of the Company and includes, but is not limited to: (i) the Company’s documents, records, communications, reports, forecasts, projections, product and service specifications, statistical models, formulae and algorithms, tools, designs, pricing methods and policies, processes, methods of operation, techniques, arrangements, procedures, tools, current and planned distribution methods and processes, strategic initiatives, business opportunities and strategies, creative plans and strategies, personnel information, policies, trade secrets, ideas, concepts, know-how, intangible rights, inventions, research and development, source code, systems, architecture, computer programs and database technologies; (ii) information belonging or relating to the Company’s customers, clients, service providers, consultants and other business relationships, including the existence or status of, and any non-public information concerning, discussions between the Company and clients or prospective clients; (iii) the Company’s non-public business, operational or financial results, including the performance of any loan portfolio facilitated by the Company, product development initiatives, expansion plans and revenue and expense information; and (iv) information belonging or relating to any third party.  In addition, the term Confidential Information includes any notes, analyses, compilations, abstracts, studies, interpretations, memoranda or other documents prepared by the Employee that contain, reflect or are based upon, in whole or in part, any Confidential Information.  Confidential Information includes information developed by the Employee in the course of his/her employment with the Company, as well as other information to which the Employee has or will have access during the period of his/her employment with the Company, including the confidential information of others with whom the Company has a business relationship.  The absence of any marking or statement that any particular information is Confidential Information will not affect its status as Confidential Information.

c)   Confidential Information will not include information which is or becomes generally known to the public through no fault of any person.  In addition, nothing in this Agreement is intended to or shall preclude the Employee from providing truthful testimony or providing truthful information in response to a valid subpoena, court order or request of any federal, state or local authority, quasi-regulatory or self-governing authority, provided, to the extent permitted by law, the Employee has provided to the Company as much advance notice as practicable of any such compelled disclosure.  The Employee further agrees to cooperate with the Company, at the Company’s cost, to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information by such governing authority.

d)   The Employee agrees that all materials, in any form or media, that contain, reflect or are based upon, in whole or in part, Confidential Information, whether created by the Employee or others, which have or will come into his/her custody or possession, are and will be the exclusive property of the Company to be used by the Employee only in the performance of his/her duties for the Company. All such tangible and intangible materials, and all copies, abstracts, compilations or reproductions thereof, and all property and equipment of the Company in the custody or possession of the Employee will be left intact by the Employee and delivered to the Company, upon the earlier of (i) a request by the Company or (ii) termination of his/her employment, whether voluntary or involuntary. After such delivery, the Employee will not retain any such tangible or intangible materials, or copies, abstracts, compilations or reproductions thereof, or any such property. For the avoidance of doubt, in connection with the voluntary or involuntary termination of his/her employment, the Employee agrees to leave intact all such tangible and intangible materials, including electronic documents of the Company, except in accordance with the Company’s document retention policies.

e)   The Employee agrees that his/her obligations not to disclose or use Confidential Information as set forth in Sections 1(a) and (d) above, and his/her obligations to return and leave intact tangible and intangible materials as set forth in Section 1(d) above, also extends to such types of information, materials and tangible property of clients or customers of the Company or other third parties who may have disclosed or entrusted the same to the Company or to the Employee.

2.           Developments

a)   All Developments (as defined below) that are made, conceived, reduced to practice, created, written, designed or developed by the Employee or under his/her direction or jointly with others, whether or not during normal working hours or on the premises of the Company, (i) during the period of the Employee’s employment with the Company if related to the business or research and development conducted or planned to be conducted by the Company and (ii) after the period of the Employee’s employment with the Company if resulting or directly derived from Confidential Information, will be the sole property of the Company.  For purposes of this Agreement, the term “Developments” means any inventions, discoveries, computer programs, source code, data, technology, designs, statistical models, formulate and algorithms, tools, innovations, improvements, methods, developments and works of authorship, whether or not patentable and whether or not copyrightable.

b)   The Employee will make full and prompt disclosure to the Company of all Developments and will maintain adequate and current written records (in the form of notes, memoranda and as may be specified by the Company) to document the conception and/or first actual reduction to practice of any Development.  The Employee will not disclose any Development to any third party without the express written permission of an authorized officer of the Company, and all Developments will be treated by the Employee as Confidential Information.  Such written records will be available to and remain the sole property of the Company at all times.

c)   The Employee agrees to assign and does hereby assign to the Company (or any person or entity designated by the Company) all of his/her right, title and interest in and to all Developments and all related patents, copyrights, trademarks, trade names, and other industrial and intellectual property rights, and all applications therefor, in the United States and elsewhere. However, this Section 2(c) will not apply to Developments which do not relate to the business or research and development conducted or planned to be conducted by the Company at the time such Development is created, made, conceived or reduced to practice and which are made and conceived by the Employee not during normal working hours, not on the Company’s premises and not using the Company’s tools, devices, equipment or Confidential Information. The Employee understands that, to the extent this Agreement will be construed in accordance with the laws of any state which precludes a requirement in an employee agreement to assign certain classes of inventions made by an employee, this Section 2(c) will be interpreted not to apply to any invention which a court rules and/or the Company agrees falls within such classes.

d)   The Employee agrees to cooperate fully with the Company, both during and after his/her employment with the Company, with respect to the procurement, maintenance and enforcement of patents, copyrights, trademarks, trade names and other industrial and intellectual property rights (both in the United States and foreign countries) relating to Developments. The Employee hereby appoints any officer of the Company as the Employee’s duly authorized attorney to execute, file, prosecute and protect any Development and related patent, copyright, trademark, trade name and other industrial and intellectual property right, and applications therefor, before any government agency, court or authority.  Upon the request of the Company, the Employee will execute such further assignments, documents and other instruments as may be necessary, desirable or appropriate to fully and completely assign all Developments to the Company and assist the Company in applying for, obtaining and enforcing patents, copyrights or other rights in the United States and in any foreign jurisdiction with respect to any Development.  The Employee also hereby waives all claims to moral rights in any Developments.

2

e)   The Employee acknowledges that the Company from time to time may have agreements with other persons or with the United States Government, or agencies thereof, which impose obligations or restrictions on the Company regarding inventions made during the course of work under such agreements or regarding the confidential nature of such work.  The Employee agrees to be bound by all such obligations and restrictions which are made known to the Employee and to take all action necessary to discharge the obligations of the Company under such agreements.

3.           Other Agreements

a)   The Employee agrees to devote his/her best efforts to the services of the Company in such capacity as the Company from time to time shall direct and agrees to comply with the Company’s rules, policies, and practices at all times.

b)   The Employee hereby represents that, except as the Employee has disclosed in writing to the Company, the Employee is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of his/her employment with the Company, to refrain from competing, directly or indirectly, with the business of such previous employer or any other party or to refrain from soliciting employees, customers or suppliers of such previous employer or other party.  The Employee further represents that his/her performance of all the terms of this Agreement and the performance of his/her duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party to which the Employee is a party (including without limitation any nondisclosure or non-competition agreement), and that the Employee will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or other third party.

c)   The Employee agrees that for a period of one year after the termination or cessation of his/her employment for any reason, whether voluntary or involuntary, the Employee will inform his/her potential or actual future employers of his/her obligations under this Agreement, including Sections 1 and 4.

d)   The Employee specifically authorizes the Company to notify any subsequent employers or prospective employers of Employee of the restrictions on Employee contained in this Agreement and of any concerns the Company may have about actual or possible conduct by Employee that may be in breach of this Agreement.

e)   In the event that the Employee believes that employment otherwise in violation of this Agreement would not harm the Company’s legitimate business interests, the Employee may request the Company to waive certain of the restrictions contained in this Agreement.  Any such request shall be made in writing to the Company’s Managing Director, Human Resources and shall identify the business with whom the Employee seeks to associate and describe the duties that the Employee seeks to perform.  The Company has the sole discretion whether to grant such a waiver and no waiver of any restrictions under this Agreement shall be effective unless in writing and signed by the Managing Director, Human Resources of the Company.

4.           Non-Competition and Non-Solicitation

While the Employee is employed by the Company and for a period of one year after the termination or cessation of such employment for any reason, whether voluntary or involuntary, the Employee will not directly or indirectly:

a)   engage or assist others in engaging in any business or enterprise in the United States (whether as owner, partner, joint venturer, officer, director, employee, consultant, contractor, investor, lender or otherwise, except as the holder of not more than 1% of the outstanding stock of a publicly-held company) that competes or intends to compete in any way with the department, division or unit of the Company (i) for which the Employee  worked, (ii) for which the Employee performed services, or (iii) about which the Employee had access to Confidential Information in the course of his/her employment with the Company;

b)   on his/her own behalf or on behalf of any third person or entity, and whether through his/her own efforts or by assisting any other person or entity (including, any person employed by or associated with any entity with whom the Employee becomes employed or associated) (i) participate in the solicitation for employment, attempt to hire or hiring of any person or entity employed or otherwise retained or engaged by the Company, (ii) hire, employ or engage any person or entity employed or otherwise retained or engaged by the Company or (iii) encourage or induce any person employed or otherwise retained or engaged by the Company to terminate his/her employment, consultancy or other relationship with the Company; provided, that this Section 4(b) will not apply to the solicitation, hiring or engagement of any person or entity whose employment or engagement with the Company has been terminated for a period of six months or longer; and

3

c)   on his/her own behalf or on behalf of any third person or entity, and whether through his/her own efforts or by assisting any other person or entity (including, any person employed by or associated with any entity with whom the Employee becomes employed or associated) induce or attempt to induce (including, without limitation, by soliciting business from or performing services for), any customer, client, supplier, consultant, licensee or business relation of the Company (i) to cease doing business with the Company, (ii) to reduce the level of business he/she/it performs with the Company, or (iii) to divert marketing or other resources away from the Company.

In addition, for a period of one year after the termination or cessation of the Employee’s employment with the Company for any reason, whether voluntary or involuntary, the Employee will not directly or indirectly solicit or accept any financial services-related business (other than personal or household financial services) from (i) any person or entity that was a client or customer of the Company at the date of any cessation or termination of the Employee’s employment, if the Employee was introduced to or interacted with such client or customer regarding the Company’s business or (ii) any person or entity that was a prospect of the Company at any time during the 12 months immediately prior to the date of any cessation or termination of the Employee’s employment, if the Employee directly solicited such prospect or if the Employee directly or indirectly, in whole or in part, supervised or participated in solicitation activities related to such prospect.

5.           No Employment Contract

The Employee understands that this Agreement does not constitute a contract of employment and does not alter the at-will nature of the Employee’s employment with the Company or otherwise imply that his/her employment will continue for any period of time.  The Employee understands that both the Employee and the Company may end the employment relationship at any time and for any reason.

6.           Miscellaneous

a)   The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement.

b)   If the Employee violates the provisions of Section 4, the Employee will continue to be bound by the restrictions set forth in Section 4 until a period of one year has expired without any violation of such provisions.

c)   If any restriction set forth in Section 4 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it will be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

d)   This Agreement supersedes all prior agreements, written or oral, between the Employee and the Company relating to the subject matter of this Agreement. This Agreement may not be modified, changed or discharged in whole or in part, except by an agreement in writing signed by the Employee and the Company. The Employee agrees that any change or changes in his/her duties, authority, salary or compensation after the signing of this Agreement will not affect the validity or scope of this Agreement.

e)   This Agreement will be binding upon the Employee’s heirs, executors and administrators and will inure to the benefit of the Company and its successors and assigns.

f)   No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

g)   The Employee agrees that the obligations and restrictions contained in this Agreement, including the covenants contained in Sections 1, 2 and 4, are necessary for the protection of the business and goodwill of the Company and are considered by the Employee to be reasonable for such purpose. The Employee agrees that any breach or threatened breach of this Agreement by the Employee is likely to cause the Company not only financial harm, but substantial and irrevocable damage which is difficult to measure and for which money damages alone will not provide an adequate remedy. Therefore, in the event of any such breach or threatened breach, the Employee agrees that the Company, in addition to such other remedies which may be available, will be entitled to enforce the specific performance of the provisions of this Agreement by the Employee and will have the right to both temporary and permanent injunctive relief (to the extent permitted by law), without the necessity of proving actual damages or posting any surety or bond, from a court restraining such a breach or threatened breach, and the Employee hereby waives the adequacy of a remedy at law as a defense to such relief.  If Employee breaches any of the covenants set forth in this Agreement, he/she agrees to pay all reasonable costs (including attorneys’ fees) incurred by the Company in establishing that breach and in otherwise enforcing any of the covenants or provisions of this Agreement

4

h)   This Agreement is governed by and will be construed as a sealed instrument under and in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflicts of laws provisions thereof).  Any action, suit, or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement will be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal court located within Massachusetts), and the Company and the Employee each consents to the jurisdiction of such a court.  Both the Employee and the Company waive the right to a trial by jury with respect to any matter arising under or relating to any provision of this Agreement or otherwise related to the Employee’s employment with the Company or the termination of the Employee’s employment with the Company.

THE EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

THE FIRST MARBLEHEAD CORPORATION

By:          /s/ Jo-Ann Burnham                             

Jo-Ann Burnham

Managing Director, Human Resources

EMPLOYEE

     /s/ Ryan Brenneman                             

Name: Ryan R. Brenneman

Date: 03/07/2011

5