Exhibit 10.3


THIS EMPLOYMENT
AGREEMENT AND MUTUAL GENERAL RELEASE (the “Agreement”), made as of November 1,
2006, is entered into by The First Marblehead Corporation, a Delaware corporation with its
principal place of business at The Prudential Tower, 800 Boylston Street,
Boston, MA 02199-8157 (the “Company”), and Donald R. Peck, residing
at [intentionally omitted] (the “Employee”).


The Company
desires to continue to employ the Employee in the capacity set forth below, and
the Employee desires to be so employed by the Company. In consideration of the
mutual covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:


1.                                       Term
of Employment.  The Company hereby
agrees to employ the Employee, and the Employee hereby accepts employment with
the Company, upon the terms set forth in this Agreement, for the period
commencing on November 1, 2006 (the “Commencement Date”) and ending on January
2, 2007 (such period constitutes the “Employment Period”), unless sooner
terminated in accordance with the provisions of Section 6.


2.                                       Title;
Capacity.  The Employee shall serve as
Senior Advisor to the Company’s Chief Executive Officer (the “CEO”). The
Employee shall provide services in connection with transition of the
responsibilities of the Chief Financial Officer to his successor, and shall
work under the supervision of, and shall have such authority as is delegated to
him by, the CEO.


The Employee
hereby accepts such employment and agrees to undertake such duties and
responsibilities inherent in the position of Senior Advisor and such related
duties and responsibilities as the CEO shall from time to time reasonably
assign to him. The Employee 










 



agrees to devote such business time, attention and energies to the
business and interests of the Company during the Employment Period as necessary
to perform his obligations.


The Employee
agrees to abide by the written rules, regulations, instructions, personnel
practices and policies of the Company generally applicable to senior level
executives and any changes therein which may be adopted from time to time by
the Company. The Employee acknowledges that he has been made aware that the
Company’s written rules and policies are available on line and may be accessed
by him now or at any time during the Employment Term.


3.                                       Invention,
Non-Disclosure, Non-Competition and Non-Solicitation Agreement.  The Employee will remain bound by the terms
of the Invention, Non-Disclosure, Non-Competition and Non-Solicitation
Agreement signed on September 12, 2005 (the “Non-Competition Agreement”). The
Non-Competition Agreement is hereby amended to provide that the restrictions
set forth in Section 4 thereof shall remain in effect until December 31, 2007.


4.                                       Exclusivity.  The Company and the Employee agree that the
Employee’s position as Senior Advisor to the CEO shall be exclusive in nature.
Specifically, during the Employment Period the Employee shall not be permitted
to provide services, whether as an employee, independent contractor or
otherwise, for entities, employers or individuals other than the Company.


5.                                       Compensation
and Benefits.


5.1                                 Salary.  The Company shall pay the Employee a semi-monthly
salary of $17,708.34 for the Employment Period, to begin on the Commencement
Date. On the last day of the Employment Period, the Company shall pay the Employee
a lump sum payment equal to six months of salary subject to adjustment for
applicable taxes (the “Final Payment”).



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5.2                                 Fringe
Benefits. During the Employment Period, the Employee shall be entitled to
all fringe benefits generally available to the Company’s senior executive
officers. Effective as of the end of the Employment Period, the Employee shall
be considered to have elected to continue receiving group medical insurance
pursuant to the federal “COBRA” law, 29 U.S.C. et seq. During the six month
period following the end of the Employment Period, the Company shall pay the
entire premium for such coverage as long as and to the extent the Employee
remains eligible for COBRA continuation. The Company will provide the Employee
materials explaining COBRA benefits. The Company shall provide to the Employee
at the Company’s expense employment transition services through Keystone
Partners, or through a provider of the Employee’s choice. Should the Employee
choose an alternate provider, the Company shall pay up to $10,000 toward such
alternate provider’s fee. Except as provided in this Section 5, the Employee
shall not be entitled to participate in any other benefit or bonus programs
sponsored or made available by the Company following the Employment Period.


5.3                                 Reimbursement
of Expenses.  The Company shall
reimburse the Employee for all reasonable travel, entertainment and other
expenses incurred or paid by the Employee in connection with, or related to,
the performance of his duties, responsibilities or services under this
Agreement, upon presentation by the Employee of documentation, expense statements,
vouchers and/or such other supporting information as the Company may request,
provided, however, that the amount available for such travel, entertainment and
other expenses may be fixed in advance by the Company.


5.4                                 Stock
Options.  Any stock options
previously granted by the Company to the Employee prior to November 1, 2006
shall be governed by the Stock Option Plan or individual Stock Option Agreement
under which such stock options were granted, provided,



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however, that Section 2.01(v) of the Grant of
Incentive Stock Option dated April 3, 2003 (the “Option Agreement”) between the
Company and the Employee is hereby amended to provide that the Employee may
exercise the Option (as defined in the Option Agreement) with respect to 15,000
shares of Common Stock scheduled to vest on the fourth anniversary of the Date
of Grant (such number of shares reflecting all stock splits and dividends since
April 3, 2003) anytime from the date hereof until the date determined in
accordance with the provisions of Section 3.02 of the Option Agreement and
shall be considered fully vested as of the date hereof for purposes of Section
3.02 of the Option Agreement. The 15,000 shares referred to in the preceding
sentence shall be adjusted to reflect any stock splits and stock dividends with
a record date after the date hereof and before the exercise of the Option. It
is expressly understood by the parties that this Agreement shall have no effect
on any vested and unexercised options provided under the Option Agreement
except for those described in Section 2.01(v) of the Option Agreement.


6.                                       Employment
Termination.  The employment of the
Employee by the Company pursuant to this Agreement shall terminate upon the
occurrence of any of the following:


6.1                                 At
the expiration of the Employment Period, at which time the Employee
acknowledges that the Company will have no obligation to employ him in any
capacity whatsoever;


6.2                                 The
death of the Employee; or


6.3                                 At
the election of the Employee upon not less than ten (10) days’ prior written
notice of termination.


7.                                       Effect
of Termination.


7.1                                 Termination
at the Expiration of the Employment Period, or at the Election of the Employee.
Upon termination at the expiration of the Employment Period, the



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Company shall
pay to the Employee the compensation and benefits otherwise payable to him
under Section 5 including any accrued but unused vacation time through December
31, 2006, and the Final Payment. Upon termination at the election of the
Employee pursuant to Section 6.3, the Company shall pay to the Employee the
compensation and benefits otherwise payable to him under Section 5 including
any accrued but unused vacation time through the last day of his actual
employment by the Company, and the Final Payment.


7.2                                 Termination
for Death .  If the Employee’s
employment is terminated by death, the Company shall pay to the estate of the
Employee the compensation which would otherwise be payable to the Employee up
to the end of the month in which the termination of his employment because of death
occurs, and the Final Payment.


7.3                                 Continuing
Obligations.  The Non-Competition
Agreement shall survive the termination of the Employee’s employment pursuant
to this Agreement.


8.                                       Litigation Cooperation.  The
Employee agrees to continue to serve the Company
as a litigation consultant and in connection therewith, to cooperate with the
Company in (i) the defense or prosecution of any claims or actions involving
matters in which he was involved while employed by the Company or about which
he has knowledge, which already have been brought or which may be brought in
the future against or on behalf of the Company, and (ii) responding to,
cooperating with, or contesting any governmental audit, inspection, inquiry,
proceeding or investigation, which relate to events or occurrences that
transpired during his employment with the



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Company. The Employee’s
cooperation in connection with such claims or actions shall include, without
implication of limitation: promptly notifying the Company in writing of any
subpoena, interview, investigation, request for information, or other material
contact concerning events or occurrences that transpired during his employment
with the Company that relate to litigation or imply that it may relate to
litigation, consulting with counsel for the Company to prepare for discovery or
trial; to testify truthfully as a witness when reasonably requested and at
reasonable times requested by the Company; to meet with counsel or other
delegated representatives of the Company; to assist in the preparation of
responses to and to cooperate with the Company’s processing of governmental
audits, inspections, inquiries, proceedings or investigations related to events
or occurrences that transpired during his employment with the Company. The
Company agrees that it will attempt to accommodate the Employee’s work schedule
when requesting his participation in the above activities and to reimburse the
Employee for any reasonable out-of-pocket expenses, including reasonable
attorneys’ fees, that he incurs in connection with such cooperation, subject to reasonable documentation. The Company will exercise
its rights under this Section so as not to interfere unreasonably with the
Employee’s personal schedule or ability to engage in gainful employment.


9.                                       Releases


9.1                                 Release
by the Employee.  The Employee hereby
fully, forever, irrevocably and unconditionally releases, remises and
discharges the Company, its officers, directors, stockholders, corporate
affiliates, agents and employees (each in their individual and corporate capacities)
(hereinafter the “Released Parties”) from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights, debts, sums of
money, costs, accounts, reckonings, covenants, contracts, agreements, promises,
doings, omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys’ fees and costs), of every kind and nature which he ever
had or now has against the Company, its officers, directors, stockholders,
corporate affiliates, agents and employees in such capacities, including, but
not limited to, all claims arising out of his employment, all employment
discrimination claims under



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Title VII of the Civil Rights Act of 1964,42 U.S.C.
§2000e et seq., the Age Discrimination in
Employment Act, 29 U.S.C., §621 et seq.,
the Americans With Disabilities Act, 42 U.S.C., §12101 et seq., the Massachusetts Fair Employment Practices Act, M.G.L.
c.151 B, § 1 et seq., all claims arising
out of the Massachusetts Civil Rights Act, M.G.L. c.12 §§11H and 11I, the Massachusetts
Equal Rights Act, c.93 §102 and 103 and M.G.L. c.214, §1C , all damages arising
out of all employment discrimination claims, wrongful discharge claims or other
common law claims and damages including but not limited to, actions in tort,
defamation and breach of contract; all claims to any non-vested ownership
interest in the Company contractual or otherwise, including but not limited to
claims to stock or stock options, except as described in Section 5.4, and any
claim or damage arising out of your employment with or separation from the
Company (including a claim for retaliation) under any common law theory or any
federal. State or local statute or ordinance not expressly referenced above;
provided however that nothing in this Agreement prevents you from filing,
cooperating with or participating in any proceeding before the EEOC or a state
Fair Employment Practices Agency (except that you acknowledge that you may not
be able to recover any monetary benefits in connection with any such claim,
charge or proceeding). Notwithstanding the foregoing, this release does not
include and will not preclude: (a) claims for unemployment compensation; (b)
rights, if any, to defense and indemnification from the Company for actions
taken by you in the course and scope of your employment with the Company and
its subsidiaries and affiliates; and/or (c) claims, actions or rights arising
under or to enforce the terms of this Agreement.


9.2                                 Release
by the Company.  In consideration of
the exchange of the promises contained herein and for such other good
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company hereby fully, forever, irrevocably and unconditionally



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releases, remises and discharges the Employee from
any and all claims, charges, complaints, demands, actions, causes of action,
suits, rights, debts, sums of money, loans, judgments, liens, costs, accounts,
reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages (including compensatory, punitive or liquidated damages), executions,
obligations, liabilities and
expenses (including attorneys’ fees and costs), of every kind and nature that
it ever had or now has against the Employee, known or unknown, at law or
equity or otherwise, including, but not limited to, all claims arising out
of the Employee’s employment with and/or separation from the Company;
provided, however, that nothing in this Agreement prevents the
Company from bringing a claim: (a) that arises from any intentional misconduct
engaged in by the Employee as an employee, officer
or director of the Company, including, but not limited to,
misappropriation, theft or fraud; (b) for breach of fiduciary duty as an
employee, officer or director of the Company; (c) in defense of or in
response to any claim by the Employee for indemnification and/or
advancement of fees; or (d) arising under this Agreement.


10.                                 Acknowledgments.  The Employee acknowledges that he has been
given twenty-one (21) days to consider this Agreement and that the Company
advised him to consult with an attorney of his own choosing prior to signing
this Agreement. The Employee may revoke this Agreement for a period of seven
(7) days after the execution of this Agreement, and the Agreement shall not be
effective or enforceable until the expiration of this seven (7) day revocation
period. The Employee understands and agrees that by entering into this
Agreement he is waiving any and all rights or claims he may have under The Age
Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act, and that he has received consideration beyond that to which he
was previously entitled.



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11.                                 Voluntary
Assent.  The Employee affirms that no
other promises or agreements of any kind have been made to or with him by any
person or entity whatsoever to cause him to sign this Agreement, and that he
fully understands the meaning and intent of this Agreement. The Employee states
and represents that he has had an opportunity to fully discuss and review the
terms of this Agreement with an attorney. The Employee further states and
represents that he has carefully read this Agreement, understands the contents
herein, freely and voluntarily assents to all of the terms and conditions
hereof, and signs his name of his own free act.


12.                                 Notices.
 All notices required or permitted under
this Agreement shall be in writing and shall be deemed effective upon personal
delivery or upon deposit in the United States Post Office, by registered or
certified mail, postage prepaid, addressed to the other party at the address
shown above, or at such other address or addresses as either party shall
designate to the other in accordance with this Section 12.


13.                                 Pronouns.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.


14.                                 Non-Disparagement.  The Employee agrees not to make any
statement, written or oral, which disparages the Company, its respective
officers, or management and business practices, or which disrupts or impairs
the Company’s normal operations. The provisions of this Section 14 shall not
apply to any truthful statement required to be made by the Employee in any
legal proceeding, required filing under the securities laws, or pursuant to any
governmental or regulatory investigation. Likewise, the Company agrees that its
directors and officers shall not make any statement, written or oral, which
disparages the Employee. The Company agrees to provide a positive written
letter of recommendation for the Employee on request.



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15.                                 Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties and supersedes all prior
agreements and understandings, whether written or oral, relating to the subject
matter of this Agreement.


16.                                 Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Employee.


17.                                 Governing
Law.  This Agreement shall be
governed by and construed 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 arising under or relating to any
provision of this Agreement shall 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.


18.                                 Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of both parties and their respective
successors and assigns, including any corporation with which, or into which,
the Company may be merged or which may succeed to the Company’s assets or
business, provided, however, that the obligations of the Employee are personal
and shall not be assigned by him.


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



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20.                                 Captions.  The captions of the sections of this
Agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this Agreement.


21.                                 Severability.  In case any provision of this Agreement shall
be invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year set forth above.


	
  

  	
  THE FIRST MARBLEHEAD CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Peter B. Tarr

  
	
   

  	
   

  	
  Peter B. Tarr

  
	
   

  	
   

  	
  Chairman and
  General Counsel

  
	
   

  	
   

  	
  Date Signed:
  November 1, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/ Donald R. Peck          November
  1, 2006

  
	
   

  	
   

  	
  Donald R. Peck                      Date
  Signed

  



 



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