exv10w8



 





Exhibit 10.8




EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of
May 6, 2001 by and between BLACKBOARD INC., a Delaware corporation (the
“Company”), and Stephen Hoffman (the “Employee”).




RECITALS





	A.	 	The Company desires to retain Employee to provide the services
hereinafter set forth.
	 
	B.	 	Employee is willing to provide such services to the Company on the terms
and conditions hereinafter set forth.
	 
	C.	 	The Company and the Employee will enter into a Shareholders’ Agreement in
the event that the Employee is granted option to purchase any stock of the
Employer.





AGREEMENT



In consideration of the promises and the terms and conditions set forth in this
Agreement, the parties agree as follows:





	1.	 	Employment and Term. The Company agrees to employ the Employee and the
Employee agrees to work for the Company, subject to the terms and
conditions below, for a term of two (2) years, from the date hereof, which
shall automatically renew unless either party notifies the other of an
intent to terminate this Agreement.
	 
	2.	 	Compensation; Benefits. Subject to the terms and conditions of this
Agreement, the Company shall pay to the Employee a base salary as set
forth on Schedule A, attached hereto and made a part hereof, payable in
accordance with the Company’s regular payroll policies. In addition to
this base salary, the Employee shall be entitled to the benefits and
bonuses described on Schedule A, subject to the terms and conditions
described therein. In addition, the Employee shall be entitled to receive
such other benefits including, but not limited to, vacation, holidays and
sick leave, as the Company generally provides, to its senior executives
holding similar positions as that of the Employee. Notwithstanding the
foregoing, the Company reserves the right to adopt, amend or discontinue
any employee benefit plan or policy in accordance with then-applicable law
	 
	3.	 	Business Expenses. The Company shall reimburse the Employee during the
term of this Agreement for travel, entertainment and other expenses
reasonably incurred by the Employee on behalf of the Company pursuant to
the Company’s expense reimbursement policy for its employees.
	 
	4.	 	Title; Duties. The Employee shall be initially employed as President and
Chief Operating Officer. The Employee shall diligently and
conscientiously devote his full time and attention and his best efforts to
discharge the duties assigned to him by the





 









 











	 	 	Company. The Employee shall perform such duties and have such direct
reports as may be assigned to him from time to time by the Board of
Directors or the Chief Executive Officer. As of execution, the Employee’s
direct reports shall be the Senior Vice President of Sales, the Senior
Vice President of Marketing, the Vice President of Operations, the
General Manager of Course and Portal Solutions, the General Manager of
Commerce and Access Solutions, the General Manager of International, and
the Vice President of Marketing. The Chief Financial Officer of the
Company shall report directly to both the Employee and the Chief
Executive Officer.
	 
	5.	 	Right to Contract; Conflict of Interest. The Employee hereby represents
and warrants to the Company that (i) he has full right and authority to
enter into this Agreement and to perform his obligations hereunder, and
(ii) the execution and delivery of this Agreement by the Employee and the
performance of the Employee’s obligations hereunder will not conflict with
or breach any agreement, order or decree to which the Employee is a party
or by which he is bound. During the term of this Agreement, the Employee
shall not directly or indirectly consult, advise, be retained or employed
by, or in any manner perform any service with any other business or entity
in any line of business, regardless of whether such line of business is
competitive with the Company’s business, without first obtaining consent
in writing from the Company.
	 
	6.	 	Intentionally Omitted
	 
	7.	 	Termination by the Company.
	 
	(a)	 	The Company shall have the right to terminate this Agreement with or
without cause at any time during the term of this Agreement by giving
written notice to the Employee. The termination shall become effective on
the date specified in the notice, which termination date shall not be a
date prior to the date ten (10) days following the date of the notice of
termination itself. In the event that the Employee is terminated for
Cause (as defined below), the Company shall pay the Employee the salary
due him under this Agreement through the day on which such termination is
effective. In the event that the Employee is terminated without cause,
the Company shall, subject to the provisions of this Agreement:
	 
	 	 	(i)  pay to the Employee within thirty (30) days of termination of
employment a lump sum cash payment equal to his annual base salary, plus
annual bonus, expense reimbursements and fringe benefits, set forth on
Schedule A; and
	 
	 	 	(ii)  maintain and provide for a period of (A) twelve (12) months from
the date of termination or (B) the date of the Employee’s full-time
employment by another employer (provided that the Employee is entitled
under the terms of such employment to benefits substantially similar to
those made available to the Employee by the Company), at no cost to the
Employee, the Employee’s continued participation in all group insurance,
life insurance, health and accident, disability and other employee
benefit plans, programs and arrangements in which the Employee was
entitled to participate immediately prior to the date of termination
(other than stock option plans of the Employer), provided that in the





 









 











	 	 	event that the Employee’s participation in any plan, program or
arrangement as provided in this subparagraph (ii) is barred or during
such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employer shall arrange to
provide the Employee with benefits substantially similar to those which
the Employee was entitled to receive under such plans, programs and
arrangements immediately prior to the Employee’s date of termination.
	 
	(b)	 	For purposes of this Section 7. “Cause” shall mean (i) a material breach
by the Employee of any fiduciary duty owed to the Employer or any material
covenant or condition under this Agreement which shall be continuing and
uncured for fifteen (15) days after written notice thereof has been given
to the Employee by the Company; (ii) a material neglect of duty by the
Employee; (iii) the commission by the Employee of any act or omission
constituting gross negligence, dishonesty, fraud, immoral or disreputable
conduct which is, or is likely to be, harmful to the Company or its
reputation; (iv) violation by the Employee of any material federal, state
or local law, rule regulation or ordinance (other than misdemeanor traffic
violations); (v) material violation by the Employee of the Company’s
policies as set forth in the Company’s personnel handbook, if one has been
adopted, or announced by Company management from time to time; (vi)
violation of the Company’s drug and alcohol policy as set forth in the
Company’s personnel handbook, if one has been adopted, or announced by
Company management from time to time; or (vii) the performance by the
Employee of any act or omission demonstrating an intentional or reckless
disregard of the interests of the Company.
	 
	(c)	 	In the event the Employee disputes in writing any termination for Cause
(after the Employee receives the grounds for termination from the
Company’s Board of Directors pursuant to Section 1(a) of the Stock
Restriction Agreement), the Company shall pay the Employee full salary
(including any earned bonuses or fringe benefits) for a period of no more
than three (3) months while the Company and the Employee attempt to
resolve such dispute in good faith.
	 
	8.	 	Termination by Death or Disability of the Employee.
	 
	(a)	 	In the event of the Employee’s death during the term of this Agreement,
all obligations of the parties hereunder shall terminate immediately, and
the Company shall pay to the Employee’s legal representatives the salary
(and any earned bonuses) due the Employee through the day on which his
death shall have occurred.
	 
	(b)	 	If the Employee is unable to perform his duties hereunder due to mental,
physical or other disability for a period of one hundred twenty (120)
consecutive business days, as determined by the Company, or for one
hundred twenty (120) business days in any period of twelve (12)
consecutive months, this Agreement may be terminated by the Company, at
its option, by written notice to the Employee, effective on the
termination date specified in such notice, provided such termination date
shall not be a date prior to the date of the notice of termination itself.
In this case, the Company will pay the Employee the salary (and any
earned bonuses) due him through the day on which such termination is
effective.





 









 











	(c)	 	The Company shall pay Employee the difference between the amount to be
paid under any disability insurance policy for the twelve (12) months
following termination and the amount of Employee’s salary due under the
termination provision of Section 7 (a) (i).
	 
	9.	 	Termination by the Employee.
	 
	(a)	 	The Employee may terminate this Agreement at any time, with or without
Good Reason (as defined below), by giving written notice to the Company.
Any such termination, if without Good Reason, shall become effective on
the date specified in such notice, provided that the Company may elect to
have such termination become effective on a date after, but not more than,
fourteen (14) days after the date of the notice. If such termination is
with Good Reason, (i) it shall become effective on the date thirty (30)
days after the date of such notice, provided the Company has failed to
cure the Good Reason specified in the notice; and (ii) the Company shall
pay to the Employee his annual base salary, as of the date of termination
(plus any bonuses, insurances and fringe benefits, except as may be
outlined in any Stock Option Agreement) for twelve (12) months from the
date of termination, payable in either one lump sum or in accordance with
normal payroll practices, at Employee’s option, through the end of the
Non-Complete Period (as defined in Section 11 below).
	 
	(b)	 	After the date of any such termination, the Employee shall be entitled to
the salary due him through the day on which such termination becomes
effective.
	 
	(c)	 	In the event the Employee terminates this Agreement without Good Reason,
or the Company terminates this Agreement with Cause, in either case within
one year after the commencement of the Employee’s employment with the
Company, the Employee shall refund to the Company all amounts, if any,
paid him by the Company as moving expenses (including temporary housing
and incidental expenses). The Employee agrees that any amounts owing to
the Company as moving expenses under this Section 9 may be deducted from
any salary or bonuses owed to him by the Company, consistent with
applicable law.
	 
	(d)	 	For purposes of this Section 9, “Good Reason” shall mean (i) a material
failure by the Company to perform its obligations under this Agreement;
(ii) a Constructive Termination (as defined below) of the Employee; (iii)
a Change in Control (as defined in this Section 9(d)) , or (iv) failure of
the Company to offer the Employee the position of Chief Executive Officer
by May 6, 2003. “Change in Control” shall mean “ (a) a sale or transfer
of more than 50% of the total number of shares of the outstanding common
and preferred stock of the Company to a single unrelated entity or group
of affiliated entities (not related to the Company) in one or a series of
closely related transactions or (b) a merger or consolidation in which the
Company is not the surviving entity or in which the shareholders in the
Company prior to the merger or consolidation own less than 50% of the
shares of outstanding common and preferred stock of the Company.
	 
	(e)	 	For purposes of this Section 9. “Constructive Termination” shall mean any
(i) diminution of the Employee’s salary, or (ii) material adverse
modification of or diminution in the





 









 











	 	 	Employee’s duties or material diminution in the Employee’s authority,
title or office, or the assignment of any duties to the Employee
inconsistent with or demeaning of those set forth above, or (ii) material
reduction in the Employee’s benefits under any employee benefit plan or
program in which he participates as an employee, other than any reduction
which is a result of a reduction of benefits applicable to all employee
participants, or relocation of the Employee outside of the Washington,
D.C. metropolitan area without the Employee’s consent.
	 
	10.	 	Intentionally Omitted.
	 
	11.	 	Non-competition.
	 
	(a)	 	Subject to the Company making the applicable payments pursuant to
Sections 7, 8 or 9, he Employee agrees that, during his employment
hereunder, and for a period of one (1) year (the “Non-Compete Period”)
after the later of (i) the effective date of termination of this
Agreement, or (ii) the date of entry by a court of competent jurisdiction
of a final judgment enforcing this covenant, he will not, in any
geographic area where the Company regularly engages in its Business (as
defined below) or maintains sales or service representatives or employees:
	 
	 	 	(i) compete with the Company, or any subsidiary or affiliate of the
Company;
	 
	 	 	(ii) interfere with or disrupt, or attempt to interfere with or disrupt,
the relationship contractual or otherwise, between the Company, or any
subsidiary or affiliate of the Company, and any customer, supplier or
employee of the Company, or any such subsidiary or affiliate;
	 
	 	 	(iii) assist a competitor of the Company by providing consulting or
other advisory services to that competitor; or
	 
	 	 	(iv) offer employment to any current employee of the Company or solicit
(directly or indirectly, individually or in connection with any new
employer or other business partner) any current employee of the Company
to accept employment elsewhere.
	 
	(b)	 	The following terms, as used in this Section 11 shall have the meanings
set forth below:
	 
	 	 	(i) The Company’s “Business” means the e-education infrastructure
industry, including in particular online course, community and
administrative software, delivery and product development.
	 
	 	 	(ii) The term “compete” means to engage in competition, directly or
indirectly, individually or through a family member or other person
acting on the Employee’s behalf, as an employee, officer, director,
proprietor, partner or stockholder or other security holder (other than
of a corporation listed on a national securities exchange or the
securities of which are regularly traded in the over-the-counter market,
provided that the Employee at no time owns in excess of 5% of the
outstanding securities of such





 









 











	 	 	corporation entitled to vote for the election of directors) of any firm,
corporation or entity of any nature whatsoever.
	 
	 	 	(iii) The term “affiliate” means any person, firm or corporation,
directly or indirectly through one or more intermediaries, controlling,
controlled by or under common control with the Company.
	 
	(c)	 	The Employee further acknowledges that this Section 11 is an independent
covenant within this Agreement, and that this covenant shall survive any
termination of Agreement and shall be treated as an independent covenant
for the purposes of enforcement. With respect to this covenant, the
Employee hereby acknowledges receipt of Ten Dollars ($10.00) and other
good and valuable consideration stated herein including the consideration
of his continued employment by the Company.
	 
	(d)	 	The Employee shall, during the term of this Agreement and thereafter,
notify any prospective employer of the terms and conditions of this
Agreement regarding nondisclosure and non-competition.
	 
	12.	 	Confidentiality and Non-Disclosure.
	 
	(a)	 	The Employee shall hold in strict confidence and shall not, either during
the term of this Agreement or after the termination hereof, disclose,
directly or indirectly, to any third party, person, firm, corporation or
other entity, irrespective of whether such person or entity is a
competitor of the Company or is engaged in a business similar to that of
the Company, any trade secrets or other proprietary or confidential
information of the Company or any subsidiary or affiliate (as defined in
Section 11) of the Company obtained by the Employee from or through his
employment hereunder. The Employee hereby acknowledges and agrees that
all proprietary information referred to in this Section 12 shall be deemed
trade secrets of the Company and of its subsidiaries and affiliates, as
defined in Section 11. Employee further acknowledges that the Company’s
products and titles consist of copyrighted material, and Employee shall
exercise his best efforts to prevent the use of such copyrighted material
by any person or entity which has not prior thereto been authorized to use
such information by the Company.
	 
	(b)	 	The Employee further hereby agrees and acknowledges that any disclosure
of any proprietary information prohibited herein, or any breach of the
provisions of Sections 4 or 10 of this Agreement, may result in
irreparable injury and damage to the Company which will not be adequately
compensable in monetary damages, that the Company will have no adequate
remedy at law therefor, and that the Company may obtain such preliminary,
temporary or permanent mandatory or restraining injunctions, orders or
decrees as may be necessary to protect the company against, or on account
of, any breach by the Employee of the provisions contained in Sections 5,
11 or 12 .
	 
	(c)	 	The Employee further agrees that, upon termination of this Agreement,
whether voluntary or involuntary or with or without cause, the Employee
shall notify any new employer, partner, associate or any other firm or
corporation with whom the Employee





 









 











	 	 	shall become associated in any capacity whatsoever of the provisions of
this Section 12, and that the Company may give such notice to such firm,
corporation or other person.
	 
	(d)	 	Notwithstanding the foregoing limitations, the Employee shall not be
required to keep confidential pursuant to this Section 12 any confidential
or proprietary information that: (i) is known or available through other
lawful sources, not bound by a confidentiality agreement with the
Employee, (ii) is or becomes publicly known or generally known in the
industry through no fault of the Employee or his agents or (iii) is
required to be disclosed pursuant to any statutes, laws, rules,
regulations, ordinances, codes, directives, writs, injunctions, decrees,
judgments, and orders of any governmental body (provided the Company is
given reasonable prior notice).
	 
	13.	 	Assignment and Disclosure of Inventions.
	 
	(a)	 	From and after the date the Employee first became employed with the
Company, the Employee hereby agrees to promptly disclose in confidence to
the Company all inventions, improvements, designs, original works of
authorship, formulas, processes, compositions of matter, computer software
programs, databases, mask works, and trade secrets (“inventions”), whether
or not patentable, copyrightable or protectible as trade secrets, that are
made or conceived or first reduced to practice or created by the Employee,
either alone or jointly with others, during the period of the Employee’s
employment, whether or not in the course of the Employee’s employment.
	 
	(b)	 	The Employee hereby acknowledges that copyrightable works prepared by the
Employee within the scope of the Employee’s employment are “works for
hire” under the Copyright Act and that the Company will be considered the
author thereof. The Employee hereby agrees that all Inventions that (i)
are developed using equipment, supplies, facilities or trade secrets of
the Company, (ii) result from work performed by the Employee for the
Company, (iii) relate to the Company’s business or current or anticipated
research and development, will be the sole and exclusive property of the
Company and are hereby assigned by the Employee to the Company.
	 
	14.	 	Severability. The Company and the Employee recognize that the laws and
public policies of the state law applicable to this Agreement is subject
to varying interpretations and change. It is the intention of the Company
and of the Employee that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public
policies of such state, but that the unenforceability (to the modification
to conform to such laws or public policies) of any provision or provisions
hereof shall not render unenforceable, or impair, the remainder of this
Agreement. Accordingly, if any provisions of this Agreement shall be
determined to be invalid or unenforceable, either in whole or in part,
this Agreement shall be deemed amended to delete or modify, as necessary,
the offending provision or provisions and to alter the balance of this
Agreement in order to render it valid and enforceable.
	 
	15.	 	Assignment. Neither the rights nor obligations under this Agreement may
be assigned by either party, in whole or in part, by operation of law or
otherwise, except that it shall be





 









 






	 	 	binding upon and inure to the benefit of any successor of the Company and
its subsidiaries and affiliates, whether by merger, reorganization or
otherwise, or any purchaser of all or substantially all of the assets of
the Company.
	 
	16.	 	Notices. Any notice expressly provided for under this Agreement shall
be in writing, shall be given either manually or by mail and shall be
deemed sufficiently given when actually received by the party to be
notified or when mailed, if mailed by certified or registered mail,
postage prepaid, addressed to such party at their addresses as set forth
below. Either party may, by notice to the other party, given in the
manner provided for herein, change their address or receiving such
notices.
	 
	(a)	 	If to the Company, to:





       Blackboard Inc.

       1899 L Street N.W., Fifth Floor

       Washington, D.C. 20036

       Attn: General Counsel




	(b)	 	If to the Employee, to:





       Stephen Hoffman

       1204 Marinaview Drive

       Arnold, MD 21012




	17.	 	Governing Law. This Agreement shall be executed, construed and performed
in accordance with the laws of the State of Delaware without reference to
conflict of laws principles. The parties agree that the venue for any
dispute hereunder will be the state or federal courts sitting in the
District of Columbia or the Commonwealth of Virginia and the parties
hereby agree to the exclusive jurisdiction thereof.
	 
	18.	 	Headings. The section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
	 
	19.	 	Entire Agreement; Amendments. This Agreement, together with any stock
option contracts between the Company and Employee, constitutes and
embodies the entire agreement between the parties in connection with the
subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings in connection with such subject matter. No
covenant or condition not expressed in this Agreement shall affect or be
effective to interpret, change or restrict this Agreement. In the event
of a conflict or inconsistency between the terms of this Agreement and the
Company’s policies regarding employees, the terms of this Agreement shall
supersede the conflicting or inconsistent Company policies. No change,
termination or attempted waiver of any of the provisions of this Agreement
shall be binding unless in writing signed by the Employee and on behalf of
the Company by an officer thereunto duly authorized by the Company’s Board
of Directors. No modification, waiver, termination, rescission, discharge
or cancellation of this Agreement shall affect the right of any party to
enforce any other provision or to exercise any right or remedy in the event of
any other default.





[SIGNATURE PAGE FOLLOWS]


 









 










IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 
	BLACKBOARD INC., a Delaware corporation

	 

	By: /s/ Michael L. Chasen

	             Name: Michael L. Chasen

	 

	             Title: Chief Executive Officer

	 

	Stephen Hoffman:

	 

	/s/ Stephen Hoffman








 









 






SCHEDULE A



The Employee is currently being paid $275,000 in annual salary; however
the Compensation Committee reserves the right to increase the Employee’s
salary from time to time, in accordance with the Company’s regular
management employee payroll and incentive policies.



The Employee shall receive (a) a $5,000 signing bonus, (b) a performance
bonus of $125,000, guaranteed during the first tweleve (12) months of
employment, based on the goals determined by the Company and Employee
within 60 days of the execution of this Agreement, and (c) for each year
thereafter, an annual bonus equal to up to 50% of Employee’s then current
salary, each payable in stock and/or cash, at the discretion of the
Compensation Committee of the Company’s Board of Directors.



The Employee’s expenses for parking at or near the Company’s DC office
shall be paid by the Company



At the discretion of the Compensation Committee of the Company’s Board of
Directors, the Employee will be eligible for an increase in compensation,
annual bonuses (paid in stock and/or cash) and other benefits in
accordance with the Company’s regular management employee payroll and
incentive policies. In addition, the Employee’s annual salary shall be
increased to $325,000 within ninety (90) days after the Company’s filing
of an S-1 registration document with the Securities and Exchange
Commission.



Employee shall receive vacation, health and insurance benefits equal to
that provided other senior executive management, which benefits may be
changed from time to time by the Company. The Company shall also pay for
supplemental disability and supplemental catastrophic injury or illness
insurance equal to that provided by Employee’s most recent prior
employer, together with long-term care insurance approximately equivalent
in initial year premium to the difference between the Company’s cost for
the supplemental insurances and the cost to Employee’s prior employer to
provide such supplemental insurances.