Ex010.3







Exhibit 10.3




AMENDMENT TO EMPLOYMENT AGREEMENT



The Employment Agreement by and between Blackboard Inc. and Matthew H. Small, which took effect
January 26, 2004 (“Agreement”) is hereby amended pursuant to this Amendment to Employment Agreement
(“Amendment”). This Amendment will take effect on October 18, 2008.



The parties, for good and valuable consideration, the sufficiency of which is hereby acknowledged,
hereby agree as follows:



1. Section 7, “Termination by the Company,” part (a)(i) is hereby amended and restated as follows:





	 	(i)	 	pay to the Employee an amount equal to his
annual base salary based on his highest annual base salary for the
three year period prior to the termination date and earned bonus
through the end of and including the then current quarter, less
applicable taxes and withholdings (“Severance Payment”). The Severance
Payment shall be made in a lump sum, less applicable taxes and
withholdings. To receive the Severance Payment Employee must sign a
release of any and all claims in the form provided by the Company. The
Severance Payment shall be made on the first pay period following
Employee’s termination date that is at least ten days after Employee
delivers the signed release to the Company; provided, however, that if
the maximum period of time permitted under applicable law for the
Employee to sign and revoke the release extends into the calendar year
following the calendar year of the Employee’s termination date, then
the Severance Payment shall be made no earlier than January 1 of such
subsequent calendar year. Employee shall also be reimbursed for
outstanding expenses as of his termination date;




2. Section 8, “Termination by Death or Disability of the Employee,” part (c) is hereby amended by
adding the following sentences:





This amount shall be paid in a lump sum, less applicable taxes and
withholdings. To receive this amount Employee must sign a release of
any and all claims in the form provided by the Company. This amount
shall be paid on the first pay period following Employee’s
termination date that is at least ten days after Employee delivers
the signed release to the Company; provided, however, that if the
maximum period of time permitted under applicable law for the
Employee to sign and revoke the release extends into the calendar
year following the calendar year of the Employee’s termination date,
then the Severance Payment shall be made no earlier than January 1 of
such subsequent calendar year. .


3. Section 9, “Termination by the Employee,” parts (a) and (a)(i) are hereby amended and restated
as follows:




     9. Termination by the Employee.



 









 






	 	(a)	 	The Employee may terminate the Employee’s
employment at any time, with or without Good Reason (as defined below),
by giving written notice to the Company as set forth below. It is
specifically acknowledged and agreed that a notification by the
Employee of a determination not to allow this Agreement to
automatically renew pursuant to Section 1 shall not be a termination by
the Employee for any purpose hereunder. 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. Employee may resign
with Good Reason only if (i) Employee provides notice of such reason
for resignation to the Company within 90 days of the initial existence
of the condition giving rise to the Good Reason and stating that such
reason will be ground for resignation with Good Reason, and (ii) if the
Company failed to cure such reason within thirty (30) days following
receipt of such notice. Furthermore, any such resignation shall occur
within one (1) year of the occurred of a Good Reason event. If such
termination is with Good Reason the Company shall, subject to the
provisions of this Agreement:






	 	(i)	 	pay to the Employee a cash
payment equal to his annual base salary based on his highest
annual base salary for the three year period prior to the
termination date and earned bonus through the end of and
including the then current quarter, less applicable taxes and
withholdings (“Severance Payment”). The Severance Payments
shall be made in a lump sum, less applicable taxes and
withholdings. To receive the Severance Payment Employee must
sign a release of any and all claims in the form provided by the
Company. The Severance Payment shall be paid on the first pay
period following Employee’s termination date that is at least
ten days after Employee delivers the signed release to the
Company; provided, however, that if the maximum period of time
permitted under applicable law for the Employee to sign and
revoke the release extends into the calendar year following the
calendar year of the Employee’s termination date, then the
Severance Payment shall be made no earlier than January 1 of
such subsequent calendar year. Employee shall also be
reimbursed for outstanding expenses as of the termination date;
and




4. The following Section 9A, “Section 409A Provisions,” is added:





9A. Section 409A Provisions




Section 409A. Subject to this Section 9A, any payments or benefits under Section 7, 8 or 9
shall begin only upon the date of a “separation from service,” as defined below, which
occurs on or after the date of termination under Section 7, 8 or 9, as applicable. The
following rules shall apply with respect to distribution of the payments and benefits, if
any, to be provided to Employee under Section 7, 8 or 9, as applicable:




	 	(a)	 	It is intended that each installment of the payments and
benefits provided under Section 7, 8 or 9, as applicable, shall be treated as a
separate “payment” for




 









 






	 	 	 	purposes of Section 409A of the U.S. Internal Revenue Code of 1986, as
amended, and the guidance issued thereunder (“Section 409A”). Neither the
Company nor Employee 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;
	 
	 	(b)	 	If, as of the date of Employee’s “separation from service” from
the Company, Employee is not a “specified employee” (each within the meaning of
Section 409A), then each installment of the payments and benefits shall be made
on the dates and terms set forth in Section 7, 8 or 9, as applicable; and
	 
	 	(c)	 	If, as of the date of Employee’s “separation from service” from
the Company, Employee is a “specified employee” (each, for purposes of this
Agreement, within the meaning of Section 409A), then:






	 	(i)	 	Each installment of the payments and benefits
due under Section 7, 8 or 9, as applicable, 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 hereinafter defined) 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. For purposes of this Agreement, the “Short-Term
Deferral Period” means the period ending on the later of the
15th day of the third month following the end of Employee’s
tax year in which the separation from service occurs and the
15th day of the third month following the end of the
Company’s tax year in which the separation from service occurs; and
	 
	 	(ii)	 	Each installment of the payments and benefits
due under Section 7, 8 or 9, as applicable, that is not described
within Section 9A(c)(i) and that would, absent this subsection, be paid
within the six-month period following Employee’s “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,
Employee’s 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
Employee’s 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 payments and benefits if
and to the maximum extent that 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) or Treasury Regulation 1.409A-1(b)(9)(iv)
(relating to reimbursements and certain other separation payments).
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.




 









 












	 	(d)	 	The determination of whether and when a separation from service
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).
	 
	 	(e)	 	All reimbursements and in-kind benefits provided under the
Agreement 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.




5. Section 15, “Notices,” is hereby amended and restated as follows:





15. 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.

650 Massachusetts Ave, NW, 6th Floor

Washington, D.C. 20001-3796

Attn: CEO



(b) If to the Employee, to the address that the Company has on file for Employee at the time the notice is to be sent.



6. The following Sections 19 and 20 are added:





19. Effect of Termination.




Notwithstanding any termination or expiration of this Agreement, the rights and obligations
under this Agreement, which by their nature should survive, will remain in effect after the
termination or expiration of this Agreement.




20. Compliance With Section 409A.




This Agreement is intended to comply with the provisions of Section 409A and the Agreement
shall, to the extent practicable, be construed in accordance therewith. Terms defined in
the Agreement shall have the meanings given such terms under Section 409A if and to the
extent required in order to comply with Section 409A. Notwithstanding the foregoing, to the
extent that the Agreement or any payment or benefit hereunder shall be deemed not to comply
with Section 409A, then neither the Company, the Board of Directors nor its or their
designees or agents shall be liable to Employee or any other person for any actions,
decisions or determinations made in good faith.



7. Except as expressly provided herein, the terms and conditions of the Agreement remain
unmodified. All capitalized terms not defined herein shall have the meaning set forth in the
Agreement.



 









 




This Amendment shall be governed by the same provisions as set forth in Section 16 of the
Agreement. If any part of this Amendment is held by a court of competent jurisdiction to be void
or unenforceable, the remaining provisions shall continue with full force and effect. The headings
in this Amendment are for convenience only and shall not effect the interpretation of this
Amendment.




 









 







This Amendment has been agreed to and executed by the following parties on the dates set forth
opposite their names:




	 	 	 	 	 	 	 	 	 
	/s/ Matthew H. Small	 	 	 	October 17, 2008	 	 
	 	 	 	 	 	 	 
	Matthew H. Small	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 
	Blackboard Inc.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Justin Tan
	 	 	 	October 17, 2008	 	 
	 	 	 	 	 	 	 	 	 
	Justin Tan	 	 	 	Date	 	 
	Senior Vice President