**Exhibit 10.2****EMPLOYMENT AGREEMENT**THIS EMPLOYMENT AGREEMENT (the “**Agreement**”) is entered into by and between Peter Segall (“**you**”) andBlackboard Inc. (“**Blackboard**”) and is effective as of September 1, 2006.     WHEREAS, Blackboard desires to employ you on the terms and conditions hereinafter set forthand you desire to accept such employment;     NOW, THEREFORE, in consideration of the promises and the mutual agreements contained herein,the parties agree as follows:1. Responsibilities. Blackboard agrees to employ you as the President of U.S. HigherEducation. You shall report to Blackboard’s CEO and shall be a member of Blackboard’s SeniorExecutive Committee. You shall devote your entire business time, attention, skill and energyexclusively to the business of Blackboard and perform the responsibilities assigned to you inaccordance with the standards and policies that Blackboard may from time to time establish. Youmay engage in appropriate civic or charitable activities and devote a reasonable amount of time toprivate investments or boards or other activities provided that such activities do not interfere orconflict with your responsibilities and are not or are not likely to be contrary to Blackboard’sinterests. You and Blackboard agree that your position is essential to Blackboard’s success andthat the highest level of performance is required from you.2. Term of Employment. Blackboard agrees to employ you, and you agree to remain inemployment with Blackboard, from September 1, 2006 until August 31, 2007 (the “**Initial Term**”),unless your employment terminates earlier pursuant to Section 5 below. This Agreement shallautomatically renew for successive one (1) year periods (each, a “**Renewal Term**” and together withthe Initial Term, the “**Term**”) unless either party provides prior written notice of its intent notto renew. You must provide notice of your intent not to renew at least ninety (90) days prior thefirst day of the applicable Renewal Term and Blackboard must provide notice of its intent not torenew at least thirty (30) days’ prior to the first day of the applicable Renewal Term.3. Compensation.     (a) Base Compensation. Your annual base compensation shall initially be US$250,000(“**Base Compensation**”), less applicable taxes and withholdings, payable in accordance withBlackboard’s regular payroll practices from time to time in effect. Blackboard’s Board ofDirectors (the “**Board**”) may review and adjust your Base Compensation periodically.     (b) Bonus Compensation. Your initial target bonus will be up to 50% of your BaseCompensation. The actual amount of the bonus, if any, will be determined by the Board in its solediscretion. If a bonus is awarded, it will be paid in the year following that for which the bonusis being awarded. To be eligible to receive an annual bonus for any fiscal year, you must meetfinancial performance targets set by the Board and be employed through March 31st of thefollowing year.For 2006, you will earn a pro-rated portion of $90,000 corresponding to the period between January1, 2006 and the date hereof. You will also be eligible to earn a pro rated portion of your 2006bonus for the time period beginning September 1, 2006 through December 31, 2006, which will becalculated in the same or similar manner to other executive employees.     (c) Business Expenses. During the Term, Blackboard shall pay or reimburse you for allordinary and reasonable business-related expenses you incur in the performance of your duties underthis Agreement. Blackboard will reimburse you for all such expenses, in accordance with itspolicies and procedures, upon the presentation by you of an itemized account of such expenditures,together with supporting receipts and other appropriate documentation.4. Employee Benefits.     (a) In General. During the Term, you shall be eligible for all employee benefits thatBlackboard may provide to employees who are officers of Blackboard, which may include, but are notlimited to benefits such as health insurance plans, a stock option plan, paid holidays and 401(k),subject in each case to the generally applicable terms andconditions of any such plan or program in question and to the determinations of any person orcommittee administering any such plan or program. Blackboard reserves the right to modify orterminate any such benefit at any time.
 

 
     (b) Vacation. You shall be eligible to take paid vacation during each calendar yearin accordance with Blackboard’s Employment Handbook.     (c) Corporate Housing. Blackboard will have the option to either provide you with useof an apartment in the Washington, DC area, beginning on September 1, 2006 for the Term of thisAgreement or to reimburse you for the reasonable cost of rent for such an apartment.5. Termination of Employment. Upon the effective date of termination of your employmentwith Blackboard (the “**Termination Date**”), you will not be eligible for further compensation,benefits or perquisites under Sections 3 and 4 of this Agreement, other than those that havealready accrued or vested as of the Termination Date. Termination of your employment may occurunder any of the following circumstances:     (a) Expiration of Term. Your employment will terminate if the Term provided for underSection 2 expires pursuant to the notice requirements of Section 2; or     (b) Termination of Employment by Blackboard. Blackboard has the right to terminateyour employment at any time with or without Cause. For all purposes under this Agreement,(“**Cause**”) shall mean:          (i) willful failure to observe the material, standard published policies of Blackboard or tocarry out the reasonable and proper directives of the Board, consistent with the Employee’sposition and duties under this Agreement;          (ii) willful misconduct or gross negligence by the Employee in respect of his obligations tothe Company;          (iii) a conviction of, or a plea of nolo contendere by, the Employeeof a felony involving moral turpitude;          (iv) a material violation or breach of the terms of this Agreement; or          (v) theft of the property of Blackboard or other disloyal or dishonest conduct of the Employeethat materially harms the Company or its business.     (c) Resignation by You. You have the right to resign your employment with Blackboardat any time, with or without Good Reason, provided that you may resign with Good Reason only if youprovide notice of such reason for resignation to Blackboard stating that such reason will begrounds for resignation with Good Reason, and if Blackboard fails to cure such reason within thirty(30) days following receipt of such notice.          (i) For purposes of this Agreement, “**Good Reason**” shall mean (A) a material failure byBlackboard to perform its obligations under this Agreement; (B) your relocation to more than 50miles outside of your residence (at the time of your execution of this Agreement) without yourconsent; or (C) a material diminution of your compensation, duties or responsibilities.          (ii) During the Term, you agree to provide Blackboard ninety (90) days’ prior written noticeof your resignation, with or without Good Reason. Blackboard may in its sole discretion place youon paid administrative leave as of any date prior to the end of such ninety (90) day notice periodand request that you no longer be present on Blackboard premises. During any period of paidadministrative leave, you will not be authorized to act as a representative, or make any statementson behalf of, Blackboard; or     (d) Death or Disability. Your employment shall be deemed to have been terminated byyou upon your (i) death or (ii) inability to perform your duties under this Agreement, even withreasonable accommodation, for more than twenty-six (26) weeks, whether or not consecutive, in anytwelve-month period (“**Disability**”). Termination will be effective upon the occurrence of suchevent.6. Severance Payments.
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     If (i) Blackboard terminates your employment without Cause (as defined in Section 5(b)) at anytime during the Term, or (ii) you resign for Good Reason and comply with the obligations set forthin Section 5(c), or (iii) you resign for any reason during the eighteen (18) month periodimmediately following your execution of this Agreement and provide ninety (90) days’ notice of suchresignation, then Blackboard will pay you your then current Base Salary, less applicable taxes andwithholdings, for twelve (12) months (“**Severance Payments**”). If, following the end of a calendaryear but prior to receiving your bonus for the completed calendar year, you are terminated withoutCause or resign for Good Reason, you shall also receive your bonus, less taxes and withholdings,for the completed calendar year as part of the Severance Payments at such time as the Board deemsappropriate, consistent with the payment of the other executives’ bonuses. The Severance Paymentsshall be made consistent with Blackboard’s regular payroll schedule and paid monthly for twelve(12) months or in a lump sum at Blackboard’s discretion. If you timely apply and qualify forCOBRA, Blackboard will pay your COBRA premiums, at your current level of coverage, for twelve (12)months, unless you become covered by another employer’s health insurance, in which case the COBRAcoverage will be terminated when your new coverage commences. You agree to notify Blackboardimmediately if you become covered by another employer’s health insurance plan. To receive theSeverance Payments and COBRA premiums you must sign a release of any and all claims in the formprovided by Blackboard. Such Severance Payments and COBRA premiums shall begin at the later of (i)the first pay period following your Termination Date or (ii) ten (10) days after you deliver thesigned release to Blackboard.7. Return of Property. Upon termination of your employment with Blackboard for any reason,you agree to immediately return to Blackboard all equipment, credit cards and other propertybelonging to Blackboard. This includes all documents and other information prepared by you or onyour behalf or provided to you in connection with performing your duties for Blackboard, regardlessof the form in which such documents or information are maintained or stored, including computer,typed, written, imaged, audio, video, micro-fiche, electronic or any other means of recording orstoring documents or other information. You hereby warrant that you will not retain in any formany such document or other information or copies thereof, except as provided in the followingsentence. You may retain a copy of any documents describing any rights or obligations you may haveafter the Termination Date under any employee benefit plan or other agreements.8. Confidentiality, Non-Solicitation and Non-Competition Agreement.     (a) Confidential Information. You shall not disclose or use at any time, eitherduring your employment or after your Termination Date, any confidential information, including, butnot limited to, the terms of this Agreement, existing and prospective investments, trade secrets orproprietary information, strategic sourcing information or analysis, financing information andsources, patents, patent applications, developmental or experimental work, formulas, test data,prototypes, models, know how and product specifications, financial information, financialprojections and pro forma financial information, sales and marketing strategies, plans and programsand product development information, employees’ and consultants’ benefits, perquisites, salaries,stock options, compensation, formulas or bonuses, and their non-business addresses and telephonenumbers, organizational structure and reporting relationships, business plans, names, addresses,phone numbers of customers, contracts, including contracts with clients, suppliers, independentcontractors or employees, business plans and forecasts, and existing and prospective projects orbusiness opportunities (“**Confidential Information**”) of Blackboard, whether patentable or not, whichyou learn as a result of your employment with Blackboard, whether or not you developed suchinformation. **“Confidential Information”**shall not include, without limitation, information that isor later becomes publicly available in a manner wholly unrelated to any breach of this Agreement byyou as of the date it enters the public domain or information that is already in your possessionprior to your receipt of it from the Company and which is not the subject of an obligation ofconfidence of any kind.If you are uncertain whether something is Confidential Information you should treat it asConfidential Information until you receive clarification from Blackboard that it is notConfidential Information. Confidential Information shall remain at all times the property ofBlackboard. You may use or disclose Confidential Information only as authorized and necessary inperforming your responsibilities under this Agreement during your employment with Blackboard; withthe General Counsel’s prior written consent; in a legal proceeding between you and Blackboard toestablish the rights of either party under this Agreement, provided that you stipulate to aprotective order to prevent any unnecessary use ordisclosure; or subject to a compulsory legal process that requires disclosure of such information,provided that you have complied with the following procedures to ensure that Blackboard has anadequate opportunity to protect its legal
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interests in preventing disclosure. Upon receipt of asubpoena that could possibly require disclosure of Confidential Information, you shall provide acopy of the compulsory process and complete information regarding the circumstances under which youreceived it to Blackboard by hand delivery within twenty-four (24) hours. You will not make anydisclosure until the latest possible date for making such disclosure in accordance with thecompulsory process (“**Latest Possible Date**”). If Blackboard seeks to prevent disclosure inaccordance with the applicable legal procedures, and provides you with notice before the LatestPossible Date that it has initiated such procedures, you will not make disclosures of anyConfidential Information that is the subject of such procedures, until such objections arewithdrawn or ruled on. You hereby acknowledge that any breach of this Section 8(a) would causeBlackboard irreparable harm.     (b) Outside Activities. You shall submit to Blackboard’s General Counsel, within areasonable time prior to dissemination, the text of any speech, professional paper, article orsimilar communication created by you which relates to Blackboard’s present or future business orresearch and development endeavors. The General Counsel then will notify you if the disseminationof the communication is permitted under the terms of this Agreement.     (c) Ownership of Confidential Information; Return of Materials. All ConfidentialInformation, including without limitation that which is produced by or for Blackboard by you oranyone else, all materials embodying Confidential Information, and all copies thereof, will remainthe property of Blackboard or of the third party who has furnished it to Blackboard. On yourTermination Date, or at the written request of Blackboard at any time, you will immediately deliverto Blackboard all materials, and copies thereof, which are in your possession or control and whichcontain or are related in any way to any Confidential Information. This includes all documents andother information prepared by you or on your behalf or provided to you in connection with yourduties while employed by Blackboard, regardless of the form in which such document or informationare maintained or stored, including computer, typed, written, imaged, audio, video, micro-fiche,electronic or any other means of recording or storing documents or other information. You herebywarrant that you will not retain in any form any such document or other information or copiesthereof. You may retain a copy of this Agreement and any other document or information describingany rights you may have after the termination of your employment.     (d) Intellectual Property.          (i) For purposes of this Agreement the following terms will be defined as indicated:               (A) “**Inventions**” shall mean inventions, ideas, formula, developments, designs, systems,software, discoveries, and improvements to existing technology, whether or not patentable.               (B) “**Improvements**” shall mean all inventions, developments, modifications, changes, whether ornot patentable, made to any Inventions and/or Confidential Information.               (C) “**Copyrighted Work**” shall mean any work of authorship eligible for copyright protectionunder the federal and state laws of the United States and foreign countries.               (D) “**Copyrights**” shall mean any and all rights granted in Copyrighted Works under the laws ofthe United States and foreign countries.          (ii) Exclusions. An Invention, Copyright or Copyrighted Work will not be subject tothis Agreement when all the following criteria are met: (A) no equipment, supplies, facilities, orConfidential Information of Blackboard was used in developing the Invention or Copyrighted Work orin applying for or obtaining a patent or Copyright; (B) the Invention or Copyrighted Work wasdeveloped entirely on your own time; (C) the Invention or Copyrighted Work does not relate directlyto the business of Blackboard or to Blackboard’s actual or demonstrably anticipated research ordevelopment; and (D) the Invention, Copyright or Copyrighted Work does not result from any workperformed by you for Blackboard or at the request of Blackboard.          (iii) Ownership and Assignment of Rights.               (A) All Inventions, Improvements, or Confidential Information that you have or will conceiveor develop, either alone or with others, shall be the exclusive property of Blackboard. You herebyassign, and agree to assign, to Blackboard your entire right, title, and interest in and to (I) anyand all such Improvements and
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Inventions, (II) any and all applications for patent, domestic andforeign that may be filed on said Improvements and Inventions, and (III) any and all patents thatmay issue or be granted on such applications, except those excluded under Section 8(d)(ii) of thisAgreement. Both during your employment and after your Termination Date you will on requestimmediately sign and deliver to Blackboard without further consideration any and all documentsnecessary to perfect the assignments granted in this Section.               (B) You understand and agree that all Copyrighted Works conceived, developed, created orcontributed to by you shall be considered works made for hire under the copyright laws of theUnited States and shall be the exclusive property of Blackboard. Blackboard shall be consideredthe author of such Copyrighted Works. You further understand and agree that in the event anyCopyrighted Work created by you within the scope of, or in connection with, your work withBlackboard, or at the request of Blackboard, fails to meet the legal requirements of a work madefor hire owned by Blackboard, then this Agreement shall operate to assign to Blackboard all of yourrights, title, and interest, including copyrights, in, to and under such Copyrighted Works.Blackboard shall have sole and absolute discretion to register, enforce, and/or assign Copyrightsfor such Copyrighted Works.          (iv) Assistance and Designation of Agent.               (A) Both during your employment and after your Termination Date, you will on requestimmediately sign and deliver to Blackboard without further consideration, all instruments inwriting requiring your signature and deemed by Blackboard to be necessary or advisable in, or inconnection with, filing or prosecuting of any application for any patent covering Improvements,Inventions or any divisional, continuing, renewal or reissue application or reexamination requestbased upon any application for patent. In the event that Blackboard is unable for any reasonwhatsoever to secure your signature to any lawful and necessary documents required to apply for orexecute any patent application with respect to such idea, process, development, design, system,program, discovery, invention, improvement or writing (including renewals, extensions,continuations, divisions or continuations in part thereof), you hereby irrevocably designate andappoint Blackboard and its officers and agents, as your agents and attorneys-in-fact to act for andon your behalf and instead of you, to execute and file any such application and to do all otherlawfully permitted acts to further the prosecution and issuance of patents thereon with the samelegal force and effect as if executed by you.               (B) You will aid Blackboard promptly on request, and without further consideration, in anymatter pertaining to or relating to the protection of any of the Improvements, Inventions,applications for patents covering Inventions or Improvements, and/or Copyrighted Works. If suchrequest is made after your employment has ended, Blackboard will reimburse you for any expensesincurred and compensate for any services rendered in complying with such request at the same rateat which you were compensated during the final month of your employment.9. Non-Solicitation/Non-Competition.During your employment and for two (2) years following your Termination Date (the “**RestrictedPeriod**”) you will not, except with prior written approval of Blackboard’s General Counsel, directlyor indirectly, individually or as part of or on behalf of any other person, company, employer orother entity: (a) hire or attempt to solicit for hire, or encourage to end their relationship withBlackboard, any persons who have been employed by Blackboard at any time within the previous six(6) months (a “**Covered Employee**”); (b) sell or otherwise provide, or solicit for the purposes ofselling or otherwise providing, services or products that are similar or related to those sold byBlackboard as of the Termination Date to any person or entity that has within the twelve (12)months preceding the Termination Date purchased any such services or products from Blackboard andwith whom you had direct contact on behalf of Blackboard during that time; or (c) own, manage,operate, control, be employed by, participate in, work in, advise, consult or contract with, orsupport in any manner (other than as the holder of not more than one percent (1%) of the totaloutstanding stock of a publicly held company) any business that is similar to the type of businessconducted by Blackboard as of the Termination Date within the geographical area in which, as of theTermination Date, Blackboard is actively marketing or has made a significant investment in time andmoney to prepare to market its products or services within the six (6) month period after theTermination Date. You agree that these provisions are necessary to protect Blackboard’slegitimate business interests. You warrant that the provisions will not unreasonably interfere inyour ability to earn a living or to pursue your occupation after the Termination Date. You agree tonotify any person or entity to which you provide services during the Restricted Period of yourobligations under this Section 9.
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10. Non-Disparagement. You agree to refrain from making any derogatory or defamatoryremarks or comments that may disparage Blackboard, or any officer, employee or agent of Blackboardduring your employment or after your Termination Date.11. Other Obligations. You warrant that you are not subject to any other obligationsthat would conflict with or inhibit your ability to perform your duties under this Agreement. Yourepresent that you have disclosed to Blackboard the existence and contents of all covenants not tocompete that you have entered into with any other entity. You further warrant that you have notand will not bring to Blackboard or use in the performance of your responsibilities at Blackboardany equipment, supplies, facility or trade secret information (that is not generally available tothe public) of any current or former employer or organization other than Blackboard to which youprovided services, unless you have obtained written authorization for their possession and use.12. Miscellaneous Provisions.     (a) Notices. Unless otherwise provided herein, any notice or other communicationrequired to be given under the terms of this Agreement must be in writing and must be personallydelivered (i.e., left with an individual 18 years of age or older) or sent by overnight delivery.Documents sent by overnight delivery will be presumed received on the next business day followingthe day sent.   If notice is to be sent to Blackboard, it will be sent to: If notice is to be sent to you, it will be sent to:   Matthew Small, Esq.  Blackboard Inc.  1899 L Street, N.W., 5th Floor  Washington DC 20036     With a copy to:     Douglas B. Mishkin, Esq.  Patton Boggs, LLP  2550 M Street, NW  Washington, DC 20037       (b) Dispute Resolution. You and Blackboard agree that any dispute between you andBlackboard will be finally resolved by binding arbitration in accordance with the FederalArbitration Act (“**FAA**”). You and Blackboard agree to follow the Dispute Resolution Procedures setforth in **Attachment A**to this Agreement.     (c) Nature of Agreement. This Agreement and the attachment hereto constitute theentire agreement between you and Blackboard and supersede all prior agreements and understandingsbetween you and Blackboard relating to the matters covered by this Agreement, including your priorEmployment Agreement dated October 31, 2002, as amended, which is hereby terminated in allrespects. Any long-term equity incentives between Blackboard and you shall be contained in aseparate agreement. In making this Agreement, the parties warrant that they did not rely on anyrepresentations or statements other than those contained in this Agreement. No modification of oramendment to this Agreement will be effective unless in writing and signed by the General Counselor Senior Vice President for Human Resources of Blackboard. A delay or failure by either party toexercise any right that is the subject of this Agreement will not be construed as a waiver of thatright. A waiver of a breach on any one occasion will not be construed as a waiver of any otherbreach. Regardless of the choice of law or conflict of law provisions of the District of Columbiaor any other jurisdiction, the parties agree that this Agreement shall be otherwise interpreted,enforced and governed by the laws of the District of Columbia. This Agreement will continue ineffect until all obligations under it are fulfilled. If any part of this Agreement is held by acourt of competent jurisdiction to be void or unenforceable, the remaining provisions shallcontinue with full force and effect. This Agreement is not assignable by you. This Agreement isbinding on you with respect to Blackboard, its successors or assigns. This Agreement may beexecuted inany number of counterparts each of which shall be an original, but all of which together shallconstitute one instrument. The headings in this Agreement are for convenience only and shall noteffect the interpretation of this Agreement. You further certify that you fully understand theterms of this Agreement and have entered into it knowingly and voluntarily.
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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case ofBlackboard by its authorized officer, as of the day and year set forth under their signaturesbelow.       Blackboard Inc.     /s/ Peter Segall By: /s/ Michael Chasen     Peter Segall   Michael Chasen, CEO and President     Date: September 1, 2006   Date: September 1, 2006
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**Attachment A****DISPUTE RESOLUTION PROCEDURES**The parties agree to make a good faith effort to informally resolve any dispute before submittingthe dispute to arbitration in accordance with the following procedures:A. The party claiming to be aggrieved shall furnish to the other a written statement of thegrievance, all persons whose testimony would support the grievance, and the relief requestedor proposed. The written statements must be delivered to the other party within the timelimits for bringing an administrative or court action based on that claim. B. If the other party does not agree to furnish the relief requested or proposed, or otherwisedoes not satisfy the demand of the party claiming to be aggrieved within thirty (30) days andthe aggrieved party wishes to pursue the issue, the aggrieved party shall by written noticedemand that the dispute be submitted to non-binding mediation before a mediator jointlyselected by the parties. C. If mediation does not produce a resolution of the dispute and either party wishes to pursuethe issue, that party shall request arbitration of the dispute by giving written notice to theother party within thirty (30) days after mediation. The parties will attempt to agree on amutually acceptable arbitrator and, if no agreement is reached, the parties will follow theprocedures established by the JAMS Employment Arbitration Rules and Procedures (“Rules”),which may be found at www.jamsadr.com/rules/employment_arbitration_Rules.asp. The arbitrationwill be conducted consistent with JAMS/Endispute’s rules governing employment disputes(“**Rules**”) that are in effect at the time of the arbitration. If there is any conflict betweenthose Rules and the terms of the Employment Agreement (“**Agreement**”), including all attachmentsthereto, the Agreement will govern. The arbitrator shall have the authority to decide whetherthe conduct complained of under Subsection A above violates the legal rights of the parties.In any such arbitration proceeding, any hearing must be transcribed by a certified courtreporter and any decision must be supported by written findings of fact and conclusions oflaw. The arbitrator’s findings of fact must be supported by substantial evidence on therecord as a whole and the conclusions of law and any remedy must be provided for by andconsistent with the laws of District of Columbia and federal law. The arbitrator shall haveno authority to add to, modify, change or disregard any lawful term of the Agreement.Blackboard will pay the arbitrator’s fee. Each party will bear its own attorneys’ fees andcosts, unless the arbitrator orders the award of attorneys’ fees and costs. The arbitrator’sdecision will be final and binding on Blackboard and you and may be recorded as a judgment ina court of competent jurisdiction. D. Arbitration shall be the exclusive means for final resolution of any dispute between theparties, except (1) for workers’ compensation and unemployment claims and (2) when injunctiverelief is necessary to preserve the status quo or to prevent irreparable injury, including,without limitation, any claims concerning an alleged or threatened breach of your obligationsregarding confidentiality, non-solicitation and non-competition. Injunctive relief may besought from any court of competent jurisdiction located in the District of Columbia.