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EXHIBIT 10.9

BLACKBOARD INC.

OUTSIDE DIRECTOR COMPENSATION POLICY

In order to attract and retain qualified and experienced independent directors to serve on the
Board of Directors of Blackboard Inc. (the “Corporation”), the Board of Directors has adopted this
Outside Director Compensation Policy (the “Policy”) which shall apply to non-employee directors of
the Corporation.

Annual Retainer

	 	•  	Each Board Member serving on the Board of Directors after the annual stockholder meeting
in any given year shall be paid a $10,000 annual retainer payable quarterly in advance.
	 	•  	Board Members elected or appointed to the Board of Directors in between annual meetings
shall be paid a prorated retainer based on the period from the time of such election or
appointment until the date one year after the previous annual meeting.

Board Meeting, Committee, and Event Fees

Each Board Member shall receive the fees listed below for attendance at Board meetings, committee
meetings and Blackboard events. Such fees shall be payable semi-annually on or about June 30 and
December 31 of each year.

	 	•  	$5,000 for each board meeting attended in person
	 	•  	$2,500 for each board meeting attended via telephone
	 	•  	$1,500 for each committee meeting attended in person
	 	•  	$3,000 if chairing the committee meeting in person
	 	•  	$750 for each committee meeting attended via telephone
	 	•  	$1,500 if chairing the committee meeting via telephone
	 	•  	$1,500 for each event (such as user conferences, governance events and annual stockholder meetings) attended in person

As a policy, Blackboard encourages its Board Members to attend its annual stockholder meetings and
accordingly, the fees for attendance at Blackboard events shall include attendance at Blackboard’s
annual stockholder meetings.

The maximum amount of fees that a Board Member may receive in any given calendar year for
attendance at Board meetings, committee meetings and Blackboard events are as follows:

	 	•  	Maximum board meeting fees of $35,000 per year
	 	•  	Maximum committee meeting fees of $30,000 per year
	 	•  	Maximum of three events per year
	 	•  	Maximum cash payout of $75,000 per year, including the annual retainer
	 	•  	Reasonable out-of-pocket travel expenses for incurred in attending Blackboard meetings and events will be reimbursed.

Equity Grants

Board Members shall be eligible for stock option grants as follows:

	 	•  	Each Board Member newly elected or appointed to the Board of Directors shall receive an
initial grant of options to purchase such number of shares obtained by dividing 100,000 by
the exercise price, rounded to the nearest 100 shares. The exercise price shall be the
closing price of Blackboard common stock on the trading date prior to such Board Member’s
election or appointment.
	 	•  	On July 1 of each year, each Board Member who at such time has served on the Board of
Directors for at least six months shall receive a grant of option to purchase such number
of shares obtained by dividing $50,000 by the exercise price, rounded to the nearest 100
shares. The exercise price shall be the closing price of Blackboard common stock on the
last trading date prior to July 1.

The vesting schedule applicable to stock options is as follows:

	 	•  	50% on first anniversary of the grant date
	 	•  	50% on second anniversary of the grant date
	 	•  	Upon departure from the Board of Directors, no additional options shall vest however
departing Board Members may exercise vested options for 90 days after the departure date.

Other Provisions

	 	•  	Board Members, on an individual basis, may elect to have their cash compensation paid directly to their employer.
	 	•  	Board Member compensation information will be disclosed to shareholders in the annual
proxy statement as required by applicable law, including disclosure of the payment of
compensation to a director’s employer as applicable.exv10w21

 

Blackboard Inc.

Incentive Stock Option Agreement

Granted Under 2004 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by Blackboard Inc., a Delaware corporation (the “Company”),
on [Date], (the “Grant Date”) to [Name], an employee of the Company (the “Participant”), of an
option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2004
Stock Incentive Plan (the “Plan”), a total of [Number] shares (the “Shares”) of common stock, $0.01
par value per share, of the Company (“Common Stock”) at $[Price] per Share. Unless earlier
terminated, this option shall expire at 5:00 p.m., Eastern time, on the tenth anniversary of the
Grant Date (the “Final Exercise Date”).

     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant”, as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.

2. Vesting Schedule.

     This option will become exercisable (“vest”) as to 33% of the original number of Shares on the
first anniversary of the Vesting Commencement Date and, as to the remaining 67% of the original
number of Shares, ratably on a monthly basis at the end of each of the 24 months following the
first anniversary of the Vesting Commencement Date. The “Vesting Commencement Date” is [Vesting
Commencement Date].

     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.

     Upon the occurrence of a Reorganization Event or a Change in Control Event (as defined in the
Plan), except to the extent specifically provided to the contrary in any other agreement between
the Participant and the Company, the vesting hereunder shall be accelerated so that this option
shall become immediately exercisable for the number of Shares subject to this option which
otherwise would have first vested within 12 months following such Reorganization Event or Change in
Control Event, and any remaining unvested shares subject to such Option shall continue to vest in
accordance with the vesting schedule set forth herein as though such 12 month period had actually
passed. At any time after a Reorganization Event or a Change in Control Event, if the Participant
ceases to be an Eligible Participant due to termination by the Company of its relationship with the
Participant or a Constructive Termination (as defined below) of the Participant, except to the
extent specifically provided to the contrary in any other agreement between the Participant and the
Company, the vesting hereunder shall be further accelerated so that this option shall become
immediately exercisable for the number of Shares

 

 

subject to this option which otherwise would have first vested within 12 months following such
termination or Constructive Termination, provided that the acceleration periods under this Section
2 shall be cumulative, and any remaining unvested shares subject to such Option shall continue to
vest in accordance with the vesting schedule set forth herein as though such additional 12 month
period had actually passed.

     For the purposes of this option, a “Constructive Termination” is deemed to have occurred if
the Participant is relocated outside of the Participant’s then residential area without his or her
consent or there is a material diminution of the Participant’s compensation, duties or
responsibilities without his or her consent.

3. Exercise of Option.

     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, or by other method
authorized pursuant to the Plan, accompanied by this agreement and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional share.

     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).

     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the
right to exercise this option shall terminate twelve months after such cessation (but in no event
after the Final Exercise Date), provided that this option shall be exercisable only
to the extent that the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date,
violates the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon such violation.

     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.

     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall

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terminate immediately upon the effective date of such discharge. “Cause” shall mean willful
misconduct by the Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar
agreement between the Participant and the Company), as determined by the Company, which
determination shall be conclusive. The Participant shall be considered to have been discharged for
“Cause” if the Company determines, within 30 days after the Participant’s resignation, that
discharge for cause was warranted.

4. Tax Matters.

     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.

     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.

5. Nontransferability of Option.

     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.

6. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with an underwritten public offering of the Company’s
securities pursuant to a registration statement under the Securities Act, (i) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the offering) without the
prior written consent of the Company or the underwriters managing such initial underwritten public
offering of the Company’s securities for a period of 90 days from the effective date of such
registration statement, and (ii) to execute any agreement reflecting clause (i) above as may be
requested by the Company or the managing underwriters at the time of such offering.

7. Provisions of the Plan.

     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.

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     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.

	 	 	 
	 	 	
Blackboard Inc.
	Dated: [Grant Date]	 	
By: __________________________
	 	 	
          Name:
	 	 	
          Title:

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PARTICIPANT’S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2004 Stock
Incentive Plan.

PARTICIPANT:

_________________________

	 	 	 	 	 
	

	 	Print Name:
	 	________________________
	 
	

	 	Address:
	 	________________________
	 
	

	 	 	 	________________________
	 
	

	 	 	 	________________________
	 
	

	 	SSN:
	 	________________________

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