Document:

exv10w6

Exhibit 10.6

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Judy Verses (“you”) and
Blackboard Inc. (“Blackboard”).

     WHEREAS, Blackboard desires to employ you on the terms and conditions hereinafter set forth
and 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 hire you as the President and COO, Bb Learn.
You shall devote your entire business time, attention, skill and energy exclusively to the business
of Blackboard and perform the responsibilities assigned to you in accordance with the standards and
policies that Blackboard may from time to time establish. With prior written notice to Blackboard,
you may engage in appropriate civic or charitable activities and devote a reasonable amount of time
to private investments or boards or other activities provided that such activities do not interfere
or conflict with your responsibilities and are not or are not likely to be contrary to Blackboard’s
interests. You and Blackboard agree that your position is essential to Blackboard’s success and
that the highest level of performance is required from you.

2. Term of Employment. Blackboard agrees to employ you, and you agree to remain in
employment with Blackboard, from July 7, 2008 until July 6, 2009 (the “Initial Term”), unless
your employment terminates earlier pursuant to Section 5 below. This Agreement shall automatically
renew for successive one (1) year periods (each, a “Renewal Term” and together with the Initial
Term, the “Term”) unless either party provides prior written notice of its intent not to renew 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$325,000
(“Base Compensation”), less applicable taxes and withholdings, payable in accordance with
Blackboard’s regular payroll practices from time to time in effect. Blackboard may review and
adjust your Base Compensation periodically.

     (b) Bonus Compensation. To be eligible to receive an annual bonus for any calendar
year, you must meet financial performance targets set by the CEO and be employed through March
31st of the following year. Your initial target bonus may be up to 50% of your Base
Compensation. The actual amount of the bonus, if any, will be determined by the CEO in the CEO’s
sole discretion. If a bonus is awarded, it will be paid in the year following that for which the
bonus is being awarded. You will receive your first bonus, if any, in 2009 for 2008. This 2008
bonus, if any, will be pro-rated.

     (c) Business Expenses. During the Term, Blackboard shall pay or reimburse you for all
ordinary and reasonable business-related expenses you incur in the performance of your duties under
this Agreement. Blackboard will reimburse you for all such expenses, in accordance with its
policies 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 that
Blackboard may provide to employees at your level, which may include, but are not limited 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 and conditions of any such plan or program in question
and to the determinations of any person or committee
administering any such plan or program. Blackboard reserves the right to modify or terminate any
such benefit at any time.

     (b) Vacation. You shall be eligible to take paid vacation during each calendar year
in accordance with Blackboard’s Employee Manual.

 

 

5. Termination of Employment. Upon the effective date of termination of your employment
with 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 have
already accrued or vested as of the Termination Date. Termination of your employment may occur
under any of the following circumstances:

     (a) Expiration of Term. Your employment will terminate if the Term provided for under
Section 2 expires pursuant to the notice requirements of Section 2; or

     (b) Termination of Employment by Blackboard. Blackboard has the right to terminate
your employment at any time with or without Cause. For all purposes under this Agreement,
(“Cause”) shall mean:

          (i) a failure by you to substantially perform your duties under this Agreement or your job
responsibilities, other than a failure resulting from your complete or partial incapacity due to
physical or mental illness or impairment;

          (ii) an act or omission by you that constitutes gross misconduct, moral turpitude or fraud;

          (iii) a conviction for, or a plea of “guilty” or “no contest” to, a
felony; or

          (iv) a material breach of any duty owed to Blackboard, including but not limited to the duties
of loyalty and confidentiality;

     (c) Resignation by You. You have the right to resign your employment with Blackboard
at any time, with or without Good Reason, provided that you may resign with Good Reason only if (i)
you provide notice of such reason for resignation to Blackboard within 90 days of the initial
existence of the condition giving rise to the Good Reason and stating that such reason will be
grounds for resignation with Good Reason, and (ii) if Blackboard fails 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 occurrence of a Good Reason event.

          (i) For purposes of this Agreement, “Good Reason” shall mean (A) a material failure by
Blackboard to perform its obligations under this Agreement; (B) your relocation to more than 30
miles outside of the Washington, DC metropolitan area without your consent; or (C) a material
diminution of your compensation, duties or responsibilities within three (3) months of (I) a sale
or transfer of more than 50% of the total number of shares of the outstanding capital stock of
Blackboard or all or substantially all of the assets of Blackboard to a single unrelated entity or
group of affiliated entities (not related to Blackboard) in one or a series of closely related
transactions, or (II) a merger or consolidation in which Blackboard is not the surviving entity or
in which the shareholders in Blackboard prior to the merger or consolidation own less than 50% of
the shares of outstanding capital stock of Blackboard.

          (ii) During the Term, you agree to provide Blackboard ninety (90) days’ prior written notice
of your resignation, with or without Good Reason. Blackboard may in its sole discretion place you
on paid administrative leave as of any date prior to the end of such ninety (90) day notice period
and request that you no longer be present on Blackboard premises. During any period of paid
administrative leave, you will not be authorized to act as a representative, or make any statements
on behalf of, Blackboard; or

     (d) Death or Disability. Your employment shall be deemed to have been terminated by
you upon your (i) death or (ii) inability to perform your duties under this Agreement, even with
reasonable accommodation, for
more than twenty-six (26) weeks, whether or not consecutive, in any twelve-month period
(“Disability”). Termination will be effective upon the occurrence of such event.

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6. Severance Payments.

     (a) Payments and Benefits. After the first six (6) months of your Initial Term have elapsed,
if during the remainder of the Term Blackboard terminates your employment without Cause (as defined
in Section 5(b)), or you resign for Good Reason and comply with the obligations set forth in
Section 5(c), then Blackboard will pay you at the rate of your then current base compensation, less
applicable taxes and withholdings, for six months (“Severance Payments”). If, following the end of
a calendar year but prior to receiving your bonus for the completed calendar year, you are
terminated without Cause 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. The Severance
Payments shall be made over a period beginning on the Termination Date and ending six months from
such date (the “Severance Period”), to be paid on Blackboard’s regular payroll cycle during the
Severance Period; provided that if any payments would otherwise be due on or after March 15 of the
calendar year next succeeding the year in which termination occurs, then all payments that would
otherwise be due after March 15 shall be paid to you on or before March 15 of such next succeeding
year, and provided further that your bonus for the completed calendar year, if any, shall be paid
at such time in such next succeeding year as Blackboard deems appropriate, consistent with the
payment of other executives’ bonuses. If you timely apply and qualify for COBRA, Blackboard will
pay your COBRA premiums, at your current level of coverage, for six months, unless you become
covered by another employer’s health insurance, in which case the COBRA coverage will be terminated
when your new coverage commences. You agree to notify Blackboard immediately if you become covered
by another employer’s health insurance plan. To receive the Severance Payments and COBRA premiums
you must sign a release of any and all claims in the form provided 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 the signed release to Blackboard.

     (b) Section 409A. Subject to this Section 6(b), any payments or benefits under Section 6
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 5. The following rules shall apply with respect to
distribution of the payments and benefits, if any, to be provided to you under this Section 6:

          (i) It is intended that each installment of the payments and benefits provided under Section 6
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 Blackboard
nor you 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;

          (ii) If, as of the date of your “separation from service” from Blackboard, you are 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 6; and

          (iii) If, as of the date of your “separation from service” from Blackboard, you are a
“specified employee” (each, for purposes of this Agreement, within the meaning of Section 409A),
then:

               (A) Each installment of the payments and benefits due under Section 6 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 your tax year in which the separation from service occurs and
the 15th day of the third month following the end of the Blackboard’s tax year in which the
separation from service occurs; and

               (B) Each installment of the payments and benefits due under Section 6 that is not described
within Section 6(b)(iii)(A) and that would, absent this subsection, be paid within the six-month
period following your “separation from service” from Blackboard shall not be paid until the date
that is six months and one day after such separation from service (or, if earlier, your 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

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one day following your 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 your taxable year following the taxable year
in which the separation from service occurs.

               (iv) 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).

               (v) 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.

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 property
belonging to Blackboard. This includes all documents and other information prepared by you or on
your behalf or provided to you in connection with performing your duties for Blackboard, regardless
of 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 or
storing documents or other information. You hereby warrant that you will not retain in any form
any such document or other information or copies thereof, except as provided in the following
sentence. You may retain a copy of any documents describing any rights or obligations you may have
after the Termination Date under any employee benefit plan or other agreements.

8. Confidentiality and Intellectual Property

     (a) Confidential Information. You shall not disclose or use at any time, either
during your employment or after your Termination Date, any confidential information, including, but
not limited to, the terms of this Agreement, existing and prospective investments, trade secrets or
proprietary information, strategic sourcing information or analysis, financing information and
sources, patents, patent applications, developmental or experimental work, formulas, test data,
prototypes, models, know how and product specifications, financial information, financial
projections and pro forma financial information, sales and marketing strategies, plans and programs
and product development information, employees’ and consultants’ benefits, perquisites, salaries,
stock options, compensation, formulas or bonuses, and their non-business addresses and telephone
numbers, organizational structure and reporting relationships, business plans, names, addresses,
phone numbers of customers, contracts, including contracts with clients, suppliers, independent
contractors or employees, business plans and forecasts, and existing and prospective projects or
business opportunities (“Confidential Information”) of Blackboard or its wholly-owned subsidiaries
or affiliates, whether patentable or not, which you learn as a result of your employment with
Blackboard, whether or not you developed such information. “Confidential Information” shall not
include, without limitation, information that is or later becomes publicly available in a manner
wholly unrelated to any breach of this Agreement by you as of the date it enters the public
domain. If you are uncertain whether something is Confidential Information you should treat it as
Confidential Information until you receive clarification from Blackboard that it is not
Confidential Information. Confidential Information shall remain at all times the property of
Blackboard. You may use or disclose Confidential Information only as authorized and
necessary in performing your responsibilities under this Agreement during your employment with
Blackboard; with the Chief Legal Officer’s prior written consent; in a legal proceeding between you
and Blackboard to establish the rights of either party under this Agreement, provided that you
stipulate to a protective order to prevent any unnecessary use or disclosure; 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 an adequate

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opportunity to
protect its legal interests in preventing disclosure. Upon receipt of a subpoena that could
possibly require disclosure of Confidential Information, you shall provide a copy of the compulsory
process and complete information regarding the circumstances under which you received it to
Blackboard by hand delivery within twenty-four (24) hours. You will not make any disclosure until
the latest possible date for making such disclosure in accordance with the compulsory process
(“Latest Possible Date”). If Blackboard seeks to prevent disclosure in accordance with the
applicable legal procedures, and provides you with notice before the Latest Possible Date that it
has initiated such procedures, you will not make disclosures of any Confidential Information that
is the subject of such procedures, until such objections are withdrawn or ruled on. You hereby
acknowledge that any breach of this Section 8(a) would cause Blackboard irreparable harm.

     (b) Outside Activities. You shall submit to Blackboard’s Chief Legal Officer, within
a reasonable time prior to dissemination, the text of any speech, professional paper, article or
similar communication created by you which relates to Blackboard’s present or future business or
research and development endeavors. The Chief Legal Officer then will notify you if the
dissemination of the communication is permitted under the terms of this Agreement.

     (c) Ownership of Confidential Information; Return of Materials. All Confidential
Information, including without limitation that which is produced by or for Blackboard by you or
anyone else, all materials embodying Confidential Information, and all copies thereof, will remain
the property of Blackboard or of the third party who has furnished it to Blackboard. On your
Termination Date, or at the written request of Blackboard at any time, you will immediately deliver
to Blackboard all materials, and copies thereof, which are in your possession or control and which
contain or are related in any way to any Confidential Information. This includes all documents and
other information prepared by you or on your behalf or provided to you in connection with your
duties while employed by Blackboard, regardless of the form in which such document or information
are 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 hereby
warrant that you will not retain in any form any such document or other information or copies
thereof. You may retain a copy of this Agreement and any other document or information describing
any 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 or
not patentable, made to any Inventions and/or Confidential Information.

               (C) “Copyrighted Work” shall mean any work of authorship eligible for copyright protection
under 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 of
the United States and foreign countries.

          (ii) Exclusions. An Invention, Copyright or Copyrighted Work will not be subject to
this Agreement when all the following criteria are met: (A) no equipment, supplies, facilities, or
Confidential Information of Blackboard was used in developing the Invention or Copyrighted Work or
in applying for or obtaining a patent or Copyright; (B) the Invention or Copyrighted Work was
developed entirely on your own time; (C) the Invention or
Copyrighted Work does not relate directly to the business of Blackboard or to Blackboard’s
actual or demonstrably anticipated research or development; and (D) the Invention, Copyright or
Copyrighted Work does not result from any work performed by you for Blackboard or at the request of
Blackboard. For purposes of this paragraph, “Blackboard” includes Blackboard’s wholly-owned
subsidiaries and affiliates.

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          (iii) Ownership and Assignment of Rights.

               (A) All Inventions, Improvements, or Confidential Information that you have or will conceive
or develop, either alone or with others, shall be the exclusive property of Blackboard. You hereby
assign, and agree to assign, to Blackboard your entire right, title, and interest in and to (I) any
and all such Improvements and Inventions, (II) any and all applications for patent, domestic and
foreign that may be filed on said Improvements and Inventions, and (III) any and all patents that
may issue or be granted on such applications, except those excluded under Section 8(d)(ii) of this
Agreement. Both during your employment and after your Termination Date you will on request
immediately sign and deliver to Blackboard without further consideration any and all documents
necessary to perfect the assignments granted in this Section.

               (B) You understand and agree that all Copyrighted Works conceived, developed, created or
contributed to by you shall be considered works made for hire under the copyright laws of the
United States and shall be the exclusive property of Blackboard. Blackboard shall be considered
the author of such Copyrighted Works. You further understand and agree that in the event any
Copyrighted Work created by you within the scope of, or in connection with, your work with
Blackboard, or at the request of Blackboard, fails to meet the legal requirements of a work made
for hire owned by Blackboard, then this Agreement shall operate to assign to Blackboard all of your
rights, 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 Copyrights
for such Copyrighted Works.

          (iv) Assistance and Designation of Agent.

               (A) Both during your employment and after your Termination Date, you will on request
immediately sign and deliver to Blackboard without further consideration, all instruments in
writing requiring your signature and deemed by Blackboard to be necessary or advisable in, or in
connection with, filing or prosecuting of any application for any patent covering Improvements,
Inventions or any divisional, continuing, renewal or reissue application or reexamination request
based upon any application for patent. In the event that Blackboard is unable for any reason
whatsoever to secure your signature to any lawful and necessary documents required to apply for or
execute 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 and
appoint Blackboard and its officers and agents, as your agents and attorneys-in-fact to act for and
on your behalf and instead of you, to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents thereon with the same
legal force and effect as if executed by you.

               (B) You will aid Blackboard promptly on request, and without further consideration, in any
matter 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 such
request is made after your employment has ended, Blackboard will reimburse you for any expenses
incurred and compensate for any services rendered in complying with such request at the same rate
at which you were compensated during the final month of your employment.

9. Non-Solicitation/Non-Competition.

During your employment and for one (1) year following your Termination Date (the “Restricted
Period”) you will not, except with prior written approval of Blackboard’s Chief Legal Officer,
directly or indirectly, individually or as part of or on behalf of any other person, company,
employer or other entity: (a) hire or attempt to solicit for hire, or encourage to end their
relationship with Blackboard, any persons who have been employed by Blackboard at any
time within the preceding six (6) months; (b) sell or otherwise provide, or solicit for the
purposes of selling or otherwise providing, services or products that are similar or related to
those sold by Blackboard 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 and with whom you had direct contact on behalf of

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Blackboard during that time; or (c)
own, manage, operate, control, be employed by, participate in, work in, advise, consult or contract
with, or support in any manner any Competing Organization.

For purposes of this Agreement, “Competing Organization” means any person or organization engaged
in or about to become engaged in the business of creating, developing, marketing or selling
products or services competitive to Blackboard’s products or services, within the geographical area
in which Blackboard is either (1) engaged in business; or (2) actively marketing or has made a
significant investment in time and money to prepare to market its products or services. This is
limited to any person or organization, which is in existence or under development, whose services
compete, directly or indirectly, with a product, process or service upon which or with which you
have worked for Blackboard or about which you acquired Confidential Information.

You agree that these provisions are necessary to protect Blackboard’s legitimate business
interests. You acknowledge that by virtue of holding a high level position at Blackboard, you have
access to and substantial information regarding Blackboard Confidential Information and other
strategic business activities and that if you held a position for a Competing Organization, it is
likely that (a) you would use or disclose the knowledge you learned while working for Blackboard,
or (b) it would appear to interested third parties that you were using or disclosing such knowledge
to your new employer. You warrant that the provisions will not unreasonably interfere in your
ability to earn a living or to pursue your occupation after the Termination Date. You agree to
notify any person or entity to which you provide services during the Restricted Period of your
obligations under this Section 9.

You agree that during the Restricted Period, you will give notice to the Company of each new
business activity you plan to undertake, at least (10) business days prior to beginning any such
activity. The notice shall state the name and address of the individual, corporation, association
or other entity or organization (“Entity”) for whom such activity is undertaken and the name of
your business relationship or position with the entity. You further agree to provide the Company
with other pertinent information concerning such business activity as the Company may reasonably
request in order to determine your continued compliance with your obligations under this Agreement.
You agree to provide a copy of this Agreement to all persons and Entities with whom you seek to be
hired or do business before accepting employment or engagement with any of them.

10. Non-Disparagement.You agree to refrain from making any derogatory or defamatory
remarks or comments that may disparage Blackboard, or any officer, employee or agent of Blackboard
during your employment or after your Termination Date.

11. Other Obligations. You warrant that you are not subject to any other obligations
that would conflict with or inhibit your ability to perform your duties under this Agreement. You
represent that you have disclosed to Blackboard the existence and contents of all covenants not to
compete that you have entered into with any other entity. You further warrant that you have not
and will not bring to Blackboard or use in the performance of your responsibilities at Blackboard
any equipment, supplies, facility or trade secret information (that is not generally available to
the public) of any current or former employer or organization other than Blackboard to which you
provided 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 communication
required to be given under the terms of this Agreement must be in writing and must be personally
delivered (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 following
the 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 the
address that Blackboard has on file for you at the
time the notice is to be sent.
	Matthew Small, Esq.

Blackboard Inc.

650 Massachusetts Ave., NW, 6th Floor

Washington, DC 20001-3796
	 	 

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	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 and
Blackboard will be finally resolved by binding arbitration in accordance with the Federal
Arbitration Act (“FAA”). You and Blackboard agree to follow the Dispute Resolution Procedures set
forth in Attachment A to this Agreement.

     (c) 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.

     (d) Nature of Agreement. This Agreement and the attachment hereto constitute the
entire agreement between you and Blackboard and supersede all prior agreements and understandings
between you and Blackboard relating to the matters covered by this Agreement. Any long-term equity
incentives between Blackboard and you shall be contained in a separate agreement. In making this
Agreement, the parties warrant that they did not rely on any representations or statements other
than those contained in this Agreement. No modification of or amendment to this Agreement will be
effective unless in writing and signed by the Chief Legal Officer or Vice President for Human
Resources of Blackboard. A delay or failure by Blackboard to exercise any right that is the
subject of this Agreement will not be construed as a waiver of that right. A waiver of a breach on
any one occasion will not be construed as a waiver of any other breach. Regardless of the choice
of law or conflict of law provisions of the District of Columbia, the State of Delaware or any
other jurisdiction, the parties agree that this Agreement shall be otherwise interpreted, enforced
and governed by the laws of the State of Delaware. This Agreement will continue in effect until
all obligations under it are fulfilled. If any part of this Agreement is held by a court of
competent jurisdiction to be void or unenforceable, the remaining provisions shall continue with
full force and effect. This Agreement is not assignable by you. This Agreement is binding on you
with respect to Blackboard, its successors or assigns. This Agreement may be executed in any
number of counterparts each of which shall be an original, but all of which together shall
constitute one instrument. The headings in this Agreement are for convenience only and shall not
effect the interpretation of this Agreement. You further certify that you fully understand the
terms of this Agreement and have entered into it knowingly and voluntarily.

     (e) 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 Blackboard, the Board of Directors nor its or their designees or agents
shall be liable to you or any other person for any actions, decisions or determinations made in
good faith.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
Blackboard by its authorized officer, as of the day and year set forth under their signatures
below.

	 	 	 	 	 	 	 
	 	 	Blackboard Inc.
	 
	 	 	 	 	 	 
	/s/ Judy Verses

	 	By:
	 	/s/ Michael Chasen	 	 
	 

	 	 	 	 	 	 
	Judy Verses

	 	 	 	Michael Chasen, CEO and President	 	 
	 
	 	 	 	 	 	 
	Date: July 2, 2008

	 	 	 	Date: July 2, 2008	 	 

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Exhibit 10.7

BLACKBOARD INC.

Restricted Stock Unit Agreement

Granted Under the Amended and Restated 2004 Stock Incentive Plan

     AGREEMENT made between Blackboard Inc., a Delaware corporation (the “Company”), and Michael L.
Chasen (the “Participant”).

     1. Grant of RSUs.

          On October 15, 2009 (the “Grant Date”) and subject to the terms and conditions set forth in
this Agreement and in the Blackboard Inc. Amended and Restated 2004 Stock Incentive Plan (the
“Plan”), the Company has granted to the Participant Restricted Stock Units (“RSUs”) representing
the right to receive One Hundred Twenty Thousand (120,000) shares of common stock, $0.01 par value,
of the Company (the “Common Stock”). The shares of Common Stock issuable with respect to the RSU
shall be referred to as the “Shares”.

     2. Vesting and Forfeiture.

          (a) The RSUs shall vest in full on June 30, 2013 provided that the Participant remains an
Eligible Participant on June 30, 2013.

     (b) Notwithstanding the foregoing, (i) the RSUs shall vest in full on the occurrence of a
Change in Control Event, provided that the Participant remains an Eligible Participant on the
closing date of such Change in Control Event, and (ii) in the event Participant is terminated
without Cause, resigns with Good Reason, dies or incurs a Disability, in each case prior to June
30, 2013, such number of RSUs shall vest as indicated in Exhibit A using the number of whole
calendar months elapsed after June 30, 2009 to the date on which Participant is no longer an
Eligible Participant. The date upon which the RSUs vest shall be referred to as the “Vesting Date”.

     (c) For purposes of this Agreement:

     (i) “Cause” shall mean (i) Participant’s non-feasance or material breach of
Participant’s employment agreement with Company then in effect, provided that
Company first provides Participant with written notice of such failure and
Participant fails to cure it within thirty (30) days of such notice; (ii) an act or
omission by Participant that constitutes gross misconduct, moral turpitude or fraud;
(iii) a conviction for, or a plea of “guilty” or “no contest” to, a felony; or (iv)
a material breach of any legally recognized duty owed to Company (e.g.,
Participant’s duty of loyalty and confidentiality);

     (ii) “Disability” shall mean Participant’s inability to perform Participant’s
duties, even with reasonable accommodation, for more than twenty-six (26) weeks,
whether or not consecutive, in any twelve-month period;

     (iii) “Good Reason” shall mean (A) a material failure by Company to perform its
obligations under any employment agreement with Participant then in

 

 

effect; (B) Participant’s material relocation outside of Participant’s current
residential area without Participant’s consent; or (C) a material diminution of
Participant’s compensation, duties, or responsibilities at any time or for any
reason other than for Cause; and

     (iv) “Eligible Participant” shall mean a Participant who has continuously at
all times since the Grant Date been, an employee, officer or director of, or
consultant or advisor to, the Company or any other entity the employees, officers,
directors, consultants, or advisors of which are eligible to receive RSUs under the
Plan; provided, however, that the Participant shall only be considered an Eligible
Participant until such time as he has a “Separation From Service” (as defined
below).

Except as otherwise provided in this Agreement, in the event that the Participant ceases to be an
Eligible Participant for any reason or no reason prior to the Vesting Date, the RSUs shall be
immediately and automatically forfeited and the Participant shall have no further rights with
respect thereto.

     3. Issuance of Shares and Rights to Vote and Receive Dividends.

     (a) Issuance Event.

               (i) No Shares shall be issued with respect to any vested RSUs until the earlier of (A) the
Participant’s “Separation From Service” from the Company (as defined under Section 409A of the
Internal Revenue Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”)) and
(B) a Section 409A Change in Control Event. 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) or its successor provision. “Section 409A
Change in Control Event” shall mean an event or occurrence that constitutes both (i) a Change in
Control Event as defined in the Plan and (ii) a “change in control event” as defined in Treasury
Regulation Section 1.409A-3(i)(5)(i) or its successor provision.

               (ii) Notwithstanding the foregoing, no later than thirty (30) days following the date that an
independent committee of the Board of Directors approves the grant of the RSUs to Participant,
Participant may deliver a written election (the “2015 Election”) specifying that up to one-half
(50%) of any Shares with respect to vested RSUs be delivered to Participant on the earliest of (A)
December 31, 2015, (B) the Participant’s Separation From Service and (C) a Section 409A Change in
Control Event, with the remaining Shares that are not subject to the 2015 Election being delivered
in accordance with Section 3(a)(i) above. In the event that the Participant does not timely make
the 2015 Election, then all of the Shares with respect to vested RSUs shall be delivered in
accordance with Section 3(a)(i) above.

The event that results in Shares with respect to vested RSUs being delivered to the Participant
shall be referred to as the “Issuance Event”.

- 2 -

 

          (b) Issuance Date. Subject to the terms and conditions of this Agreement (including any
Withholding Tax obligations), as soon as practicable after the Issuance Event, the Company shall
issue one or more certificates representing the vested Shares to the Participant or his estate, or,
as directed by the Participant, by book-entry credit into a brokerage account in the name of
Participant or his estate. The Company must, in any event, issue the applicable Shares no later
than the later of (i) December 31 of the calendar year in which the Issuance Event occurs or (ii)
two and one half (21/2) months after the Issuance Event occurs; provided that in no event shall the
Participant be able to designate in which taxable year the Company issues the Shares.
Notwithstanding the foregoing, and solely to the extent necessary to avoid the penalty provisions
under Section 409A, if a Separation From Service is the Issuance Event and the Participant is a
“specified employee” (as defined under Section 409A) on the date of the Separation From Service,
then the issuance of the Shares shall be delayed until the earlier of (i) the date that is six (6)
months plus one (1) day after the date of the Separation From Service and (ii) the 10th
day after the Participant’s date of death. The date on which the Shares are issued to the
Participant shall be referred to as the “Issuance Date.”

          (c) Voting and Dividend Rights. Until the Issuance Date, the Participant shall have no rights
to any Shares or any rights associated with such Shares, including without limitation dividend or
voting rights. The Participant shall receive Dividend Equivalent Rights on the Shares between the
applicable Vesting Date and the Issuance Date. “Dividend Equivalent Rights” mean a credit to the
account of the Participant, based on the number of vested RSUs then credited to the Participant
under this Agreement, equivalent to the cash, stock or other property dividends declared by the
Company with respect to the Common Stock. Dividend Equivalent credits shall be deemed reinvested in
additional RSUs (or fractions thereof) by dividing the dollar amount of the Dividend Equivalent
credit by the Fair Market Value of a share of the Company’s Common Stock on the payment date of the
dividend. The resulting number of Common Stock equivalents shall be added to the number of RSUs
subject to this Agreement and the Shares with respect thereto shall be delivered in accordance with
this Agreement on the Issuance Date.

     4. Acceleration/ Deferral.

          (a) Acceleration. In no event may the Company deliver the Shares to the Participant
earlier than the Issuance Event unless explicitly permitted or required by Section 409A.

          (b) Deferral. In no event may the Company or the Participant defer the delivery of
the Shares beyond Issuance Event, unless such deferral is explicitly permitted or required by
Section 409A or otherwise complies in all respects with Treasury Regulation Section 1.409A-2(b)
related to subsequent changes in the time or form of payment of nonqualified deferred compensation
arrangements, or any successor regulation.

     5. Transferability.

          This Agreement may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of (whether by operation of law or otherwise) (collectively, a “transfer”), except that
this Agreement may be transferred by the laws of descent and distribution or as

- 3 -

 

otherwise permitted under the Plan and Section 409A. The Participant may only transfer the
Shares that may be issued pursuant to this Agreement following the Issuance Date.

     6. Taxes.

          (a) The Participant has reviewed with the Participant’s own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents.

          (b) The Company’s obligation to deliver Shares to the Participant upon the Issuance Date shall
be subject to the satisfaction of all income tax (including federal, state and local taxes), social
insurance, payroll tax, payment on account or other tax related withholding requirements
(“Withholding Taxes”).

          (c) The Participant acknowledges and agrees that the Company has the right to deduct from
payments of any kind otherwise due to the Participant any Withholding Taxes to be withheld with
respect to the transactions contemplated by this Agreement, including the vesting of the Shares.
The Participant may choose to execute Exhibit B to provide a method for satisfying the Withholding
Taxes or any other instruments required from time to time under the Company’s policies.

     7. Securities Laws.

          Notwithstanding any other provision of the Plan or this Agreement, the Company will not be
required to issue, and the Participant may not sell, assign, transfer or otherwise dispose of, any
shares of Common Stock received with respect to vested RSUs, unless (a) there is in effect with
respect to the shares of Common Stock received as payment of the RSUs a registration statement
under the Securities Act of 1933, as amended, and any applicable state or foreign securities laws
or an exemption from such registration, and (b) there has been obtained any other consent, approval
or permit from any other regulatory body that the Committee, in its sole discretion, deems
necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt
of any representations or agreements from the parties involved, and the placement of any legends on
certificates representing Common Stock received as payment of the RSUs, as may be deemed necessary
or advisable by the Company to comply with such securities law or other restrictions.

     8. Adjustments.

          In the event of any reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture
or extraordinary dividend (including a spin-off), or any other change in the corporate structure or
shares of the Company, the Committee (or, if the Company is not the surviving corporation in any
such transaction, the board of directors of the surviving corporation), in order to prevent
dilution or enlargement of the rights of the Grantee, shall make equitable adjustments (which
adjustments will be conclusive) as to the number and kind of securities or other property
(including cash) covered by this grant of RSUs.

- 4 -

 

     9. Provisions of the Plan.

          This Agreement is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this Agreement. Any capitalized terms used but not defined in this Agreement are
defined in the Plan.

     10. Miscellaneous.

          (a) Section 409A. This Agreement is intended to comply with the requirements of
Section 409A and shall be construed consistently therewith.

          (b) Unsecured Creditor. This Agreement shall create a contractual obligation on the
part of Company to make payment of the RSUs credited to the account of the Participant at the time
provided for in this Agreement. Neither the Participant nor any other party claiming an interest in
deferred compensation hereunder shall have any interest whatsoever in any specific assets of the
Company. The Participant’s right to receive payments hereunder shall be that of an unsecured
general creditor of Company.

          (c) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.

          (d) Waiver. Any provision for the benefit of the Company contained in this Agreement
may be waived, either generally or in any particular instance, by the Board of Directors of the
Company or the Committee.

          (e) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Company and the Participant and their respective heirs, executors, administrators, legal
representatives, successors and assigns, subject to the restrictions on transfer set forth in
Section 5 of this Agreement.

          (f) Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five calendar days after deposit in the United
States Post Office, by registered or certified mail, postage prepaid, addressed to the other party
hereto at the address shown beneath his or its respective signature to this Agreement, or at such
other address or addresses as either party shall designate to the other in accordance with this
Section 10(f).

          (g) Entire Agreement. This Agreement and the Plan constitute the entire agreement
between the parties related to the RSUs covered hereby, and supersede all prior agreements and
understandings relating to such RSUs.

          (h) Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Participant.

- 5 -

 

          (i) Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws of the State of Delaware without regard to any applicable
conflicts of laws.

          (j) Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to participation in the Plan, RSUs granted under the Plan or future RSUs that
may be granted under the Plan by electronic means or to request the Participant’s consent to
participate in the Plan by electronic means. The Participant hereby consents to receive such
documents by electronic delivery and, if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date indicated
below.

	 	 	 	 	 
	 	Blackboard Inc.

 	 
	Dated: October 15, 2009 	By:  	/s/  Matthew Small
 	 
	 	 	Matthew Small 	 
	 	 	Chief Business Officer 	 
	 

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 Amended and
Restated 2004 Stock Incentive Plan.

	 	 	 	 	 
	 	PARTICIPANT:

 	 
	 	/s/ Michael Chasen
 	 
	 	Print Name:  	Michael L. Chasen 	 
	 	 	 

- 6 -

 

	 	 	 	 	 

Exhibit A

Special Vesting Schedule for Section 2(b)(ii)

	 	 	 	 	 	 	 
	Number	 	 	 	Number	 	 
	of Full	 	 	 	of Full	 	 
	Months	 	 	 	Months   	 	 
	Elapsed	 	Shares	 	Elapsed	 	Shares
	1
	 	102	 	25	 	33,163
	2
	 	306	 	26	 	35,816
	3
	 	612	 	27	 	38,571
	4
	 	1,020	 	28	 	41,428
	5
	 	1,530	 	29	 	44,387
	6
	 	2,142	 	30	 	47,448
	7
	 	2,857	 	31	 	50,612
	8
	 	3,673	 	32	 	53,877
	9
	 	4,591	 	33	 	57,244
	10
	 	5,612	 	34	 	60,714
	11
	 	6,734	 	35	 	64,285
	12
	 	7,959	 	36	 	67,959
	13
	 	9,285	 	37	 	71,734
	14
	 	10,714	 	38	 	75,612
	15
	 	12,244	 	39	 	79,591
	16
	 	13,877	 	40	 	83,673
	17
	 	15,612	 	41	 	87,857
	18
	 	17,448	 	42	 	92,142
	19
	 	19,387	 	43	 	96,530
	20
	 	21,428	 	44	 	101,020
	21
	 	23,571	 	45	 	105,612
	22
	 	25,816	 	46	 	110,306
	23
	 	28,163	 	47	 	115,102
	24
	 	30,612	 	48	 	120,000

- 7 -

 

Exhibit B

Withholding Taxes

     To satisfy all Withholding Taxes due with respect to Participant’s RSUs, the Participant
agrees to the following:

     1. As a condition to receiving any Shares upon the Issuance Date, on the date of this
Agreement, the Participant must execute the Irrevocable Standing Order to Sell Shares attached
hereto, which authorizes the Company and a broker designated by the Company (the “Broker”) to take
the actions described in this Paragraph 1 (the “Standing Order”). The Participant authorizes the
Company to transfer the Shares to the Broker to an account for the Participant’s benefit (the
“Account”) and authorizes the Broker to sell, at the market price and on the Issuance Date the
number of Shares that the Company has instructed Broker is necessary to obtain proceeds sufficient
to satisfy the Withholding Taxes. The Participant agrees to execute and deliver such documents,
instruments and certificates as may reasonably be required in connection with the sale of the
Shares pursuant to this Exhibit A.

     2. The Participant understands and agrees that the number of Shares that Broker will sell will
be based on an estimate made by the Broker of the Shares required to be sold to satisfy the
Withholding Taxes. The Participant agrees that the proceeds received from the sale of Shares
pursuant to Paragraph 1 will be used to satisfy the Withholding Taxes and, accordingly, the
Participant hereby authorizes Broker to pay such proceeds to the Company for such purpose. The
Participant understands that to the extent that the proceeds obtained by such sale exceed the
amount necessary to satisfy the Withholding Taxes, such excess proceeds shall be deposited into the
Account and in the event of a shortfall, additional Shares may be sold and/or cash withholding may
be required from the Participant. The Participant further understands that any remaining Shares
shall be deposited into the Account.

     3. The Participant acknowledges and agrees that (i) if there is not a market in the Common
Stock or (ii) the Company determines in its sole discretion that the procedure described in
Paragraph 1 is not advisable or sufficient, the Company will have the right to make other
arrangements to satisfy the Withholding Taxes due upon issuance of the Shares with respect to the
RSUs, including, but not limited to, the right to deduct amounts from salary or payments of any
kind otherwise due to the Participant or withhold in Shares, provided that the Company only
withholds the amount of Shares necessary to satisfy the statutory minimum withholding amount.

     4. The Participant has reviewed with the Participant’s own tax advisors the federal, state,
local and foreign tax consequences of this grant and the transactions contemplated by this
Agreement. The Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant’s own tax liability that
may arise as a result of this grant or the transactions contemplated by this Agreement.

     5. The Participant represents to the Company that, as of the date hereof, he is not aware of
any material nonpublic information about the Company or the Common Stock. The Participant and the
Company have structured this Agreement to constitute a “binding contract” relating to the sale of
Common Stock pursuant to this Exhibit A, consistent with the affirmative defense to liability under
Section 10(b) of the Securities Exchange Act of 1934 under Rule 10b5-1(c) issued under such Act.

     IN WITNESS WHEREOF, the undersigned has executed this Exhibit B as of the last date indicated
below.

	 	 	 	 	 
	 	PARTICIPANT:

 	 
	 	/s/ Michael Chasen
 	 
	 	Print Name:  	Michael Chasen 	 
	 	Date:              October 15, 2009 	 
	 

- 8 -

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