EMPLOYMENT AGREEMENT
Exhibit 10.7
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Xxxxx Sample (“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 Senior Vice President, Sales.
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 during business hours 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 the date hereof until June 3, 2006 (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
within ninety (90) days of the applicable Renewal Term.
3. Compensation.
(a) Base Compensation. Your annual base compensation shall initially be US$225,000
(“Base Compensation”), less applicable taxes and withholdings, payable in accordance with
Blackboard’s regular payroll practices from time to time in effect. Blackboard’s Board of
Directors (the “Board”) may review and adjust your Base Compensation periodically.
(b) Bonus Compensation. To be eligible to receive an annual bonus for any year, you
must meet financial performance targets set by the Board and be employed through March
31st of the following year, and to be eligible to receive a quarterly bonus for any
quarter, you must remain employed for at least thirty one (31) days following the end of such
quarter. Your initial on-target bonus will be 100% of your Base Compensation. The actual amount
of the bonus, if any, will be determined by the Board in its sole discretion. If an annual bonus
is awarded, it will be paid in the year following that for which the bonus is being awarded, and if
a quarterly bonus is awarded, it will be paid in the quarter following that for which the bonus is
being awarded.
(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 upon the presentation by you
of an itemized account of such expenditures, together with supporting receipts and other
appropriate documentation.
(d) Relocation Expenses. Blackboard will provide you with temporary housing and
reimbursement for reasonable travel expenses for necessary travel between Concord, Massachusetts
and Washington DC for a period of up to three (3) months; provided, however, that such three (3)
month period may be extended by Blackboard on a month-to-month basis for up to an additional three
(3) months. In addition, for your relocation to the metropolitan D.C. area, Blackboard will
arrange for (i) the reasonable shipment of your household goods to the metropolitan D.C. area at
Blackboard’s expense and (ii) reimbursement of up to $25,000 in other documented reasonable
relocation expenses. To receive reimbursement, you must submit to Blackboard receipts documenting
the expenses incurred.
4. Employee Benefits.
(a) In General. During the Term, you shall be eligible for all employee benefits that
Blackboard may provide to employees who are officers of Blackboard, 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 Employment Handbook.
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 you
provide notice of such reason for resignation to Blackboard stating that such reason will be
grounds 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 by
Blackboard to perform its obligations under this Agreement; (B) your relocation outside of the your
current residential area without your consent; or (C) a material diminution of your compensation,
duties or responsibilities.
(ii) During the Term, you agree to provide Blackboard six (6) months’ 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 6-month 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.
6. Severance Payments.
(a) 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
fails to renew this Agreement pursuant to Section 2, then Blackboard will pay you your then current
Base Salary, less applicable taxes and withholdings, and COBRA premiums for the six (6) months
immediately following the Termination Date (“Severance Payments”). The Severance Payments shall be
made consistent with Blackboard’s regular payroll schedule. To
-2-
receive the Severance Payments you must sign a release of any and all claims in the form
provided by Blackboard. Such Severance Payments 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. The Severance Payments will end the earlier of (A) six (6) months after they begin
or (B) upon your employment in a position with no less seniority and compensation, including as an
employee, owner or independent contractor. You have a duty to take all reasonable measures to find
employment promptly after your employment with Blackboard terminates.
(b) If during the Term you resign for Good Reason, as defined in Section 5(c), you shall be
entitled to the Severance Payment as described in Section 6(a), provided that you continue working
for Blackboard for a period of at least six (6) months following Blackboard’s receipt of written
notice from you of your resignation pursuant to Section 5(c)(i)(A), unless you are placed on
administrative leave by Blackboard; in such case, you shall be entitled to six (6) months’
severance under this Section 6 as well as regular compensation under Section 3 until the
Termination Date. To receive the Severance Payment, you must sign a release of any and all claims
in the form provided by Blackboard. Such Severance Payment 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. The Severance Payments will end the earlier of (A) six (6) months after
they begin or (B) upon your employment in any capacity, including as an employee, owner or
independent contractor. You have a duty to take all reasonable measures to find employment
promptly after your employment with Blackboard terminates.
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, Non-Solicitation and Non-Competition Agreement.
(a) Confidential Information. You shall not disclose or use at any time, either
during 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, 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 General Counsel’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 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
-3-
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 General Counsel, within a
reasonable time prior to dissemination, the text of any speech, professional paper, article or
similar external communication created by you which relates to Blackboard’s present or future
business or research and development endeavors. The General Counsel 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. Notwithstanding the foregoing,
you shall have sole ownership to Copyright or Copyright Work developed by you if advance written
permission was obtained from Blackboard’s General Counsel to develop such material.
(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
-4-
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 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 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 xxx 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 General Counsel, 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 previous six
(6) months (a “Covered Employee”). If during the Restricted Period any Covered Employee accepts
employment with any person, company, employer or other entity of which you are an officer,
director, employee, partner, shareholder (other than of less than 5% of the stock in a publicly
traded company) or joint venture, it will be presumed that the Covered Employee was hired in
violation of this provision (the “Presumption”). This Presumption may only be overcome by your
showing by a preponderance of the evidence that you were not directly or indirectly involved in
hiring, soliciting or encouraging the Covered Employee to leave employment with Blackboard; (b)
sell or otherwise provide, or solicit for the purposes of selling or otherwise providing, services
or products that directly or indirectly compete with 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 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 business
that is similar to the type of business conducted by Blackboard as of the Termination Date within
the geographical area in which, as of the Termination Date, Blackboard is actively marketing or has
made a significant investment in time and money to prepare to market its products or services
within the six (6) month period after the Termination Date. You
-5-
agree that these provisions are necessary to protect Blackboard’s legitimate business interests.
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.
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 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.
(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) Nature of Agreement. This Agreement and the attachment hereto constitute the entire
agreement between you and Blackboard and supercede 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 Senior 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
provisions of the District of Columbia or 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 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.
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/ Xxxxx Sample
|
By: | /s/ Xxxxxxx Xxxxxx | ||||
Xxxxx Sample
|
Xxxxxxx Xxxxxx, CEO and President | |||||
| Date: June 3, 2005 | Date: June 3, 0000 | |||||
-0-
XXXXXXXXX TO EMPLOYMENT AGREEMENT
Blackboard Inc. (“Blackboard”) and Xxxxx Sample hereby enter into this Amendment to the June 3,
2005 Employment Agreement (“Agreement”) between them.
The parties, for good and valuable consideration, the sufficiency of which is hereby acknowledged,
hereby agree as follows:
1. The first sentence of Section 3(d) of the Agreement is hereby amended and restated as follows:
“(d) Relocation Expenses. (i) Blackboard will provide you with temporary housing
and reimbursement for reasonable travel expenses for necessary travel between Concord,
Massachusetts and Washington DC until April 30, 2006 as follows: Blackboard will (i)
directly pay for your temporary housing from July 5, 2005 to October 5, 2005 in the amount
of $11,453.89 and will withhold the appropriate taxes for such amount, and (ii) reimburse
you for your temporary housing from October 5, 2005 to April 30, 2005 in the amount of
$2,166 per month and will gross up such amounts for the applicable tax.”
2. Except as expressly provided herein, the terms and conditions of the Agreement remain
unmodified. All capitalized terms not defined herein shall have the meaning set forth in the
Agreement. This Amendment shall be governed by laws of the District of Columbia and shall be
subject to the Dispute Resolution provisions set forth in Section 12 of the Agreement. If any part
of this Amendment is held by a court of competent jurisdiction to be void or unenforceable, the
remaining provisions shall continue with full force and effect.
This Amendment has been agreed to and executed by the following parties on the dates set forth
opposite their names:
| Blackboard Inc. | ||||||
/s/ Xxxxx Sample
|
By: | /s/ Xxxxxxx Xxxxxx | ||||
Xxxxx Sample
|
Xxxxxxx Xxxxxx, CEO and President | |||||
| January 31, 2006 | January 31, 2006 | |||||
