Edgar Filing: BLACKBAUD INC

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

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Blackbaud, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)



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TABLE OF CONTENTS



LETTER TO STOCKHOLDERS FROM OUR BOARD OF DIRECTORS	2

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS	3

PROXY SUMMARY	4

PROXY STATEMENT	8

GOVERNANCE	9
Proposal 1—Election of Directors	9
Board of Directors and Committees	14
Director Compensation	21
Transactions with Related Persons	23
Environmental and Social Responsibility	23

STOCK OWNERSHIP	24
Ownership of Equity Securities of the Company	24
Section 16(a) Beneficial Ownership Reporting Compliance	25

EXECUTIVE COMPENSATION	26
Proposal 2—Advisory Vote to Approve Named Executive Officer Compensation	26
Compensation Discussion and Analysis	27
Compensation Committee Report	42
Compensation Committee Interlocks and Insider Participation	42
Compensation Tables	43
Nonqualified Deferred Compensation and Retirement Plans	46
Potential Payments Upon Termination or Change in Control	46
CEO Pay Ratio	49
Proposal 3—Approval of the Amendment and Restatement of the Blackbaud, Inc. 2016 Equity and Incentive Compensation Plan	51
Equity Compensation Plan Information	61

AUDIT MATTERS	62
Proposal 4—Ratification of Appointment of Independent Registered Public Accounting Firm	62
Audit Committee Report	62

ADDITIONAL INFORMATION	64
Questions and Answers about the 2019 Annual Meeting of Stockholders	64
Stockholder Proposals	66
Delivery of Documents to Stockholders Sharing an Address	67
Annual Report on Form 10-K	67
Other Matters	67

APPENDICES	68
Appendix A—Reconciliations of GAAP to non-GAAP Financial Measures
Appendix B—Amended and Restated Blackbaud, Inc. 2016 Equity and Incentive Compensation Plan
Appendix C—Form of Proxy Card



2019 Proxy Statement		1



	Table of Contents



		LETTER TO STOCKHOLDERS FROM OUR BOARD OF DIRECTORS

Fellow Blackbaud Stockholders:

Blackbaud is the world's leading cloud software company powering social good. As the leader in a large and growing market, our Company offers its customers a comprehensive solution set combined with domain expertise. As stewards of the Company, we are committed to achieving long-term performance and delivering stockholder value through a strong business model and four-point strategy for growth, which is: building integrated and open solutions in the cloud; driving sales effectiveness; expanding the Company’s total addressable market ("TAM") into near adjacent markets through acquisitions and product investments; and improving operating efficiency. With that strategy in mind, the Board of Directors is pleased with the Company’s progress over the past year.

In 2018, the Company:


•	Introduced our Cloud Solution for Faith Communities, which combines our proven strength in financial management, fundraising, marketing, payments and analytics with completely new Church Management capabilities;


•	Announced our Cloud Solution for Higher Education, introducing a new Education Management portfolio, along with stewardship management and guided fundraising capabilities tailored for higher education;

•

Announced the Integrated Cloud Initiative for Nonprofits, a joint investment with Microsoft to accelerate cloud innovation in areas that address critical market needs across the mission life cycle of nonprofits. As part of this initiative, we are jointly developing a solution called Nonprofit Resource Management, which is a breakthrough in helping nonprofits effectively source, track, distribute and measure the impact of their resources across core business processes for managing the distribution of everything from material goods to financial and human capital;


•	Added approximately $2 billion to our TAM through these solution introductions;


•	Acquired Reeher, which expanded our fundraising performance management capabilities and is intended to drive more effective fundraising and greater social good outcomes for our customers;


•	Made investments to increase the effectiveness of our sales organization, with a focus on enabling our expanding sales teams with the talent, processes and tools to accelerate our revenue growth and improve effectiveness and spent the second half of 2018 ramping our direct sales hiring resulting in an increase in sales headcount of 19% since the end of 2017;


•	Continued to execute against our plan to relocate some of our existing offices to highly modern and more collaborative workspaces that are more centrally located for our employees and closer to our customers;


•	Released our first Blackbaud Social Responsibility Report to provide greater transparency in our environmental, social and governance ("ESG") initiatives; and


•	Provided $23.3 million to stockholders in the form of dividends.

We remain committed to continuing stockholder communication and engagement to better understand your views on the Company and, in particular, our executive compensation program. In 2018, as we do every year, we reviewed our executive compensation program with our Compensation Committee’s independent compensation consultant, Compensia, Inc., and evaluated our program against our industry peers.

Our compensation decisions, including the continued practice of granting annual equity awards to our executive officers that are at least 50% performance-based, reinforce our strong pay-for-performance compensation philosophy. We are committed to providing competitive, performance-based compensation opportunities to our executive officers, who collectively are responsible for making our Company successful, and are confident that our compensation program achieves this aim.

We appreciate your investment in Blackbaud and value your input and continued support.



	The Board of Directors of Blackbaud, Inc.
		April 24, 2019



2		2019 Proxy Statement



	Table of Contents



		NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Thursday, June 13, 2019

4:00 p.m., Eastern Time

The Sanctuary Hotel at Kiawah Island Golf Resort

One Sanctuary Beach Drive, Kiawah Island, South Carolina 29455

Fellow Blackbaud Stockholders:

The 2019 Annual Meeting of Stockholders of Blackbaud, Inc. will be held on Thursday, June 13, 2019 at 4:00 p.m., Eastern Time, at The Sanctuary Hotel at Kiawah Island Golf Resort located at One Sanctuary Beach Drive, Kiawah Island, South Carolina 29455, to take action on the following business:



1.	To elect the three Class C directors named in the Proxy Statement, each for a three-year term expiring in 2022;
2.	To hold an advisory vote to approve the 2018 compensation of our named executive officers;
3.	To approve the amendment and restatement of the Blackbaud, Inc. 2016 Equity and Incentive Compensation Plan;
4.	To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and
5.	To transact such other business as may properly come before the meeting or any adjournment thereof.

These matters are more fully described in the Proxy Statement accompanying this Notice.

If you were a stockholder of record of Blackbaud common stock as of the close of business on April 16, 2019, you are entitled to receive this Notice and vote at the Annual Meeting of Stockholders and any adjournments or postponements thereof.

You are cordially invited to attend the meeting in person; however, to assure your representation at the meeting, you are urged to vote by proxy by following the instructions contained in the accompanying Proxy Statement. You may revoke your proxy in the manner described in the Proxy Statement at any time before it has been voted at the meeting. Any stockholder attending the meeting may vote in person even if he or she has returned a proxy.

Your vote is important. Whether or not you plan to attend the meeting, we hope that you will vote as soon as possible.




	By order of the Board of Directors

	Jon W. Olson
	Senior Vice President, General Counsel and Corporate Secretary
	Dated:	April 24, 2019



2019 Proxy Statement		3



	Table of Contents



		PROXY SUMMARY

This proxy summary is intended to provide a broad overview of the items that you will find elsewhere in this proxy statement. Because this is only a summary, it does not contain all of the information that you should consider, and you should read the entire proxy statement carefully prior to voting.

ANNUAL MEETING OF STOCKHOLDERS



TIME AND DATE:	June 13, 2019, 4:00 p.m., Eastern Time

PLACE:	The Sanctuary Hotel at Kiawah Island Golf Resort, One Sanctuary Beach Drive, Kiawah Island, South Carolina 29455.

RECORD DATE:	April 16, 2019

VOTING:	Stockholders as of the record date are entitled to vote. Each share of Blackbaud common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on.
	Even if you plan to attend the 2019 Annual Meeting of Stockholders in person, please vote right away using one of the following advance voting methods (see page 64 for additional details). Make sure you have your proxy card or voting instruction form in hand and follow the instructions.
	Use the Internet	Call Toll-Free	Mail Your Proxy Card

	8	'	*
	www.proxyvote.com	1-800-690-6903	Follow the instructions on your proxy materials
ADMISSION:	Proof of share ownership and a form of personal photo identification will be required to enter the Blackbaud Annual Meeting.

MEETING AGENDA AND VOTING MATTERS



Proposal		Board's Voting Recommendation	Voting Standard	Page Number (for more details)
No. 1	Election of three Class C directors, each for a three-year term expiring in 2022.	ü FOR (each nominee)	Majority of votes present and entitled to vote	9
No. 2	Advisory vote to approve the 2018 compensation of our named executive officers.	ü FOR	Majority of votes present and entitled to vote	26
No. 3	Approve the amendment and restatement of the Blackbaud, Inc. 2016 Equity and Incentive Compensation Plan.	ü FOR	Majority of votes present and entitled to vote	51
No. 4	Ratification of appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.	ü FOR	Majority of votes present and entitled to vote	62



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	Table of Contents		PROXY SUMMARY




MEMBERS OF OUR BOARD OF DIRECTORS	(pages 10-14)



	Age	Director Since	Class	Current Term Expires	Expiration of Term For Which Nominated	Independent	Other Public Company Boards	Committee Memberships
Name, Primary Occupation	Age	Director Since	Class	Current Term Expires	Expiration of Term For Which Nominated	Independent	Other Public Company Boards	AC	CC	NCGC	ROC
Timothy Chou, Ph.D. President of Oracle On Demand, a division of Oracle Corporation (Retired)	64	2007	A	2020	-	Yes	1			l
George H. Ellis Managing Director of Huron Consulting Group, Inc.	70	2006	B	2021	-	Yes	1	l
Thomas R. Ertel Partner of Ernst & Young, LLP (Retired)	63	2017	C	2019	2022	Yes	None	l
Michael P. Gianoni President and CEO of Blackbaud, Inc.	58	2014	C	2019	2022	No	1
Peter J. Kight Private Investor	63	2014	A	2020	-	Yes	1	l			l
Andrew M. Leitch Chairman of the Board of Blackbaud, Inc., Regional Partner - Asia of Deloitte & Touche LLP (Retired)	75	2004	B	2021	-	Yes	2	l	l	l	l
Sarah E. Nash Vice Chairman of JPMorgan Chase & Co. (Retired)	65	2010	C	2019	2022	Yes	1		l	l
Joyce M. Nelson President and Chief Executive Officer of National Multiple Sclerosis Society (Retired)	68	2012	A	2020	-	Yes	None		l	l

l - Committee Chair

AC - Audit Committee

CC - Compensation Committee

NCGC - Nominating and Corporate Governance Committee

ROC - Risk Oversight Committee




INFORMATION ABOUT OUR BOARD AND COMMITTEES	(pages 14-20)



	Number of Members	Independence	Number of Meetings During Fiscal Year 2018
Full Board	8	87.5%	5
Audit Committee	4	100%	14
Compensation Committee	3	100%	5
Nominating and Corporate Governance Committee	4	100%	4
Risk Oversight Committee	2	100%	4




2018 PERFORMANCE HIGHLIGHTS	(page 27)



Total Revenue	Recurring Revenue	Cash Flow from Operations	Non-GAAP Free Cash Flow⁽¹⁾
$848.6M	89.8%	$201.4M	$149.0M
(increased 7.6%)	(vs. 86.8% in 2017)	(increased 14.2%)	(increased 8.2%)


(1)	See Appendix A for a reconciliation of non-GAAP financial measures to results reported in accordance with generally accepted accounting principles.



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		PROXY SUMMARY		Table of Contents

GOVERNANCE HIGHLIGHTS



Governance Matter	Summary Highlights		Page Number (for more details)
Board Independence	ü	Independent Board, except CEO	15
	ü	Independent Board Chairman	14
	ü	100% Independent Committee Members	15
	ü	Regular Executive Sessions of Independent Directors	16
	ü	Committee Authority to Retain Independent Advisors	15
Director Elections	ü	Majority Voting	65
Meeting Attendance	ü	All Directors Attended At Least 75% of the Total Number of Meetings of our Board and Committees on which the Director Served in 2018	16
Evaluating and Improving Board Performance	ü	Annual Board Evaluations	18
	ü	Annual Committee Evaluations	18
	ü	Continuing Director Education	22
Aligning Director and Stockholder Interests	ü	Director Stock Ownership Guidelines	22
Aligning Director and Stockholder Interests	ü	Annual Director Equity Awards	21
Aligning Executive Officer and Stockholder Interests	ü	Executive Officer Stock Ownership Guidelines	41
Aligning Executive Officer and Stockholder Interests	ü	Executive Compensation Driven by Pay-For-Performance Philosophy	28
ESG	ü	Commitment to ESG Principles and Reporting	23
Other	ü	Annual Stockholder Advisory ("Say-on-Pay") Vote	26
	ü	Risk Oversight Committee of the Board	20
	ü	Prohibition on Pledging and Hedging of Company Securities	29
	ü	Equity Plan Prohibits Stock Option Exchanges or Repricing Without Stockholder Approval	29




COMPONENTS OF EXECUTIVE COMPENSATION PROGRAM	(page 28)



Component	Description
Base Salary	Fixed compensation component payable in cash
Annual Cash Bonus	Variable compensation component payable based on performance against pre-established short-term performance objectives
Annual Equity Awards	Variable long-term compensation component consisting of a combination of 1) restricted stock awards ("RSAs") or restricted stock units ("RSUs"); and 2) at least 50% performance-based restricted stock units ("PRSUs")
“Double-Trigger” Change in Control Severance Arrangements	Provide change in control payments and benefits to executive officers only upon a qualifying termination of employment within 12 months of a change in control of our Company
Other Benefits	Generally provide the same health and welfare benefits as offered to all of our employees



6		2019 Proxy Statement



	Table of Contents		PROXY SUMMARY




2018 EXECUTIVE COMPENSATION ACTIONS	(page 29)

Base Salaries


•	Increased the base salaries of our named executive officers (other than our newly hired Executive Vice President and President, Enterprise Markets Group) from their 2017 levels.

Annual Cash Bonuses


•	Awarded cash bonuses that were, on average, 79% of each named executive officer's target annual cash bonus opportunity.

Long-term Incentive Compensation


•	Approved annual equity awards consisting of 50% RSAs and 50% PRSUs for our named executive officers (except for Mr. Gregoire who joined us April 9, 2018) that met competitive market practices, supported our retention objectives, and rewarded overall company performance.


•	Based on Company performance in 2018, determined that 63.3% of the shares of our common stock subject to the PRSUs granted in February 2018 will vest in three equal annual installments starting in February 2019 subject to each NEO's continued employment as of each vesting date.




2018 NEO COMPENSATION SUMMARY	(page 43)

Set forth below is the 2018 compensation for each of our named executive officers as determined under SEC rules. This table is not a substitute for the compensation tables, including the Summary Compensation Table, required by the SEC and set forth elsewhere in this proxy statement. See the notes accompanying the 2018 Summary Compensation Table beginning on page 43 for more information.



Name and Principal Position	Salary		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		All Other Compensation		Total
Michael P. Gianoni President and CEO	$	715,778	$	7,912,218	$	—	$	562,636	$	99,058	$	9,289,690
Anthony W. Boor Executive Vice President and CFO	461,042		2,967,058		—		235,561		37,894		3,701,555
Kevin P. Gregoire Executive Vice President and President, Enterprise Markets Group	309,908		2,417,865		—		163,139		9,493		2,900,405
Kevin W. Mooney Executive Vice President and President, General Markets Group	446,942		1,978,101		—		238,642		30,537		2,694,222
Jon W. Olson Senior Vice President and General Counsel	325,358		1,236,243		—		127,886		19,368		1,708,855



2019 Proxy Statement		7



	Table of Contents





65 FAIRCHILD STREET
CHARLESTON, SC 29492

April 24, 2019



		PROXY STATEMENT

The Board of Directors (the "Board" or "Board of Directors") of Blackbaud, Inc. (the "Company") is furnishing you this Proxy Statement to solicit proxies on its behalf to be voted at the 2019 Annual Meeting of Stockholders of Blackbaud, Inc. The meeting will be held on Thursday, June 13, 2019 at 4:00 p.m. Eastern Time, at The Sanctuary Hotel at Kiawah Island Golf Resort located at One Sanctuary Beach Drive, Kiawah Island, South Carolina 29455. The proxies also may be voted at any adjournments or postponements of the meeting.

We are first furnishing the proxy materials including the Notice of Annual Meeting of Stockholders, this Proxy Statement, our 2018 Annual Report to Stockholders, including financial statements, and a proxy card for the meeting, by providing access to them via the Internet on April 24, 2019. All properly completed proxies submitted by Internet or telephone and properly executed written proxies that are delivered pursuant to this solicitation will be voted at the meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of voting at the meeting.

Only owners of record and beneficial owners of common stock of the Company as of the close of business on the record date, April 16, 2019, are entitled to notice of, and to vote at, the meeting or at any adjournments or postponements of the meeting. Each owner of record and beneficial owner on the record date is entitled to one vote for each share of common stock held. Stockholders’ votes will be tabulated by persons appointed by the Board to act as inspectors of election for the meeting.




	IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2019.
	The Notice of Annual Meeting of Stockholders, Proxy Statement and 2018 Annual Report to Stockholders, including financial statements, are available at www.proxyvote.com



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	Table of Contents



		GOVERNANCE

PROPOSAL 1 — ELECTION OF DIRECTORS

The Board of Directors consists of eight members and is divided into three classes, the members of which each serve for a staggered three-year term. The term of office of one class of directors expires each year in rotation so that one class is elected at each annual meeting for a full three-year term. Each of our existing Class C directors, Thomas R. Ertel, Michael P. Gianoni and Sarah E. Nash, have been nominated to fill a three-year term expiring in 2022. The two other classes of directors, who were elected or appointed for terms expiring at the annual meetings in 2020 and 2021, respectively, will remain in office.

If you are a stockholder of record, unless you mark your Proxy Card otherwise, the proxy holders will vote the proxies received by them for the three Class C nominees named below, each of whom is currently a director and each of whom has consented to be named in this Proxy Statement and to serve if elected. In the event that any nominee is unable or declines to serve as a director at the time of the meeting, your proxy will be voted for any nominee designated by the Board of Directors to fill the vacancy. We do not expect that any nominee will be unable or will decline to serve as a director.

If you are a beneficial owner of shares held in street name and you do not provide your broker with voting instructions, your broker may not vote your shares on the election of directors. Therefore, it is important that you vote.




	ü	The Board of Directors unanimously recommends that stockholders vote FOR the three Class C director nominees.

The voting requirements for this Proposal 1 are described above and under "Additional Information" on page 64 of this Proxy Statement.

Director Qualifications

The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole in light of the Company's current business. The Board believes the areas of director expertise that contribute to a well-functioning Board to effectively oversee the Company's strategy and management include:



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		GOVERNANCE		Table of Contents

Biographies of Our Director Nominees

The biographies of our directors as of April 16, 2019 are set forth below. There are no family relationships among our directors, director nominees or executive officers. The business address for each of our directors, director nominees and executive officers for matters regarding Blackbaud is 65 Fairchild Street, Charleston, South Carolina 29492.



THOMAS R. ERTEL		Age	63	Director since December 2017

Partner of Ernst & Young, LLP (Retired)

INDEPENDENT DIRECTOR Class C				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2019			ü	Accounting and Finance
Blackbaud Board Committees Audit				ü	Business Development and Corporate Transactions
Other Public Boards None				ü	Business Operations

Biography

Mr. Ertel joined the Board of Directors in December 2017. He was a Partner at Ernst & Young, LLP, an accounting firm, from June 2002 until his retirement from full-time employment in June 2017. Prior to that, Mr. Ertel spent 25 years, including 13 years as Partner, with Arthur Andersen, LLP, an accounting firm. Since October 2017, Mr. Ertel has served as Senior Vice President and Chief Accounting Officer of Strada Education Network, a nonprofit organization that strengthens America's pathways between education and employment. He holds a BS in Accounting from Ball State University and has maintained an active CPA license in the State of Indiana since 1980.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Mr. Ertel’s knowledge and experience in auditing and accounting, and in corporate transactions, as well as his management skills, led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



MICHAEL P. GIANONI		Age	58	Director since January 2014

President and Chief Executive Officer of Blackbaud, Inc.

NON-INDEPENDENT DIRECTOR Class C				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2019			ü	Leadership - Current CEO
Blackbaud Board Committees None				ü	Business Operations
Other Public Boards Teradata Corporation				ü	Technology and Software Industries
				ü	Nonprofit Industry
				ü	Public Company Board Service

Biography

Mr. Gianoni joined us as President, Chief Executive Officer and a member of the Board of Directors in January 2014. Prior to joining us, he served as Executive Vice President and Group President, Financial Institutions at Fiserv, Inc., a global technology provider serving the financial services industry, from January 2010 to December 2013. He joined Fiserv as President of its Investment Services division in December 2007. Mr. Gianoni was Executive Vice President and General Manager of CheckFree Investment Services, which provided investment management solutions to financial services organizations, from June 2006 until December 2007 when Fiserv acquired CheckFree. From May 1994 to November 2005, he served as Senior Vice President of DST Systems Inc., a global provider of technology-based service solutions. Mr. Gianoni is a member of the board of directors of Teradata Corporation, a publicly traded global big data analytics and marketing applications company. Mr. Gianoni has served on several nonprofit boards across several segments, including relief organizations, hospitals, and higher education. He currently is a board member of the International African American Museum and on the President’s advisory council board at Clemson University. He holds an AS in electrical engineering from Waterbury State Technical College, a BS with a business concentration from Charter Oak State College and an MBA and honorary Doctorate from the University of New Haven.



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	Table of Contents		GOVERNANCE

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Mr. Gianoni's unique knowledge and experience in the technology industry and his experience with nonprofit organizations, as well as his leadership as our President and CEO since January 2014, led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



SARAH E. NASH		Age	65	Director since July 2010

Vice Chairman of JPMorgan Chase & Co. (Retired)

INDEPENDENT DIRECTOR Class C				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2019			ü	Business Development and Corporate Transactions
Blackbaud Board Committees Compensation (Chair), Nominating and Corporate Governance				ü	Finance
				ü	Corporate Governance
Other Public Boards Knoll, Inc.				ü	Nonprofit Industry
				ü	Public Company Board Service

Biography

Ms. Nash joined the Board of Directors in July 2010. Ms. Nash is Chairman and CEO of Novagard Solutions, Inc., a privately held manufacturer of sealants, foam, coatings, and thermals located in Cleveland, OH. Ms. Nash spent nearly 30 years in investment banking at JPMorgan Chase & Co. (and predecessor companies), a financial services firm, retiring as Vice Chairman in July 2005. She currently serves on the boards of directors of Knoll, Inc., HBD Industries, Inc. and Irving Oil Company. Ms. Nash is trustee of the New York-Presbyterian Hospital, Chair of the International Friends Advisory Board of the Montreal Museum of Fine Arts and a member of the National Board of the Smithsonian Institution. Ms. Nash holds a BA in political science from Vassar College.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Ms. Nash’s knowledge and experience in capital markets, strategic transactions, corporate governance and nonprofit organizations led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that she is well qualified to serve as a director of our Company.

Biographies of Our Directors Not Up For Re-election At This Meeting



TIMOTHY CHOU, Ph.D.		Age	64	Director since June 2007

President of Oracle On Demand, a division of Oracle Corporation (Retired)

INDEPENDENT DIRECTOR Class A				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2020			ü	Business Operations
Blackbaud Board Committees Nominating and Corporate Governance				ü	Technology and Software Industries
Other Public Boards Teradata Corporation				ü	Business Development and Corporate Transactions
				ü	Corporate Governance
				ü	Public Company Board Service

Biography

Dr. Chou joined the Board of Directors in June 2007. From November 1999 until January 2005, he served as President of Oracle On Demand, a division of Oracle Corporation, a provider of enterprise software and computer hardware products and services. Prior to that, Dr. Chou served as Chief Operating Officer of Reasoning, Inc., an information technology services firm, and as Vice President, Server Products, of Oracle Corporation. Dr. Chou is the author of “The End of Software” and is a lecturer at Stanford University. He is a member of the board of directors of Teradata Corporation, a publicly traded global



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		GOVERNANCE		Table of Contents

big data analytics and marketing applications company. Dr. Chou holds a BS in Electrical Engineering from North Carolina State University and MS and PhD degrees in Electrical Engineering from the University of Illinois Urbana-Champaign.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Dr. Chou’s knowledge and experience in the software-as-a-service and cloud computing industry, corporate governance as well as his senior leadership roles and operational experience in large organizations in the information technology industry led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



GEORGE H. ELLIS		Age	70	Director since March 2006

Managing Director of Huron Consulting Group, Inc.

INDEPENDENT DIRECTOR Class B				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2021			ü	Leadership - Former CEO
Blackbaud Board Committees Audit (Chair)				ü	Accounting and Finance
Other Public Boards Liquidity Services, Inc.				ü	Nonprofit Industry
				ü	Technology and Software Industries
				ü	Public Company Board Service

Biography

Mr. Ellis joined the Board of Directors in March 2006. Mr. Ellis is a Managing Director of Huron Consulting Group, Inc., a Nasdaq traded consulting and services company. Mr. Ellis joined Huron in February 2015 in connection with Huron's acquisition of The Studer Group L.L.C. Mr. Ellis served as the Chief Financial Officer of The Studer Group L.L.C., a private company in the health care industry, since September 2011. Prior to that, from July 2006 to August 2011, Mr. Ellis was Chief Financial Officer of Global 360, Inc., now OpenText Corporation, a private company offering business process management services. Since April 2010, Mr. Ellis has served on the board of Liquidity Services, Inc., currently as Chairman of its audit committee. He has also served in several capacities at Softbrands, Inc., as a member of its board of directors from October 2001 to August 2009, serving as Chairman from October 2001 to June 2006, and Chief Executive Officer from October 2001 to January 2006. Mr. Ellis was the Chairman and Chief Executive Officer of AremisSoft Corporation from October 2001 to confirmation of its plan of reorganization under Chapter 11 of the Federal Bankruptcy Code in August 2002. Mr. Ellis, who served as a director of AremisSoft from April 1999 until February 2001, accepted the position at AremisSoft to assist in the reorganization. Mr. Ellis served on the board of directors of PeopleSupport, Inc. from October 2004 to October 2008. Mr. Ellis served as the Chief Operating Officer of the Community Foundation of Texas from August 1999 to July 2001. Mr. Ellis has served on the board of directors and advisory boards of several nonprofit companies in the Dallas area. Mr. Ellis is a licensed CPA and an attorney in the State of Texas. Mr. Ellis is a National Association of Corporate Directors (“NACD”) Board Leadership Fellow. He has demonstrated his commitment to boardroom excellence by completing NACD's comprehensive program of study for corporate directors, earned the NACD certificate for Directors Cyber Security Oversight and supplements his skill set through ongoing engagement with the director community and access to leading practices. Mr. Ellis holds a BS in accounting from Texas Tech University and a JD from Southern Methodist University.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Mr. Ellis’ knowledge and experience in leading large organizations in the information technology industry and his experience with financial, auditing and legal matters, as well as with nonprofit companies, led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



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PETER J. KIGHT		Age	63	Director since December 2014

Private Investor

INDEPENDENT DIRECTOR Class A				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2020			ü	Leadership - Former CEO
Blackbaud Board Committees Risk Oversight (Chair), Audit				ü	Business Development and Corporate Transactions
Other Public Boards Huntington Bancshares Incorporated				ü	Business Operations
				ü	Corporate Governance
				ü	Public Company Board Service

Biography

Mr. Kight joined the Board of Directors in December 2014. He has been self-employed as a private investor since April 2015. Mr. Kight served as a senior advisor at Comvest Partners, a private investment firm providing equity and debt capital to middle market companies across the United States, from January 2010 to April 2015. He served as Co-Chairman and Managing Partner of Comvest Advisors, LLC, from January 2010 to April 2013. From December 2007 to March 2010, Mr. Kight served as Vice Chairman of Fiserv and as director from December 2007 to May 2012 following Fiserv's acquisition of CheckFree Corporation, a leading provider of electronic commerce services and products. Mr. Kight founded CheckFree Corporation in 1981 and served as its Chairman and Chief Executive Officer until December 2007. Mr. Kight has served on the board of directors of Huntington Bancshares Incorporated, a multi-state diversified regional bank holding company, since June 2012. Mr. Kight served on the boards of directors of Akamai Technologies, Inc., a publicly traded company that distributes computing solutions and services, from March 2004 to July 2012, and Manhattan Associates, Inc., a publicly traded company that provides supply chain planning and execution solutions, from October 2007 to July 2011.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Mr. Kight’s leadership experience at various other public companies, including strategic planning and operational experience, as well as valuable insight on public company governance practices, and his knowledge of the payment services industry, led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



ANDREW M. LEITCH		Age	75	Director since February 2004

Chairman of the Board of Blackbaud, Inc., Regional Partner - Asia of Deloitte & Touche LLP (Retired)

INDEPENDENT DIRECTOR Class B				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2021			ü	Leadership - Current Chairman
Blackbaud Board Committees Nominating and Corporate Governance (Chair), Audit, Compensation, Risk Oversight				ü	Accounting and Finance
				ü	Corporate Governance
Other Public Boards STR Holdings, Inc, Taxus Cardium Pharmaceuticals Group Inc.				ü	Public Company Board Service

Biography

Mr. Leitch joined the Board of Directors in February 2004 and has served as our Chairman since July 2009. Mr. Leitch was with Deloitte & Touche LLP, an accounting firm, for over 27 years, last serving as the Vice Chairman of the Management Committee, Hong Kong from September 1997 to March 2000. Mr. Leitch has served on the boards of directors of the following public companies: STR Holdings, Inc. since November 2009; Taxus Cardium Pharmaceuticals Group Inc. since August 2007; and L & L Energy, Inc. from February 2011 to August 2011. Mr. Leitch also serves as director of other private companies. He is a licensed CPA in the State of New York and a Chartered Accountant in Ontario, Canada.



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Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Mr. Leitch’s experience in auditing and accounting, corporate governance, board service on various other public companies as well as his leadership as our Board Chairman since July 2009, led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that he is well qualified to serve as a director of our Company.



JOYCE M. NELSON		Age	68	Director since September 2012

President and Chief Executive Officer of National Multiple Sclerosis Society (Retired)

INDEPENDENT DIRECTOR Class A				DIRECTOR QUALIFICATION HIGHLIGHTS

Current Term Expires	2020			ü	Leadership - Former CEO
Blackbaud Board Committees Compensation, Nominating and Corporate Governance				ü	Nonprofit Industry
				ü	Business Operations
Other Public Boards None				ü	Corporate Governance

Biography

Ms. Nelson joined the Board of Directors in September 2012. From October 2011 to her retirement from full-time employment in September 2012, Ms. Nelson served as a special consultant to the in-coming President and Chief Executive Officer of the National Multiple Sclerosis Society (“NMSS”), a nonprofit organization focused on multiple sclerosis. From November 2004 to October 2011, Ms. Nelson served as President and Chief Executive Officer of NMSS. From December 1991 to November 2004, she led NMSS's national field services and fundraising departments. From June 1985 to December 1991, she led the Mid America (Greater Kansas City) chapter of NMSS. From September 1983 to June 1985, she oversaw fundraising activities for the Northern California Chapter of NMSS. Ms. Nelson was on the board of directors of NMSS from November 2004 to November 2011 and the Multiple Sclerosis International Federation from November 2004 to November 2011, as well as the advisory board to the North Park University School of Nonprofit Management from September 2006 to June 2010. In 2016, Ms. Nelson was elected to the board of the National Endowment for Financial Education where she currently serves as Chair of the Governance committee and as a member of the Compensation committee. Ms. Nelson holds a BA in English from North Park University, where she was named Distinguished Alum and awarded an honorary doctorate in 2012.

Experience, Skills and Qualifications of Particular Relevance to Blackbaud

Among other experience, qualifications, attributes and skills, Ms. Nelson’s leadership experience at a large nonprofit organization, including her knowledge and extensive operational experience in the nonprofit industry as well has her experience in corporate governance led to the conclusion of our Nominating and Corporate Governance Committee, and of our full Board, that she is well qualified to serve as a director of our Company.

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors currently comprises eight members, namely Chairman Andrew M. Leitch, Timothy Chou, Ph.D., George H. Ellis, Thomas R. Ertel, Michael P. Gianoni, Peter J. Kight, Sarah E. Nash and Joyce M. Nelson.

We have historically separated the positions of Chairman, currently independent director Andrew M. Leitch, and Chief Executive Officer (“CEO”), currently Michael P. Gianoni. While the Board of Directors believes the separation of these positions has served our Company well, and intends to maintain this separation where appropriate and practicable, the Board does not believe that it is appropriate to prohibit one person from serving as both Chairman and CEO. We believe our leadership structure is appropriate given the size of our Company in terms of number of employees. Mr. Leitch’s experience on boards of directors and management skills led to the conclusion of our Nominating and Corporate Governance Committee, and that of our full Board, that he is well qualified to serve as Chairman.



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Independence of Directors

The Board of Directors has adopted categorical standards or guidelines to assist it in making independence determinations with respect to each director. These standards are published in Section 1 of our Corporate Governance Guidelines and are available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com. Each of our directors and executive officers completes an annual questionnaire to confirm that there are no material relationships or related person transactions between such individuals and the Company other than those previously disclosed to Blackbaud and agrees to notify the Company in the event of any changes to that information. Based on its review of a summary of the answers to the questionnaires, the Board has determined that the following seven directors are independent within the meaning of Rule 5605(a)(2) of the Nasdaq Marketplace Rules: Dr. Chou; Mr. Ellis; Mr. Ertel; Mr. Kight; Mr. Leitch; Ms. Nash; and Ms. Nelson. As part of such determination of independence, the Board has affirmatively determined that none of these directors has a relationship with the Company or the Company's management that would interfere with the exercise of independent judgment in carrying out their responsibilities as directors. Mr. Gianoni, our President and CEO, is the only member of management serving as a director.

Each Board committee is composed entirely of independent directors in accordance with Rule 5605(a)(2) of the Nasdaq Marketplace Rules, the Sarbanes-Oxley Act and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”), as applicable. The Board and each committee have the authority to obtain, at our expense, the advice and assistance from independent advisors, experts and others as they may deem necessary, and to the extent they engage any such advisors they consider the independence of such advisors and any conflict of interest that may exist.

Furthermore, our Compensation Committee consists entirely of independent directors in accordance with Nasdaq Marketplace Rule 5605(d)(2)(A). The Board has also determined that each member of the Compensation Committee qualifies as an "outside director" under Section 162(m) of the Internal Revenue Code, and each member qualifies as a "non-employee director" under Rule 16b-3 of the Exchange Act.

Corporate Governance Guidelines

We believe in sound corporate governance practices and have adopted formal Corporate Governance Guidelines to enhance our effectiveness. The Board of Directors adopted these Corporate Governance Guidelines in order to ensure that it has the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board follows, including, but not limited to, Board and Committee composition and selection, director responsibilities, director access to executive officers and employees, and CEO performance evaluation and succession planning. A copy of our Corporate Governance Guidelines is available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com.



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Code of Business Conduct and Ethics and Code of Ethics

The Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all of our directors and employees. The Board has also adopted a separate Code of Ethics for our CEO and all senior financial officers, including our Chief Financial Officer (“CFO”), who is our principal accounting officer, our Corporate Controller, or persons performing similar functions. We will provide copies of our Code of Business Conduct and Ethics and Code of Ethics without charge upon request. To obtain a copy of our Code of Business Conduct and Ethics or Code of Ethics, please send your written request to Blackbaud, Inc., 65 Fairchild, Charleston, South Carolina 29492, Attn: General Counsel. Our Code of Business Conduct and Ethics and Code of Ethics are also available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com. We intend to disclose any amendment to or waiver of a provision of the Code of Business Conduct and Ethics or the Code of Ethics by posting such information on our website.

Communication with the Board of Directors

Stockholders who wish to communicate with members of the Board of Directors, including the directors individually or as a group, may send correspondence to them in care of our Corporate Secretary at our principal executive offices. Such communication will be forwarded to the intended recipient(s). We currently do not intend to have our Corporate Secretary screen this correspondence, but we may change this policy if directed by the Board due to the nature or volume of correspondence.

Information Regarding Meetings of the Board and Committees

During 2018, the Board of Directors held five meetings. Each of our current directors attended at least 75% of the aggregate of all meetings of the Board and the committees on which he or she served during 2018.

The Board has established four standing committees. The following table provides membership and meeting information for each of the committees during 2018.



Name	Audit Committee			Compensation Committee		Nominating and Corporate Governance Committee	Risk Oversight Committee
Timothy Chou, Ph.D.						l
George H. Ellis		l	†
Thomas R. Ertel		l	†
Michael P. Gianoni
Peter J. Kight		l					l
Andrew M. Leitch		l	†		l	l	l
Sarah E. Nash					l	l
Joyce M. Nelson					l	l
2018 Meetings		14			5	4	4

l - Committee Chair

† - Audit Committee Financial Expert

Although we do not have a formal written policy with respect to directors’ attendance at our annual meetings of stockholders, we strongly encourage all directors to attend. All directors attended our 2018 Annual Meeting of Stockholders. In addition to the meetings held by the above-referenced committees, the independent non-employee members of the Board of Directors regularly meet in executive session without our CEO or any executive officers present. One purpose of these executive sessions is to evaluate the performance of management.

Each of the above-referenced committees operates pursuant to a formal written charter. The charters for each committee, which have been adopted by the Board of Directors, contain a detailed description of the respective committee’s duties and responsibilities and are available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com.



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AUDIT COMMITTEE
Committee Members		Primary Responsibilities
(all independent)		Pursuant to its charter, the Committee assists the Board in its oversight of:
		l	the integrity of our financial statements;
George H. Ellis (Chair)† Thomas R. Ertel† Peter J. Kight Andrew M. Leitch†		l	the performance of our internal audit function;
		l	the qualifications, independence and performance of our independent registered public accounting firm, for whose appointment the Committee bears primary responsibility;
		l	the review of our annual audited financial statements and quarterly financial statements;
2018 Meetings:	14	l	the review of our capital management;
† Audit Committee Financial Expert		l	the review of our public disclosures related to earnings, guidance and other matters as appropriate; and
		l	the review of our compliance with certain financial, regulatory and legal requirements.

For more information regarding the duties and operations of the Audit Committee, see “Audit Committee Report” on page 62 of this Proxy Statement.



COMPENSATION COMMITTEE
Committee Members		Primary Responsibilities
(all independent)		Pursuant to its charter, the Committee:
		l	reviews and approves all compensation decisions relating to our executive officers, including approving the compensation decisions for the CEO;
Sarah E. Nash (Chair) Andrew M. Leitch Joyce M. Nelson		l	annually reviews and approves the compensation of our non-employee members of the Board of Directors;
		l	periodically reviews and makes recommendations to the Board of Directors with respect to incentive compensation plans and equity-based plans;
2018 Meetings:	5	l	periodically reviews and makes recommendations to the Board of Directors with respect to stock ownership guidelines for the Company's executive officers and non-employee directors;
		l	administers and amends the Company's various incentive compensation and other similar plans; and
		l	reviews and assesses on a periodic basis the Company's compliance with laws and regulations relating to compensation and employee benefits, and other human resource matters.

Compensation Decisions

In evaluating incentive and other compensation and equity-based plans, the Compensation Committee considers the results of the most recent non-binding stockholder advisory ("Say-on-Pay") vote on named executive officer compensation. As part of its review, the Compensation Committee also considers compensation data with respect to the executive officers' counterparts at the companies in our compensation peer group and the recommendations of the CEO regarding compensation for those executive officers reporting directly to him as well as our other officers. See “Compensation Discussion and Analysis” beginning on page 27 of this Proxy Statement.



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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Committee Members		Primary Responsibilities
(all independent)		Pursuant to its charter, the Committee has responsibility for:
		l	identifying individuals qualified to become Board members;
Andrew M. Leitch (Chair) Timothy Chou, Ph.D. Sarah E. Nash Joyce M. Nelson		l	recommending to the Board director nominees for the next Annual Meeting of Stockholders;
		l	reviewing the qualifications and independence of the members of the Board and its various committees;
		l	recommending to the Board the Corporate Governance Guidelines and reviewing such Guidelines on a regular basis to ensure compliance with sound corporate governance practices and legal, regulatory and Nasdaq requirements;
2018 Meetings:	4	l	leading the Board and its committees in their annual self-evaluation process; and
		l	reviewing our Company’s governance scores and ratings from third parties.

Selection of Nominees for the Board of Directors

The Nominating and Corporate Governance Committee is responsible for establishing the criteria for recommending which directors should stand for re-election to the Board and the selection of new directors to serve on the Board. In addition, the Committee is responsible for establishing the procedures for our stockholders to nominate candidates to the Board. The Committee has not formulated any specific minimum qualifications for director candidates, but has determined certain desirable characteristics, including strength of character, mature judgment, career specialization, relevant technical skills, diversity of race, ethnicity, gender, age, cultural background and professional experience, and independence. With the assistance of an independent search firm, the Committee regularly identifies individuals who have expertise that would complement and enhance the current board’s skills and experience. While it does not have a specific written policy with regard to the consideration of diversity in identifying director nominees, the Committee does consider diversity to be an additional desirable characteristic in potential nominees because the Board believes that a variety of points of view contributes to a more effective decision-making process. This commitment to diversity is part of our Corporate Governance Guidelines, which are available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com.

Director Tenure

The Nominating and Corporate Governance Committee generally practices a long-term approach to board refreshment. We believe that a variety of tenures on our Board helps to provide an effective mix of deep experience and fresh perspective to our boardroom. The average tenure of Blackbaud directors is 8.3 years.



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Board Diversity

The current composition of our Board reflects the importance of diversity to the Board as approximately 38% of our directors are women or minority individuals.

Stockholder Nominations of Directors

Our Bylaws permit any stockholder of record to nominate directors. Stockholders wishing to nominate a director, whether by inclusion of such business in our proxy materials or otherwise, must deliver written notice of the nomination by registered mail, return receipt requested, to the Corporate Secretary at our principal executive offices not more than 75 and not less than 45 days before the meeting at which directors are to be elected. Any such notice must set forth the following: (a) the name, age, business address, residence and ownership of our stock of any director nominee and all information relating to the director nominee that is required to be disclosed in solicitations of proxies for elections of directors; (b) any material interest in the director nomination of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate; (c) as to the stockholder or any Stockholder Associated Person, their holdings of our stock and whether the stockholder has entered into transactions to manage risk with respect to such stock; (d) as to the stockholder giving notice and Stockholder Associated Person, the name and address of such stockholder, as they appear on our stock ledger, and current name and address, if different, and of such Stockholder Associated Person; and (e) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election as a director. Our Bylaws define “Stockholder Associated Person” as (a) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (b) any beneficial owner of our shares of stock owned of record or beneficially by such stockholder; and (c) any person controlling, controlled by or under common control with such Stockholder Associated Person. The Nominating and Corporate Governance Committee will evaluate a nominee recommended by a stockholder in the same manner in which the Committee evaluates nominees recommended by other persons as well as its own nominee recommendations.

CEO and Executive Management Succession Planning

Assuring we have appropriate executive management talent to successfully pursue our strategies is one of the Board's primary responsibilities. To this end, at least annually, the Board discusses succession planning for our CEO and the remainder of our executive management. To help fulfill the Board's responsibility, pursuant to our corporate governance guidelines, the Nominating and Corporate Governance Committee is responsible for ensuring that we have in place appropriate planning to address CEO succession both in the ordinary course of business and in emergency situations. Our CEO provides the Board with recommendations and evaluations of potential successors, along with a review of their development plans when the individuals are internal candidates.



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RISK OVERSIGHT COMMITTEE
Committee Members		Primary Responsibilities
(all independent)		Pursuant to its charter, the Committee assists the Board in its oversight of:
		l	the Company's risk management, compliance and control activities as they relate to information technology security;
Peter J. Kight (Chair) Andrew M. Leitch		l	the Company's cybersecurity risks, including the Company's cyber risk management practices, adequacy of cyber-insurance, adequacy of an incident response plan and the Company's ability to respond to a cyber breach;
2018 Meetings:	4	l	the Company's systems of operational controls regarding certain legal and regulatory compliance; and
		l	the compliance with certain legal and regulatory requirements applicable to the Company.

While our Company’s senior management is responsible for management of risk, the Board and its committees play a significant role in overseeing this function. Each of the committees oversees risks associated with its respective area of responsibility. In particular, the Audit Committee oversees risk related to our accounting, tax, financial and public disclosure processes. It also assesses risks associated with our financial assets. The Compensation Committee oversees risks related to our compensation and benefit plans, programs and policies to ensure sound pay practices that do not cause risks to arise that are reasonably likely to have a material adverse effect on our Company. The Nominating and Corporate Governance Committee seeks to minimize risks related to governance structure by implementing sound corporate governance principles and practices. The Risk Oversight Committee oversees risks related to information technology security, in addition to the risk oversight described above. Each of the committees regularly reports to the full Board as appropriate on its efforts at risk oversight and on any matter that rises to a material or enterprise level of risk.



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DIRECTOR COMPENSATION

The general policy of the Board of Directors is that the compensation for our non-employee directors should be a mix of cash and equity-based compensation. The Board periodically reviews our director compensation program and practices, generally once every other year, and makes changes as it deems appropriate. The current director compensation program and practices were adopted in March 2018.

Effective as of July 1, 2018, the annual compensation for our non-employee directors consisted of the following components:



Component	Amount and Description	Maximum Number of Meetings (if applicable)
Annual Cash Retainer⁽¹⁾⁽²⁾	$60,000 (unless non-employee director elects to receive RSAs in lieu of a portion or all of his or her annual cash retainer)	8
Annual Equity Awards	Approximately $235,000 in RSAs that vest in full on the first anniversary of the date of grant or, if earlier, immediately prior to the following annual election of directors of our Company, provided that the director is still serving as a member of the Board of Directors at that time. Recipients of RSAs have the right to vote such shares and receive dividends
Board Chair Fee⁽¹⁾⁽²⁾	$100,000
Committee Chair Fees⁽¹⁾⁽²⁾	$30,000 for the Audit Committee $25,000 for the Compensation Committee $15,000 for the Nominating and Corporate Governance Committee $20,000 for the Risk Oversight Committee	12 8 4 4
Committee Member Fees⁽¹⁾	$15,000 for the Audit Committee $10,000 for the Compensation Committee $10,000 for the Nominating and Corporate Governance Committee $10,000 for the Risk Oversight Committee	12 8 4 4
Meeting Fees⁽²⁾	None


(1)	The annual cash retainer and other fees are paid on a quarterly basis.

(2)

Based on a review of the competitive market in 2018, the Compensation Committee made the following changes effective as of July 1, 2018: increased annual cash retainer from $50,000 to $60,000, increased the board chair fee from $50,000 to $100,000, increased the Compensation Committee chair fee from $20,000 to $25,000 and eliminated per meeting fees. Previously, all non-employee chairs and members of the Board and committees received $1,000 for each meeting they attended in person or by telephone above the specified maximum number of meetings for the Board and committees on which they served.

2018 Director Compensation Table

The following table sets forth the total compensation paid to each of our non-employee directors in 2018.



Name	Fees Earned or Paid in Cash⁽¹⁾ ($)		Stock Awards⁽²⁾⁽⁵⁾ ($)		All Other Compensation⁽⁴⁾ ($)		Total ($)
Timothy Chou, Ph.D.	$	65,000	$	210,982	$	1,151	$	277,133
George H. Ellis	86,000		210,982		1,151		298,133
Thomas R. Ertel⁽³⁾	70,000		327,220		1,110		398,330
Peter J. Kight	89,407		210,982		1,151		320,693
Andrew M. Leitch	181,000		210,982		1,151		383,193
Sarah E. Nash	85,703		210,982		1,151		297,836
Joyce M. Nelson	75,000		210,982		1,151		287,133

(1)

Mr. Kight elected to receive RSAs in lieu of a portion of his annual cash retainer. Accordingly, on January 2, 2018 and April 4, 2018, Mr. Kight received 128 and 120 RSAs, respectively, with an aggregate grant date fair value of $24,407, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). Ms. Nash elected to receive RSAs in lieu of a portion of her annual cash retainer. Accordingly, on January 2, 2018 and April 4, 2018, Ms. Nash received 64 and 60 RSAs, respectively, with an aggregate grant date fair value of $12,203, computed in accordance with FASB ASC Topic 718.


(2)	On August 2, 2018, we granted each of our non-employee directors then serving 2,145 RSAs with a grant date fair value of $210,982, computed in accordance with FASB ASC Topic 718. No options to purchase shares of our common stock or SAR awards for shares of our common stock were granted to our non-employee directors in 2018.


(3)	The value of the Stock Awards reported in the table above for Mr. Ertel includes an initial grant of 1,240 RSAs granted on February 12, 2018 with a grant date fair value of $116,238, computed in accordance with FASB ASC Topic 718.



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(4)	The amounts reported consist of dividends paid in 2018 on shares of our common stock subject to unvested RSAs granted as equity compensation.


(5)	The following table shows the aggregate number of RSAs held by our non-employee directors as of December 31, 2018 that were received as compensation.



Name	Number of RSAs
Dr. Chou	21,264
Mr. Ellis	6,404
Mr. Ertel	3,385
Mr. Kight	13,752
Mr. Leitch	22,957
Ms. Nash	21,961
Ms. Nelson	15,051

Director Stock Ownership Guidelines

Under our Non-Employee Directors’ Stock Ownership Guidelines, it is expected that our non-employee directors will accumulate and hold, through their receipt of equity compensation, not later than three years after first receiving his or her first annual RSA, $100,000 of our common stock. Once a non-employee director has been a director for five consecutive years, he or she is expected to accumulate and hold, through his or her receipt of equity compensation, $200,000 of our common stock. Additionally, non-employee directors should not dispose of any vested RSAs granted to such director until reaching these ownership targets, unless the disposition is to satisfy tax obligations resulting from the lapse of restrictions. As of December 31, 2018, each of our non-employee directors was in compliance with the Non-Employee Directors' Stock Ownership Guidelines.

The following table shows the ownership levels of our non-employee directors as of December 31, 2018:



Name	Stock Ownership Requirement		Number of Shares or RSAs Owned⁽¹⁾	Value of Shares or RSAs Owned⁽²⁾		Ownership as a Multiple of Requirement⁽²⁾
Dr. Chou	$	200,000	21,264	$	1,337,506	6.7x
Mr. Ellis	200,000		6,404	402,812		2.0x
Mr. Ertel⁽³⁾	—		3,385	212,917		—
Mr. Kight⁽⁴⁾	100,000		83,896	5,277,058		52.8x
Mr. Leitch	200,000		24,457	1,538,345		7.7x
Ms. Nash	200,000		21,961	1,381,347		6.9x
Ms. Nelson	200,000		15,051	946,708		4.7x


(1)	Includes vested and unvested shares of our common stock subject to RSAs beneficially owned.


(2)	Based on $62.90 per share, which was the closing market price of our common stock on the Nasdaq Global Select Market on December 31, 2018, the last trading day of that fiscal year.


(3)	Since Mr. Ertel had been a director of the Company for less than three years as of December 31, 2018, he was not required to meet an ownership target. However, as of December 31, 2018, Mr. Ertel achieved 2.1x the three-year requirement.


(4)	Mr. Kight joined our Board of Directors effective December 9, 2014.

Continuing Director Education

Our non-employee directors are encouraged to attend director education seminars that are designed to develop skills and strategies for effective service on the Board. As such, it is our policy to reimburse our non-employee directors for the reasonable and direct costs, including transportation and lodging, of attending such educational seminars. These reimbursement costs are not included in the “2018 Director Compensation Table” above.



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	Table of Contents		GOVERNANCE

TRANSACTIONS WITH RELATED PERSONS

The written charter of our Audit Committee authorizes, and the Nasdaq Marketplace Rules require, our Audit Committee to review and approve related person transactions. In reviewing related person transactions, our Audit Committee applies the basic standard that transactions with related persons should be made on terms no less favorable to us than could have been obtained from unaffiliated parties. Therefore, the Audit Committee reviews the benefits of the transactions, terms of the transactions and the terms available from unrelated third parties, as applicable. All transactions other than compensatory arrangements and certain other specified categories of transactions between us and our executive officers, directors, principal stockholders and their affiliates must be approved by our Audit Committee or a majority of the disinterested directors, and must continue to be on terms no less favorable to us than could be obtained from unaffiliated third parties. Since January 1, 2018, we had no transactions in which we were a participant where the amount involved exceeded $120,000 and one or more of our executive officers, directors, principal stockholders or their affiliates had a direct or indirect material interest.

ENVIRONMENTAL AND SOCIAL RESPONSIBILITIY

We drive social good through our commitment to being a responsible corporate citizen across the communities where our people live and work. Through our giving and volunteerism, we support causes that are meaningful to our employees and to the Company. Through our Blackbaud Community Matters Grants, an employee-led program that distributes funds to local nonprofits, we not only fund organizations making an impact in our communities, we also educate our employees on what it means to be grantmakers. Through the Blackbaud Institute for Philanthropic Impact, we elevate the sector as a whole by bringing together innovative experts in philanthropy to conduct research and uncover insight from the most comprehensive data set in the social good community, helping us drive impact.

Our growth and market leadership support an environment where people can learn and develop. We subscribe to a total rewards philosophy built on principles of equity and pay-for-performance. We embrace a culture of mutual respect and inclusion where diverse people with different experiences, perspectives and backgrounds serve the entire social good community.

We worked diligently to ensure that our new LEED Gold certified World Headquarters is sustainable. These efforts included occupancy sensors, solar panels, electric vehicle charging stations, and locally sourced food in the cafeteria. The building is also home to the new Blackbaud Innovation Center, a high-tech meeting place designed to help the world’s change agents come together to cultivate ideas and transform them into positive impact. Our Innovation Center includes spaces to host our ongoing community development and corporate citizenship activities, like our Camp Blackbaud program and our employee-led service projects by our new hire classes for organizations across our communities.




	2.2x	In 2018, Blackbaud employees participated in the Company's matching gifts program at 2.2x the national median as reported by the Committee Encouraging Corporate Philanthropy (CECP).

It is important to us to be a caring employer, govern our business ethically, positively impact our communities and build a better world by reducing our impact on the environment. To learn more about our sustainability efforts, please view our 2018 Blackbaud Social Responsibility Report under the Corporate Social Responsibility section of our website at www.blackbaud.com.



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	Table of Contents



		STOCK OWNERSHIP

OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY

Five Percent Beneficial Owners of Company Stock

Set forth in the table below is information about the number of shares held by holders we know to be the beneficial owners of more than 5% of our issued and outstanding common stock as of April 16, 2019.



Name and Address	Total Shares Beneficially Owned	Percentage Beneficially Owned⁽¹⁾
BlackRock, Inc.⁽²⁾	5,632,690	11.45	%
55 East 52nd Street
New York, New York 10055
Eaton Vance Management⁽³⁾	4,885,040	9.93	%
2 International Place
Boston, Massachusetts 02110
Brown Capital Management, LLC⁽⁴⁾	4,573,463	9.30	%
1201 North Calvert Street
Baltimore, Maryland 21202
The Vanguard Group, Inc.⁽⁵⁾	4,573,854	9.30	%
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
Wellington Management Group LLP⁽⁶⁾	4,315,786	8.77	%
280 Congress Street
Boston, Massachusetts 02210
Janus Henderson Group PLC⁽⁷⁾	3,963,121	8.06	%
201 Bishopsgate
London, EC2M 3AE, United Kingdom


(1)	The ownership percentages set forth in this column are based on the assumption that each of the stockholders continued to own the number of shares reflected in the table above on April 16, 2019.


(2)	Based on information contained in Schedule 13G/A filed with the SEC on January 24, 2019, by BlackRock, Inc. BlackRock reported that it had sole voting power over 5,474,768 shares and sole dispositive power over 5,632,690 shares.


(3)	Based on information contained in Schedule 13G/A filed with the SEC on February 14, 2019, by Eaton Vance Management. Eaton reported that it had sole voting and dispositive power over 4,885,040 shares.


(4)	Based on information contained in Schedule 13G/A filed with the SEC on February 14, 2019, by Brown Capital Management, LLC. Brown reported that it had sole voting power over 2,836,259 shares and sole dispositive power over 4,573,463 shares.

(5)

Based on information contained in Schedule 13G/A filed with the SEC on February 11, 2019, by The Vanguard Group, Inc. Vanguard reported that it had sole voting power over 100,363 shares, shared voting power over 5,816 shares, sole dispositive power over 4,472,812 shares and shared dispositive power over 101,042 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 95,226 shares of the Company as a result of serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 10,953 shares of the Company as a result of serving as investment manager of Australian investment offerings.


(6)	Based on information contained in Schedule 13G/A filed with the SEC on February 12, 2019, by Wellington Management Group LLP. Wellington reported that it had shared voting power over 3,880,182 shares and shared dispositive power over 4,315,786 shares due to its ownership of Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP.

(7)

Based on information contained in Schedule 13G/A filed with the SEC on February 12, 2019, by Janus Henderson Group PLC. Janus reported that it had shared voting and dispositive power over 3,963,121 shares due to its ownership of Intech Investment Management LLC, Janus Capital Management LLC, Janus Capital International Limited, Perkins Investment Management LLC, Geneva Capital Management LLC, Henderson Global Investors Limited and Janus Henderson Global Investors Australia Institutional Funds Management Limited.



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	Table of Contents		STOCK OWNERSHIP

Executive Officers and Directors

The following table sets forth information regarding beneficial ownership of our common stock by each individual named in the 2018 Summary Compensation Table on page 43, each director, and our current executive officers and directors as a group, all as of April 16, 2019. Unless otherwise noted, voting power and investment power in common stock are exercisable solely by the named person. The address for each executive officer and director is c/o Blackbaud, Inc., 65 Fairchild Street, Charleston, South Carolina 29492.



Name	Shares Owned	Shares Under Exercisable SARs⁽¹⁾	Total Shares Beneficially Owned	Percentage Beneficially Owned
Anthony W. Boor	92,016	—	92,016	*
Timothy Chou, Ph.D.	20,514	—	20,514	*
George H. Ellis	6,404	—	6,404	*
Thomas R. Ertel	3,385	—	3,385	*
Michael P. Gianoni	271,464	—	271,464	*
Kevin P. Gregoire	39,179	—	39,179	*
Peter J. Kight	83,896	—	83,896	*
Andrew M. Leitch	24,457	—	24,457	*
Kevin W. Mooney	70,030	22,871	92,901	*
Sarah E. Nash	21,961	—	21,961	*
Joyce M. Nelson	14,051	—	14,051	*
Jon W. Olson	39,571	—	39,571	*
All current executive officers and directors as a group (13 persons)	744,481	22,871	767,352	1.56	%


(1)	Includes only SARs exercisable within 60 days of April 16, 2019.



*	Less than one percent.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors and any person or entity who owns more than 10% of a registered class of our common stock to file with the SEC certain reports of ownership and changes in ownership of our securities. Executive officers, directors and stockholders who hold more than 10% of our outstanding common stock are required by the SEC to furnish us with copies of all required forms filed under Section 16(a). We prepare Section 16(a) reports on behalf of our executive officers and directors based on the information provided by them. Based solely on a review of this information and written representations from these persons that no other reports were required, we believe that, during fiscal year 2018, all our executive officers, directors and, to our knowledge, 10% stockholders complied with all applicable Section 16(a) filing requirements, with the exception of Mses. Nash and Nelson, Dr. Chou and Messrs. Ellis, Ertel, Kight and Leitch, who filed Forms 4 on August 7, 2018 reporting the acquisition of 2,145 shares of restricted stock on August 2, 2018, Ms. Nash, who filed a Form 4 on May 9, 2018 reporting the sale of 520 shares on May 3, 2018 and Mr. Gregoire, who filed a Form 3 on May 1, 2018 reporting his beneficial ownership and commencement of Section 16 reporting on April 9, 2018.



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	Table of Contents



		EXECUTIVE COMPENSATION

PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

In deciding how to vote on Proposal 2, the Board urges you to specifically consider our executive compensation philosophy, policies and practices, all of which are fully described under “Compensation Discussion and Analysis” beginning on page 27 of this Proxy Statement.

Background

The Board recognizes the interest our stockholders have expressed in how we compensate our named executive officers. At the 2017 Meeting of Stockholders, in accordance with the Board’s recommendation, our stockholders endorsed holding an annual, non-binding stockholder advisory (“Say-on-Pay”) vote on the compensation of our named executive officers. As part of its commitment to our stockholders, the Board is submitting a Say-on-Pay proposal for stockholder consideration again this year. Each Say-on-Pay vote is being provided as required pursuant to Section 14A of the Securities Exchange Act. The Say-on-Pay vote is not intended to address any specific item of compensation, but rather our overall compensation philosophy, policies and practices as they relate to the named executive officers. While your vote is advisory and will not be binding on the Board, the Compensation Committee, or us, we strive to align our executive compensation program with the interests of our long-term stockholders. As they do every year, the Board and the Compensation Committee will take into account the outcome of this year’s Say-on-Pay vote when considering future compensation actions and decisions.

Say-on-Pay Proposal

The Board believes that our executive compensation is a competitive advantage in attracting and retaining the high caliber of executive talent necessary to drive our business forward and build sustainable value for our stockholders. Accordingly, we are asking our stockholders to vote FOR the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the named executive officers as disclosed in this Proxy Statement for the 2019 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Compensation Discussion and Analysis, the 2018 Summary Compensation Table and the other related tables and disclosures).”

Effect of Say-on-Pay Vote

As indicated above, the vote on Proposal 2 is advisory and will not be binding on the Board, the Compensation Committee, or us. However, because the Board values your opinions as expressed through votes and other communications with us, it and our Compensation Committee will carefully review the 2019 Say-on-Pay voting results in an effort to better understand any issues or concerns you may have with our executive compensation program. Stockholders who want to communicate with the Board on executive compensation or other matters should refer to “Communication with the Board of Directors” on page 16 of this Proxy Statement for additional information.




	ü	The Board of Directors unanimously recommends that stockholders vote, on an advisory basis, FOR the 2018 compensation of our named executive officers.

The voting requirements for this Proposal 2 are described under "Additional Information" on page 64 of this Proxy Statement.



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	Table of Contents		EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program, as well as the philosophy underlying this program and our related policies and practices. It focuses on the compensation of our named executive officers ("NEO" or "NEOs") for 2018, who were:



Name	Title
Michael P. Gianoni	President and Chief Executive Officer
Anthony W. Boor	Executive Vice President and Chief Financial Officer
Kevin P. Gregoire	Executive Vice President and President, Enterprise Markets Group (“EMG”)
Kevin W. Mooney	Executive Vice President and President, General Markets Group (“GMG”)
Jon W. Olson	Senior Vice President and General Counsel

Executive Summary

Our executive compensation program is designed to reward our executive management for effectively building stockholder value.

2018 Business Highlights

We believe that through the strength of our business model and executive leadership team, we delivered on our strategic priorities in 2018. In particular, we:


•	Introduced our Cloud Solution for Faith Communities, which combines our proven strength in financial management, fundraising, marketing, payments and analytics with our completely new Church Management capabilities;


•	Announced our Cloud Solution for Higher Education, introducing a new Education Management portfolio, along with stewardship management and guided fundraising capabilities tailored for higher education;

•


•	Added approximately $2 billion to our TAM through these solution introductions;


•	Acquired Reeher, which expanded our fundraising performance management capabilities and is intended to drive more effective fundraising and greater social good outcomes for our customers;


•	Made investments to increase the effectiveness of our sales organization, with a focus on enabling our expanding sales teams with the talent, processes and tools to accelerate our revenue growth and improve effectiveness and spent the second half of 2018 ramping our direct sales hiring resulting in an increase in sales headcount of 19% since the end of 2017; and


•	Continued to execute against our plan to relocate some of our existing offices to highly modern and more collaborative workspaces that are more centrally located for our employees and closer to our customers.

These accomplishments contributed to a year of solid financial performance for us, inclusive of our mid-market cloud-transition for the NXT solutions, as we:


•	Increased total revenue by 7.6%;


•	Grew recurring revenue to approximately 90% of total revenue;


•	Increased cash flow from operations by 14.2%


•	Increased non-GAAP free cash flow* by 8.2%; and


•	Returned $23.3 million to stockholders in the form of dividends.

* See Appendix A for a reconciliation of non-GAAP financial measures to results reported in accordance with generally accepted accounting principles.



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		EXECUTIVE COMPENSATION		Table of Contents

Other 2018 Highlights


•	We released our first Blackbaud Social Responsibility Report to provide greater transparency in our ESG initiatives.


•	We were named one of America’s Best Mid-size Employers by Forbes for the second consecutive year. Forbes also recognized us as one of America’s Best Employers for Diversity in 2018.


•	We were named to the Forbes America’s Best Employers for Women list and AnitaB.org recognized us as one of the 2018 Top Companies for Women Technologists.


•	We were included in IDC’s “Worldwide Software as a Service and Cloud Software Market Shares, 2017: A Year of Expanding Platforms” report, ranked #24 for the second straight year on IDC’s list of “Top 100 Cloud Software Vendors by Revenue” and climbed two spots to #18 on IDC’s list of “Top 20 Worldwide SaaS Applications Revenue by Vendor.”


•	For a fourth consecutive year, we ranked #1 on Capterra's Top 20 Most Popular Nonprofit Software list.

Stockholder Engagement and Consideration of Last Year's Say-on-Pay Vote

Throughout each year, we actively engage in a structured and regular communication program with our stockholders. In addition to current topics of relevance including our business results and initiatives, strategy and capital structure, we invite stockholders to discuss matters related to Board composition and tenure, corporate governance, executive compensation and social responsibility, among other topics. Our goal is to be responsive to all of our stockholders and ensure we understand and address their concerns and observations. Stockholder feedback, including through direct discussions and prior stockholder votes, is reported to our Board periodically through the year.




	98%	At the June 12, 2018 Annual Meeting of Stockholders, approximately 98% of the shares present and entitled to vote on the matter voted to approve, on an advisory basis, the compensation of our NEOs.

We believe that these results represent a strong endorsement of our executive compensation philosophy and practices, and as such, the Compensation Committee did not make any changes to our executive compensation program in 2018. We will continue to engage our stockholders this year and in future years and consider their input in all facets of our business, including executive compensation.

Overview of Compensation Philosophy and Executive Compensation Program

We are committed to a philosophy of pay-for-performance as it relates to executive compensation. Our executive compensation program is designed to achieve three primary objectives:



1.	Market Competitiveness. Provide market competitive compensation opportunities to attract and retain executive officers and motivate them to perform at their highest level.



2.	Stockholder Value Creation. Structure compensation through base salary, annual cash bonus opportunities and a combination of performance-based and time-based equity awards, which should ultimately promote increased value for our stockholders.



3.	Pay-for-Performance. Ensure actual compensation realized by our executive officers is linked to the attainment and furtherance of our short-term and long-term business strategies thereby enhancing operational performance and stockholder return.



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	Table of Contents		EXECUTIVE COMPENSATION

The following table describes the components of our executive compensation program and how they support these objectives:



Component	Description	Compensation Objective(s) Supported
Base Salary	Provide competitive fixed compensation payable in cash based on individual experience and contributions, corporate performance, historical compensation practices for our executive officers and an analysis of competitive market practices.	1 and 2
Annual Cash Bonus	Offer variable compensation in the form of annual cash bonus opportunities based on performance against pre-established short-term performance objectives.	1, 2 and 3
Annual Equity Awards	Provide variable long-term incentives aligned with stockholder interests consisting of a combination of 1) RSAs or RSUs; and 2) at least 50% PRSUs. Recipients of RSAs have the right to vote such shares and receive dividends while recipients of RSUs have the right to receive dividend equivalents.	1, 2 and 3
“Double-Trigger” Change in Control Severance Arrangements	Provide change in control payments and benefits to our executive officers only upon a qualifying termination of employment within 12 months of a change in control of our Company.	1 and 2
Other Benefits	Generally provide the same health and welfare benefits as offered to all of our employees.	1

2018 Executive Compensation Actions

For 2018, the Compensation Committee continued to use our executive compensation program to focus on creating incentives for our executive officers to achieve our financial and operational objectives and foster sustainable stockholder value creation.

The key compensation decisions of the Compensation Committee for 2018 for our NEOs were as follows:

Base Salaries


•	Increased the base salaries of our named executive officers (other than our newly hired Executive Vice President and President, Enterprise Markets Group) from their 2017 levels;

Annual Cash Bonuses


•	Awarded cash bonuses that were, on average, 79% of each NEO's target annual cash bonus opportunity;

Long-term Incentive Compensation


•	Approved grants of annual equity awards consisting of 50% RSAs and 50% PRSUs for our NEOs (except for Mr. Gregoire, who joined us April 9, 2018) that met competitive market practices, supported our retention objectives and rewarded overall company performance; and


•	Based on Company performance in 2018, determined that 63.3% of the shares of our common stock subject to the PRSUs granted in February 2018 will vest in three equal annual installments starting in February 2019 subject to each NEO's continued employment as of each vesting date. See the discussion of the 2018 PRSU Awards to NEOs beginning on page 38 for more information.

2018 Corporate Governance Policies and Practices

During 2018, we maintained robust compensation-related corporate governance policies and practices including:


•	The Compensation Committee is composed solely of independent directors;


•	The Compensation Committee retains its own independent compensation consultant that performs no other consulting or other services for us;


•	The Compensation Committee conducts an annual review of our executive compensation program, including a review of our compensation-related risk profile, to ensure that any compensation-related risks are not reasonably likely to have a material adverse effect on our Company;


•	Our arrangements for paying post-employment compensation provide for “double-trigger” change in control payments and benefits;


•	We do not provide material non-cash benefits (such as guaranteed retirement or pension plan benefits) or perquisites for our executive officers that are not available to our employees generally;


•	Our current equity compensation plan, the 2016 Equity and Incentive Compensation Plan does not permit stock option exchanges or repricing without stockholder approval;


•	Our employees are not permitted to hedge their economic exposure to our common stock and Company directors and Section 16(a) reporting executive officers may not pledge their ownership interests in our common stock to secure



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		EXECUTIVE COMPENSATION		Table of Contents

a loan; and


•	We emphasized performance-based compensation by continuing the practice of granting PRSUs to our NEOs that are earned through the attainment of pre-established performance objectives, and, when earned, are subject to additional time-based vesting requirements.

Executive Compensation-Setting Process

The Compensation Committee works closely with its compensation consultant and senior management to address executive compensation matters throughout the year. The Compensation Committee met five times in 2018. During these meetings, the Compensation Committee reviewed our executive compensation program and formulated its compensation actions for the year, and made decisions regarding the compensation for our CEO and the other NEOs. The Compensation Committee may create a subcommittee consisting of one or more of its members and may delegate any of its duties and responsibilities to such subcommittee, unless otherwise prohibited by applicable laws or listing standards. In addition, the Compensation Committee may delegate any of its duties and responsibilities, including the administration of equity incentive or employee benefit plans, to the Compensation Committee Chair, unless otherwise prohibited by applicable laws or listing standards.

The Compensation Committee does not seek to deliver a specified percentage of pay to our executive officers through each component of the executive compensation program; rather, it adheres to the overall principle of delivering the majority of executive compensation in variable, performance-based forms. For base salary, annual cash bonuses and equity awards, generally our strategy has been to evaluate individual experience and contribution, corporate performance, historical compensation practices for our executive officers and competitive market analyses. With respect to base salary and annual cash bonuses, we generally target pay to be competitive to the market. At times, the Compensation Committee has approved compensation levels for individual executive officers above and below target pay positions, based on experience, individual contribution and the Company's performance relative to the compensation peer group, to ensure an appropriate pay-for-performance alignment.

Role of the Compensation Committee

The Compensation Committee has overall responsibility for our executive compensation program and approves our executive compensation decisions. Its principal duties and responsibilities include:


•	Establishing our compensation philosophy, policies and practices for our executive officers, including the compensation objectives and target pay levels, and approving the compensation peer group used for assessing the competitiveness of our executive compensation;


•	Establishing and approving corporate goals and objectives relevant to the compensation of our CEO and, in light of those goals and objectives, evaluating and determining his compensation level;


•	Reviewing and overseeing the corporate goals and objectives relevant to the compensation of our other executive officers, including the other NEOs, taking into account the practices of the compensation peer group and other appropriate factors, such as corporate and individual performance and historical compensation practices for such executive officers and the recommendations of our CEO;


•	Establishing appropriate compensation, retention, incentive, severance and benefit policies and programs for our executive officers;


•	Reviewing and recommending, with input from the Board of Directors, incentive compensation plans for our executive officers and employees;


•	Administering and amending as necessary the Company's various incentive compensation and other similar plans; and


•	Conducting periodic competitive evaluations of our executive compensation program.

Our Compensation Committee operates pursuant to a written charter that further outlines its specific authority, duties and responsibilities. The charter is periodically reviewed and revised by the Compensation Committee and the Board and is available under Corporate Governance in the Company – Investor Relations section of our website at www.blackbaud.com.



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	Table of Contents		EXECUTIVE COMPENSATION

Role of our CEO

Our CEO evaluates and makes recommendations regarding the compensation of our executive officers, including the other NEOs. At the end of each fiscal year, our CEO reviews with the Compensation Committee the performance of each executive officer and makes recommendations with respect to his or her base salary, target annual cash bonus opportunity and equity awards for the ensuing year. In formulating his recommendations, our CEO considers both internal and external compensation data from our Human Resources Department and the Compensation Committee's compensation consultant. While the Compensation Committee considers the recommendations of our CEO, these recommendations are just one factor considered in its deliberations when making executive compensation decisions. The Compensation Committee consults with the full Board of Directors (excluding our CEO) in making decisions regarding our CEO's compensation.

Role of Compensation Consultant

Pursuant to its written charter, the Compensation Committee has the authority to engage the services of outside advisors, experts and others to assist it in the performance of its duties and responsibilities. In 2018, the Compensation Committee engaged Compensia, Inc. ("Compensia"), a national compensation consulting firm, to provide support and information relating to executive and director compensation. Compensia reports to the Compensation Committee and does not provide any additional services to management. From time to time, the Compensation Committee may direct its advisors to work with our Human Resources Department to support it in matters relating to the fulfillment of its charter.

During 2018, at the request and on behalf of our Compensation Committee, Compensia:


•	Assessed our executive compensation program and practices, particularly with respect to our pay-for-performance alignment;


•	Advised on the size and structure of the cash components of our executive compensation program (i.e., base salary and target annual cash bonus opportunities, and performance measures and weighting of bonuses);


•	Advised on the composition, structure and competitiveness of the long-term incentive component of our executive compensation program;


•	Advised on the composition of our compensation peer group; and


•	Advised on the design and amount of the compensation package for our CEO and other executive officers.

The Compensation Committee has evaluated Compensia's engagement, and based on the six factors for assessing independence and identifying potential conflicts of interest that are set forth in Exchange Act Rule 10C-1(b)(4), Rule 5605(d)(3)(D) of the Nasdaq Marketplace Rules and such other factors as were deemed relevant under the circumstances, has determined that its relationship with Compensia and the work of Compensia on behalf of the committee did not raise any conflict of interest, and that Compensia is independent.



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Competitive Positioning

In selecting the compensation peer group, the Compensation Committee considers software or technology companies with comparable annual revenue and market capitalization. Periodically, the Compensation Committee reviews the current compensation peer group, with the assistance of its compensation consultant, to determine whether it is still appropriate. It updates the compensation peer group for changes resulting from mergers, acquisitions, bankruptcies, going private transactions and other changes in strategic focus or circumstances, removing from the group any companies that no longer fit the relevant criteria and adding ones that do. The following compensation peer group was approved by the Compensation Committee in January 2018 and used as a reference when making executive compensation decisions for 2018. U.S. headquartered, public software companies with revenue and market capitalization between about 0.5x and 2.0x our financial profile were considered for inclusion.

2018 COMPENSATION PEER GROUP

ACI Worldwide, Inc. (ACIW)

Aspen Technology, Inc. (AZPN)*

Athenahealth, Inc. (ATHN)⁽¹⁾

Commvault Systems, Inc. (CVLT)

Blackbaud, Inc. Vs. Peer Group

Cornerstone OnDemand, Inc. (CSOD)*

Market Capitalization**

CoStar Group, Inc. (CSGP)*

Fair Isaac Corporation (FICO)

Fortinet, Inc. (FTNT)*

Blackbaud, Inc.

43rd Percentile

Guidewire Software, Inc. (GWRE)*

Manhattan Associates, Inc. (MANH)*

Revenue***

Medidata Solutions, Inc. (MDSO)

Paycom Software, Inc. (PAYC)*

Proofpoint, Inc. (PFPT)*

Blackbaud, Inc.

51st Percentile

PTC Inc. (PTC)*

RealPage, Inc. (RP)*

*Added to peer group in December 2017

SS&C Technologies Holdings, Inc. (SSNC)

**Based upon a 30-day average as of 12/22/2017

Tableau Software, Inc. (DATA)*

***Based upon the last four fiscal quarters of publicly available data as of December 2017

Tyler Technologies, Inc. (TYL)

The Ultimate Software Group, Inc. (ULTI)*

Veeva Systems Inc. (VEEV)


(1)	This company was subsequently removed from the peer group as it is no longer a publicly traded company.

In addition to the practices of the compensation peer group, the Compensation Committee reviews the executive pay practices of other similarly sized software or technology companies with which we compete for talent as reported in the Radford Global Technology Survey. This information is considered when making determinations for each component of compensation as well as target total direct compensation.



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	Table of Contents		EXECUTIVE COMPENSATION

Analysis of 2018 Executive Compensation

The charts below show the significant percentage of performance-based compensation reported for 2018 in the Summary Compensation Table for Mr. Gianoni, our CEO, and on average for our other NEOs as a group.

2018 Total Direct Compensation* Mix



	CEO		Other NEOs**
	(49% Performance-based)		(46% Performance-based)

Fixed

Performance-based

Time-based

Base Salary

Annual

Cash Bonus

Annual PRSU Grants

Annual RSA or RSU Grants

Cash

Equity

*Base salary, actual annual cash bonus and the grant date fair value of all equity awards for 2018.

**Mr. Gregoire's compensation was excluded as he joined us on April 9, 2018.

Base Salary

Base salary is the principal fixed component in our executive compensation program. The Compensation Committee reviews the base salaries of our executive officers each year and makes adjustments as it deems necessary and appropriate based on its consideration of individual experience and contributions, corporate performance, historical compensation practices for our executive officers and its assessment of the competitive market.

In 2018, the Compensation Committee increased the base salaries of our NEOs, other than Mr. Gregoire (who joined us April 9, 2018), effective April 1, 2018, as set forth in the following table. The Compensation Committee made these adjustments after taking into consideration the individual achievements of each NEO, in recognition of our success in delivering on our 2017 strategic priorities, the recommendations of our CEO (except with respect to his own base salary), and the factors described above.



Name	2018 Base Salary		2017 Base Salary		Salary Adjustment
Name	2018 Base Salary		2017 Base Salary		$ Change		% Change
Mr. Gianoni	$	721,000	$	700,000	$	21,000	3.0	%
Mr. Boor	464,406		450,880		13,526		3.0	%
Mr. Gregoire⁽¹⁾	425,000		—		—		—	%
Mr. Mooney	450,203		437,090		13,113		3.0	%
Mr. Olson	330,000		311,380		18,620		6.0	%


(1)	Mr. Gregoire joined us on April 9, 2018.



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Annual Cash Bonuses

Annual cash bonuses represent one of the principal variable pay components of our executive compensation program, and are reported in the “Non-Equity Incentive Plan Compensation” columns of the 2018 Summary Compensation Table and the 2018 NEO Compensation Summary on pages 43 and 7, respectively, of this Proxy Statement. During 2018, we provided our executive officers with the opportunity to earn cash bonuses based on one or more pre-established corporate performance objectives and, where applicable, the financial performance of the executive officer's market group.

Target Annual Cash Bonus Opportunities

The following table sets forth each NEO's target annual cash bonus opportunity for 2018, as set by the Compensation Committee, and how the opportunity was weighted between corporate performance and market group performance. All of our NEOs 2018 target annual cash bonus opportunities were unchanged from 2017 with the exception of Mr. Olson's which increased from 40% to 50% based on a review of the competitive market for similar roles.



	Target Annual Cash Bonus Opportunity as a Percentage of Base Salary	Weighting of Target Annual Cash Bonus Opportunity
Name		Portion Attributable to Corporate Performance Metrics	Portion Attributable to Market Group Performance Metrics
Mr. Gianoni	100%	100%	—%
Mr. Boor	65%	100%	—%
Mr. Gregoire	65%	70%	30%
Mr. Mooney	65%	70%	30%
Mr. Olson	50%	100%	—%

Corporate Performance Metrics

Consistent with 2017 and 2016, the Compensation Committee selected Adjusted Revenue (as defined below) and Adjusted Earnings (as defined below) as the corporate performance metrics to be used in 2018 for purposes of the corporate performance factor used to determine our executive officers' annual cash bonuses. For purposes of determining annual cash bonuses:


•	“Adjusted Revenue” means our 2018 non-GAAP revenue, which excludes the impact of acquisition-related deferred revenue write-downs, as presented in our periodic reports filed with the SEC within the section "Management's discussion and analysis of financial condition and results of operations" of those reports.

•

“Adjusted Earnings” means our 2018 non-GAAP income from operations, which excludes the impact of acquisition-related deferred revenue write-downs, stock-based compensation charges, costs associated with amortization of intangibles arising from business combinations, impairment of capitalized software development costs due to business combinations, acquisition-related integration costs, acquisition-related expenses, CEO transition costs and restructuring costs. Non-GAAP income from operations is also presented in our periodic reports filed with the SEC within the section "Management's discussion and analysis of financial condition and results of operations" of those reports. Adjusted Earnings is calculated before bonus expense.

The Compensation Committee selected "Adjusted Revenue" as a performance metric because it reflects our top-line growth, which the Committee believes is a strong indicator of our long-term ability to increase profitability, cash flow and deliver stockholder value.

The Compensation Committee selected "Adjusted Earnings" as a performance metric because it focuses on results of operations, without considering the cost of financing those operations (interest in debt or gains and losses on debt extinguishment and termination of derivative instruments), our tax provision, and non-operating items like interest income and foreign exchange transaction gains and losses.

Achievement against the corporate performance metrics is calculated on a constant currency basis, using foreign exchange rates in effect during the 2017 base year. In addition, the impact of companies we acquired during 2018 were excluded from the calculations of Adjusted Revenue and Adjusted Earnings. The Compensation Committee weighted the corporate performance metrics at 60% for Adjusted Revenue and 40% for Adjusted Earnings. The Compensation Committee also determined the threshold levels for each performance metric that would have to be achieved for any amount to be paid with respect that metric, as set forth in the following table.



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The determination of each NEO’s potential payout under the corporate performance metrics was based on the following matrix:



Corporate Performance Metric			Performance
Corporate Performance Metric	2018 Target (in millions)		Below Threshold		Threshold		Target		Maximum
Adjusted Revenue	$	890.1	<90.0%		90.0	%	100.0	%	115.0	%
Adjusted Earnings	$	218.4	<90.0%		90.0	%	100.0	%	115.0	%
			Payout
Maximum individual potential bonus as percentage of target			—	%	62.5	%	100.0	%	200.0	%

For each of our performance metrics, the Compensation Committee set the performance target at a level it believed was reasonably achievable while requiring what it believed would be outstanding performance to achieve the maximum payout level.

For 2018, our achievement against the corporate performance metrics was 94.9% with respect to Adjusted Revenue and 90.7% with respect to Adjusted Earnings, for a corporate performance factor of approximately 93.2%. The corporate performance factor decreased payments by 2.5% for every 1% of achievement below the target performance level down to 95%, and decreased payments by 5% for every 1% of achievement below 95%. Therefore, the Compensation Committee determined that, with respect to the corporate performance metrics, the application of the corporate factor resulted in a payout of approximately 78.6% of the target payout.

NEO Performance Metrics and Annual Cash Bonus Determinations

Mr. Gianoni

The Compensation Committee determined Mr. Gianoni’s 2018 bonus entirely based on the achievement of the corporate performance metrics as described above. Accordingly, Mr. Gianoni received $562,636 (approximately 78.6% of his total target annual cash bonus opportunity).

Mr. Boor

The Compensation Committee determined Mr. Boor’s 2018 bonus entirely based on the achievement of the corporate performance metrics as described above. Accordingly, Mr. Boor received $235,561 (approximately 78.6% of his total target annual cash bonus opportunity).



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Mr. Gregoire

The Compensation Committee determined Mr. Gregoire’s 2018 bonus 70% based on the achievement of the corporate performance metrics described above and 30% based on the achievement of overall EMG performance. For the corporate performance component of his 2018 bonus, Mr. Gregoire received $111,184 (approximately 78.6% of the 70% of his target annual cash bonus opportunity attributable to corporate performance).



For the overall EMG performance component of his 2018 bonus, Mr. Gregoire received $51,955 (approximately 85.7% of the 30% of his target annual cash bonus opportunity attributable to EMG performance). The Compensation Committee evaluated overall EMG performance against Adjusted Revenue and Monthly Recurring Revenue ("MRR") Bookings as follows:
			Performance
EMG Performance Metric	2018 Target (in millions)		Below Threshold		Threshold		Target		Maximum
Adjusted Revenue	$	400.2	<80.0%		80.0	%	100.0	%	150.0	%
MRR Bookings	$	3.2	<80.0%		80.0	%	100.0	%	150.0	%
			Payout
Maximum potential bonus as percentage of target			—	%	70.0	%	100.0	%	200.0	%
MRR Bookings are sales of our offerings that generate MRR. The monthly amount of recurring subscriptions, maintenance as well as renewable consulting and training offerings are classified as MRR bookings.
The Adjusted Revenue and MRR Bookings threshold levels both had to be achieved for any EMG performance bonus to be paid. The Adjusted Revenue and MRR Bookings metrics were each measured annually. The Adjusted Revenue and MRR Bookings metrics were each weighted 50%. For 2018, EMG achieved an overall performance bonus factor of approximately 90.5%. The EMG performance factor decreased payments by 1.5% for every 1% of achievement below the target performance level.

Mr. Mooney

The Compensation Committee determined Mr. Mooney’s 2018 bonus 70% based on the achievement of the corporate performance metrics described above and 30% based on the achievement of overall GMG performance. For the corporate performance component of his 2018 bonus, Mr. Mooney received $159,850 (approximately 78.6% of the 70% of his target annual cash bonus opportunity attributable to corporate performance).



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For the overall GMG performance component of his 2018 bonus, Mr. Mooney received $78,792 (approximately 90.4% of the 30% of his target annual cash bonus opportunity attributable to GMG performance). The Compensation Committee evaluated overall GMG performance against Adjusted Revenue and MRR Bookings as follows:
			Performance
GMG Performance Metric	2018 Target (in millions)		Below Threshold		Threshold		Target		Maximum
Adjusted Revenue	$	406.7	<80.0%		80.0	%	100.0	%	150.0	%
MRR Bookings	$	3.4	<80.0%		80.0	%	100.0	%	150.0	%
			Payout
Maximum potential bonus as percentage of target			—	%	70.0	%	100.0	%	200.0	%
The Adjusted Revenue and MRR Bookings threshold levels both had to be achieved for any GMG performance bonus to be paid. The Adjusted Revenue and MRR Bookings metrics were each measured annually. The Adjusted Revenue and MRR Bookings metrics were each weighted 50%. For 2018, GMG achieved an overall performance bonus factor of approximately 93.6%. The GMG performance factor decreased payments by 1.5% for every 1% of achievement below the target performance level.

Mr. Olson

The Compensation Committee determined Mr. Olson’s 2018 bonus entirely based on the achievement of the corporate performance metrics as described above. Accordingly, Mr. Olson received $127,886 (approximately 78.6% of his total target annual cash bonus opportunity).

Summary of Annual Cash Bonus Payments

The following illustrates the 2018 annual cash bonus opportunities for our NEOs and their respective payout amounts.



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Long-Term Incentive Compensation

Our Long-term Incentive Plan ("LTIP") is designed to align the interest of our executive officers with the interests of our stockholders and serve as an important means for executive retention. Based on feedback from our stockholders and our assessment of the competitive market, at least 50% of the equity awards granted to our NEOs are performance-based with the balance of their equity awards being time-based (except for Mr. Gregoire who joined us on April 9, 2018). In 2018, the Compensation Committee granted our executive officers their annual LTIP awards in the first fiscal quarter.

The following table sets forth the number of shares of our common stock subject to RSAs and PRSUs granted to each NEO on February 12, 2018 under our LTIP (except for Mr. Gregoire who was granted his LTIP award on May 4, 2018 after joining us), which are reflected in the 2018 Summary Compensation Table below. The Compensation Committee determined LTIP award levels for our NEOs after considering peer group equity award practices, individual performance, criticality of each NEO's role, expected future contributions of and the long-term retention objectives for each NEO and our performance compared to our compensation peer group.



Name	Number of RSAs	Number of PRSUs
Mr. Gianoni	42,203	42,203
Mr. Boor	15,826	15,826
Mr. Gregoire	23,944	—
Mr. Mooney	10,551	10,551
Mr. Olson	6,594	6,594

The RSAs granted to our NEOs during 2018 vest in four equal annual installments beginning on the first anniversary of the date of grant, subject to the NEO's continued employment. The vested and unvested shares of common stock subject to RSAs are eligible to receive dividends declared by the Company.

2018 PRSU Awards to NEOs

In February 2018, the Compensation Committee granted PRSUs to our NEOs (the "2018 PRSUs"). Shares of our common stock subject to the 2018 PRSUs may be earned and become eligible for vesting if the following threshold performance criteria are met (together, the “2018 PRSU Performance Metrics”):


i.	During the one-year period from January 1, 2018 to December 31, 2018 (the "Performance Period"), we achieve Non-GAAP Adjusted Revenue of a minimum of $858.0 million; and


ii.	During the Performance Period, we achieve Non-GAAP Adjusted Income from Operations of $171.6 million.

For purposes of determining 2018 PRSU attainment:

•

“Non-GAAP Adjusted Revenue” means our 2018 non-GAAP revenue as presented in our periodic reports filed with the SEC (within the section "Management's discussion and analysis of financial condition and results of operations" of those reports), adjusted to exclude acquisition-related revenue associated with companies acquired during the Performance Period, as well as the effects of any fair value adjustments to acquired deferred revenue.

•

“Non-GAAP Adjusted Income from Operations” means our 2018 non-GAAP income from operations as presented in our periodic reports filed with the SEC (within the section "Management's discussion and analysis of financial condition and results of operations" of those reports), adjusted to exclude the impact during the Performance Period of acquisitions as contemplated by the Non-GAAP Adjusted Revenue performance metric set forth above.

Based on our stated strategy of simultaneous growth and improving profitability, the Compensation Committee believed that, the pre-established performance levels for revenue and operating income closely aligned our strategic goals with the interests of our stockholders. Moreover, to focus our executive officers on the importance of continuing to grow our revenues significantly, the Compensation Committee believed that it was appropriate to emphasize revenues as a performance metric in both our annual cash bonus opportunities and the 2018 PRSUs.

To the extent earned, the 2018 PRSUs are eligible for vesting in three equal annual installments starting in February 2019. Achievement against the 2018 PRSU Performance Metrics was to be calculated on a constant currency basis, eliminating



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both positive and negative effects of currency exchange rate fluctuations. The Compensation Committee weighted the 2018 PRSU Performance Metrics equally. The threshold levels for both 2018 PRSU Performance Metrics had to be achieved or exceeded for there to be a payout.

In September 2018, the Compensation Committee reviewed the 2018 PRSU Performance Metrics and approved a reduction in the minimum threshold performance level for Non-GAAP Adjusted Revenue from $858.0 million, or 97.5% of the target performance level, to $836.0 million, or 95% of the target performance level. This change was made to address unanticipated factors negatively impacting revenue achievement, that the Compensation Committee determined resulted from factors outside of management control, which resulted from the Company's strategy shift to a cloud model.

The Non-GAAP Income from Operations threshold performance level was previously determined as a percentage of the threshold for Non-GAAP Adjusted Revenue and thus the Compensation Committee approved a corresponding reduction in the threshold performance level for Non-GAAP Adjusted Income from Operations from $171.6 million to $167.2 million. In approving these changes, the Compensation Committee also considered competitive market practice and determined that a threshold performance level for the Adjusted Non-GAAP Revenue metric equal to 95% of target was equal to the 50th percentile of performance level of revenue goals in incentive plans of comparable software companies with a high percentage of recurring revenue.

The Compensation Committee evaluated our performance against the 2018 PRSU Performance Metrics as follows:



2018 PRSU Performance Metrics	Performance (dollars in millions)
2018 PRSU Performance Metrics	Below Threshold	Threshold	Target	Maximum
Non-GAAP Adjusted Revenue	< $836.0	$836.0	$880-$890	$897.0
Non-GAAP Adjusted Income from Operations	< $167.2	$167.2	$184.8-$186.9	$197.3
	Payout
Maximum potential number of shares as percentage of target	—%	50.0%	100.0%	200.0%

Our achievement against the 2018 PRSU Performance Metrics was $844.3 million or 59.5% with respect to Non-GAAP Adjusted Revenue and $173.2 million or 67.1% with respect to Non-GAAP Adjusted Income from Operations, for a combined performance factor of approximately 63.3%. As a result, the Compensation Committee determined that 63.3% of the shares of our common stock subject to the 2018 PRSUs as shown in the table below will vest according to the time-based vesting schedule set forth above subject to each NEO's continued employment as of each vesting date.



Name	Number of PRSUs Granted	Number of PRSUs earned⁽¹⁾
Mr. Gianoni	42,203	26,714
Mr. Boor	15,826	10,018
Mr. Mooney	10,551	6,679
Mr. Olson	6,594	4,174


(1)	The earned 2018 PRSUs will vest in three equal annual installments beginning on February 12, 2019 subject to each NEO's continued employment.

Post-Employment Compensation

Change In Control Payments and Benefits

We have entered into arrangements with our NEOs which provide for payments and benefits upon a termination of employment in connection with a change in control of the Company. These arrangements provide for a "double-trigger," that is, they generally only provide payments and benefits if a NEO's employment is terminated within 12 months following a change in control of the Company either by us without cause or by the NEO for good reason. Based on our assessment of the competitive market, we believe these arrangements are appropriate as they serve as a means for executive retention.

For a detailed discussion of these arrangements and an estimate of the payments and benefits that our NEOs would be eligible to receive in certain circumstances pursuant to their agreements, see “Potential Payments Upon Termination or Change in Control - Employment Arrangements” beginning on page 46 of this Proxy Statement.



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Retirement Benefit

Our LTIP includes a retirement benefit, which allows eligible retirees to receive a post-retirement benefit consisting of continued vesting of their qualified RSUs. To be eligible, employees need to be 60 years of age, complete a minimum of 10 years of continuous service with us at the time of grant, provide six months' notice of their retirement date and successfully complete a transition plan. The transition plans require the approval of our CEO.

Other Benefits

Health and Welfare Benefits

Generally, the Compensation Committee seeks to provide our executive officers with health and welfare benefits on the same basis as all of our full-time employees. These benefits include health, dental, and vision benefits, health and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance and basic life insurance coverage.

We have established a tax-qualified Section 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age and length of service. Currently, we make matching contributions to each NEO's account under our Section 401(k) plan on the same terms and using the same formulas as other participating employees. We intend for the plan to qualify under Section 401(a) of the Internal Revenue Code (the “Code”) so that contributions by employees to the plan and income earned on plan contributions are not taxable to employees until withdrawn from the plan.

Perquisites and Other Personal Benefits

Historically, we have not provided any material perquisites or other personal benefits to our executive officers. While we do not view perquisites or other personal benefits as a significant component of our executive compensation program, from time to time, the Compensation Committee may provide certain of the NEOs with perquisites or other personal benefits in amounts deemed to be reasonable where it believes that these benefits may be useful in attracting, motivating, and retaining the executive talent for which we compete, to assist our executive officers in performing their duties and to provide certain time efficiencies in appropriate circumstances. We provide certain of our executive officers access to use our Company-owned club memberships (but do not pay club fees or dues for executive officers), which afford our executives the opportunity to conduct business in a more informal environment.