Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 20, 2022, Blackbaud, Inc. (the "Company") entered into an Amended
and Restated Employment and Noncompetition Agreement with Michael P. Gianoni
(the "Agreement") under which Mr. Gianoni will continue to serve as the
President and Chief Executive Officer and a member of the Board of Directors of
the Company (the "Board"). The Agreement amends and restates the previously
amended and restated employment and noncompetition agreement dated December 11,
2019 between Mr. Gianoni and the Company. The following is a summary of the
principal terms of the Agreement, and is qualified in its entirety by reference
to the attached Agreement:
The initial term of the Agreement begins on January 1, 2023 and expires on
December 31, 2025 and is renewable thereafter by mutual agreement of Mr. Gianoni
and the Company.
•Mr. Gianoni's base salary will be $800,000 per year, subject to annual
increases (the "Base Salary").
•For 2023 and each year thereafter during the term of the Agreement, Mr. Gianoni
is eligible to receive an annual cash performance bonus targeted at 100% of his
then current Base Salary, dependent upon the achievement of performance goals
pre-established by the Board (or a Board committee) in its discretion. Amounts
could be greater than the target amount for performance in excess of the
pre-established performance goals or less than the target amount based on actual
results and the review of Mr. Gianoni's performance. However, in no event will
the actual annual performance bonus be more than two times the target amount.
•For 2023 and each year thereafter during the term of the Agreement, the Company
may award Mr. Gianoni an annual equity-based award with a target value of $6
million to $9 million and a value ranging from zero to 250% of the target. The
grant will be in a form determined by the Board (or applicable committee). The
Board (or applicable committee) will set the actual value of the award,
considering Mr. Gianoni's performance during its review. Generally, one-third of
the award will vest on each of the first, second, and third anniversaries of the
grant date (or such shorter vesting schedule as may be provided by the Board or
applicable committee). However, up to 70% of the annual equity-based grant may
also be contingent upon Company performance with respect to the achievement of
pre-established performance goals. To the extent that the annual equity-based
award is comprised of a performance-based equity award, then subject to the
achievement of the applicable performance goals, one-third of the
performance-based award will vest on each of the first, second, and third
anniversaries of the grant date (or such shorter vesting schedule as may be
provided by the Board or applicable committee). Vesting generally is contingent
upon Mr. Gianoni's continued employment or service on the Board.
•Mr. Gianoni is eligible for the following additional compensation and benefits
on the same basis as other senior executives of the Company: all employee
benefit plans and fringe benefits as may be provided by the Company from time to
time; reasonable periods of paid time off and paid holidays; reimbursement for
all out-of-pocket expenses reasonably incurred in the performance of his duties;
and health, life, short-term disability and long-term disability insurance
(provided that the short-term disability and long-term disability insurance
coverage is for an amount not less than 60% of Mr. Gianoni's Base Salary).
•Mr. Gianoni also is eligible for reimbursement of reasonable legal expenses he
incurred in connection with the preparation and negotiation of the Agreement,
provided that the Company's obligation to reimburse such expenses is capped at
$15,000.
•During the term of the Agreement and unless otherwise determined by the Board,
the Board will nominate Mr. Gianoni to be a member of the Board prior to the
expiration of each of his terms as a director, with his election to the Board
subject to stockholder vote.
•Upon termination of employment by the Company for "cause" (as defined in the
Agreement), Mr. Gianoni will be entitled to payment of his accrued but unpaid
Base Salary through the termination date, any unreimbursed expenses through the
termination date in accordance with the Company's policies, and payment of other
amounts and benefits, if any, to which he is entitled under applicable benefit
plans, agreements and applicable law (collectively, the "Accrued Compensation").
Mr. Gianoni will cease to be entitled to any other compensation or benefits
under the Agreement.
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•Upon termination of employment by the Company without cause, including due to
the Company's non-renewal of the Agreement, or by Mr. Gianoni with "good reason"
(as defined in the Agreement), which termination in any such case is not in
connection with a change in control (as described in the Agreement) or Mr.
Gianoni's death or disability, Mr. Gianoni will be entitled to: the Accrued
Compensation; payment of any awarded but unpaid bonus compensation for prior
calendar years; payment of his Base Salary for a period of 24 months; a lump sum
payment based on the average cash bonus he received for the two calendar years
prior to the calendar year in which termination occurs, pro-rated based upon his
period of employment during the year of termination; and accelerated vesting by
12 months of all of his then-unvested time-based equity awards. In addition,
following certification of performance objectives, Mr. Gianoni will be entitled
to vesting of any then-unvested performance-based equity awards to the extent
that such awards would have vested if he had continued employment with the
Company through the end of the applicable performance period, but only if the
performance period for such equity awards ends within 12 months of Mr. Gianoni's
termination date. Mr. Gianoni will cease to be entitled to any other
compensation or benefits under the Agreement. The foregoing severance payments
and benefits (other than the Accrued Compensation and payment of any awarded but
unpaid bonus compensation for prior calendar years) are subject to Mr. Gianoni's
timely executing a release of claims in favor of the Company, and such release
becoming effective. Notwithstanding the foregoing, if Mr. Gianoni remains a
member of the Board after termination of his employment under these
circumstances, he will not receive the foregoing severance payments and
benefits, but such continued service as a member of the Board will constitute
continuous service for purposes of vesting of any of Mr. Gianoni's then-unvested
equity grants at the time of his termination of employment.
•If Mr. Gianoni resigns without good reason or fails to renew the Agreement, Mr.
Gianoni will be entitled to: the Accrued Compensation, payment of any awarded
but unpaid bonus compensation for prior calendar years (but not in the case of
resignation without "good reason" (as defined in the Agreement)) and the
opportunity to exercise any vested stock options or stock appreciation rights
pursuant to the terms of the applicable award agreements. Mr. Gianoni will cease
to be entitled to any other compensation or benefits under the Agreement.
•If Mr. Gianoni dies or suffers a "disability" (within the meaning of the
Agreement), Mr. Gianoni will be entitled to: the Accrued Compensation; payment
of any awarded but unpaid bonus compensation for prior calendar years; a lump
sum payment based on the average cash bonus he received for the two calendar
years prior to the calendar year in which termination occurs, pro-rated based
upon his period of employment during the year of termination; and the
opportunity to exercise any vested stock options or stock appreciation rights
pursuant to the terms of the applicable award agreements. Mr. Gianoni will cease
to be entitled to any other compensation or benefits under the Agreement.
•If within 12 months after a change in control, the Company terminates Mr.
Gianoni's employment without cause or he resigns with good reason, or if during
discussions which lead to a change in control or within 12 months after a change
in control, the Company delivers notice of its intention not to renew the
Agreement and Mr. Gianoni's employment thereafter accordingly is terminated by
the Company without cause, Mr. Gianoni will be entitled to: the Accrued
Compensation; payment of his Base Salary for a period of 24 months; payment of
any awarded but unpaid bonus compensation for prior calendar years; a lump sum
payment based on the average cash bonus he received for the two calendar years
prior to the calendar year in which termination occurs, pro-rated based upon his
period of employment during the year of termination; accelerated vesting of all
of his then-unvested time-based equity awards; and accelerated vesting of
performance-based equity awards based on the achievement of applicable
performance goals as of the termination date (or if calculation of the
achievement of the applicable performance goals is not possible, then based on
an assumed achievement of the performance goals at target). Mr. Gianoni will
cease to be entitled to any other compensation or benefits under the Agreement.
The foregoing severance payments and benefits (other than the Accrued
Compensation and payment of any awarded but unpaid bonus compensation for prior
calendar years) are subject to Mr. Gianoni's timely executing a release of
claims in favor of the Company, and such release becoming effective.
•If the payments and benefits that may be due to Mr. Gianoni in connection with
. . .
Item 8.01. Other Events.
On September 15, 2022, the Board adopted tenure limits for its independent
directors within the Company's corporate governance guidelines.
Effective immediately, an independent director of the Company will not be
nominated for election as a director if he or she has, or will have, served on
the Board for nine years or more as of the date scheduled for his or her next
election. Notwithstanding the foregoing, the Nominating and Corporate Governance
Committee may recommend to the Board that, based on specific circumstances the
director's tenure should be extended beyond the expiration of the term during
which he or she reached his or her ninth year of service. The Board may in such
case waive or modify the retirement date if it determines that there is good
cause to do so and that such action would be in the best interests of the
Company and its stockholders, but only if such director has not completed more
than 15 years of service as a director of the Company on or prior to the date of
election to which such nomination relates.
Non-independent directors are not subject to the tenure limit described above.
Consistent with these new tenure limits, the Board does not intend to renominate
the Company's existing Class A directors at the Company's 2023 Annual Meeting of
Stockholders. As part of its ongoing effort with respect to the orderly
refreshment of the Board, the Board has engaged an independent search firm to
assist in identifying candidates to serve as Class A directors.
The foregoing summary of the Company's tenure limits for its independent
directors does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Company's corporate governance guidelines,
a copy of which is available under Corporate Governance in the Company -
Investor Relations section of our website at www.blackbaud.com. None of the
content of the Company's website shall be deemed incorporated by reference into
this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed with this current report:
Exhibit No. Description
10.1 Amended and Restated Employment and Noncompetition Agreement dated September
20, 2022 between Blackbaud, Inc. and Michael P. Gianoni.
99.1 Press release of Blackbaud, Inc. dated September 21, 2022.
101.INS Inline XBRL Instance Document - the Instance Document does not appear in the
interactive data file because its XBRL tags are embedded within the Inline
XBRL Document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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