Blackbaud, Inc.
As filed with the Securities and Exchange Commission on
August 2, 2005
Registration Statement No. 333-122122
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Blackbaud, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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7372 |
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11-2617163 |
(State or other jurisdiction of
incorporation or organization) |
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(Primary Standard Industrial
Classification Code Number) |
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(I.R.S. Employer
Identification No.) |
2000 Daniel Island Drive
Charleston, South Carolina 29492
Telephone: (843) 216-6200
(Address, including zip code, and telephone number, including
area code, of
registrants principal executive offices)
Robert J. Sywolski
Chief Executive Officer
Blackbaud, Inc.
2000 Daniel Island Drive
Charleston, South Carolina 29492
Telephone: (843) 216-6200
(Name, address, including zip code, and telephone number,
including area
code, of agent for service)
Copies to:
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Donald R. Reynolds, Esq.
Jeffrey M. Smith, Esq.
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607
Telephone: (919) 781-4000
Facsimile: (919) 781-4865 |
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
registration statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, check the following
box. x
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following
box. o
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act or until the registration statement shall
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this prospectus is
not complete and may be changed. We may not sell these
securities until the registration statement filed with the SEC
is effective. This prospectus is not an offer to sell these
securities, and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
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Subject to completion, dated
August 2, 2005
Prospectus
10,000,000 shares
BLACKBAUD, INC.
Common stock
This prospectus relates to the offer and sale from time to time
of up to an aggregate of 10,000,000 shares of our common
stock for the account of the selling stockholders named in this
prospectus. The selling stockholders may sell the common stock
from time to time in public transactions or in privately
negotiated transactions, without limitation, through any means
described in the section hereof entitled Plan of
Distribution, at market prices prevailing at the time of
sale or at negotiated prices. The timing and amount of any sale
are within the sole discretion of the selling stockholders.
Our common stock is listed on the Nasdaq National Market under
the symbol BLKB. On August 1, 2005, the last
reported sale price of our common stock on the Nasdaq National
Market was $14.07 per share.
You should read this prospectus and any prospectus supplement
carefully before you invest. See Where You Can Find More
Information for more information.
See Risk factors beginning on page 5 to read
about factors you should consider before buying shares of our
common stock.
Neither the SEC nor any state securities commission has
approved or disapproved of these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
,
2005
Table of contents
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Ex-23.1 |
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About this prospectus
This prospectus is part of a Registration Statement (the
Registration Statement) utilizing the
shelf registration process that we filed with the
Securities and Exchange Commission (the SEC), which
registers the distribution of the securities offered under this
prospectus. The Registration Statement, including the attached
exhibits and schedules, contains additional relevant information
about our company and the securities. The Registration Statement
can be read at the SECs web site (www.sec.gov) or at the
offices mentioned under the heading Where you can find
more information.
Under this Registration Statement, the selling stockholders may,
from time to time, sell up to 10,000,000 shares of Common Stock,
including shares obtained through the exercise of warrants.
This prospectus provides you with a general description of the
securities the selling stockholders may offer. Each time
securities are sold, we will provide a prospectus supplement
that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement, together
with additional information described in this prospectus under
the heading Where you can find more information.
You should rely only on the information provided in this
prospectus, including the documents incorporated by reference,
and in any prospectus supplement. We have not authorized anyone
to provide you with different information. We are only offering
the securities in states where offers are permitted. You should
not assume that the information in this prospectus or any
prospectus supplement is accurate at any date other than the
date indicated on the cover page of these documents.
Unless the context otherwise requires, we,
us, our, and similar terms refer to
Blackbaud, Inc. and its subsidiaries.
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Prospectus summary
This summary highlights selected information contained
elsewhere in this prospectus and the documents incorporated by
reference. This summary does not contain all the information you
should consider before investing in shares of our common stock.
You should read this entire prospectus and the documents
incorporated by reference carefully, including Risk
factors beginning on page 5 and our consolidated
financial statements and the related notes thereto, before
making an investment decision.
Blackbaud, Inc.
We are the leading global provider of software and related
services designed specifically for nonprofit organizations. Our
products and services enable nonprofit organizations to increase
donations, reduce fundraising costs, improve communications with
constituents, manage their finances and optimize internal
operations. We have focused solely on the nonprofit market since
our incorporation in 1982 and have developed our suite of
products and services based upon our extensive knowledge of the
operating challenges facing nonprofit organizations. In 2004, we
had over 12,700 customers, over 12,300 of which pay us
annual maintenance and support fees. Our customers operate in
multiple verticals within the nonprofit market including
religion, education, foundations, health and human services,
arts and cultural, public and societal benefits, environment and
animal welfare, and international and foreign affairs.
Industry
Nonprofit organizations are a large part of the
U.S. economy, employing one out of every
ten Americans. There were greater than 1.5 million
registered U.S. nonprofit organizations in 2003 according
to data from the Internal Revenue Service. In addition, there
are greater than 1.5 million nonprofit organizations
outside the United States. Donations to nonprofit organizations
in the United States were $241 billion in 2003, having
increased almost every year since 1962, with a compound annual
growth rate over that period of 7.8%, according to Giving USA.
In addition, these organizations received fees of approximately
$600 billion in the twelve months prior to December 2003
for services they provided.
Nonprofit organizations often utilize methods of fundraising
that are costly and inefficient, largely because of the
difficulties in effectively collecting, sharing and using
information. Fundraising and administration costs are
significant, with the fundraising component alone amounting to
more than $0.24 for each dollar donated based on our market
research. Furthermore, nonprofit organizations face distinct
operational challenges, such as soliciting contributions from
numerous contributors and complying with unique accounting, tax
and reporting issues. Because of these fundraising costs and
operational challenges, we believe nonprofit organizations can
benefit from software applications and services specifically
designed to serve their particular needs.
Our products and services
Our suite of products and services includes:
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The Raisers Edge®, a complete fundraising
software solution that helps nonprofit organizations improve
relationships with their donors and constituents to more
effectively raise money; |
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The Financial Edge, a complete financial management
solution that addresses the specific fund accounting needs of
nonprofit organizations; |
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The Education Edge, a student information
management software suite designed primarily for K-12
independent schools; |
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The Patron Edge, a comprehensive ticketing
management solution that streamlines ticketing, marketing,
staffing and other administrative tasks; |
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The Information Edge, a comprehensive business
intelligence application that extracts, aggregates and analyzes
data to improve strategic decision making; |
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ProspectPoint and WealthPoint,
services that use custom statistical models developed by us to
more effectively analyze customer databases to better target and
build more productive relationships with their key constituents;
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NetCommunity and NetSolutions, internet
applications that enable our customers to establish online
communities and conduct online fundraising. |
We have web-enabled most of our applications to allow our
customers to access them over the Internet. We also offer a
variety of Internet applications and consulting services that
allow nonprofit organizations to leverage the Internet for
online fundraising and other important operations. In addition,
we provide a broad range of services, including implementation,
business process improvement, training and education services,
and maintenance and technical support to enable our customers to
more effectively run their organizations.
Our strategy
Our objective is to maintain and leverage our position as the
leading provider of software and related services designed
specifically for nonprofit organizations. Key elements of our
strategy to achieve this objective are to:
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grow our customer base; |
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maintain and expand existing customer relationships; |
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introduce additional products and services; |
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leverage the Internet as a means of additional growth; |
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expand international presence; and |
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pursue strategic acquisitions and alliances. |
Sales and marketing
We primarily sell our products and services to nonprofit
organizations through our direct sales force. Our customers
enter into license agreements and pay us an upfront license fee
and annual maintenance and support fees for our software. We
also receive fees, on a subscription and fixed price basis, for
our hosted services and access to our data enrichment and
analytical services. We sell the majority of our consulting and
technical services on a time and materials basis.
Over the past three years we have added an average of 1,400 new
customers per year. Our customers are located in
47 countries, primarily the United States, the United
Kingdom and
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Canada. Ongoing customer relationships that illustrate our broad
customer base include the American Red Cross, the Chesapeake Bay
Foundation, the Crohns & Colitis Foundation of
America, the Detroit Zoological Society, the Mayo Foundation,
the New York Philharmonic, Seton Hall University and the United
Way of America.
Recent developments
Dividend policy
On February 1, 2005, we announced that our board of
directors has adopted a dividend policy that reflects an
intention to distribute to our stockholders a portion of the
cash generated by our business that exceeds our operating needs
and capital expenditures as regular quarterly dividends. In
accordance with this dividend policy, we paid dividends of $0.05
per share in February and May 2005, and currently intend to
continue to pay quarterly dividends at an annual rate of $0.20
per share for the fiscal year ending December 31, 2005.
Dividends will be paid only if and to the extent they are
declared by our board of directors and are permitted by
applicable law and by the terms of our credit facility. Based on
current outstanding share numbers, dividends at this rate would
total approximately $2.1 million in cash per quarter and
$8.6 million in the aggregate for the year ending
December 31, 2005. Dividend payments are not guaranteed and
our board of directors may decide, in its absolute discretion,
at any time and for any reason, not to declare or pay further
dividends. Dividends on our common stock are not cumulative. See
Dividend policy and restrictions.
Stock repurchase programs
On February 1, 2005, we also announced that our board of
directors has approved a stock repurchase program to purchase of
up to $35.0 million of our outstanding shares of common
stock in open market or privately negotiated transactions from
time to time. Through May 2005, when we discontinued this
program in order to conduct the self tender offer described
below, we repurchased 861,076 shares under this program at
an average price per share of $12.34. On July 27, 2005, we
announced a new stock repurchase program of up to
$35.0 million. Any open market purchases under these
repurchase programs have been and will be made in compliance
with Rule 10b-18 of the Securities Exchange Act of 1934 and
all other applicable securities regulations. We may choose to
not purchase any more shares of our common stock and our board
of directors may decide, in its absolute discretion, at any time
and for any reason, to terminate the stock repurchase program.
As a part of our capital management strategy on June 3,
2005, we commenced a self tender offer to purchase shares of our
common stock for $14.50 per share. The offer expired on
July 1, 2005. On July 13, 2005 we purchased
2,965,517 shares of our common stock for a total of
$43.0 million.
The stock repurchase program, self tender and divided policy are
intended to achieve multiple objectives, including providing
value to continuing stockholders, providing an opportunity for
our stockholders who wish to receive cash for their shares,
establishing a capital structure that we believe is appropriate
for our current business and maintaining financial flexibility
and a strong balance sheet. We intend to fund future dividends
and stock purchases, if any, from a combination of our existing
cash balances and anticipated future earnings.
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Company information
We originally incorporated in New York in 1982 and moved our
operations to Charleston, South Carolina in 1989. We
reincorporated in South Carolina in December 1991, engaged in a
recapitalization in October 1999 and reincorporated under the
laws of the State of Delaware on July 16, 2004. Our
principal executive offices are located at 2000 Daniel Island
Drive, Charleston, South Carolina 29492, and our telephone
number at that location is (843) 216-6200. Our web site
address is www.blackbaud.com. The information contained
on our web site is not a part of, and should not be construed as
being incorporated by reference into, this prospectus.
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Risk factors
An investment in our common stock involves a high degree of
risk. You should carefully consider the following risk factors
and the other information in this prospectus and the documents
incorporated by reference, including our consolidated financial
statements and the related notes thereto, before investing in
our common stock. Our business, operating results and financial
condition could be seriously harmed by any of the following
risks. The trading price of our common stock could decline due
to any of these risks, in which case you could lose all or part
of your investment.
Risks related to our business
The market for software and services for nonprofit
organizations might not grow, and nonprofit organizations might
not continue to adopt our products and services.
Many nonprofit organizations have not traditionally used
integrated and comprehensive software and services for their
nonprofit-specific needs. We cannot be certain that the market
for such products and services will continue to develop and grow
or that nonprofit organizations will elect to adopt our products
and services rather than continue to use traditional, less
automated methods, attempt to develop software internally, rely
upon legacy software systems, or use generalized software
solutions not specifically designed for the nonprofit market.
Nonprofit organizations that have already invested substantial
resources in other fundraising methods or other non-integrated
software solutions might be reluctant to adopt our products and
services to supplement or replace their existing systems or
methods. In addition, the implementation of one or more of our
core software products can involve significant time and capital
commitments by our customers, which they may be unwilling or
unable to make. If demand for and market acceptance of our
products and services does not increase, we might not grow our
business as we expect.
We might not generate increased business from our current
customers, which could limit our revenue in the future.
Our business model is highly dependent on the success of our
efforts to increase sales to our existing customers. Many of our
customers initially make a purchase of only one or a limited
number of our products or only for a single department within
their organization. These customers might choose not to expand
their use of or make additional purchases of our products and
services. If we fail to generate additional business from our
current customers, our revenue could grow at a slower rate or
even decrease. In addition, as we deploy new applications and
features for our existing products or introduce new products and
services, our current customers could choose not to purchase
these new offerings.
If our customers do not renew their annual maintenance and
support agreements for our products or if they do not renew them
on terms that are favorable to us, our business might
suffer.
Most of our maintenance agreements are for a term of one year.
As the end of the annual period approaches, we pursue the
renewal of the agreement with the customer. Historically,
maintenance renewals have represented a significant portion of
our total revenue, including approximately 48% of our total
revenue in 2004 and 49% of our total revenue for the three
months ended March 31, 2005. Because of this characteristic
of our business, if our customers choose not to renew their
maintenance and support agreements with us on beneficial terms,
our business, operating results and financial condition could be
harmed.
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A substantial majority of our revenue is derived from The
Raisers Edge and a decline in sales or renewals of this
product and related services could harm our business.
We derive a substantial majority of our revenue from the sale of
The Raisers Edge and related services, and revenue from
this product and related services is expected to continue to
account for a substantial majority of our total revenue for the
foreseeable future. For example, revenue from the sale of The
Raisers Edge and related services represented
approximately 70% of our total revenue in 2004 and 70% of our
total revenue for the three months ended March 31, 2005.
Because we generally sell licenses to our products on a
perpetual basis and deliver new versions and enhancements to
customers who purchase annual maintenance and support, our
future license, services and maintenance revenue are
substantially dependent on sales to new customers. In addition,
we frequently sell The Raisers Edge to new customers and
then attempt to generate incremental revenue from the sale of
additional products and services. If demand for The
Raisers Edge declines significantly, our business would
suffer.
Our quarterly financial results fluctuate and might be
difficult to forecast and, if our future results are below
either any guidance we might issue or the expectations of public
market analysts and investors, the price of our common stock
might decline.
Our quarterly revenue and results of operations are difficult to
forecast. We have experienced, and expect to continue to
experience, fluctuations in revenue and operating results from
quarter to quarter. As a result, we believe that
quarter-to-quarter comparisons of our revenue and operating
results are not necessarily meaningful and that such comparisons
might not be accurate indicators of future performance. The
reasons for these fluctuations include but are not limited to:
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the size and timing of sales of our software, including the
relatively long sales cycles associated with many of our large
software sales; |
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budget and spending decisions by our customers; |
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market acceptance of new products we release, such as our
recently-introduced business intelligence tools; |
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the amount and timing of operating costs related to the
expansion of our business, operations and infrastructure; |
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changes in our pricing policies or our competitors pricing
policies; |
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seasonality in our revenue; |
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general economic conditions; and |
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costs related to acquisitions of technologies or businesses. |
Our operating expenses, which include sales and marketing,
research and development and general and administrative
expenses, are based on our expectations of future revenue and
are, to a large extent, fixed in the short term. If revenue
falls below our expectations in a quarter and we are not able to
quickly reduce our operating expenses in response, our operating
results for that quarter could be adversely affected. It is
possible that in some future quarter our operating results may
be below either any guidance we might issue or the expectations
of public market analysts and investors and, as a result, the
price of our common stock might fall.
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We encounter long sales and implementation cycles,
particularly for our largest customers, which could have an
adverse effect on the size, timing and predictability of our
revenue and sales.
Potential customers, particularly our larger enterprise-wide
clients, generally commit significant resources to an evaluation
of available software and require us to expend substantial time,
effort and money educating them as to the value of our software
and services. Sales of our core software products to these
larger customers often require an extensive education and
marketing effort.
We could expend significant funds and management resources
during the sales cycle and ultimately fail to close the sale.
Our core software product sales cycle averages approximately two
months for sales to existing customers and from six to nine
months for sales to new customers and large enterprise-wide
sales. Our implementation cycle for large enterprise-wide sales
can extend for a year or more, which can negatively impact the
timing and predictability of our revenue. Our sales cycle for
all of our products and services is subject to significant risks
and delays over which we have little or no control, including:
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our customers budgetary constraints; |
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the timing of our clients budget cycles and approval
processes; |
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our clients willingness to replace their current methods
or software solutions; |
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our need to educate potential customers about the uses and
benefits of our products and services; and |
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the timing and expiration of our clients current license
agreements or outsourcing agreements for similar services. |
If we are unsuccessful in closing sales after expending
significant funds and management resources or if we experience
delays as discussed above, it could have a material adverse
effect on the size, timing and predictability of our revenue.
We have recorded a significant deferred tax asset, and we
might never realize the full value of our deferred tax asset,
which would result in a charge against our earnings.
In connection with the initial acquisition of our common stock
by our current stockholders in 1999, we recorded approximately
$107 million as a deferred tax asset. Our deferred tax
asset was approximately $82.5 million as of March 31,
2005, or approximately 53.1% of our total assets as of that
date. Realization of our deferred tax asset is dependent upon
our generating sufficient taxable income in future years to
realize the tax benefit from that asset. In accordance with
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 109, deferred tax assets are
reviewed at least annually for impairment. Impairment would
result if, based on the available evidence, it is more likely
than not that some portion of the deferred tax asset will not be
realized. This impairment could be caused by, among other
things, deterioration in performance, loss of key contracts,
adverse market conditions, adverse changes in applicable laws or
regulations, including changes that restrict the activities of
or affect the products sold by our business and a variety of
other factors. If an impairment were to occur in a future
period, it would be recognized as an expense in our results of
operations during the period of impairment. Depending on future
circumstances, it is possible that we might never realize the
full value of our deferred tax asset. Any future determination
of impairment of a significant portion of our deferred tax asset
would have an adverse effect on our financial condition and
results of operations.
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Nonprofit organizations might not use the Internet to
facilitate their fundraising and organizational efforts in a
manner sufficient to allow us to make a profit or even recapture
our investment in this area. In addition, even if they
increasingly use the Internet for these purposes, if we fail to
capitalize on this opportunity, we could lose market
share.
The market for online fundraising solutions for nonprofit
organizations is new and emerging. Nonprofit organizations have
not traditionally used the Internet or web-enabled software
solutions for fundraising. We cannot be certain that the market
will continue to develop and grow or that nonprofit
organizations will elect to use any of our web-enabled products
rather than continue to use traditional offline methods, attempt
to develop software solutions internally or use standardized
software solutions not designed for the specific needs of
nonprofits. Nonprofit organizations that have already invested
substantial resources in other fundraising methods may be
reluctant to use the Internet to supplement their existing
systems or methods. In addition, increasing concerns about
fraud, privacy, reliability and other problems might cause
nonprofit organizations not to adopt the Internet as a method
for fundraising. If demand for and market acceptance of
Internet-based products for nonprofits does not occur, we might
not recapture our investment in this area or grow our business
as we expect. On the other hand, even if nonprofits increasingly
use the Internet for their fundraising and organizational
efforts, if we fail to develop and offer products that meet
customer needs in this area, we could lose market share.
Our failure to compete successfully could cause our
revenue or market share to decline.
Our market is fragmented, competitive and rapidly evolving, and
there are limited barriers to entry for some aspects of this
market. We mainly face competition from four sources:
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software developers offering integrated specialized products
designed to address specific needs of nonprofit organizations; |
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providers of traditional, less automated fundraising services,
such as services that support traditional direct mail campaigns,
special events fundraising, telemarketing and personal
solicitations; |
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custom-developed products created either internally or
outsourced to custom service providers; and |
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software developers offering general products not designed to
address specific needs of nonprofit organizations. |
The companies we compete with, and other potential competitors,
may have greater financial, technical and marketing resources
and generate greater revenue and better name recognition than we
do. If one or more of our competitors or potential competitors
were to merge or partner with one of our competitors, the change
in the competitive landscape could adversely affect our ability
to compete effectively. For example, a large diversified
software enterprise, such as Microsoft, Oracle or PeopleSoft,
could decide to enter the market directly, including through
acquisitions.
Additionally, Sage and Intuit have recently made acquisitions
and product development efforts in the nonprofit market. Our
competitors might also establish or strengthen cooperative
relationships with our current or future resellers and
third-party consulting firms or other parties with whom we have
relationships, thereby limiting our ability to promote our
products and limiting the number of channel partners available
to help market our products. These competitive pressures could
cause our revenue and market share to decline.
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We might not be able to manage our future growth
efficiently or profitably.
We have experienced significant growth since our inception, and
we anticipate that continued expansion will be required to
address potential market opportunities. For example, we will
need to expand the size of our sales and marketing, product
development and general and administrative staff and operations,
as well as our financial and accounting controls. There can be
no assurance that our infrastructure will be sufficiently
scalable to manage our projected growth. For example, our
anticipated growth will result in a significant increase in
demands on our maintenance and support services professionals to
continue to provide the high level of quality service that our
customers have come to expect. If we are unable to sufficiently
address these additional demands on our resources, our
profitability and growth might suffer. Also, if we continue to
expand our operations, management might not be effective in
expanding our physical facilities and our systems, procedures or
controls might not be adequate to support such expansion. Our
inability to manage our growth could harm our business.
Because competition for highly qualified personnel is
intense, we might not be able to attract and retain the
employees we need to support our planned growth.
To execute our continuing growth plans, we need to increase the
size and maintain the quality of our sales force, software
development staff and our professional services organization. To
meet our objectives successfully, we must attract and retain
highly qualified personnel with specialized skill sets focused
on the nonprofit industry. Competition for qualified personnel
can be intense, and we might not be successful in attracting and
retaining them. The pool of qualified personnel with experience
working with or selling to nonprofit organizations is limited
overall and specifically in Charleston, South Carolina, where
our principal office is located. Our ability to maintain and
expand our sales, product development and professional services
teams will depend on our ability to recruit, train and retain
top quality people with advanced skills who understand sales to,
and the specific needs of, nonprofit organizations. For these
reasons, we have from time to time in the past experienced, and
we expect to continue to experience in the future, difficulty in
hiring and retaining highly skilled employees with appropriate
qualifications for our business. For example, in mid-2005 our
Vice President of Sales left to pursue other opportunities
outside Blackbaud. In addition, it takes time for our new sales
and services personnel to become productive, particularly with
respect to obtaining and supporting major customer accounts. In
particular, we plan to continue to increase the number of
services personnel to attempt to meet the needs of our customers
and potential new customers. In addition to hiring services
personnel to meet our needs, we might also engage additional
third-party consultants as contractors, which could have a
negative impact on our earnings. If we are unable to hire or
retain qualified personnel, or if newly hired personnel fail to
develop the necessary skills or reach productivity slower than
anticipated, it would be more difficult for us to sell our
products and services, and we could experience a shortfall in
revenue or earnings, and not achieve our planned growth.
Our services revenue produces substantially lower gross
margins than our license revenue, and an increase in services
revenue relative to license revenue would harm our overall gross
margins.
Our services revenue, which includes fees for consulting,
implementation, training, data and technical services and
analytics, was approximately 31% of our revenue for the three
months ended March 31, 2005, 31% of our revenue for 2004,
29% of our revenue for 2003 and approximately 25% of our revenue
for 2002. Our services revenue has substantially lower gross
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margins than our product license revenue. An increase in the
percentage of total revenue represented by services revenue
would adversely affect our overall gross margins.
Certain of our services are contracted under fixed fee
arrangements, which we base on estimates. If our estimated fees
are less than our actual costs, our operating results would be
adversely affected.
Services revenue as a percentage of total revenue has varied
significantly from quarter to quarter due to fluctuations in
licensing revenue, economic changes, changes in the average
selling prices for our products and services, our
customers acceptance of our products and our sales force
execution. In addition, the volume and profitability of services
can depend in large part upon:
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competitive pricing pressure on the rates that we can charge for
our services; |
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the complexity of the customers information technology
environment and the existence of multiple non-integrated legacy
databases; |
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the resources directed by customers to their implementation
projects; and |
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the extent to which outside consulting organizations provide
services directly to customers. |
Any erosion of our margins for our services revenue or any
adverse changes in the mix of our license versus service revenue
would adversely affect our operating results.
Failure to adapt to technological change and to achieve
broad adoption and acceptance of our new products and services
could adversely affect our earnings.
If we fail to keep pace with technological change in our
industry, such failure would have an adverse effect on our
revenue and earnings. We operate in a highly competitive
industry characterized by evolving technologies and industry
standards, changes in customer requirements and frequent new
product introductions and enhancements. During the past several
years, many new technological advancements and competing
products have entered the marketplace. Our ability to compete
effectively and our growth prospects depend upon many factors,
including the success of our existing software products and
services to address the changing needs of our customers, the
timely introduction and success of future software products and
services and releases and the ability of our products to perform
well with existing and future technologies, including databases,
applications, operating systems and other platforms. We have
made significant investments in research and development and our
growth plans are premised in part on generating substantial
revenue from new product introductions. New product
introductions involve significant risks. For example, delays in
new product introductions, or less-than-anticipated market
acceptance of our new products are possible and would have an
adverse effect on our revenue and earnings. We cannot be certain
that our new products or future enhancements to existing
products will meet customer performance needs or expectations
when shipped or that they will be free of significant software
defects or bugs. If they do not meet customer needs or
expectations, for whatever reason, upgrading or enhancing these
products could be costly and time consuming. In addition, the
selling price of software products tends to decline
significantly over the life of the product. If we are unable to
offset any reductions in the selling prices of our products by
introducing new products at higher prices or by reducing our
costs, our revenue, gross margin and operating results would be
adversely affected.
10
If our products fail to perform properly due to undetected
errors or similar problems, our business could suffer.
Complex software such as ours often contains undetected errors
or bugs. Such errors are frequently found after introduction of
new software or enhancements to existing software. We
continually introduce new products and new versions of our
products. If we detect any errors before we ship a product, we
might have to delay product shipment for an extended period of
time while we address the problem. We might not discover
software errors that affect our new or current products or
enhancements until after they are deployed, and we may need to
provide enhancements to correct such errors. Therefore, it is
possible that, despite testing by us, errors may occur in our
software. These errors could result in:
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harm to our reputation; |
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lost sales; |
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delays in commercial release; |
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product liability claims; |
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delays in or loss of market acceptance of our products; |
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license terminations or renegotiations; and |
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unexpected expenses and diversion of resources to remedy errors. |
Furthermore, our customers may use our software together with
products from other companies. As a result, when problems occur,
it might be difficult to identify the source of the problem.
Even when our software does not cause these problems, the
existence of these errors might cause us to incur significant
costs, divert the attention of our technical personnel from our
product development efforts, impact our reputation and cause
significant customer relations problems.
Our failure to integrate third-party technologies could
harm our business.
We intend to continue licensing technologies from third parties,
including applications used in our research and development
activities and technologies which are integrated into our
products. These technologies might not continue to be available
to us on commercially reasonable terms or at all. Our inability
to obtain any of these licenses could delay product development
until equivalent technology can be identified, licensed and
integrated. This inability in turn would harm our business and
operating results. Our use of third-party technologies exposes
us to increased risks, including, but not limited to, risks
associated with the integration of new technology into our
products, the diversion of our resources from development of our
own proprietary technology and our inability to generate revenue
from licensed technology sufficient to offset associated
acquisition and maintenance costs.
If the security of our software, in particular our hosted
Internet solutions products, is breached, our business and
reputation could suffer.
Fundamental to the use of our products is the secure collection,
storage and transmission of confidential donor and end user
information. Third parties may attempt to breach our security or
that of our customers and their databases. We might be liable to
our customers for any breach in such security, and any breach
could harm our customers, our business and our reputation. Any
imposition of liability, particularly liability that is not
covered by insurance or is in excess of insurance coverage,
could harm our reputation and our business and operating
results. Also, computers, including those that utilize our
software, are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead
to interruptions, delays or loss of data. We might be required
to expend significant capital and other
11
resources to protect further against security breaches or to
rectify problems caused by any security breach.
If we are unable to detect and prevent unauthorized use of
credit cards and bank account numbers and safeguard confidential
donor data, we could be subject to financial liability, our
reputation could be harmed and customers may be reluctant to use
our products and services.
We rely on third-party and internally-developed encryption and
authentication technology to provide secure transmission of
confidential information over the Internet, including customer
credit card and bank account numbers, and protect confidential
donor data. Advances in computer capabilities, new discoveries
in the field of cryptography or other events or developments
could result in a compromise or breach of the technology we use
to protect sensitive transaction data. If any such compromise of
our security, or the security of our customers, were to occur,
it could result in misappropriation of proprietary information
or interruptions in operations and have an adverse impact on our
reputation or the reputation of our customers. If we are unable
to detect and prevent unauthorized use of credit cards and bank
account numbers or protect confidential donor data, our business
could suffer.
We currently do not have any issued patents, but we rely
upon trademark, copyright, patent and trade secret laws to
protect our proprietary rights, which might not provide us with
adequate protection.
Our success and ability to compete depend to a significant
degree upon the protection of our software and other proprietary
technology rights. We might not be successful in protecting our
proprietary technology, and our proprietary rights might not
provide us with a meaningful competitive advantage. To protect
our proprietary technology, we rely on a combination of patent,
trademark, copyright and trade secret laws, as well as
nondisclosure agreements, each of which affords only limited
protection. We currently do not have patents issued for any of
our proprietary technology and we only recently filed patent
applications relating to a number of our products. Moreover, we
have no patent protection for The Raisers Edge, which is
one of our core products. Any inability to protect our
intellectual property rights could seriously harm our business,
operating results and financial condition. It is possible that:
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our pending patent applications may not result in the issuance
of patents; |
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any patents issued to us may not be timely or broad enough to
protect our proprietary rights; |
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any issued patent could be successfully challenged by one or
more third parties, which could result in our loss of the right
to prevent others from exploiting the inventions claimed in
those patents; and |
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current and future competitors may independently develop similar
technologies, duplicate our products or design around any of our
patents. |
In addition, the laws of some foreign countries do not protect
our proprietary rights in our products to the same extent as do
the laws of the United States. Despite the measures taken by us,
it may be possible for a third party to copy or otherwise obtain
and use our proprietary technology and information without
authorization. Policing unauthorized use of our products is
difficult, and litigation could become necessary in the future
to enforce our intellectual property rights. Any litigation
could be time consuming and expensive to prosecute or resolve,
result in substantial diversion of management attention and
resources, and materially harm our business, financial condition
and results of operations.
12
If we do not successfully address the risks inherent in
the expansion of our international operations, our business
could suffer.
We currently have operations in the United Kingdom, Canada and
Australia, and we intend to expand further into international
markets. We have limited experience in international operations
and may not be able to compete effectively in international
markets. In 2004, our international offices generated revenues
of approximately $20.9 million, an increase of 95% over
2003 international revenue of $10.7 million, itself an
increase of 78% over international revenue of $6.0 million
for 2002. In the three months ended March 31, 2005, our
international revenue was $5.1 million. Expansion of our
international operations will require a significant amount of
attention from our management and substantial financial
resources and may require us to add qualified management in
these markets. Our direct sales model requires us to attract,
retain and manage qualified sales personnel capable of selling
into markets outside the United States. In some cases, our costs
of sales might increase if our customers require us to sell
through local distributors. If we are unable to grow our
international operations in a cost effective and timely manner,
our business and operating results could be harmed. Doing
business internationally involves additional risks that could
harm our operating results, including:
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difficulties and costs of staffing and managing international
operations; |
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differing technology standards; |
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difficulties in collecting accounts receivable and longer
collection periods; |
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political and economic instability; |
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fluctuations in currency exchange rates; |
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imposition of currency exchange controls; |
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potentially adverse tax consequences; |
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reduced protection for intellectual property rights in certain
countries; |
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dependence on local vendors; |
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protectionist laws and business practices that favor local
competition; |
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compliance with multiple conflicting and changing governmental
laws and regulations; |
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seasonal reductions in business activity specific to certain
markets; |
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longer sales cycles; |
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restrictions on repatriation of earnings; |
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differing labor regulations; |
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restrictive privacy regulations in different countries,
particularly in the European Union; |
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restrictions on the export of technologies such as data security
and encryption; and |
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import and export restrictions and tariffs. |
Future acquisitions could prove difficult to integrate,
disrupt our business, dilute stockholder value and strain our
resources.
We intend to acquire companies, services and technologies that
we feel could complement or expand our business, augment our
market coverage, enhance our technical capabilities, provide us
with important customer contacts or otherwise offer growth
opportunities. Acquisitions and investments involve numerous
risks, including:
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difficulties in integrating operations, technologies, services,
accounting and personnel; |
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difficulties in supporting and transitioning customers of our
acquired companies; |
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diversion of financial and management resources from existing
operations; |
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risks of entering new sectors of the nonprofit industry; |
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potential loss of key employees; and |
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inability to generate sufficient revenue to offset acquisition
or investment costs. |
Acquisitions also frequently result in recording of goodwill and
other intangible assets, which are subject to potential
impairments in the future that could harm our operating results.
In addition, if we finance acquisitions by issuing equity
securities or securities convertible into equity securities, our
existing stockholders would be diluted, which, in turn, could
affect the market price of our stock. Moreover, we could finance
any acquisition with debt, resulting in higher leverage and
interest costs. As a result, if we fail to evaluate and execute
acquisitions or investments properly, we might not achieve the
anticipated benefits of any such acquisition, and we may incur
costs in excess of what we anticipate.
Claims that we infringe upon third parties
intellectual property rights could be costly to defend or
settle.
Litigation regarding intellectual property rights is common in
the software industry. We expect that software products and
services may be increasingly subject to third-party infringement
claims as the number of competitors in our industry segment
grows and the functionality of products in different industry
segments overlaps. We may from time to time encounter disputes
over rights and obligations concerning intellectual property.
Although we believe that our intellectual property rights are
sufficient to allow us to market our software without incurring
liability to third parties, third parties may bring claims of
infringement against us. Such claims may be with or without
merit. Any litigation to defend against claims of infringement
or invalidity could result in substantial costs and diversion of
resources. Furthermore, a party making such a claim could secure
a judgment that requires us to pay substantial damages. A
judgment could also include an injunction or other court order
that could prevent us from selling our software. Our business,
operating results and financial condition could be harmed if any
of these events occurred.
In addition, we have agreed, and will likely agree in the
future, to indemnify certain of our customers against certain
claims that our software infringes upon the intellectual
property rights of others. We could incur substantial costs in
defending ourselves and our customers against infringement
claims. In the event of a claim of infringement, we and our
customers might be required to obtain one or more licenses from
third parties. We, or our customers, might be unable to obtain
necessary licenses from third parties at a reasonable cost, if
at all. Defense of any lawsuit or failure to obtain any such
required licenses could harm our business, operating results and
financial condition.
If we become subject to product or general liability or
errors and omissions claims, they could be time-consuming and
costly.
Errors, defects or other performance problems in our software,
as well as the negligence or misconduct of our consultants,
could result in financial or other damages to our customers.
They could seek damages from us for losses associated with these
errors, defects or other performance problems. If successful,
these claims could have a material adverse effect on our
business. Although we possess product liability insurance and
errors and omissions insurance, there is no guarantee that our
insurance would be enough to cover the full amount of any loss
we might suffer. Our license and service agreements typically
contain provisions designed to limit our exposure to product
liability claims, but existing or future laws or unfavorable
judicial decisions could negate these limitation of liability
provisions. A claim brought against us, even if unsuccessful,
could be time-consuming and costly to defend and could harm our
reputation.
14
If we were found subject to or in violation of any laws or
regulations governing privacy or electronic fund transfers, we
could be subject to liability or forced to change our business
practices.
It is possible that the payment processing component of our
web-based software is subject to various governmental
regulations. Pending legislation at the state and federal levels
could also restrict further our information gathering and
disclosure practices. Existing and potential future privacy laws
might limit our ability to develop new products and services
that make use of data we gather from various sources. For
example, our custom modeling and analytical services, including
ProspectPoint and WealthPoint, rely heavily on securing and
making use of data we gather from various sources and privacy
laws could jeopardize our ability to market and profit from
those services. The provisions of these laws and related
regulations are complicated, and we do not have extensive
experience with these laws and related regulations. Even
technical violations of these laws can result in penalties that
are assessed for each non-compliant transaction. In addition, we
might be subject to the privacy provisions of the Health
Insurance Portability and Accountability Act of 1996 and the
Gramm-Leach-Bliley Act and related regulations. If we or our
customers were found to be subject to and in violation of any of
these laws or other privacy laws or regulations, our business
would suffer and we and/or our customers would likely have to
change our business practices. In addition, these laws and
regulations could impose significant costs on us and our
customers and make it more difficult for donors to make online
donations.
Increasing government regulation could affect our
business.
We are subject not only to regulations applicable to businesses
generally but also to laws and regulations directly applicable
to electronic commerce. Although there are currently few such
laws and regulations, state, Federal and foreign governments may
adopt laws and regulations applicable to our business. Any such
legislation or regulation could dampen the growth of the
Internet and decrease its acceptance. If such a decline occurs,
companies may decide in the future not to use our products and
services. Any new laws or regulations in the following areas
could affect our business:
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user privacy; |
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the pricing and taxation of goods and services offered over the
Internet: |
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the content of websites; |
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copyrights; |
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consumer protection, including the potential application of
do not call registry requirements on our customers
and consumer backlash in general to direct marketing efforts of
our customers; |
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the online distribution of specific material or content over the
Internet; and |
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the characteristics and quality of products and services offered
over the Internet. |
Our operations might be affected by the occurrence of a
natural disaster or other catastrophic event in Charleston,
South Carolina.
We depend on our principal executive offices and other
facilities in Charleston, South Carolina for the continued
operation of our business. Although we have contingency plans in
effect for natural disasters or other catastrophic events, these
events, including terrorist attacks and natural disasters such
as hurricanes, which historically have struck the Charleston
area with some regularity, could disrupt our operations. Even
though we carry business interruption
15
insurance policies and typically have provisions in our
contracts that protect us in certain events, we might suffer
losses as a result of business interruptions that exceed the
coverage available under our insurance policies or for which we
do not have coverage. Any natural disaster or catastrophic event
affecting us could have a significant negative impact on our
operations.
Outstanding employee stock options subject to variable
accounting and recent changes to accounting standards could
cause us to record significant compensation expense or benefit
and could significantly reduce or increase our GAAP earnings in
future periods.
Prior to our initial public offering in July 2004, options
to purchase approximately 6.6 million shares under two of
our stock option plans were subject to variable accounting
treatment. Options to purchase approximately 2.5 million
shares continue to be subject to variable accounting treatment
and there is volatility in our stock price which could affect
operating results. Accordingly, we could record significant
compensation expense at the end of future periods, particularly
if our stock price increases significantly. For example, we
recorded compensation expense attributable to these options of
$27.5 million in 2003 and $18.4 million in 2004. We also
recorded a compensation benefit of $7.7 million in the
three months ended March 31, 2005. Stock option
compensation expense or benefit could significantly change our
GAAP earnings in future periods, which could cause our stock
price to be volatile in a way unrelated to our operating
results, and, as a result, you could lose some or all of your
investment. In addition, on December 16, 2004, the
Financial Accounting Standards issued Board Statement
No. 123 (revised 2004), Share-Based Payment.
Statement 123(R) will require us to measure all employee
stock-based compensation awards using a fair value method and
record such expense in our consolidated financial statements. In
addition, the adoption of Statement 123(R) will require
additional accounting related to the income tax effects and
additional disclosure regarding the cash flow effects resulting
from share-based payment arrangements. Statement 123(R) is
effective beginning in 2006. We are still evaluating which
transition method we will use to comply with
Statement 123(R). The adoption of Statement 123(R)
could have a material impact on our consolidated results of
operations and cash flows.
The requirements of being a public company might strain
our resources and distract management.
As a newly public company, we are subject to a number of
additional requirements, including the reporting requirements of
the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of
2002 and new Nasdaq rules promulgated in response to the
Sarbanes-Oxley Act. These requirements might place a strain on
our systems and resources. The Securities Exchange Act requires,
among other things, that we file annual, quarterly and current
reports with respect to our business and financial condition.
The Sarbanes-Oxley Act requires, among other things, that we
maintain effective disclosure controls and procedures and
internal controls for financial reporting. In order to maintain
and improve the effectiveness of our disclosure controls and
procedures and internal controls over financial reporting,
significant resources and management oversight will be required.
As a result, our managements attention might be diverted
from other business concerns, which could have a material
adverse effect on our business, financial condition, results of
operations and cash flows. In particular, our efforts to comply
with Section 404 of the Sarbanes-Oxley Act of 2002 and the
related regulations regarding our required assessment of our
internal controls over financial reporting and our independent
registered public accounting firms audit of that
assessment will require the commitment of significant financial
and managerial resources. In addition, we might need to hire
additional
16
accounting and financial staff with appropriate public company
experience and technical accounting knowledge and we might not
be able to do so in a timely fashion.
Risks related to purchasing our shares
We cannot assure you that a market will continue for our
common stock or what the market price of our common stock will
be.
Before our initial public offering in July 2004, there was
no public trading market for our common stock, and we cannot
assure you that one will be sustained. If a market is not
sustained, it might be difficult for you to sell your shares of
common stock at an attractive price or at all. We cannot predict
the prices at which our common stock will trade. The offering
price for our common stock covered by this prospectus will be
determined through our selling stockholders negotiations
with potential purchasers and might not bear any relationship to
the market price at which it will trade after this offering or
to any other established criteria of the value of our business.
In future quarters our operating results might be below the
expectations of public market analysts and investors and, as a
result of these and other factors, the price of our common stock
might decline.
The price of our common stock might be volatile.
Our stock price has been volatile and might continue to be,
making an investment in our company risky. Between July 26,
2004, when our common stock started trading on the Nasdaq
National Market, and August 1, 2005, the price of a share
of our common stock varied from $8.30 to $15.22.
In the three years prior to 2003, technology stocks listed on
The Nasdaq National Market experienced high levels of volatility
and significant declines in value from their historic highs. The
trading price of our common stock might fluctuate substantially.
The price of the common stock that will prevail in the market
might be higher or lower than the price you pay, depending on
many factors, some of which are beyond our control and might not
be related to our operating performance. The fluctuations could
cause you to lose part or all of your investment in our shares
of common stock. Those factors that could cause fluctuations in
the trading price of our common stock include the following:
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price and volume fluctuations in the overall stock market from
time to time; |
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significant volatility in the market price and trading volume of
software and technology companies; |
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actual or anticipated changes in our earnings or fluctuations in
our operating results or in the expectations of securities
analysts; |
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the amount of dividends we pay, if any; |
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the amount of stock we purchase under our stock repurchase
program, if any; |
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economic conditions and trends in general and in the nonprofit
industry; |
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major catastrophic events, including terrorist activities, which
could reduce or divert funding to, and technology spending by,
our core nonprofit customer base; |
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changes in our pricing policies or the pricing policies of our
customers; |
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changes in the estimation of the future size and growth of our
market; or |
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departures of key personnel. |
In the past, following periods of volatility in the market price
of a companys securities, securities class action
litigation has often been brought against that company. Due to
the potential volatility of our stock price, we might be the
target of securities litigation in the
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future. Securities litigation could result in substantial costs
and divert managements attention and resources from our
business.
Insiders hold a significant percentage of our stock and
could limit your ability to influence the outcome of key
transactions, including a change of control, which could
adversely affect the market price of our stock.
Assuming it sells all of its common stock registered under this
prospectus, Hellman & Friedman Capital Partners III,
L.P. and its affiliates will beneficially own approximately
33.1% of our common stock. In addition, our executive officers,
directors and their affiliates will, in the aggregate,
beneficially own or control approximately 38.4% of our common
stock. As a result, Hellman & Friedman could have
significant control with respect to all matters submitted to our
stockholders for approval, including the election and removal of
directors and the approval of any merger, consolidation or sales
of all or substantially all of our assets. These stockholders
might make decisions that are adverse to your interests. In
addition, Hellman & Friedman and certain of its transferees
will not be governed by Section 203 of the Delaware General
Corporation Law. See Description of capital
stockAnti-takeover effects of Delaware law and provisions
of our certificate of incorporation and bylawsDelaware
anti-takeover law for a discussion of Section 203.
This fact might make it easier for Hellman & Friedman or its
transferees to acquire your shares at a lower price than would
otherwise be the case. This provision and the concentration of
ownership could have the effect of delaying, preventing or
deterring a change of control of our company, could deprive our
stockholders of an opportunity to receive a premium for their
common stock as part of a sale of our company and might
ultimately affect the market price of our common stock.
Future sales of our common stock might depress our stock
price.
As of July 31, 2005, we had 41,034,613 shares of
common stock outstanding. The 10,000,000 shares that may be
sold by the selling stockholders under this prospectus will be
freely tradable without restriction or further registration
under federal securities laws unless purchased by our
affiliates. If these or other stockholders sell substantial
amounts of common stock in the public market, or if the market
perceives that these sales may occur, the market price of our
common stock might decline. We are unable to estimate the
amount, timing or nature of future sales of outstanding common
stock.
Investors in this offering will experience immediate and
substantial dilution.
The public offering price of the common stock registered for
resale by the selling stockholders under this prospectus is
expected to be considerably more than the net tangible book
value per share of our outstanding common stock. Accordingly,
investors purchasing shares of common stock offered under this
prospectus will pay a price per share that substantially
exceeds, on a per share basis, the value of our assets after
subtracting liabilities. Investors will suffer additional
dilution to the extent outstanding stock options are exercised
and to the extent we issue any restricted stock to our employees
under our equity incentive plans.
We might need to raise capital, which might not be
available.
We will not receive any of the proceeds from the sale of shares
by the selling stockholders under this prospectus. Accordingly,
the proceeds from any sales by the selling stockholders will not
be available to us to pay dividends, repurchase shares of our
outstanding common stock under our stock repurchase program, or
finance our operations, capital expenditures or investment
activities. We might need to raise funds to meet these or other
needs, and we
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might not be able to obtain such financing on favorable terms,
if at all. If we need capital and cannot raise it on acceptable
terms, we might not be able to:
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develop enhancements and additional features for our products; |
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develop new products and services; |
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hire, train and retain employees; |
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enhance our infrastructure; |
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respond to competitive pressures or unanticipated requirements; |
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pursue international expansion; |
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pursue acquisition opportunities; or |
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continue to fund our operations. |
If any of the foregoing consequences occur, our stock price
might fall and you might lose some or all of your investment.
Our certificate of incorporation authorizes our board of
directors to issue new series of preferred stock that may have
the effect of delaying or preventing a change of control, which
could adversely affect the value of your shares.
Our certificate of incorporation provides that our board of
directors is authorized to issue from time to time, without
further stockholder approval, up to 20,000,000 shares of
preferred stock in one or more series and to fix or alter the
designations, preferences, rights and any qualifications,
limitations or restrictions of the shares of each series,
including the dividend rights, dividend rates, conversion
rights, voting rights, rights of redemption, including sinking
fund provisions, redemption price or prices, liquidation
preferences and the number of shares constituting any series or
designations of any series. Such shares of preferred stock could
have preferences over our common stock with respect to dividends
and liquidation rights. We may issue additional preferred stock
in ways that might delay, defer or prevent a change of control
of our company without further action by our stockholders. Such
shares of preferred stock may be issued with voting rights that
may adversely affect the voting power of the holders of our
common stock by increasing the number of outstanding shares
having voting rights, and by the creation of class or series
voting rights.
Anti-takeover provisions under our charter documents and
Delaware law could delay or prevent a change of control and
could also limit the market price of our stock.
Our certificate of incorporation and our bylaws contain
provisions that could delay or prevent a change of control of
our company or changes in our board of directors that our
stockholders might consider favorable, including the following:
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our board of directors is classified into three classes, each of
which will serve for staggered three year terms; and |
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we require advance notice for stockholder proposals, including
nominations for the election of directors. |
In addition, we are governed by the provisions of
Section 203 of the Delaware General Corporate Law, which
can prohibit certain business combinations with stockholders
owning 15% or more of our outstanding voting stock, although our
certificate of incorporation excludes Hellman & Friedman
Capital Partners III, L.P. and its affiliates and
transferees from the application of these anti-takeover
provisions. These and other provisions in our certificate of
incorporation and our bylaws and Delaware law could make it more
difficult for stockholders or potential acquirors to obtain
control of our board of directors or initiate actions that are
19
opposed by the then-current board of directors, including
delaying or impeding a merger, tender offer, or proxy contest or
other change of control transaction involving our company. Any
delay or prevention of a change of control transaction or
changes in our board of directors could prevent the consummation
of a transaction in which our stockholders could receive a
substantial premium over the then current market price for their
shares.
Risks relating to our dividend policy and stock repurchase
program
You might not receive any dividends, and the reduction or
elimination of dividends might negatively affect the market
price of our common stock.
Dividend payments are not guaranteed and are within the absolute
discretion of our board of directors. You might not receive any
dividends as a result of any of the following factors:
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we are not obligated to pay dividends; |
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while our dividend policy contemplates the distribution of a
portion of the excess cash generated by our business in respect
of each of the fiscal quarters in 2005, our board of directors
could modify or revoke the policy at any time and for any reason; |
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even if the dividend policy is not modified or revoked, our
board of directors could decide to reduce dividends or not to
pay any dividends at all, at any time and for any reason; |
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the amount of dividends distributed is subject to state law
restrictions; |
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our credit facility limits the amount of dividends we are
permitted to pay; and |
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our stockholders have no contractual or other legal right to
dividends. |
Our dividend policy is based upon our current assessment of the
cash needs of our business and the environment in which it
operates. That assessment could change due to, among other
things, changes in our results of operations, cash requirements,
financial condition, contractual restrictions, growth
opportunities, acquisitions, competitive or technological
developments, provisions of applicable law and other factors
that our board of directors might deem relevant. The reduction
or elimination of dividends might negatively affect the market
price of our common stock.
Our dividend policy and stock repurchase program might
limit our ability to pursue growth opportunities.
Our board of directors has adopted a dividend policy and a stock
repurchase program which reflects an intention to distribute to
our stockholders a portion of the cash generated by our business
that exceeds our operating needs and capital expenditures as
regular quarterly dividends. In developing the dividend policy
and stock repurchase program, we have made assumptions for and
judgments about 2005 as to our expected results of operations,
anticipated levels of capital expenditures, income taxes and
working capital. As a result of any payment made under the
dividend policy or any purchases under our stock repurchase
program, our ability to finance any material expansion of our
business, including through acquisitions or increased capital
spending, or to fund our operations might be more limited than
if we had retained all of our cash flow from operations.
20
Payment of dividends or the repurchase of shares of common
stock might be restricted under our credit facility
We are subject to certain restrictions on payment of dividends
and the repurchase of outstanding shares of common stock under
our $30 million credit facility which, if triggered, might
result in our modification or elimination of dividends,
cancellation of our stock repurchase program or being in default
under the credit facility. If we default under our credit
facility, we might not have adequate access to capital to run
our business or pursue growth opportunities.
21
Forward-looking statements
This prospectus, including the documents incorporated by
reference, contains forward-looking statements as defined in the
Private Securities Litigation Reform Act. In some cases, you can
identify forward-looking statements by terminology such as
may, might, will,
should, could, would,
expect, plan, anticipate,
believe, estimate, project,
predict, intend, potential
or the negative of such terms or other similar expressions.
The forward-looking statements reflect our current expectations
and views about future events and speak only as of the date the
statements were made. The forward-looking statements involve
known and unknown risks, uncertainties and other factors which
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Given these risks and uncertainties, you should not
place undue reliance on the forward-looking statements.
You should read this prospectus and the documents that we
reference in this prospectus and have filed as exhibits to the
registration statement, of which this prospectus is part,
completely and with the understanding that our actual future
results might be materially different from what we expect. We
might not update the forward-looking statements, even though our
situation might change in the future, unless we have obligations
under U.S. federal securities laws to update and disclose
material developments related to previously disclosed
information. We qualify all of the forward-looking statements by
these cautionary statements.
You should rely only on the information contained in this
prospectus, including the documents incorporated by reference.
We have not authorized anyone to provide you with information
different from that contained in this prospectus, including the
documents incorporated by reference. Offers to sell, and offers
to buy, shares of our common stock are being made only in
jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery
of this prospectus or of any sale of our common stock.
No action is being taken in any jurisdiction outside the
United States to permit a public offering of common stock or
possession or distribution of this prospectus in that
jurisdiction. Persons who come into possession of this
prospectus in jurisdictions outside the United States are
required to inform themselves about and to observe any
restrictions as to this offering and the distribution of this
prospectus applicable to those jurisdictions.
Blackbaud and The Raisers Edge
are registered trademarks of Blackbaud, Inc. This prospectus
also includes references to registered service marks and
trademarks of other entities.
22
Use of proceeds
We will not receive any proceeds from the sale of the common
stock by the selling stockholders. The selling stockholders will
receive all net proceeds from any sales of shares of our common
stock under this prospectus.
23
Selling stockholders
The following table sets forth information regarding the
beneficial ownership of our common stock as of July 31,
2005, by each selling stockholder.
Beneficial ownership of a security is determined in accordance
with the rules and regulations of the SEC. Under these rules, a
person is deemed to beneficially own a share of our common stock
if that person has or shares voting power or investment power
with respect to that share, or has the right to acquire
beneficial ownership of that share within 60 days,
including through the exercise of any option or other right or
the conversion or any other security. Shares issuable under
stock options are deemed outstanding for computing the
percentage of the person holding options but are not outstanding
for computing the percentage of any other person. The percentage
of beneficial ownership shown in the following table is based
upon 41,034,613 shares of capital stock outstanding as of
July 31, 2005. The number and percentage of shares
beneficially owned after the offering in the table below assumes
that the selling stockholders sell all shares of common stock
registered under this prospectus. The selling stockholders might
not sell all or any of these shares.
Unless otherwise indicated, the address for each listed
stockholder is: c/o Blackbaud, Inc., 2000 Daniel Island
Drive, Charleston, South Carolina 29492-7541. To our knowledge,
except as indicated in the footnotes to this table and pursuant
to applicable community property laws, the persons named in the
table have sole voting and investment power with respect to all
shares of capital stock. To our knowledge, at the time of the
acquisition of the securities being registered under this
prospectus the selling stockholders had no agreements,
understandings or arrangements with any other persons, either
directly or indirectly, to dispose of the securities acquired
from us.
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Percentage of shares | |
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Beneficial | |
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Beneficial | |
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beneficially owned | |
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ownership | |
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Shares | |
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ownership | |
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prior to | |
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registered | |
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after the | |
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Before the | |
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After the | |
Name |
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the offering | |
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to be sold | |
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offering | |
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offering | |
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offering | |
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Hellman & Friedman Capital Partners III,
L.P.(1)
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20,318,348 |
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7,928,292 |
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12,390,056 |
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49.52 |
% |
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30.19% |
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H&F Orchard Partners III,
L.P.(1)
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1,493,440 |
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582,746 |
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910,694 |
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3.64 |
% |
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2.22% |
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H&F International Partners III,
L.P.(1)
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445,139 |
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173,695 |
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271,444 |
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1.08 |
% |
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* |
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Robert J.
Sywolski(2)
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2,675,680 |
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692,706 |
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985,481 |
(4) |
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6.14 |
% |
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2.26% |
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JMI Equity Fund IV,
L.P.(3)
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1,120,880 |
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437,371 |
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683,509 |
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2.73 |
% |
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1.67% |
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JMI Euro Equity Fund IV,
L.P.(3)
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357,914 |
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139,659 |
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218,255 |
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* |
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* |
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JMI Equity Fund IV (A1),
L.P.(3)
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88,763 |
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34,636 |
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54,127 |
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* |
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* |
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JMI Equity Side Fund,
L.P.(3)
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30,153 |
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10,895 |
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19,258 |
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* |
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* |
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* Less than 1%
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(1) |
Hellman & Friedman Capital Partners III, L.P.,
H&F Orchard Partners III, L.P. and H&F
International Partners III, L.P. are referred to as
the H&F Funds. H&F Investors III is the
sole general partner of the H&F Funds. Investment decisions
for the H&F Funds with respect to the Blackbaud shares are
made by the investment committee of H&F Investors III
which is currently composed of Brian Powers, Warren Hellman,
Thomas Steyer and Matthew Barger, each of whom disclaims
beneficial ownership in the Blackbaud shares except to the
extent of his pecuniary interest therein. Membership of the
investment committee is subject to change from time to time. The
address for each of the H&F Funds is One Maritime Plaza,
12th Floor, San Francisco, California 94111. |
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(2) |
Includes 2,570,736 shares of common stock obtainable upon
the exercise of stock options. Does not include shares held by
JMI Associates IV, L.L.C., of which Mr. Sywolski is a
member. |
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(3) |
JMI Equity Fund IV, L.P., JMI Euro Equity Fund IV,
L.P., JMI Equity Fund IV (A1), L.P. and JMI Equity Side
Fund, L.P. are referred to as the JMI Funds. JMI
Associates IV, LLC is the sole general partner of the JMI
Funds. Investment decisions for |
24
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the JMI Funds with respect to the
Blackbaud shares are made by the investment committee of JMI
Associates IV, LLC which is currently composed of
Paul V. Barber, Harry S. Gruner, Bradford D.
Woloson, Charles E. Noell, III, Peter C. Arrowsmith
and Robert Smith, each of whom disclaims beneficial ownership in
the Blackbaud shares except to the extent of his pecuniary
interest therein. Membership of the investment committee is
subject to change from time to time. The address for each of the
JMI Funds is 12680 High Bluff Drive, Suite 200, San Diego,
California 92130.
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(4) |
This share number assumes that
Mr. Sywolski cancels options to purchase 997,493 shares of
common stock as payment, under a net exercise, for the exercise
price of the options that would be necessary for
Mr. Sywolski to exercise in order to sell all shares
registered under this prospectus. The assumed value of the
shares used for calculating this net exercise was $14.07, the
closing price of our common stock on August 1, 2005, the
last reported sales price prior to filing this prospectus. We
will receive no proceeds from the net exercise of these options.
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Plan of distribution
We are registering the shares of common stock for resale on
behalf of the selling stockholders. As used herein,
selling stockholders includes donees, pledgees,
transferees or other successors in interest selling securities
received from a selling stockholder after the date of this
prospectus. We will receive no proceeds from any shares of our
common stock sold hereunder.
Any selling stockholder may offer any of its securities at
various times in one or more of the following transactions
(which may include block transactions):
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in one or more exchanges or over-the-counter market transactions; |
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in private transactions other than exchange or over-the-counter
market transactions; |
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through short sales, although neither Blackbaud nor any of the
selling stockholders concedes that any such transactions would
constitute a sale of the securities for purposes of the
Securities Act; |
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through underwriters, brokers or dealers (who may act as agent
or principal) who may receive compensation in the form of
underwriting discounts, concessions or commissions from the
selling stockholders and/or the purchasers of securities, for
whom they may act as agent or to whom they sell as principal, or
both (which compensation as to a particular underwriter, dealer
or agent might be in excess of customary commissions); |
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in purchases by a broker or dealer as principal and resales by
such broker or dealer for its account pursuant to this
prospectus; |
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directly to one or more purchasers; |
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pursuant to a contract, instruction or plan of sale in
compliance with Rule 10b5-1 promulgated under the Exchange
Act; |
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through agents; |
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through distribution by a selling stockholder or its successor
in interest to its members, partners or shareholders; |
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in negotiated transactions; |
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by pledge to secure debts and other obligations; |
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any other method permitted pursuant to applicable law; or |
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in a combination of any of the foregoing methods. |
A selling stockholder also may resell all or a portion of its
securities in open market transactions in reliance upon
Rule 144 under the Securities Act, provided it meets the
criteria and conforms to the requirements of Rule 144.
A selling stockholder may enter into hedging transactions with
broker-dealers or other financial institutions. In connection
with such transactions, broker-dealers or other financial
institutions may engage in short sales of the securities in the
course of hedging the positions they assume with a selling
stockholder. A selling stockholder may also enter into options
or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or
their financial institution of the securities offered hereby,
which securities such broker-dealer or their financial
institution may resell pursuant to this prospectus as
supplemented or amended to reflect such transaction.
In effecting sales, brokers and dealers engaged by the selling
stockholders may arrange for other brokers or dealers to
participate in such sales. Brokers or dealers may receive
commissions or discounts from the selling stockholders (or, if
any such broker-dealer acts as agent for the purchaser of such
shares, from such purchaser) in amounts to be negotiated which
are not expected to exceed those customary in the types of
transactions involved. Broker-dealers may agree with the selling
stockholders to sell a specified number of such shares of common
stock
26
at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for a selling
stockholder, to purchase as principal any unsold shares of
common stock at the price required to fulfill the broker-dealer
commitment to the selling stockholders. Broker-dealers who
acquire shares of common stock as principal may thereafter
resell such shares of common stock from time to time in
transactions (which may involve block transactions and sales to
and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market or
otherwise at prices and on terms then prevailing at the time of
sale, at prices then related to the then-current market price or
in negotiated transactions and, in connection with such resales,
may pay to or receive from the purchasers of such shares
commissions as described below.
A selling stockholder may offer and sell securities other than
for cash. In such event, any required details of the transaction
will be set forth in a prospectus supplement.
The selling stockholders and any underwriters, dealers or agents
that participate in the distribution of securities may be deemed
to be underwriters, and any profit on the sale of securities by
them and any discounts, commissions or concessions received by
any such underwriters, dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
If we are advised that an underwriter has been engaged with
respect to the sale of any securities offered hereby, or in the
event of any other material change in the plan of distribution,
we will cause appropriate amendments to the registration
statement of which this prospectus forms a part to be filed with
the SEC reflecting such engagement or other change. See
Where You Can Find More Information.
At the time a particular offer of securities is made, to the
extent required, a prospectus supplement will be provided by us
and distributed by the relevant selling stockholder which will
set forth the aggregate amount and type of the securities being
offered and the terms of the offering, including the name or
names of any underwriters, dealers or agents, any discounts,
commissions and other items constituting compensation from the
selling stockholders and any discount, commissions or
concessions allowed or reallowed or paid to dealers.
The securities may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or
at market prices prevailing at the time of the sale, at varying
prices determined at the time of sale or at negotiated prices.
Such prices will be determined individually by the selling
stockholders or by agreement among two or more of the selling
stockholders.
Under applicable rules and regulations under the Exchange Act,
any person engaged in a distribution of securities may not
simultaneously engage in market-making activities with respect
to such securities for a period of nine business days prior to
the commencement of such distribution and ending upon the
completion of such distribution. In addition to and without
limiting the foregoing, each selling stockholder will be subject
to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation
Regulation M, which provisions may limit the timing of
purchases and sales of any of the securities by the selling
stockholders. All of the foregoing may affect the marketability
of the securities and the ability of any person or entity to
engage in market-making activities with respect to the
securities.
We will pay all expenses of the registration of the shares of
common stock pursuant to the registration rights agreement,
including, without limitation, SEC filing fees, expenses of
compliance with state securities or blue sky laws
and underwriting discounts and selling commissions, if any. We
will indemnify the selling stockholders against liabilities,
including
27
some liabilities under the Securities Act, in accordance with
the investor rights agreement, or the selling stockholders will
be entitled to contribution. We may be indemnified by the
selling stockholders against civil liabilities, including
liabilities under the Securities Act, that arise from any
written information furnished to us by the selling stockholder
specifically for use in this prospectus, in accordance with the
related investor rights agreement, or we may be entitled to
contribution.
In order to comply with certain states securities laws, if
applicable, the shares of common stock will be sold in such
jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain states the common stock may not
be sold unless the common stock has been registered or qualified
for sale in such state or an exemption from registration or
qualification is available and is satisfied.
Once sold under the shelf registration statement, of which this
prospectus forms a part, the shares of common stock will be
freely tradable in the hands of persons other than our
affiliates.
Legal matters
The validity of the issuance of our shares of common stock
offered by this prospectus will be passed upon for us by Wyrick
Robbins Yates & Ponton LLP, Raleigh, North Carolina.
Experts
The consolidated financial statements incorporated in this
prospectus by reference to the annual report on Form 10-K
for the year ended December 31, 2004 have been so
incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered
public accounting firm, given on the authority of said firm as
experts in auditing and accounting.
Where you can find more information
We have filed with the SEC a registration statement (file
number 333-122122), originally on Form S-1, now
amended to be on Form S-3, including exhibits, under the
Securities Act of 1933 with respect to the shares of our common
stock that might be sold under this prospectus. This prospectus
does not contain all of the information set forth in the
registration statement. For further information with respect to
us and the shares that might be sold under this prospectus,
reference is made to the registration statement and the exhibits
attached to the registration statement. Statements contained in
this prospectus as to the contents of any contract, agreement or
other document referred to are not necessarily complete. We are
subject to the information and reporting requirements of the
Securities Exchange Act of 1934 and file annual, quarterly and
current reports, proxy statements and other information with the
SEC.
You may read and copy all or any portion of the registration
statement or any of our annual, quarterly and current reports,
proxy statements or other information that we file at the
SECs Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the
SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. Our
SEC filings, including the registration statement, are also
available to you on the SECs web site
http://www.sec.gov.
28
Incorporation of documents by reference
The SEC allows us to incorporate into this prospectus
information that we file with the SEC in other documents, which
means that we can disclose important information to you by
referring you to those documents. The information incorporated
by reference is an important part of this prospectus. Any
statement contained in a document which is incorporated by
reference is automatically updated and superseded if such
information is contained in this prospectus, or information that
we later file with the SEC modifies and replaces such
information. We incorporate by reference into this registration
statement and prospectus the documents listed below and any
future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
prior to the termination of the offering of the securities
covered by this prospectus (other than any portion of such
documents that are not deemed filed under the
Exchange Act in accordance with the Exchange Act and applicable
SEC rules):
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the annual report on Form 10-K for the year ended
December 31, 2004, filed on March 14, 2005; |
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the definitive proxy solicitation materials for our 2005 annual
meeting of stockholders, filed on May 2, 2005; |
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the quarterly report on Form 10-Q for the quarter ended
March 31, 2005, filed on May 13, 2005; and |
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the description of our common stock contained in our
registration statement on Form 8-A, filed on
February 20, 2004, including any amendment or report filed
for the purpose of updating such description. |
We will furnish without charge to you, on written or oral
request, a copy of any or all of the documents incorporated by
reference, including exhibits to these documents. You should
direct any requests for documents to Blackbaud, Inc., Attention:
Corporate Secretary, 2000 Daniel Island Drive, Charleston,
South Carolina 29492, (843) 216-6200.
29
Part II
Information not required in prospectus
Item 16. Exhibits.
See Exhibit Index beginning on
page II- of this registration
statement.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver
or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
provisions described in Item 14 above or otherwise, the
registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the
II-1
question of whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(i) The undersigned registrant also hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Act shall be
deemed to be part of this Registration Statement as of the time
it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-2
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3 and has duly caused this amendment to Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Charleston, State of
South Carolina, on this 2nd day of August 2005.
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By: |
/s/ Robert J.
Sywolski |
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Robert J. Sywolski |
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President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this
amendment to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature |
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Capacity |
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Date |
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/s/ Robert J. Sywolski
Robert
J. Sywolski |
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President, Chief Executive Officer and Director
(Principal Executive Officer) |
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August 2, 2005 |
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/s/ Timothy V.
Williams*
Timothy
V. Williams |
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Vice President
and Chief Financial Officer
(Principal Financial and Accounting Officer) |
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August 2, 2005 |
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/s/ Paul V. Barber*
Paul
V. Barber |
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Director |
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August 2, 2005 |
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/s/ Marco W. Hellman*
Marco
W. Hellman |
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Director |
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August 2, 2005 |
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/s/ Dr. Sandra R.
Hernández*
Dr.
Sandra R. Hernández |
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Director |
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August 2, 2005 |
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/s/ Andrew M. Leitch*
Andrew
M. Leitch |
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Director |
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August 2, 2005 |
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/s/ David R. Tunnell*
David
R. Tunnell |
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Director |
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August 2, 2005 |
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*By: |
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/s/ Robert J. Sywolski
Robert
J. Sywolski, Attorney-in-Fact |
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|
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August 2, 2005 |
II-3
Exhibit index
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Filed In | |
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Exhibit | |
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Registrants | |
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Exhibit | |
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Filed | |
Number | |
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Description of Document |
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Form | |
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Dated | |
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Number | |
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Herewith | |
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2 |
.1 |
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Agreement and Plan of Merger and Reincorporation dated
April 6, 2004 |
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S-1 |
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04/06/04 |
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2 |
.1 |
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3 |
.1 |
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Certificate of Incorporation of Blackbaud, Inc. |
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S-1 |
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04/06/04 |
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3 |
.1 |
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3 |
.2 |
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By-laws of Blackbaud, Inc. |
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S-1 |
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04/06/04 |
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3 |
.2 |
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4 |
.1 |
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Specimen Common Stock Certificate. |
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S-1 |
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02/20/04 |
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4 |
.1 |
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5 |
.1 |
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Opinion of Wyrick Robbins Yates & Ponton LLP regarding
the legality of the securities being registered. |
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S-1 |
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01/18/05 |
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5 |
.1 |
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10 |
.1 |
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Investor Rights Agreement dated as of October 13, 1999
among Blackbaud, Inc. and certain of its stockholders. |
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S-1 |
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02/20/04 |
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10 |
.1 |
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10 |
.2 |
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Employment and Noncompetition Agreement dated as of
March 1, 2000 between Blackbaud, Inc. and Robert J.
Sywolski |
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S-1 |
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02/20/04 |
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10 |
.2 |
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10 |
.3 |
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Option Agreement dated as of March 8, 2000 between
Blackbaud, Inc, and Robert J. Sywolski. |
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S-1 |
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02/20/04 |
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10 |
.3 |
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10 |
.4 |
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Lease Agreement dated October 13, 1999 between Blackbaud,
Inc., and Duck Pond Creek, LLC |
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S-1 |
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02/20/04 |
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10 |
.4 |
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10 |
.5 |
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Trademark License and Promotional Agreement dated as of
October 13, 1999 between Blackbaud, Inc. and Charleston
Battery, Inc. |
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S-1 |
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02/20/04 |
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10 |
.5 |
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10 |
.6 |
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Blackbaud, Inc. 1999 Stock Option Plan, as amended. |
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S-1 |
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04/06/04 |
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10 |
.6 |
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10 |
.7 |
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Blackbaud, Inc. 2000 Stock Option Plan, as amended. |
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S-1 |
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04/06/04 |
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10 |
.7 |
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10 |
.8 |
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Blackbaud, Inc. 2001 Stock Option Plan, as amended. |
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S-1 |
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04/06/04 |
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10 |
.8 |
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10 |
.9 |
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Form of Software License Agreement. |
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S-1 |
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02/20/04 |
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10 |
.9 |
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10 |
.10 |
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Form of Professional Services Agreement. |
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S-1 |
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02/20/04 |
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10 |
.10 |
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10 |
.11 |
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Form of NetSolutions Services Agreement. |
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S-1 |
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02/20/04 |
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10 |
.11 |
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10 |
.12 |
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Standard Terms and Conditions for Software Maintenance and
Support |
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S-1 |
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02/20/04 |
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10 |
.12 |
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10 |
.13 |
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Credit Agreement dated as of October 13, 1999 among
Blackbaud, Inc., Bankers Trust Company, Fleet National Bank,
First Union Securities, Inc. and the lenders party thereto. |
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S-1 |
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04/06/04 |
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10 |
.13 |
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10 |
.14 |
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First Amendment to Credit Agreement dated as of December 6,
1999 among Blackbaud, Inc., Bankers Trust Company, Fleet Boston
Corporation, First Union Securities, Inc., and the lenders party
thereto. |
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S-1 |
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04/06/04 |
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10 |
.14 |
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II-4
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Filed In | |
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Exhibit | |
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Registrants | |
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Exhibit | |
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Filed | |
Number | |
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Description of Document |
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Form | |
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Dated | |
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Number | |
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Herewith | |
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10 |
.15 |
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Second Agreement to Credit Agreement dated as of
December 19, 2000 among Blackbaud, Inc., Bankers Trust
Company, Fleet Boston Corporation, First Union Securities, Inc.,
and the lenders party thereto. |
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S-1 |
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02/20/04 |
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10 |
.15 |
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10 |
.16 |
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Third Amendment to Credit Agreement dated as of May 16,
2001 among Blackbaud, Inc., Blackbaud, LLC, Bankers Trust
Company, Fleet Boston Corporation, First Union Securities, Inc.,
and the lenders party thereto. |
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S-1 |
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02/20/04 |
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10 |
.16 |
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10 |
.17 |
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Letter Agreement dated March 23, 2004 between the Company
and certain of its stockholders relating to registration rights
held by those stockholders. |
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S-1 |
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04/06/04 |
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10 |
.17 |
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10 |
.18 |
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Employment and Noncompetition Agreement dated as of
April 1, 2004 between Blackbaud, Inc. and Robert J.
Sywolski. |
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S-1 |
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06/16/04 |
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10 |
.18 |
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10 |
.19* |
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Software Transition Agreement dated as of January 30, 2004
between Blackbaud, Inc. and United Way of America. |
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S-1 |
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04/06/04 |
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10 |
.19 |
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10 |
.20 |
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Blackbaud, Inc. 2004 Stock Plan |
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S-1 |
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04/06/04 |
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10 |
.20 |
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10 |
.21 |
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Commitment Letter for Arrangement of Senior Credit Facility
dated June 1, 2004 from Wachovia Bank, N.A. |
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S-1 |
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06/16/04 |
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10 |
.21 |
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10 |
.22 |
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Credit Agreement dated September 30, 2004 by and among
Blackbaud, Inc., as borrower, the lenders referred to therein
and Wachovia Bank, National Association. |
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8-K |
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10/05/04 |
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10 |
.22 |
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10 |
.23 |
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Guaranty Agreement dated September 30, 2004 by and among
Blackbaud, LLC, as guarantor, in favor of Wachovia Bank,
National Association. |
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8-K |
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10/05/04 |
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10 |
.23 |
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10 |
.24 |
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Form of Notice of Stock Option Grant and Stock Option Agreement
under the Blackbaud, Inc. 2004 Stock Plan. |
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10-Q |
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11/12/04 |
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10 |
.24 |
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21 |
.1 |
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Subsidiaries of Blackbaud, Inc. |
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S-1 |
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07/19/04 |
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21 |
.1 |
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23 |
.1 |
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Consent of Independent Registered Public Accounting Firm. |
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X |
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23 |
.2 |
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Consent of Wyrick Robbins Yates & Ponton LLP
(included in Exhibit 5.1). |
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S-1 |
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01/18/05 |
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23 |
.2 |
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* |
The registrant has received confidential treatment with respect
to certain portions of this exhibit. Such portions have been
omitted and have been filed separately with the SEC. |
II-5