UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant                              þ
Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to § 240.14a-12

COMPELLENT TECHNOLOGIES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box)

þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1.		Title of each class of securities to which transaction applies:
2.		Aggregate number of securities to which transaction applies:
3.		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
4.		Proposed maximum aggregate value of transaction:
5.		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1.		Amount Previously Paid:
2.		Form, Schedule or Registration Statement No.:
3.		Filing Party:
4.		Date Filed:

 

COMPELLENT TECHNOLOGIES, INC.

7625 Smetana Lane

Eden Prairie, Minnesota 55344

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On May 21, 2009

 

Dear Stockholder:

 

You are cordially invited to attend the Annual Meeting of Stockholders of Compellent Technologies, Inc., a Delaware corporation. The meeting will be held on Thursday, May 21, 2009 at 3:30 p.m., Central Time, at Faegre & Benson, LLP, 2200 Wells Fargo Center, 90 South 7th Street, Minneapolis, MN 55402 for the following purposes:

 

1. To elect three directors nominated by the Board of Directors to hold office until the 2012 Annual Meeting of Stockholders.

 

2. To ratify the selection by the Audit Committee of the Board of Directors of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2009.

 

3. To conduct any other business properly brought before the meeting.

 

These items of business are more fully described in the Proxy Statement accompanying this Notice.

 

The record date for the Annual Meeting is April 8, 2009. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

 

 

 

By Order of the Board of Directors

 

Lawrence E. Aszmann

Secretary

 

Eden Prairie, Minnesota

April 17, 2009

 

You are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting, please complete, date, sign and return the enclosed proxy, or vote over the telephone or the Internet as instructed in these materials, as promptly as possible in order to ensure your representation at the Annual Meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder.

 

COMPELLENT TECHNOLOGIES, INC.

7625 Smetana Lane

Eden Prairie, Minnesota 55344

 

PROXY STATEMENT

FOR THE 2009 ANNUAL MEETING OF STOCKHOLDERS

MAY 21, 2009

 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

Why am I receiving these materials?

 

We have sent you this proxy statement and the enclosed proxy card because the Board of Directors of Compellent Technologies, Inc. is soliciting your proxy to vote at the 2009 Annual Meeting of Stockholders, or the Annual Meeting, including at any adjournments or postponements of the Annual Meeting. You are invited to attend the Annual Meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or on the Internet.

 

We intend to mail this proxy statement and accompanying proxy card on or about April 17, 2009 to all stockholders of record entitled to vote at the Annual Meeting.

 

Who can vote at the Annual Meeting?

 

Only stockholders of record at the close of business on April 8, 2009 will be entitled to vote at the Annual Meeting. On this record date, there were 30,800,023 shares of common stock outstanding and entitled to vote.

 

Stockholder of Record: Shares Registered in Your Name

 

If, on April 8, 2009, your shares were registered directly in your name with Compellent’s transfer agent, Wells Fargo Shareholder Services, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed below to ensure your vote is counted.

 

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

 

If, on April 8, 2009, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your broker or other agent.

 

What am I voting on?

 

There are two matters scheduled for a vote:

 

How do I vote?

 

 

The procedures for voting are fairly simple:

 

Stockholder of Record: Shares Registered in Your Name

 

If you are a stockholder of record, you may vote in person at the Annual Meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy on the Internet. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.

 

 

Beneficial Owner: Shares Registered in the Name of Broker or Bank

 

If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Compellent. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.

 

We provide Internet proxy voting to allow you to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

 

How many votes do I have?

 

On each matter to be voted upon, you have one vote for each share of common stock you own as of April 8, 2009.

 

What if I return a proxy card but do not make specific choices?

 

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “For” the election of all three nominees for director and “For” the ratification of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2009. If any other matter is properly presented at the Annual Meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his best judgment.

Who is paying for this proxy solicitation?

 

We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

 

What does it mean if I receive more than one proxy card?

 

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

 

Can I change my vote after submitting my proxy?

 

Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

 

 

If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.

 

When are stockholder proposals due for next year’s annual meeting?

 

To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by December 18, 2009, to Compellent’s Secretary at Compellent Technologies, Inc., 7625 Smetana Lane, Eden Prairie, Minnesota 55344. However, if Compellent’s 2010 Annual Meeting of Stockholders is not held between April 21, 2010 and June 20, 2010, then the deadline will be a reasonable time prior to the time Compellent begins to print and mail its proxy materials.

 

If you wish to bring a proposal before the stockholders or nominate a director at the 2010 Annual Meeting of Stockholders, but you are not requesting that your proposal or nomination be included in next year’s proxy materials, you must notify Compellent’s Secretary, in writing, not later than the close of business on February 20, 2010. However, if Compellent’s 2010 Annual Meeting of Stockholders is not held between April 21, 2010 and June 20, 2010, then the deadline will be not later than the close of business on the 10th day following the date on which the notice of the date of the 2010 Annual Meeting of Stockholders was mailed, or the 10th day following the date on which public disclosure of the date of the 2010 Annual Meeting of Stockholders was made, whichever occurs first. We also advise you to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. The chairman of the 2010 Annual Meeting of Stockholders may determine, if the facts warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting.

 

How are votes counted?

 

Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For” and “Withhold” votes. With respect to proposals other than the election of directors, the inspector of elections will also count “Against” votes, abstentions and broker non-votes. Abstentions will be counted towards the vote total for each proposal other than the election of directors, and will have the same effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.

What are “broker non-votes”?

 

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of The New York Stock Exchange, “non-routine” matters are generally those involving a contest or a matter that may substantially affect the rights or privileges of stockholders, such as mergers or stockholder proposals.

 

How many votes are needed to approve each proposal?

 

 

What is the quorum requirement?

 

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares are present at the Annual Meeting in person or represented by proxy. On the record date, there were 30,800,023 shares outstanding and entitled to vote. Thus, the holders of 15,400,012 shares must be present in person or represented by proxy at the Annual Meeting or by proxy to have a quorum.

 

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the Annual Meeting to another date.

 

How can I find out the results of the voting at the Annual Meeting?

 

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in Compellent’s quarterly report on Form 10-Q for the second quarter of 2009.

 

PROPOSAL 1

 

ELECTION OF DIRECTORS

 

Our Board of Directors, or our Board, is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons appointed by a majority of the remaining directors. A director appointed by the Board to fill a vacancy in a class, including a vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is elected and qualified or such director’s earlier death, resignation or removal.

 

Our Board presently has seven members. There are three directors in the class whose term of office expires in 2009, Messrs. Sarkar, Spreng and Williams, each of whom is currently a director of Compellent. The Nominating and Corporate Governance Committee of the Board recommended to the Board that each of Messrs. Sarkar, Spreng and Williams be nominated for election at the Annual Meeting. Mr. Sarkar and Mr. Spreng were each previously elected by the stockholders. Mr. Williams, who was appointed to the Board effective October 1, 2008 to fill a vacancy on the Board, was originally identified by a professional search firm. If elected at the Annual Meeting, each

of these nominees would serve until the 2012 Annual Meeting and until his successor is elected and has qualified, or, if sooner, until the director’s death, resignation or removal. We encourage our directors and nominees for director to attend the Annual Meeting. Messrs. Beeler, Guider, Soran and Wehrwein attended the 2008 Annual Meeting of Stockholders.

 

Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. The three nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our management team. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve.

 

THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF OUR
NOMINEES TO THE BOARD.

 

Members of the Board of Directors

 

The following is information regarding each of the members of our Board as of the date of this proxy statement.

 

 

Nominees for Election for a Three-year Term Expiring at Our 2012 Annual Meeting

 

Neel Sarkar

 

Neel Sarkar has been with Centennial Ventures, a venture capital firm, since 2002 and has been a Managing Director since December 2005. Mr. Sarkar previously served as a Principal of Centennial Ventures from December 2003 to December 2005 and as an Associate from January 2002 to December 2003. From 2000 to 2002, Mr. Sarkar was with Dell, Inc., a computer company, where he most recently served as Director of Strategy and Business Development for the server and storage division. From 1998 to 2000, Mr. Sarkar was a consultant with McKinsey & Company, a management consulting company. From 1993 to 1998, he served in various operations, management, supply chain and information technology strategy positions with divisions of General Electric Co., a diversified industrial corporation, and Exelon Corporation, a power general services company. Mr. Sarkar received a B.S. in Electrical Engineering from M.I.T. and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University.

 

R. David Spreng

 

R. David Spreng has been the Managing General Partner of Crescendo Ventures, a venture capital firm he founded since 1998. Mr. Spreng is active with the World Economic Forum and is a member of the board of directors of the National Venture Capital Association. Mr. Spreng received a B.S. in Accounting from the University of Minnesota.

Duston M. Williams

 

Duston M. Williams has served as the Chief Financial Officer of Infinera Corporation, an optical networking company, since June 2006. From December 2004 to June 2006, Mr. Williams was Executive Vice President and Chief Financial Officer of Maxtor Corporation, an information storage solutions company. From July 2003 to November 2004, Mr. Williams served as Chief Financial Officer of Aruba Networks, Inc., a network infrastructure company. From July 2001 to February 2003, Mr. Williams served as Chief Financial Officer of Rhapsody Networks, Inc., a storage networking provider. Mr. Williams holds a B.S. in Accounting from Bentley College and an M.B.A. from the University of Southern California.

 

Directors Continuing in Office Until Our 2010 Annual Meeting

 

Charles Beeler

 

Charles Beeler has been a General Partner of El Dorado Ventures, a venture capital firm since 1999. Prior to 1999, Mr. Beeler was an Investment Manager with Piper Jaffray Ventures Technology Funds, a venture investing arm of Piper Jaffray & Co., a financial services company. Mr. Beeler received a B.A. in Economics from Colby College and an M.B.A. in entrepreneurial studies from the Wharton School.

 

John P. Guider

 

John P. Guider has served as Compellent’s Chief Operating Officer since co-founding Compellent in March 2002. From July 1995 to August 2001, Mr. Guider served as Chief Operating Officer of Xiotech Corporation, or Xiotech, a storage area networking company, which Mr. Guider co-founded in July 1995. Xiotech was acquired by Seagate Technology, or Seagate, a disk drive manufacturer, in January 2000. From 1987 to 1995, Mr. Guider served as Chief Technology Officer and Senior Vice President of Product Development of Tricord Systems, a high performance server company, which Mr. Guider co-founded in 1987. From December 1982 to January 1987, Mr. Guider served as Director of Hardware Development at Star Technologies, a scientific computer company, and held various management and technical positions with Sperry Corporation, a mainframe systems company. Mr. Guider received a B.S. in Electrical Engineering from the University of Minnesota.

 

Directors Continuing in Office Until Our 2011 Annual Meeting

 

Philip E. Soran

 

Philip E. Soran has served as our President and Chief Executive Officer since co-founding Compellent in March 2002. From July 1995 to August 2001, Mr. Soran served as President and Chief Executive Officer of Xiotech, which Mr. Soran co-founded in July 1995. Xiotech was acquired by Seagate in January 2000. From October 1993 to April 1995, Mr. Soran served as Executive Vice President of Prodea Software Corporation, a data warehousing software company. Mr. Soran also held a variety of management, sales, marketing and technical positions with IBM. Mr. Soran received a B.A. in Education from the University of Northern Colorado.

 

Sven A. Wehrwein

 

Sven A. Wehrwein has over 30 years of experience in accounting, finance and investment banking. Since 1999, Mr. Wehrwein has provided financial consulting services to emerging growth companies. Mr. Wehrwein previously served as Chief Financial Officer of Digi International Inc., a networking solutions company, and Instent, Inc., a medical device company. Mr. Wehrwein also serves on the board of directors of Image Sensing Systems, Inc., a video imaging company, Synovis Life Technologies, Inc., a medical device company, Uroplasty, Inc., a medical device company, and Vital Images, Inc., a visualization software company. Mr. Wehrwein received an M.S. in Management from the Sloan School at the Massachusetts Institute of Technology and is a certified public accountant (inactive).

PROPOSAL 2

 

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee of the Board has selected Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2009 and has further directed that management submit the selection of our independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Grant Thornton LLP has audited our financial statements since the December 31, 2002 audit. Representatives of Grant Thornton LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. For additional information regarding the Audit Committee and its activities with Grant Thornton LLP, see “Information Regarding Our Board of Directors and Corporate Governance” and “Report of the Audit Committee of the Board of Directors.”

 

Neither our bylaws nor other governing documents or law require stockholder ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Grant Thornton LLP to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of Compellent and our stockholders.

 

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of Grant Thornton LLP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

 

Principal Accountant Fees and Services

 

The following table represents aggregate fees billed to us for the years ended December 31, 2008 and 2007, by Grant Thornton LLP, our independent registered public accounting firm.

 

 

 

 

In 2008, all fees described above were pre-approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policies and procedures. In 2007, all fees described above incurred following our initial

public offering were pre-approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policies and procedures.

 

Pre-Approval Policies and Procedures

 

The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, Grant Thornton LLP. The policy generally requires Audit Committee pre-approval of specified services in the defined categories of audit services, audit-related services, and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may also be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. Our management has limited authority to engage Grant Thornton LLP to perform limited services without Audit Committee pre-approval.

 

The Audit Committee has determined that the rendering of services other than audit services by Grant Thornton LLP is compatible with maintaining their independence.

 

THE BOARD RECOMMENDS A VOTE FOR PROPOSAL 2.

 

INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Independence of The Board of Directors

 

As required under The New York Stock Exchange, or NYSE, listing standards, a majority of the members of a listed company’s Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with our outside counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the NYSE, as in effect from time to time.

 

Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his family members, and Compellent, our senior management and our independent registered public accounting firm, the Board has affirmatively determined that the following five directors are independent directors within the meaning of the applicable NYSE listing standards: Messrs. Beeler, Sarkar, Spreng, Wehrwein and Williams. In making this determination, the Board found that none of these directors or nominees for director had a material or other disqualifying relationship with Compellent. Mr. Guider, our Chief Operating Officer, and Mr. Soran, our President and Chief Executive Officer, are not independent directors by virtue of their employment with us.

 

Meetings of the Board of Directors

 

The Board of Directors met six times during 2008. During 2008, each Board member attended 75% or more of the meetings of the Board and of the committees on which he served, held during the period for which he was a director or committee member.

 

As required under applicable NYSE listing standards, in 2008, our non-management directors met in an executive session at which only non-management directors were present. Mr. Beeler was chosen as the Company’s lead independent director in October 2008 and presided over the executive sessions following his appointment.

Information Regarding Committees of the Board of Directors

 

The Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership and meeting information for 2008 for each of the Board committees:

 

 

 

 

 

Below is a description of each committee of the Board. The Board has determined that each current member of each committee meets the applicable NYSE rules and regulations regarding “independence” and that each current member is free of any relationship that would impair his individual exercise of independent judgment with regard to Compellent. The Audit, Compensation and Nominating and Corporate Governance Committees each have the authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. Each of our Committees has adopted a written charter that is available to stockholders on our website at www.compellent.com, under the “Investors — Corporate Governance” tab and are available in print upon a request to Compellent Technologies, Inc., Attn: Corporate Secretary, 7625 Smetana Lane, Eden Prairie, Minnesota 55344. The contents of our website are not part of this proxy statement.

 

Audit Committee

 

Our Audit Committee was established by the Board to oversee our corporate accounting and financial reporting processes and audits of our financial statements. For this purpose, the Audit Committee performs several functions:

 

 

 

Our Board reviews the NYSE listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of our current Audit Committee are independent (as independence is currently defined by NYSE listing standards). Our Board has also determined that Messrs. Wehrwein and Williams qualify as “audit committee financial experts,” as defined in applicable SEC rules. The Board made a qualitative assessment of Messrs. Wehrwein and Williams’ level of knowledge and experience based on a number of factors, including their formal education and experience as Chief Financial Officers for public reporting companies and Mr. Wehrwein’s status as a certified public accountant (inactive). In addition to our Audit Committee, Mr. Wehrwein also serves on the Audit Committees of Image Sensing Systems, Inc., Synovis Life Technologies, Inc., Uroplasty, Inc. and Vital Images, Inc., each of which are publicly traded companies. Our Board has determined that this simultaneous service does not impair Mr. Wehrwein’s ability to effectively serve on our Audit Committee.

 

Report of the Audit Committee of the Board of Directors

 

The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2008 with management of Compellent. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. The Audit Committee has also received the written disclosures and the letter from the independent accountants required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with the independent accountants the independent accountants’ independence. Based on the foregoing, the Audit Committee has recommended to the Board that the audited financial statements be included in the Compellent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

 

Sven A. Wehrwein (Chair)

Neel Sarkar

Duston M. Williams

 

The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, expect to the extent specifically incorporated by referenced therein.

 

Compensation Committee

 

The Compensation Committee acts on behalf of the Board to review, adopt and oversee our compensation strategy, policies, plans and programs, including:

 

 

 

All the members of our Compensation Committee are independent (as independence is currently defined in NYSE listing standards).

 

Compensation Committee Interlocks and Insider Participation

 

In 2008, our Compensation Committee consisted of three directors: Messrs. Beeler, Spreng and Wehrwein. None of our executive officers currently serves, or has served during the last completed fiscal year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of Compellent’s Board of Directors or Compensation Committee.

 

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee of our Board is responsible for, among other things:

 

 

All members of our Nominating and Corporate Governance Committee are independent (as independence is currently defined in the NYSE listing standards).

 

Board Member Qualifications

 

Our Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. Our Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of Compellent, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of Compellent and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and Compellent, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to Compellent during their terms, including the

number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for NYSE purposes, which determination is based upon applicable NYSE listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. In 2008, the Nominating and Corporate Governance Committee paid a fee in the amount of approximately $91,000 to Spencer Stuart, an executive search consulting firm, to assist in the process of identifying or evaluating director candidates. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.

 

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: Compellent Technologies, Inc., Attn: Corporate Secretary, 7625 Smetana Lane, Eden Prairie, Minnesota 55344 at least 120 days prior to the anniversary date of the mailing of our proxy statement for the last Annual Meeting of Stockholders. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of our stock. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected.

 

Communications With Our Board Of Directors

 

Compellent’s Board has adopted a formal process by which any interested party, including our stockholders, may communicate with the Board or any of its directors. Interested parties who wish to communicate with the Board may do so by sending written communications addressed to the Board of Directors of Compellent Technologies, Inc. at 7625 Smetana Lane, Eden Prairie, Minnesota 55344. These communications will be reviewed by the Chair of the Audit Committee, who will determine whether they should be presented to the Board. The purpose of this screening is to allow the Board to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications). The screening procedures have been approved by the Board, including a majority of our independent directors.

 

Code of Business Conduct and Ethics

 

Our Code of Business Conduct and Ethics (which includes code of ethics provisions applicable to our chief executive officer, chief financial officer, principal accounting officer, controller and persons performing similar functions) is available on our website at www.compellent.com, under the “Investors — Corporate Governance” tab and is available in print upon a request to Compellent Technologies, Inc., Attn: Corporate Secretary, 7625 Smetana Lane, Eden Prairie, Minnesota 55344. The contents of our website are not part of this proxy statement. If we make any amendments to our Code of Business Conduct and Ethics or grant any waiver from a provision of the code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website at the address and the location specified above.

 

Corporate Governance Guidelines

 

In 2007, our Board adopted Corporate Governance Guidelines to assure that the Board and its Committees will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the

practices the Board intends to follow with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees. The Corporate Governance Guidelines may be viewed at www.compellent.com, under the “Investors — Corporate Governance” tab and is available in print upon a request to Compellent Technologies, Inc., Attn: Corporate Secretary, 7625 Smetana Lane, Eden Prairie, Minnesota 55344. The contents of our website are not part of this proxy statement.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Compellent. Executive officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

 

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2008, all Section 16(a) filing requirements applicable to our executive officers, directors and greater than ten percent beneficial owners were complied with, except for a late Form 4 filing for Brian P. Bell, our Vice President, Worldwide Sales.

 

Director Compensation

 

2008 Director Compensation

 

In 2008, our non-employee directors (other than Mr. Williams who was appointed to the Board in October 2008) received the following annual compensation pursuant to the non-employee director compensation arrangement approved by the Board in February 2008:

 

 

All sums referenced above were payable on a pro rata basis each quarter.

 

In February 2008, our Board also approved a stock option grant for each non-employee director (other than Mr. Williams) to purchase 60,260 shares of our common stock at an exercise price equal to the closing price of Compellent common stock on the date of grant as reported by the New York Stock Exchange Arca, or $8.64 per share. The shares subject to this stock option vest 1/36th per month over a three year period. Vesting is contingent upon the non-employee director’s continued service. If a non-employee director’s service terminates immediately prior to or within 12 months following a specified change-in-control transaction, the non-employee director may exercise the stock option for a period of 12 months following the effective date of such a transaction. The stock option term may also be extended in the event that exercise of the stock option following termination of service is prohibited by applicable securities laws. In no event, however, may an option be exercised beyond the expiration of its original term. If a non-employee director is required to resign his position as a condition of a change-in-control

transaction or is removed as a director in connection with a change-in-control transaction, the unvested portion of the stock option shall vest in full. In the event of certain significant corporate transactions, if the surviving or acquiring entity or its parent elects not to assume, continue or substitute such stock options, then such stock options shall accelerate in full prior to the effective time of such corporate transaction and such stock options shall terminate if not exercised at or prior to the effective time of the corporate transaction.

 

Effective October 1, 2008, our Board appointed Duston M. Williams to fill a vacancy currently existing on the Board. In connection with his appointment to the Board, Mr. Williams was granted a stock option to purchase 42,735 shares of our common stock at an exercise price equal to the closing price of Compellent common stock on the date of grant as reported by the New York Stock Exchange Arca, or $12.35 per share. The shares subject to this stock option vested as to 1/36th of the shares underlying the option award per month over a three year period. Vesting is contingent upon Mr. Williams continued service. The stock option contains the same terms as described above with respect to the stock option grants to our other non-employee directors made in February 2008. In addition, Mr. Williams received cash compensation consistent with the non-employee director compensation arrangement described above but pro rated to reflect a partial year of service as a director.

 

2008 Director Compensation Table

 

The following table shows for the year ended December 31, 2008 certain information with respect to the compensation of our non-employee directors:

 

 

 

 

The following table indicates the grant date fair value for each stock option awarded to our non-employee directors during the year ended December 31, 2008, as determined in accordance with SFAS No. 123R, as well as the total number of shares subject to options outstanding as of December 31, 2008 for each non-employee director:

 

 

2009 Compensation of Directors

 

In February 2009, our Board approved the following increases to the annual compensation arrangement for our non-employee directors, effective as of January 1, 2009:

 

 

The annual cash compensation for non-employee directors in the amount of $20,000 remained unchanged.

 

In February 2009, our Board also approved a stock option grant for each non-employee director to purchase 14,730 shares of our common stock (one share greater than reported on the Section 16 reports for each of our non-employee directors due to a clerical error on the Section 16 reports) at an exercise price equal to the closing price of Compellent common stock on the date of grant as reported by the New York Stock Exchange Arca, or $13.43 per share. The shares subject to this stock option vest 1/36th per month over a three year period. Vesting is contingent upon the non-employee director’s continued service. If a non-employee director’s service terminates immediately prior to or within 12 months following a specified change-in-control transaction, the non-employee director may exercise the stock option for a period of 12 months following the effective date of such a transaction. The stock option term may also be extended in the event that exercise of the stock option following termination of service is prohibited by applicable securities laws. In no event, however, may an option be exercised beyond the expiration of its original term. If a non-employee director is required to resign his position as a condition of a change-in-control transaction or is removed as a director in connection with a change-in-control transaction, the unvested portion of the stock option shall vest in full. In the event of certain significant corporate transactions, if the surviving or acquiring entity or its parent elects not to assume, continue or substitute such stock options, then such stock options shall accelerate in full prior to the effective time of such corporate transaction and such stock options shall terminate if not exercised at or prior to the effective time of the corporate transaction.

 

EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Introduction

 

This Compensation Discussion and Analysis provides information regarding the compensation paid to our President and Chief Executive Officer, our Chief Financial Officer, and our three other executive officers who were the most highly compensated executive officers of Compellent Technologies, Inc., or the Named Executive Officers, as of December 31, 2008. These individuals are:

 

 

In this Compensation Discussion and Analysis, Compellent Technologies, Inc, is referred to as “our,” “us,” “we,” or “the Company.”

Our Compensation Philosophy

 

Our executive compensation program is shaped by the competitive market for executives in the network storage industry and at other public and private technology companies. We believe that our executives’ compensation should be competitive with the organizations with which we compete for talent. Consequently, we have designed our executive compensation program to achieve the following objectives:

 

 

Consistent with this philosophy, we primarily used base salary and performance-based compensation to reward our Named Executive Officers for helping us achieve our financial performance objectives and overall corporate strategic objectives during 2008.

 

How We Determine Compensation

 

The Competitive Marketplace

 

The market for experienced executives is highly competitive in the network storage industry. Since the inception of Compellent in 2002, we have sought to recruit the most highly-qualified, experienced, and dedicated executives to manage our business. In doing so, we have drawn upon a talent pool that is highly sought after by both large, established technology companies in our geographic area and by other companies in the network storage industry that are in developmental or early stage phases. The competition for executives with the requisite management, research and development and technical skills in the network storage industry is fierce across our sector and we expect it to remain high for the foreseeable future.

 

Historically, we have not benchmarked the targeted or actual compensation of our executives against the compensation of executives at other companies. Instead, the Compensation Committee of our Board of Directors gathered publicly-available compensation data from other companies in the network storage industry or from similarly-sized technology companies, but did not designate a specific peer group for establishing compensation comparisons. We use publicly-available compensation data that matches our executives’ positions at network storage and other similarly-sized technology companies from which we are most likely to recruit key executives to assess the competitive environment. We also factor in the compensation practices in our specific geographical area to ensure that our executives’ compensation, both in terms of targeted total cash compensation, as well as the mix and amounts of individual compensation elements, is competitive within our industry.

 

Compensation Committee

 

The Compensation Committee of our Board of Directors, or the Committee, oversees and administers our executive compensation program and approves executive compensation decisions. During 2008, the Committee

took the following actions to ensure that our executive compensation program was consistent with our compensation philosophy:

 

 

Ongoing Compensation Decisions

 

Each year, the Committee conducts an annual review of the aggregate level of our executives’ compensation, as well as the mix of compensation elements. The Committee has not adopted any formal guidelines for allocating total compensation between cash and equity components. Instead, in determining the amount and mix of compensation elements and whether each element provides the correct incentives and rewards for performance consistent with our annual and long-term objectives, the Committee relies on its judgment about each executive rather than adopting a formulaic approach to compensatory decisions it believes is too narrowly responsive to short-term changes in business performance. The Committee also does not use a fixed weighting system between compensation elements for each executive, but rather assesses each executive’s overall contribution to the business, the scope of his responsibilities and his historical performance to determine the executive’s annual compensation. Historically, and during 2008, the Committee has taken into account input from other independent members of our Board of Directors based on their general work experience and their experience with companies in their investment portfolio.

 

The Committee also works with our President and Chief Executive Officer to ensure that our executives are compensated in accordance with our compensation philosophy. Typically, the Committee meets following the end of the fiscal year to evaluate the performance of each of our executives (including our President and Chief Executive Officer), to discuss the President and Chief Executive Officer’s recommendations (except with respect to his compensation), and then to make its preliminary decisions, in its sole discretion, relying principally on industry data (as described above) as well as on its members’ own experience as investors and directors of similarly-situated network storage and other technology companies. After the Committee has finalized its decisions, they review and approve all of our compensation policies, including the base salaries, annual incentive compensation awards, and equity compensation awards for our executives.

 

During 2008, our President and Chief Executive Officer proposed base salary adjustments and target annual incentive compensation payments (except with respect to his own compensation) to the Committee for its consideration for the Named Executive Officers other than himself. He also played a key role in establishing the performance targets under our annual incentive plan.

 

Compensation Consultant

 

Since December 2007, the Committee has retained Compensia, Inc., a national executive compensation consulting firm, to conduct market research and analysis on our various executive positions, to assist the Committee in developing appropriate incentive plans for our executives on an annual basis, to provide the Committee with advice and ongoing recommendations regarding material executive compensation decisions, and to review compensation proposals of management. Other than the work they perform for the Committee, Compensia has provided no other consulting services to Compellent.

Compensation Elements and 2008 Determinations

 

For 2008, the compensation of our executives, including the Named Executive Officers, consisted of the following elements:

 

Base Salary

 

The base salaries of our Named Executive Officers are established based on the scope of their responsibilities, historical performance, and individual experience. Base salaries are reviewed annually, and adjusted each year as the Committee deems necessary and appropriate. Generally, salary adjustments are effective on January 1st of each year. We have not and do not intend to apply specific formulas to determine base salary adjustments.

 

In establishing the 2008 base salaries of our Named Executive Officers, the Committee took into consideration several factors, including each Named Executive Officer’s seniority, position, functional role and scope of responsibility as well as general economic conditions. In addition, the Committee increased the salaries of certain Named Executive Officers whom the Committee determined to be below market levels with regard to the base salaries of executives in comparable positions. As a result, the Committee took the following actions with respect to our Named Executive Officers:

 

 

Annual Incentive Compensation

 

The Committee has the authority to make cash incentive awards to our Named Executive Officers to reward the achievement of annual performance objectives. Typically, these awards are intended to compensate our Named Executive Officers for achieving financial objectives based on corporate objectives and other value-creating objectives with a time horizon of one year or less. Generally, awards are paid in the first quarter of each fiscal year for the prior fiscal year’s performance.

 

2008 Management Incentive Plan

 

In February 2008, the Committee, upon the recommendation of our President and Chief Executive Officer (except with respect to his own compensation), established individual target annual incentive compensation award opportunities for each of our Named Executive Officers under our 2008 Management Incentive Plan (the “2008 Incentive Plan”). These target award opportunities were determined based on a variety of factors, including the position and functional role, scope of responsibilities, and total compensation of each Named Executive Officer, and ranged from 32% to 63% of the respective Named Executive Officer’s annual base salary (excluding commissions). The target award opportunities for our Named Executive Officers, other than Mr. Bell, were weighted between financial (80%) and management (20%) objectives based on each Named Executive Officer’s anticipated contribution to our performance in 2008. The Committee, upon the recommendation of our President and Chief Executive Officer, selected a revenue target of $92.8 million (the “Revenue Target”) and the achievement of positive net income for the quarter ended December 31, 2008 (the “Profitability Target”), as the financial objectives under the 2008 Incentive Plan. The Committee altered the weighting of Mr. Bell’s target award opportunity based on his ability to participate in a commission sales arrangement, so as to balance his compensation between objectives. The Company’s audited financial statements for 2008 were used as the basis to determine the level of revenue achieved against the Revenue Target and for the achievement of the Profitability Target for purposes of the 2008 Incentive Plan.

For 2008, the target annual incentive compensation award opportunities and weightings for our Named Executive Officers were as follows:

 

 

 

 

The Committee has also set a threshold revenue target for 2008 at 75% of the Revenue Target (the “Threshold”), for the award of a portion of the target annual incentive compensation award allocated to the Revenue Target. If the Company’s revenue was less than the Threshold, the Named Executive Officers would not have received any portion of their target annual incentive compensation award opportunity allocated to the Revenue Target. The threshold award with respect to the financial objective that a Named Executive Officer could receive pursuant to the 2008 Incentive Plan was 3% of his target annual incentive compensation award opportunity associated with the achievement of the Threshold. To provide a way for the Committee to recognize a truly exceptional individual contribution, there was no defined maximum payment for the annual incentive compensation award attributable to the revenue portion of the financial objective or the management objectives.

 

The Committee views the annual incentive compensation awards as a reward for exceptional performance. Accordingly, the Committee generally sets the target performance level for the financial objective at a level that would only be achieved if Compellent continued to substantially improve on its past levels of performance, and if our executives perform at very high levels. As a result, we believe the Revenue Target and Profitability Target will be difficult to reach but is attainable with significant effort. In 2006 (the first year in which we had a similar type of plan in place), the financial objective was exceeded, which was a bookings number, and our Named Executive Officers were paid between 110% to 120% of their target amount. In 2007, 70% of the financial objective, which was a revenue target, was achieved and our Named Executive Officers were paid 70% of their target annual incentive compensation award opportunity allocated to the financial objective. Since our actual financial performance in any given fiscal year is dependent on a variety of conditions and factors, including our size and operating history relative to our competitors, the fierce competitive environment for customers, and the overall financial climate in the United States, the Committee believed that meeting our Revenue Target and Profitability Target for the year would present a significant challenge for our executives, but would not entail taking inappropriate risks. The Committee further believed that the financial objective under the 2008 Incentive Plan would be difficult to achieve as it represented a significant increase over our actual 2007 performance and required a high level of execution and performance by our Named Executive Officers in order to receive the full target incentive compensation award.

 

Financial Objectives

 

Under the 2008 Incentive Plan, our Named Executive Officers were to be paid on tiered scale as follows:

 

 

 

Additionally, our Named Executive Officers were eligible to receive 20% of their target annual incentive compensation award if the Company achieved the Profitability Target.

 

For 2008, we recognized revenue of $90.9 million and achieved positive net income in the quarter ended December 31, 2008, as a result, our Named Executive Officers earned the following amounts, which represented in the aggregate 80% of the target award opportunity, under the financial objectives portion of the 2008 Incentive Plan:

 

 

Management Objectives

 

In February 2009, the Committee evaluated our Named Executive Officers’ performance to make its decisions about the remainder of the annual incentive compensation awards payable under the 2008 Incentive Plan. These awards were based on a thorough review of Company performance, as well as consideration of the Named Executive Officers’ performance against the following management objectives:

 

 

While, generally, the Committee considered the Named Executive Officers as a group on the basis of their performance against these objectives, under the 2008 Incentive Plan it also had the discretion to consider and weigh each executive’s individual contribution to the achievement of the objectives and his personal impact on the business and to increase or decrease the portion of the executive’s award based on this assessment. The Committee exercised this discretion with respect to the 2008 Incentive Plan in recognition of the contribution of each Named Executive Officer to our business, including executing on Compellent’s business plan in a challenging macro-economic environment, by compensating each Named Executive Officer at a range between approximately 230% and 315% of their target award opportunity for the achievement of the management objectives under the 2008 Incentive Plan, with actual award amounts ranging between approximately $44,000 and $119,000.

 

The Committee determined that our executives had significantly exceeded the management objectives under the 2008 Incentive Plan, based, in part, on the following:

 

 

 

Compellent would not have achieved its record year without high levels of performance from each of our Named Executive Officers. More specifically, Mr. Soran exceeded goals relating to strategic management of the business, increasing business momentum, management of inside and outside advisors and the recruitment of an outside member of the board of directors. Mr. Judd exceeded goals relating to expense management, financial forecasting and organizational management, implementation of internal controls for compliance with the Sarbanes-Oxley Act of 2002 and progress against other public company management initiatives. Mr. Guider exceeded goals relating to engineering management and hiring, product deliverables and timelines and product development and manufacturing strategies. Mr. Aszmann exceeded goals relating to technology leadership, product deliverables and timelines, cross-organization coordination and disaster recovery plan expansion. Mr. Bell exceeded goals related to service revenue, sales management and hiring, strategic planning and cross-organization coordination.

 

As a result, our Named Executive Officers were paid the following amounts under the management objectives portion of the 2008 Incentive Plan:

 

 

 

 

Under the 2008 Incentive Plan, the Committee retained the discretion to increase, reduce, or eliminate annual incentive compensation awards or make awards even if the financial or management objectives are not achieved. As described above, the Committee exercised this discretion with respect to the 2008 Incentive Plan to increase the amounts payable for the achievement of the management objectives portion of the plan for each of our Named Executive Officers.

 

Commission Sales Plan

 

Mr. Bell, our Vice President, Worldwide Sales, also participates in a commission sales plan whereby he receives cash compensation on a monthly basis in an amount determined by the dollar amount of the Company’s monthly sales. The commission plan is intended to directly tie Mr. Bell’s compensation to the Company’s sales results. Pursuant to the commission sales plan, Mr. Bell receives a base commission amount on a monthly basis calibrated to match a pre-determined baseline monthly sales amount. The commission amount Mr. Bell receives increases or decreases if the Company’s actual monthly sales are above or below the monthly baseline amount. In 2008, Mr. Bell earned $137,080 pursuant to the commission sales plan, which is characterized as non-equity plan incentive compensation in the “Summary Compensation Table.”

 

Discretionary Bonuses

 

The Committee has the authority to award discretionary bonuses to our Named Executive Officers from time to time. The Committee did not award any discretionary bonuses to any of the Named Executive Officers in 2008.

 

Long-Term Incentive Compensation

 

We believe that long-term performance is achieved through an ownership culture that encourages such performance by our Named Executive Officers through the use of equity-based awards. Our equity compensation

plans have been established to provide our employees, including our Named Executive Officers, with incentives to help align their interests with the interests of our stockholders. The Committee believes that the use of equity and equity-based awards offers the best approach to achieving our overall compensation goals. Throughout our history, the Committee has used stock options as its sole long-term equity incentive award.

 

Typically, the Committee makes decisions with respect to the grant of stock options to our Named Executive Officers, taking into consideration the recommendations of our President and Chief Executive Officer (except with respect to his own compensation). The size of these option awards reflects past individual and Company performance, expected future contribution, the retention value of unvested stock and stock options held by each Named Executive Officer, and the estimated value of the awards compared with equity awards offered to executives in similar positions by companies within and outside our industry.

 

In February 2008, in connection with the Committee’s annual review of the Named Executive Officer’s performance for the prior year and in establishing compensation for 2009 the Committee granted stock option awards to our Named Executive Officers. The exercise price of each of the stock option grants is equal to the closing price of Compellent common stock on the date of grant as reported by the New York Stock Exchange Arca, or $8.64 per share. The awards vest over a period of four years in equal monthly installments. The following table sets forth number of shares of each stock option awarded to the Named Executive Officers on February 19, 2008:

 

 

We have not adopted stock ownership guidelines, and, other than for our co-founders, our equity compensation plans have provided the primary means for our Named Executive Officers to acquire equity or equity-based interests in Compellent.

 

Equity Award Practices

 

In November 2007, the Committee adopted an equity awards policy, or Equity Awards Policy, that requires us to grant equity awards in accordance with certain guidelines. In accordance with this policy, the exercise price for all equity awards will be the “Fair Market Value” of our common stock as determined in accordance with the terms of our 2007 Equity Incentive Plan, which is the closing market price for our common stock as reported on the NYSE on the grant date.

 

New Hire Grants

 

Pursuant to the Equity Awards Policy, the Committee has delegated to either Mr. Soran, our President and Chief Executive Officer, or Mr. Guider, our Chief Operating Officer, the authority to grant stock options to new hires who are not persons subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended, or the Excluded Persons, and Mr. Soran the authority to grant stock options to Excluded Persons on a quarterly basis to reward exceptional performance. With respect to the new hire grants, these options must be granted on the date on which each such employee commences employment with us, regardless of whether a blackout period under our insider trading policy is in effect, and, with respect to the quarterly grants, on the date approved by Mr. Soran. New hire grants to Excluded Persons must be approved by the Committee at a meeting of the Committee or through action by unanimous written consent and may only be made when a blackout period under our insider trading policy is not in effect. No employee may be granted an equity award with a grant date prior to date that such person commenced employment with us.

Annual Grants

 

Pursuant to the Equity Awards Policy, annual equity awards for executive officers must generally be approved by the Committee at a regular meeting of the Committee. Such annual equity awards will be granted on the third business day following the public release of our prior fiscal year financial results, which generally occurs in the second week of February of each year, regardless of whether a blackout period under our insider trading policy is in effect

 

We have not repriced outstanding stock options, nor have we replaced options where our stock price has declined following the grant date.

 

Other Compensation and Benefits

 

Welfare Benefits

 

We provide a number of benefit programs to meet the health care and welfare needs of our employees and their families, including medical and prescription drug coverage, dental and vision programs, short-term disability insurance, long-term disability insurance, accidental death and dismemberment insurance, medical and dependent care flexible spending accounts, and group life insurance, as well as customary vacation, paid holiday, leave of absence, and other similar policies. Our Named Executive Officers are eligible to participate in these programs on the same basis as our other salaried employees.

 

Perquisites

 

We provide Messrs. Soran, Aszmann, and Guider, our co-founders, with an annual allowance of $1,000 for a medical physical examination. In 2008, only Mr. Aszmann used this allowance. The Committee has not found it necessary for the attraction or retention of our Named Executive Officers to provide them with perquisites or other personal benefits except as described in the preceding sentence. In the future, the Committee, in its discretion, may revise, amend, or add to any Named Executive Officer’s perquisites and other personal benefits as it deems advisable.

 

Retirement Benefits

 

Other than the tax-qualified Section 401(k) plan described below, we do not currently maintain, nor do we have plans to provide, pension arrangements, retirement plans, or nonqualified deferred compensation plans for our Named Executive Officers.

 

Employee Stock Purchase Plan

 

In conjunction with the initial public offering of shares of our common stock, we implemented a tax-qualified Section 423 employee stock purchase plan for our employees. The Named Executive Officers are eligible to participate in this plan on the same basis as our other salaried employees.

 

Section 401(k) Plan

 

We maintain a defined contribution employee retirement plan, or 401(k) plan, for our U.S. employees. Our Named Executive Officers are also eligible to participate in the 401(k) plan on the same basis as our other U.S. employees. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the Code. The plan provides that each participant may contribute up to the statutory limit, which was $15,500 for calendar year 2008. Participants that are 50 years or older can also make “catch-up” contributions, which in calendar year 2009 may be up to an additional $5,000 above the statutory limit. The plan permits us to make discretionary contributions and matching contributions, subject to established limits and a vesting schedule. In 2008, we did not make any discretionary or matching contributions to the 401(k) plan on behalf of our Named Executive Officers.

Employment Agreements

 

In connection with the founding of Compellent in 2002, Mr. Soran, our President and Chief Executive Officer, Mr. Guider, our Chief Operating Officer, and Mr. Aszmann, our Chief Technology Officer, executed employment agreements setting out the material terms of their employment with Compellent. These agreements were modified and restated in August 2007 and again in June 2008. In addition, in June 2008, we entered into an employment agreements with Mr. Judd, our Chief Financial Officer, and Mr. Bell, our Vice President, Worldwide Sales. Generally, these agreements provide that these executives are “at will” employees and that, for a period of six months following their termination of employment, they will be subject to certain restrictions on competition with Compellent and on the solicitation of our employees, customers, and clients. These agreements also provide these executives with certain severance and change-in-control benefits, as described below.

 

The material terms of the employment agreements with our Named Executive Officers are described below under “Executive Compensation — Narrative to Summary Compensation Table and Grants of Plan Based Award Table — Employment Agreements” below.

 

Severance Arrangements

 

Our Named Executive Officers, other than Mr. Bell, are entitled to a lump sum payment equal to six months of base salary and payments for six months of continued health insurance coverage, subject to such Named Executive Officer’s execution of a binding release of claims, if his employment with us is terminated. Mr. Bell is entitled to a lump sum payment equal to four months of base salary and payments for four months of continued health insurance coverage, subject to his execution of a binding release of claims, if his employment with us is terminated. The material terms of these arrangements are described under “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” below.

 

The Committee believes that these payments and benefits are an essential element of our executive compensation program and assist us in recruiting and retaining talented individuals. The Committee approved these arrangements in light of its member’s experience with executive employment terminations. In setting the terms of and determining whether to approve such arrangements, the Committee recognized that executives often face challenges securing new employment following termination of employment. The severance payments and benefits are composed of cash payments and continued health care coverage for a limited period of time. The cash payments and benefits coverage correspond to the period of time that the Committee believes it would take the affected Named Executive Officer to obtain employment following their separation from Compellent.

 

Change-in-Control Arrangements

 

The employment agreements with our Named Executive Officers provide for the full acceleration of vesting of any outstanding unvested equity awards if such Named Executive Officer is terminated without cause or resigns for good reason within three months prior to or 18 months following a change-in-control of the company. Under our 2007 Equity Incentive Plan, all employees, including our Named Executive Officers, may also be entitled to accelerated vesting of a portion of their outstanding stock awards upon a change-in-control of Compellent in the event their stock awards are not assumed by the acquiror. The material terms of these arrangements are described under “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” below.

 

The Committee provided this benefit to our Named Executive Officers in connection with the amendment and restatement of Messrs. Aszmann’s, Guider’s and Soran’s employment agreements and the entry into employment agreements with Messrs. Bell and Judd. The Committee determined that this benefit was an essential element of our executive compensation program and would assist us in retaining our executives and reward our current Named Executive Officers’ for their value to the company. The Committee approved the change-in-control benefit in light of its member’s experience with executive employment agreements and change-in-control transactions.

 

Tax and Accounting Considerations

 

Section 162(m) of the Code limits the amount that we may deduct from our federal income taxes for remuneration paid to our President and Chief Executive Officer and our three other most highly compensated

executive officers (other than our Chief Financial Officer) to $1 million per executive per year, unless certain requirements are met. Section 162(m) provides an exception from this deduction limitation for certain forms of “performance-based compensation,” which includes the gain recognized by an executive upon the exercise of qualifying compensatory stock options.

 

We believe that the stock options that we have granted in the past to our executives have satisfied this exception under Section 162(m). While the Committee has not adopted a formal policy regarding the tax deductibility of the compensation paid to our executives, it intends to consider this deductibility issue under Section 162(m) as a factor in future compensation decisions.

 

We adopted Statement of Financial Accounting Standards No. 123R on January 1, 2006. SFAS No. 123R establishes the accounting treatment for stock-based awards exchanged for employee services. Generally, stock-based compensation cost is measured at grant date, based on an award’s “fair value,” and is recognized for financial reporting purposes as an expense over the requisite employee service period. The Committee has determined that, for the foreseeable future, the sole component of our long-term incentive compensation program will consist of stock options. Therefore, we will record this compensation expense in our financial statements on an ongoing basis according to SFAS No. 123R.

 

Summary Compensation Table

 

The following table shows for the years ended December 31, 2008, 2007 and 2006, compensation awarded to or paid to, or earned by, our Named Executive Officers.

 

 

 

 

 

Grants of Plan-Based Awards Table For 2008

 

The following table shows certain information regarding grants of plan-based awards made to our Named Executive Officers during the year ended December 31, 2008:

 

 

 

 

Narrative to Summary Compensation Table and Grants of Plan-Based Award Table

 

Employment Agreements

 

We are party to the following employment agreements with our Named Executive Officers:

 

Philip E. Soran.  In June 2008, we amended and restated our employment agreement with Mr. Soran, our President and Chief Executive Officer. Mr. Soran’s employment agreement provides that he is an “at-will” employee and his employment may be terminated at any time by us or Mr. Soran. For a period of six months after his termination of employment, Mr. Soran will be subject to certain restrictions on competition with us and on the solicitation of our employees, customers and clients. Mr. Soran’s employment agreement also entitles him to an annual allowance of

$1,000 for a medical physical examination, to participate in our cash incentive program and to participate in our general employee benefit plans in accordance with the terms and conditions of such plans. The employment agreement also provides Mr. Soran with certain severance benefits and change-in-control benefits. Mr. Soran’s employment agreement with us contains a “best after tax” provision in the event that Mr. Soran’s compensation in connection with a change-in-control of the company is subject to excise tax under the Code. Pursuant to such provision, Mr. Soran shall be entitled to the “best after tax” result in connection with any payments or benefits received by him from us in connection with a change-in-control. See “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

John R. Judd.  In June 2008, we entered into an employment agreement with Mr. Judd, our Chief Financial Officer. Mr. Judd’s employment agreement provides that he is an “at-will” employee and his employment may be terminated at any time by us. For a period of one year after his termination of employment, Mr. Judd will be subject to certain restrictions on competition with us and on the solicitation of our employees, customers and clients. Mr. Judd’s employment agreement also entitles him to participate in our cash incentive program and to participate in our general employee benefit plans in accordance with the terms and conditions of such plans. The employment agreement also provides Mr. Judd with certain severance benefits and change-in-control benefits. Mr. Judd’s employment agreement with us contains a “best after tax” provision in the event that Mr. Judd’s compensation in connection with a change-in-control of the company is subject to excise tax under the Code. Pursuant to such provision, Mr. Judd shall be entitled to the “best after tax” result in connection with any payments or benefits received by him from us in connection with a change-in-control. See “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

John P. Guider.  In June 2008, we amended and restated our employment agreement with Mr. Guider, our Chief Operating Officer. Mr. Guider’s employment agreement provides that he is an “at-will” employee and his employment may be terminated at any time by us or Mr. Guider. For a period of six months after his termination of employment, Mr. Guider will be subject to certain restrictions on competition with us and on the solicitation of our employees, customers and clients. Mr. Guider’s employment agreement also entitles him to an annual allowance of $1,000 for a medical physical examination, to participate in our cash incentive program and to participate in our general employee benefit plans in accordance with the terms and conditions of such plans. The employment agreement also provides Mr. Guider with certain severance benefits and change-in-control benefits. Mr. Guider’s employment agreement with us contains a “best after tax” provision in the event that Mr. Guider’s compensation in connection with a change-in-control of the company is subject to excise tax under the Code. Pursuant to such provision, Mr. Guider shall be entitled to the “best after tax” result in connection with any payments or benefits received by him from us in connection with a change-in-control. See “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

Lawrence E. Aszmann.  In June 2008, we amended and restated our employment agreement with Mr. Aszmann, our Chief Technology Officer. Mr. Aszmann’s employment agreement provides that he is an “at-will” employee and his employment may be terminated at any time by us or Mr. Aszmann. For a period of six months after his termination of employment, Mr. Aszmann will be subject to certain restrictions on competition with us and on the solicitation of our employees, customers and clients. Mr. Aszmann’s employment agreement also entitles him to an annual allowance of $1,000 for a medical physical examination, to participate in our cash incentive program and to participate in our general employee benefit plans in accordance with the terms and conditions of such plans. The employment agreement also provides Mr. Aszmann with certain severance benefits and change-in-control benefits. Mr. Aszmann’s employment agreement with us contains a “best after tax” provision in the event that Mr. Aszmann’s compensation in connection with a change-in-control of the company is subject to excise tax under the Code. Pursuant to such provision, Mr. Aszmann shall be entitled to the “best after tax” result in connection with any payments or benefits received by him from us in connection with a change-in-control. See “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

Brian P. Bell.  In June 2008, we entered into an employment agreement with Mr. Bell, our Vice President, Worldwide Sales. Mr. Bell’s employment agreement provides that he is an “at-will” employee and his employment may be terminated at any time by us. For a period of one year after his termination of employment, Mr. Bell will be subject to certain restrictions on competition with us and on the solicitation of our employees, customers and clients. Mr. Bell’s employment agreement also entitles him to participate in our cash incentive program and to participate in

our general employee benefit plans in accordance with the terms and conditions of such plans. The employment agreement also provides Mr. Bell with certain severance benefits and change-in-control benefits. Mr. Bell’s employment agreement with us contains a “best after tax” provision in the event that Mr. Bell’s compensation in connection with a change-in-control of the company is subject to excise tax under the Code. Pursuant to such provision, Mr. Bell shall be entitled to the “best after tax” result in connection with any payments or benefits received by him from us in connection with a change-in-control. See “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

Annual Cash Incentive Compensation

 

The 2008 Incentive Plan provides for annual cash bonus awards to reward our Named Executive Officers for performance in the prior year. For more information regarding our 2008 Incentive Plan, see the section of the Compensation Discussion and Analysis titled “Executive Compensation — Annual Incentive Compensation — 2008 Management Incentive Plan.”

 

Equity Compensation

 

Consistent with its practices for awarding stock options described in the Compensation Discussion and Analysis above, the Compensation Committee approved equity compensation awards in the form of stock options to each of our Named Executive Officers in February 2008. For more information regarding the equity compensation awards and our equity award practices, please see the section of the Compensation Discussion and Analysis titled “Executive Compensation — Annual Incentive Compensation — Long-Term Incentive Compensation.” In addition, the Named Executive Officers’ equity compensation awards may, under certain circumstances, be subject to accelerated vesting in the event of a change-in-control of Compellent. For more information regarding the accelerated vesting provisions and treatment of the equity compensation awards in the event of a change-in-control, see the section titled “Executive Compensation — Potential Payments upon Termination or Change-in-Control” below.

 

Other Benefits

 

For a description of the other elements of our executive compensation program, see the section of the Compensation Discussion and Analysis titled “Executive Compensation — Other Compensation and Benefits.”

Outstanding Equity Awards Table At December 31, 2008

 

The following table shows certain information regarding outstanding equity awards at December 31, 2008 held by our Named Executive Officers.

 

 

 

 

Options Exercised and Stock Vested Table in 2008

 

Our Named Executive Officers did not exercise any vested stock options in 2008. The following table shows for the year ended December 31, 2008, certain information regarding the vesting of stock awards held by our Named Executive Officers:

 

 

 

 

Potential Payments Upon Termination or Change-in-Control

 

Severance Benefits

 

Compellent’s employment agreements with its Named Executive Officers provide that if we terminate such Named Executive Officer’s employment without cause, and other than as a result of death or disability, or such Named Executive Officer resigns for good reason, the Named Executive Officer is entitled to receive a lump sum payment equal to six months of base salary and payments for six months of continued health insurance coverage, other than Mr. Bell who is entitled to a lump sum payment equal to four months of base salary and payments for four months of continued health insurance coverage, subject to the Named Executive Officer’s execution of a binding

release of claims. For purposes of the Named Executive Officers’ employment agreements, any such Named Executive Officer will be terminated automatically, and such termination will be considered for cause, in the event:

 

 

For purposes of the Named Executive Officers’ employment agreements, any such Named Executive Officer will be deemed to have been terminated for good reason if following the occurrence of any of the following events, the Named Executive Officer provides written notice of the event within 30 days, we fail to reasonably cure such event within 30 days thereafter and the Named Executive Officer’s resignation is effective not later than 30 days after such cure period:

 

 

Upon termination of employment, each Named Executive Officer has agreed not to compete with us for six months following such termination under the terms and conditions of the respective employment agreement.

 

Change-in-Control

 

In June 2008, in connection with the amendment and restatement of Messrs. Aszmann, Guider and Soran’s employment agreements and the entry into employment agreements with Messrs. Bell and Judd we provided each Named Executive Officer’s employment agreement a change-in-control benefit providing for the full acceleration of vesting of all outstanding equity awards held by such Named Executive Officer if such Named Executive Officer is terminated without cause or resigns for good reason within three months prior to or 18 months following a change-in-control of the company. In addition to this benefit, each of the Named Executive Officers will also receive the severance benefit of a lump sum payment equal to six months of base salary and payments for six months of continued health insurance coverage, other than Mr. Bell who is entitled to a lump sum payment equal to four

months of base salary and payments for four months of continued health insurance coverage, subject to the Named Executive Officer’s execution of a binding release of claims. These benefits are provided to motivate our Named Executive Officers to act in the best interests of our stockholders when negotiating a corporate transaction by removing the distraction of post-change-in-control uncertainties faced by our Named Executive Officers with regard to their continued employment.

 

Under our 2007 Equity Incentive Plan, in the event of a corporate transaction or a change-in-control, outstanding stock awards held by our employees, consultant or directors, including our Named Executive Officers, may be assumed, continued, or substituted by the surviving corporation. If the surviving corporation does not assume, continue, or substitute such stock awards, then under our 2007 Equity Incentive Plan (a) any stock awards that are held by individuals performing services for us immediately prior to the effective time of the transaction, the vesting and exercisability provisions of such stock awards will be accelerated in full and such stock awards will be terminated if not exercised prior to the effective date of the corporate transaction or change-in-control, and (b) all other outstanding stock awards will be terminated if not exercised on or prior to the effective date of the corporate transaction or change-in-control.

 

Potential Payments Upon Termination or Change-in-Control.  The following table illustrates the potential payments to our Named Executive Officers in connection with their (i) respective terminations without cause or resignation for good reason and (ii) respective terminations without cause or resignation for good reason within three months prior to or 18 months following a change-in-control of the company, as if such termination, resignation or change-in-control occurred as of December 31, 2008:

 

 

 

 

Compensation Committee Report

 

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis, or CD&A, contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this proxy statement and incorporated into our Annual Report on Form 10-K for the year ended December 31, 2008.

 

Charles Beeler (Chair)
R. David Spreng
Sven A. Wehrwein

 

The material in this report is not “soliciting material,” is furnished to, but not deemed “filed” with, the SEC and is not deemed to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, other than our Annual Report on Form 10-K, where it shall be deemed to be “furnished,” whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, expect to the extent specifically incorporated by referenced therein.

 

Equity Compensation Plan Information

 

The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2008:

 

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information regarding the ownership of our common stock as of April 1, 2009 by:

 

 

Unless otherwise indicated, the address for each of the beneficial owners in the table below is c/o Compellent Technologies, Inc., 7625 Smetana Lane, Eden Prairie, Minnesota, 55344.

 

 

 

CERTAIN TRANSACTIONS WITH RELATED PERSONS

 

Related-Person Transactions Policy and Procedures

 

Pursuant to Compellent’s Code of Business Conduct and Ethics, our executive officers, directors, and principal stockholders, including their immediate family members and affiliates, are not permitted to enter into a related party transaction with us without the prior consent of our Audit Committee, or other independent committee of our Board in the case it is inappropriate for our Audit Committee to review such transaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director, principal stockholder, or any of such persons’ immediate family members or affiliates, in which the amount involved exceeds $120,000 must first be presented to our Audit Committee for review, consideration and approval. All of our directors, executive officers and employees are required to report to our Audit Committee any such related party transaction. In approving or rejecting the proposed transaction, our Audit Committee shall consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. Our Audit Committee will approve only those agreements that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our Audit Committee determines in the good faith exercise of its discretion. All of the transactions described below were entered into prior to the adoption of our Code of Business Conduct and Ethics and were approved by our Board.

 

Certain Related-Person Transactions

 

Third Amended and Restated Investor Rights Agreement

 

Compellent and the prior holders of our preferred stock, including entities with which certain of our directors are affiliated, have entered into an investor rights agreement pursuant to which these stockholders are entitled to certain rights with respect to the registration of their shares. As of December 31, 2008, the holders of 10,691,711 shares of our common stock were entitled to such rights.

 

Employment Agreements

 

We have entered into employment agreements with our certain of our executive officers. See “Executive Compensation — Narrative to Summary Compensation Table and Grants of Plan Based Award Table — Employment Agreements.”

 

Stock Option Grants to Executive Officers and Directors

 

We have granted stock options to our executive officers and our non-employee directors. See “Executive Compensation” and “Information Regarding Our Board of Directors and Corporate Governance — Director Compensation.”

 

Indemnification Agreements with Executive Officers and Directors

 

We have entered into an indemnification agreement with each of our directors and executive officers. These indemnification agreements and our certificate of incorporation and our bylaws indemnify each of our directors and officers to the fullest extent permitted by Delaware General Corporation Law.

 

HOUSEHOLDING OF PROXY MATERIALS

 

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience stockholders and cost savings for companies.

 

This year, a number of brokers with account holders who are Compellent stockholders will be “householding” our proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless

contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report, please notify your broker. Direct your written request to Compellent Technologies, Inc., Corporate Secretary, 7625 Smetana Lane, Eden Prairie, Minnesota 55344 or contact the Corporate Secretary at (877) 715-3300. Stockholders who currently receive multiple copies of the proxy statement at their addresses and would like to request “householding” of their communications should contact their brokers.

 

OTHER MATTERS

 

Our Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.

 

By Order of the Board of Directors

 

Lawrence E. Aszmann

Secretary

 

April 17, 2009

 

A copy of our Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC, is being furnished to stockholders concurrently herewith. A stockholder may submit a written request for an additional copy of the Annual Report on Form 10-K for the year ended December 31, 2008 to: Secretary, Compellent Technologies, Inc., 7625 Smetana Lane, Eden Prairie, Minnesota 55344.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:		M13927-P77148		KEEP THIS PORTION FOR YOUR RECORDS
				DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and Annual Report are available at www.compellent.com/proxy.

M13928-P77148