2008 Management Incentive Plan

EXHIBIT 10.18

COMPELLENT TECHNOLOGIES, INC.
2008 MANAGEMENT INCENTIVE PLAN

Overview

The 2008 Management Incentive Plan (the “Plan”) of Compellent Technologies, Inc. (the “Company”) is designed to motivate, retain and reward its management through a combination of corporate and individual performance-based incentive compensation components. The members of the Company’s management team designated by the Compensation Committee of the Company’s Board of Directors (the "Committee”) in its sole discretion (each a “Participant”), employed at the Company during 2008 and an employee as of December 31, 2008 (unless otherwise determined by the Committee), shall be eligible to participate in the Plan. The Plan is administered by the Committee in its sole discretion. For purposes of this Plan, “2008” shall mean the calendar year ending December 31, 2008.

The Plan is designed to award a cash incentive payment (each a “Cash Payment”) for performance in 2008 to a Participant: (i) if the Company achieves a certain net income objective (the “Net Income Target”); (ii) if the Company achieves certain revenue objectives (the “Revenue Target”) and/or (iii) if the Participant achieves certain individual performance objectives (the “Individual Targets”).

Determination of 2008 Cash Payments

For 2008, if the Net Income Target, the Revenue Target and all of a Participant’s Individual Targets are achieved, a Participant will receive 100% of his or her eligible Cash Payment (the "Cash Payment Target Amount”). Under the Plan, the Cash Payment Target Amounts range from 32% to 62.5% of a Participant’s annual base salary, depending on the management position and responsibilities of the Participant within the Company.

The Committee has determined that each Participant’s Cash Payment Target Amount will be allocated twenty percent (20%) to the achievement of the Net Income Target (the “Net Income Cash Payment”), sixty percent (60%) to the achievement of the Revenue Target (the “Revenue Cash Payment”) and twenty percent (20%) to the achievement of the Individual Targets (the “Individual Cash Payment”). The Committee retains the discretion to reallocate a Participant’s Cash Payment Target Amount in its sole discretion based on a partial year of service or otherwise.

Net Income Cash Payment

The Committee has set the Net Income Target for the Participants, based on achievement by the Company of positive net income for the quarter ended December 31, 2008, which shall be determined based on a U.S. generally accepted accounting principles (“GAAP”) basis. The Company’s audited GAAP financial statements for 2008 shall determine whether or not the Company has achieved positive net income for purposes under this Plan.

The actual Net Income Cash Payments to be made to Participants hereunder for 2008 shall be made at the discretion of the Committee. If a Participant does not receive a Net Income Cash Payment, he or she may still be eligible to receive all or a portion of the Revenue Cash Payment and/or the Individual Cash Payment, as described more fully below.

Revenue Cash Payment

The Committee has set the Revenue Target for the Participants, based on achievement of certain 2008 revenue targets. The Company’s audited GAAP financial statements for 2008 shall determine the level of revenue achieved against the Revenue Target for purposes of this Plan. The Committee has also set a threshold revenue target for 2008 at 75% of the Revenue Target, for the award of a portion of the Revenue Cash Payment (the “Threshold”). If the Company’s revenue is less than the Threshold, a Participant will not receive any portion of his or her Revenue Cash Payment (unless otherwise determined by the Committee). If the Company’s revenue exceeds the Threshold, the Participant shall be entitled to a portion of his or her Revenue Cash Payment in accordance with the schedule set forth below:

Portion of the Revenue Cash Payment		Portion of the Revenue Target
3% of the Revenue Cash Payment for each 1% of revenue recognized		75-80% of the Revenue Target
4% of the Revenue Cash Payment for each 1% of revenue recognized		85-90% of the Revenue Target
5% of the Revenue Cash Payment for each 1% of revenue recognized		90-100% of the Revenue Target
6% of the Revenue Cash Payment for each 1% of revenue recognized		Over 100% of the Revenue Target

There is no maximum Revenue Cash Payment under the Plan.

The actual Revenue Cash Payments to be made to Participants hereunder for 2008 shall be made at the discretion of the Committee. If a Participant does not receive a Revenue Cash Payment, he or she may still be eligible to receive the Net Income Cash Payment, as outlined above, and/or all or a portion of the Individual Cash Payment, as described more fully below.

Individual Cash Payment

The Committee has set the Individual Targets for the Participants, based on the achievement of certain individual performance objectives. For the Chief Executive Officer, the Individual Target shall be set by the Committee. For the Participants, other than the Chief Executive Officer, the Individual Targets shall be set by the Committee based upon recommendations made by the Chief Executive Officer. An Individual Cash Payment may be awarded to a Participant based on the achievement of his or her Individual Targets or other criteria determined by the Committee.

The actual Individual Cash Payments to be made to Participants for 2008 shall be shall be determined as follows:

	•		For the Chief Executive Officer, the Committee shall determine if the Individual Targets have been achieved and shall determine the amount of the Individual Cash Payment; and
	•		For the Participants other than the Chief Executive Officer, the Committee, based on input from the Chief Executive Officer, shall determine if the Individual Targets have been achieved by each other Participant and shall determine the amount of the Individual Cash Payments for each other Participant.

If a Participant does not receive a Individual Cash Payment, he or she may still be eligible to receive the Net Income Cash Payment and/or all or a portion of the Revenue Cash Payment, as outlined above. There is no maximum Individual Cash Payment under the Plan.

Miscellaneous Provisions

If any of the Company’s financial statements are required to be restated resulting from errors, omissions or fraud, the Committee may (in its sole discretion, but acting in good faith) direct that the Company recover all or a portion of a Cash Payment under this Plan if the financial results of the Company for the year ended December 31, 2008 are negatively affected by such restatement. The amount to be recovered from the Participant shall be the amount by which a Cash Payment exceeded the amount that would have been payable to the Participant had the financial statements been initially filed as restated, or any greater or lesser amount (including, but not limited to, the Cash Payment) that the Committee shall determine. In no event shall the amount to be recovered by the Company be less than the amount required to be repaid or recovered as a matter of law. The Committee shall determine whether the Company shall effect any such recovery (i) by seeking repayment from the Participant, (ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the Participant under any compensatory plan, program or arrangement maintained by the Company or any of its affiliates, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (iv) by any combination of the foregoing.

Cash Payments under this Plan shall be made on such schedule as may be approved by the Committee in its discretion.

Participation in the Plan shall not alter in any way the at will nature of the Company’s employment of a Participant, and such employment may be terminated at any time for any reason, with or without cause and with or without prior notice.

The Board of Directors or the Committee may amend or terminate this Plan at any time. Further, the Board of Directors or the Committee may modify the Net Income Target, the Revenue Targets, the Individual Targets, the Cash Payment Target Amounts and/or the Net Income, Revenue and/or Individual Cash Payment Amounts at any time.

The Plan shall be interpreted in accordance with Delaware law without reference to conflicts of law principles.