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Double-Take Software DEF 14A 2008
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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
Section 240.14a-12
Double-Take Software, Inc.
(Name of Registrant as Specified
In Its Charter)
Payment of Filing Fee (Check the appropriate box):
DOUBLE-TAKE
SOFTWARE, INC.
257 Turnpike Road, Suite 210 Southborough, Massachusetts 01772
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
MAY 23, 2008
To Our Stockholders:
You are cordially invited to attend our 2008 Annual Meeting of
Stockholders, which will be held on Friday, May 23, 2008,
at 9:00 a.m. local time, at The Harvard Club of Boston
located at 374 Commonwealth Avenue, Boston, Massachusetts, 02215
for the following purposes:
1. to elect five members of the Board of Directors;
2. to ratify the appointment of Eisner LLP as the
independent registered public accounting firm for the Company
for the fiscal year ending December 31, 2008; and
3. to consider any other matters that properly come before
the Annual Meeting or any adjournment or postponement thereof.
Management is presently aware of no other business to come
before the Annual Meeting.
Each outstanding share of Double-Take Software, Inc. common
stock (NASDAQ: DBTK) entitles the holder of record at the close
of business on March 31, 2008, to receive notice of and to
vote at the Annual Meeting or any adjournment or postponement of
the Annual Meeting. Shares of our common stock can be voted at
the Annual Meeting only if the holder is present in person or by
valid proxy. We have enclosed a copy of our Proxy Statement and
our 2007 Annual Report on
Form 10-K,
which includes financial statements. Management cordially
invites you to attend the Annual Meeting.
Please note that space limitations make it necessary to limit
attendance to stockholders and one guest. Registration and
seating will begin at 8:30 a.m. local time. Stockholders
holding stock in brokerage accounts (“street name”
holders) will need to bring to the meeting a letter from the
broker, bank or other nominee confirming their beneficial
ownership of the shares to be voted. Cameras, recording devices
and other electronic devices will not be permitted at the
meeting.
By Order of the Board of Directors
S. Craig Huke
Corporate Secretary
April 21, 2008
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND IN
PERSON, WE URGE YOU TO VOTE YOUR SHARES AT YOUR EARLIEST
CONVENIENCE. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE
ANNUAL MEETING. PROMPTLY VOTING YOUR SHARES BY SIGNING, DATING
AND RETURNING THE ENCLOSED PROXY CARD WILL SAVE US THE EXPENSE
AND EXTRA WORK OF ADDITIONAL SOLICITATION. AN ADDRESSED ENVELOPE
FOR WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES
IS ENCLOSED. SUBMITTING YOUR PROXY NOW WILL NOT PREVENT YOU FROM
VOTING YOUR SHARES AT THE MEETING IF YOU DESIRE TO DO SO, AS
YOUR PROXY IS REVOCABLE AT YOUR OPTION. YOUR VOTE IS IMPORTANT,
SO PLEASE ACT TODAY.
DOUBLE-TAKE
SOFTWARE, INC.
257 Turnpike Road, Suite 210 Southborough, Massachusetts 01772
This Proxy Statement (the “Proxy Statement”), which
was first mailed to stockholders on or about April 21,
2008, is furnished in connection with the solicitation of
proxies by the Board of Directors (the “Board”) of
Double-Take Software, Inc. (hereinafter, “we”
“us” “Company” and “Double-Take
Software”), to be voted at the Annual Meeting of
Stockholders (the “Annual Meeting”) and at any
adjournment or postponement of the Annual Meeting, which will be
held at 9:00 a.m. local time on Friday May 23, 2008,
at The Harvard Club of Boston located at 374 Commonwealth
Avenue, Boston, Massachusetts, 02215, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders.
ABOUT THE
ANNUAL MEETING
The purpose of the Annual Meeting is for our stockholders to
consider and act upon the proposals described in this Proxy
Statement and any other matters that properly come before the
Annual Meeting or any adjournment or postponement thereof.
Management is presently aware of no other business to come
before the Annual Meeting. In addition, management will report
on the performance of Double-Take Software and respond to
questions from stockholders.
There are two proposals scheduled to be voted upon at the Annual
Meeting. The two proposals for stockholders to consider and vote
upon are:
In addition, any other matters that properly come before the
Annual Meeting or any adjournment or postponement thereof will
be considered. Management is presently aware of no other
business to come before the Annual Meeting.
The Board recommends that you vote FOR each of the nominees to
the Board (Proposal 1) and FOR the ratification of the
appointment of Eisner as our independent registered public
accounting firm for the fiscal year ending December 31,
2008 (Proposal 2).
Stockholders will be entitled to vote at the Annual Meeting on
the basis of each share held of record at the close of business
on March 31, 2008 (the “Record Date”).
If, on the Record Date you hold shares of our common stock that
are registered directly in your name with our transfer agent,
Continental Stock Transfer & Trust Company
(“Continental”), you are considered the stockholder of
record with respect to those shares, and Continental is sending
these proxy materials directly to you on our behalf. As a
stockholder of record, you may vote in person at the meeting or
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 to
follow the Internet or telephone voting procedures explained on
the proxy card.
If, on the Record Date you hold shares of our common stock in an
account with a brokerage firm, bank, or other nominee, then you
are a beneficial owner of the shares and hold such shares in
street name, and these proxy materials are being forwarded to
you by that organization. As a beneficial owner, you have the
right to direct your broker, bank, or other nominee on how to
vote the shares held in their account, and the nominee has
enclosed or provided voting instructions for you to use in
directing it how to vote your shares. The nominee that holds
your shares, however, is considered the stockholder of record
for purposes of voting at the Annual Meeting. Because you are
not the stockholder of record, you may not vote your shares in
person at the Annual Meeting unless you bring a letter from your
broker, bank or other nominee confirming your beneficial
ownership of the shares to the Annual Meeting. Whether or not
you plan to attend the Annual Meeting, we urge you to vote by
proxy to ensure that your vote is counted.
The shares represented by all valid proxies will be voted in
accordance with the instructions specified on the proxy card.
Where specific choices are not indicated, the shares represented
by all valid proxies received will be voted FOR the nominees for
directors named in this proxy statement and FOR ratification of
the selection of Eisner LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2008. Should any matter not described above be properly
presented at the Annual Meeting, the persons named in the proxy
form will vote in accordance with the recommendation of the
Board or in the absence of such a recommendation, in accordance
with their judgment.
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.
You may revoke your proxy at any time before it is exercised at
the Annual Meeting by submitting a new proxy bearing a later
date, by providing written notice to our Corporate Secretary, or
by voting in person at the Annual Meeting. Your presence at the
Annual Meeting does not in and of itself revoke your proxy.
A list of stockholders of record as of the Record Date will be
available for inspection during ordinary business hours at our
offices located at 8470 Allison Pointe Boulevard,
Suite 300, Indianapolis, Indiana 46250, from May 9,
2008 to the date of our Annual Meeting. The list will also be
available for inspection at the Annual Meeting.
The presence at the Annual Meeting, whether in person or by
valid proxy, of the persons holding a majority of shares of
common stock on the Record Date will constitute a quorum,
permitting us to conduct our business at the Annual Meeting. On
the Record Date, there were 21,945,688 shares of common
stock outstanding, held by 167 stockholders. Abstentions (i.e.,
if you or your broker mark “ABSTAIN” on a proxy card)
and “broker non-votes” will be considered to be shares
present at the meeting for purposes of a quorum. Broker
non-votes occur when shares held by a broker for a beneficial
owner are not voted with respect to a particular proposal and
generally occur because: (1) the broker does not receive
voting instructions from the beneficial owner and (2) the
broker lacks discretionary authority to vote the shares. Banks,
brokers and other nominees cannot vote on their clients’
behalf on “non-routine” proposals. Banks, brokers and
other nominees can, however, vote your shares in their
discretion for the election of directors and the ratification of
the appointment of our independent registered public accounting
firm.
Election of directors. Each director will be
elected by a majority of the votes cast with respect to that
director. For purposes of electing directors, a majority of the
votes cast means that the number of shares voted “FOR”
a
director must exceed 50% of the votes cast with respect to that
director. Abstentions and broker non-votes are not taken into
account in determining the outcome of the election of directors.
Ratification of the appointment of independent registered
public accounting firm. Approval of the proposal to ratify
the Audit Committee’s appointment of Eisner as our
independent registered public accounting firm for the fiscal
year ending December 31, 2008 requires the affirmative vote
of the holders of at least a majority of the shares of common
stock present in person or represented by proxy at the Annual
Meeting. Broker non-votes are not taken into account in
determining the outcome of this proposal; however, abstentions
will have the effect of a vote against this proposal.
We will bear the cost of solicitation of
proxies. This includes the charges and expenses
of brokerage firms and others for forwarding solicitation
material to beneficial owners of our outstanding common stock.
We may solicit proxies by mail, personal interview, telephone or
via the Internet through our officers, directors and other
management employees, who will receive no additional
compensation for their services.
We have adopted Corporate Governance Guidelines, a Code of
Business Conduct and Ethics, and a Related Person Transactions
Policy as part of our corporate governance practices and in
accordance with rules of the Securities and Exchange Commission
(the “SEC”) and the listing standards of The NASDAQ
Stock Market (“NASDAQ”).
Our Board has adopted Corporate Governance Guidelines (the
“Guidelines”) and a Code of Business Conduct and
Ethics (the “Code of Ethics”). The Guidelines set
forth a framework within which the Board oversees and directs
the affairs of Double-Take Software. The Guidelines cover, among
other things, the composition and functions of the Board,
director independence, stock ownership by our directors,
management succession and review, Board committees, the
selection of new directors, and director responsibilities and
duties.
The Code of Ethics covers, among other things, compliance with
laws, rules and regulations (including insider trading),
conflicts of interest, corporate opportunities, confidentiality,
protection and use of company assets, and the reporting process
for any illegal or unethical conduct. The Code of Ethics is
applicable to all of our officers, directors and employees,
including our Chief Executive Officer and our Chief Financial
Officer. The Code of Ethics includes provisions that are
specifically applicable to our Chief Financial Officer and
senior financial officers (as defined in the Code of Ethics).
Any waiver of the Code of Ethics for our executive officers or
directors may be made only by our Board or a Board committee
consisting solely of disinterested and independent directors and
will be promptly disclosed as may be required by law or NASDAQ
listing standards. If we amend our Code of Ethics or waive the
Code of Ethics with respect to our Chief Executive Officer,
principal financial officer or principal accounting officer, we
will post the amendment or waiver on our website.
The Guidelines and Code of Ethics are each available on the
Investor Relations section of our website, which is located at
www.doubletake.com, under “Corporate Governance.” The
Guidelines are reviewed at least annually by our Nominating and
Corporate Governance Committee, and changes are recommended to
our Board for approval as appropriate.
Transactions in Connection with our Initial Public Offering,
Secondary Offering and Resale Registration
Statement. In December 2006, we completed our
initial public offering. ABS Capital Partners IV, L.P., ABS
Capital Partners IV-A, L.P., ABS Capital Partners IV Offshore
L.P. and ABS Capital Partners IV Special Offshore L.P., which we
refer to as the ABS Entities, participated in the initial public
offering as selling stockholders pursuant
to the terms of a registration rights agreement among them and
us. The ABS Entities sold an aggregate of 1,525,542 shares
in December 2006 for gross proceeds of $15,606,295 and an
aggregate of 954,752 shares in January 2007 upon the
exercise of the underwriters’ overallotment option for
additional gross proceeds of $9,767,113. In connection with the
sale of the shares by the ABS Entities in the initial public
offering, we paid $20,000 in legal expenses incurred by the ABS
Entities pursuant to the terms of a registration rights
agreement among us and the ABS Entities. In August 2007, we
completed a secondary offering, in which the ABS Entities sold
an aggregate of 3,092,750 shares, which amount includes
shares sold upon the exercise of the underwriters’
over-allotment option, for aggregate gross proceeds of
$49,484,000. In connection with the sale of the shares by the
ABS Entities in the August secondary offering, we paid all of
the costs, fees and expenses incurred in connection with the
secondary offering in the aggregate amount of approximately
$612,000. Upon the ABS Entities’ exercise of their rights
under the registration rights agreement with us, we filed a
registration statement on
Form S-3
in January 2008 to register the resale from time to time of
3,184,519 shares, the remaining shares held by the ABS
Entities. In connection with the resale registration statement,
we paid all of the costs, fees and expenses incurred in
effecting the registration of the shares offered in the
aggregate amount of approximately $29,000. Mr. Goswami and
Ms. Witt are both managing members of the general partner
of each of the ABS Entities, and Mr. Goodermote is a
non-voting member of the general partner. Mr. Goswami,
Ms. Witt and Mr. Goodermote each disclaim beneficial
ownership of these shares except to the extent of their
respective pecuniary interests.
Double-Take EMEA Acquisition and Agreements with Jo
Murciano. In May 2006, we entered into a share
purchase agreement for the acquisition of all of the outstanding
shares of Sunbelt System Software S.A.S., from its shareholders,
Jo Murciano, who is one of our executive officers, and Sunbelt
International S.A.R.L., of which Mr. Murciano is the
Managing Director. Sunbelt Systems Software is now known as
Double-Take Software S.A.S., or Double-Take EMEA, which was our
primary distributor in Europe, the Middle East and Africa. As a
result of his former shareholdings in Double-Take EMEA and his
interest in Sunbelt International, Mr. Murciano was
entitled to receive 62.5% of the amounts we paid in connection
with the acquisition of Double-Take EMEA. In addition, in
connection with the acquisition, Mr. Murciano became our
Vice President of EMEA and President of Double-Take EMEA. In
January 2008, Mr. Murciano became our Vice President of
International.
Pursuant to the share purchase agreement, we paid
$1.1 million to the former shareholders of Double-Take EMEA
as the initial payment for the acquisition. The remaining
portion of the total purchase price was payable in monthly
payments based upon a percentage of the intercompany amounts
paid by Double-Take EMEA to us each month in respect of
purchases under our intercompany distribution agreement with
Double-Take EMEA from the date of the share purchase agreement
through December 31, 2007, which we refer to as the
earn-out period. The base percentage for the calculation of the
earn-out payments is 50% of the intercompany amounts for the
month, although this percentage was decreased to 15% once the
aggregate payments totaled $10 million. Earn-out payments
after the initial payment of $1.1 million were
$8.7 million through December 31, 2007. The final
earn-out payment of approximately $0.3 million was paid in
the first quarter of 2008.
An escrow account was established to hold 20% of our initial
$1.1 million payment and 20% of each of our earn-out
payments to satisfy claims against the selling shareholders that
we may have from time to time as a result of breaches of
representations, warranties or covenants through
December 31, 2007. We anticipate that the funds in escrow
will be released to the former shareholders of Double-Take EMEA
in the second quarter of 2008.
The share purchase agreement provides that during the earn-out
period we would continue to operate Double-Take EMEA in
accordance with its past practices and the intercompany
distribution agreement. During the earn-out period Double-Take
EMEA also served as our exclusive distributor in Europe and the
United Kingdom, subject to exceptions for worldwide licenses
that we may have granted and certain agreements with our OEMs.
In addition, we agreed that during the earn-out period
Mr. Murciano would remain as President of Double-Take EMEA
and receive the same compensation that he received prior to the
acquisition.
Under our intercompany distribution agreement with Double-Take
EMEA, which expired on December 31, 2007, Double-Take EMEA
received a 48% discount on all orders for software licenses and
internal training services and a 23% discount on all orders for
training services that we provide to its customers. In addition,
Double-Take EMEA could receive credits of up to 3% of its
quarterly sales to be used to fund mutually agreed upon
marketing programs. Double-Take EMEA could purchase maintenance
contracts for purchased software licenses at 40% off
our then-current list price. The intercompany distribution
agreement provided for minimum sales goals of orders of new
licenses for each quarter in the year ending December 31,
2007 that in the aggregate total $13,390,000. If Double-Take
EMEA achieved at least 87.5% of a quarterly goal, it was
eligible to receive a rebate on purchases of new software
licenses equal to 5% of the list price for those software
licenses purchased in that quarter. This rebate could be
increased to 7.5% if Double-Take EMEA achieved at least 93.49%
of its quarterly goal, and to 10% if it achieved 100% or more of
its quarterly goal. In addition, during 2007 if we entered into
any worldwide agreements for which we required Double-Take EMEA
to provide technical support, we agreed to pay Double-Take EMEA
5% of our then-current list price for each license for which it
provided technical support during the first year of the license.
Mr. Murciano is also a director and chief executive officer
of Sunbelt Software Distribution, Inc., or Sunbelt Distribution,
which is a reseller of our software and services.
Mr. Murciano is the beneficial owner of approximately 31%
of Sunbelt Distribution, which is also partly owned by Sunbelt
International S.A.R.L. In 2007, our sales to Sunbelt
Distribution totaled $10.8 million. Sunbelt Distribution
continues to serve as a reseller of our software and services.
Under our distribution agreement with Sunbelt Distribution,
Sunbelt Distribution receives a 30% discount on all orders for
software licenses and internal training services, and a 10%
discount on all orders for training services that we provide to
its customers. In addition, Sunbelt Distribution receives
credits of up to 2% of its total quarterly sales to be used to
fund mutually agreed upon marketing programs. Sunbelt
Distribution may purchase maintenance contracts for purchased
software licenses at 20% off our then-current list price. The
distribution agreement provides for minimum quarterly sales
goals of orders of new licenses. In 2007 the aggregate of the
quarterly sales goal was $8,500,000. If Sunbelt Distribution
achieves at least 60% of a quarterly goal, it is eligible to
receive a rebate equal to 10% of the aggregate value of licenses
sold in that quarter multiplied by the percentage of the
quarterly goal achieved. During 2007, Sunbelt Distribution
attained 100% of the goals and received 10% of the aggregate
value of licenses sold.
Related Person Transactions Policy. Our Board
has adopted a Related Person Transactions Policy. The Related
Person Transactions Policy sets forth our policy and procedures
for review, approval and monitoring of transactions in which we
and “related persons” are participants. Related
persons include directors, nominees for director, officers,
stockholders owning 5% or greater of our outstanding stock or
any immediate family members of the aforementioned. The Related
Person Transactions Policy is administered by a committee
designated by the Board, which is currently the Audit Committee.
The Related Person Transactions Policy covers any related person
transaction that meets the minimum threshold for disclosure in
our annual meeting proxy statement under the relevant SEC rules,
which is currently, transactions involving amounts exceeding
$120,000 in which a related person has a direct or indirect
material interest. Related person transactions must be approved,
ratified or rejected, or referred to the Board, by the
Committee. The policy provides that as a general rule all
related person transactions should be on terms reasonably
comparable to those that could be obtained by us in arm’s
length dealings with an unrelated third party. However, the
policy takes into account that in certain cases it may be
impractical or unnecessary to make such a comparison. In such
cases, the transaction may be approved in accordance with the
provisions of the Delaware General Corporation Law.
The Related Person Transactions Policy provides that management
or the affected director or officer will bring any relevant
transaction to the attention of the Audit Committee. Any
director who has a direct or indirect material interest in the
related person transaction should not participate in the Audit
Committee or Board action regarding whether to approve or ratify
the transaction. However, we recognize that there may be certain
cases in which all directors are deemed to have a direct or
indirect material interest in a transaction. In such cases, we
may enter into such transaction if it is approved in accordance
with the provisions of the Delaware General Corporation Law. The
transaction must be approved in advance whenever practicable,
and if not practicable, must be ratified as promptly as
practicable. All related person transactions will be disclosed
to the full Board, in the Company’s proxy statement and
other appropriate filings as required by the rules and
regulations of the SEC and NASDAQ.
Our Board has determined that any related person transaction
with another company at which a related person’s only
relationship is as an employee (other than an executive officer
or an employee having direct
supervisory authority over the transaction constituting the
related party transaction) or beneficial owner of less than 10%
of that company’s equity interests, if the aggregate amount
involved does not exceed the greater of $500,000 or 2% of that
company’s total annual revenues, shall be deemed to be
pre-approved. A summary of any transaction entered into by us
pursuant to the pre-approval policy described in this paragraph
shall be submitted to the Audit Committee.
In addition, the Related Person Transactions Policy provides
that transactions under our distribution agreement with Sunbelt
Distribution need not be reviewed in advance but will be
reviewed by the Audit Committee on a quarterly basis, and
management will provide such information regarding these
transactions as the Audit Committee may request.
Our Board believes, and our Guidelines require, that a majority
of its members, and all the members of the Audit, Compensation
and Nominating and Corporate Governance Committees, should be
independent directors. Currently, five of the six members of our
Board are independent directors, as defined in the applicable
rules for companies traded on NASDAQ. NASDAQ’s independence
criteria includes a series of objective tests, such as whether a
director is an employee of ours and whether a director has
engaged in various types of business dealings with us. In
addition, as further required by NASDAQ rules, the Board has
made a subjective determination as to each independent director
that no relationship exists which, in the opinion of the Board,
would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. In making these
determinations, the directors reviewed and discussed information
provided by the directors and us with regard to each
director’s business and personal activities as they may
relate to us and our management. Based on this review and
consistent with our independence criteria, the Board has
affirmatively determined that all of our directors are
independent of Double-Take Software and our management, with the
exception of Dean Goodermote, who is an employee of Double-Take
Software.
In accordance with our Guidelines, the independent members of
our Board will hold at least two closed “executive
session” meetings each year. A chairperson is selected for
each executive session. In general, these meetings are intended
to be used as a forum to discuss such topics as the independent
directors deem necessary or appropriate, the annual evaluation
of the Chief Executive Officer’s performance, the annual
review of the Chief Executive Officer’s plan for management
succession and the annual evaluation of the performance of the
Board.
Information concerning the Board and its three standing
committees is set forth below. Each Board committee currently
consists only of directors who are not employees of the Company
and who are “independent” as defined in NASDAQ’s
Marketplace Rules.
The Board and its committees meet regularly throughout the year,
and also hold special meetings and act by written consent from
time to time. The Board held a total of seven meetings during
the fiscal year ended December 31, 2007. During that time
all directors attended at least 75% of the aggregate number of
meetings held by the Board and all committees of the Board on
which such director served (during the period which such
director served). The Board does not have a formal policy with
respect to Board member attendance at annual meetings of
stockholders, however our Guidelines express an expectation that
Board members will make every effort to attend. Our 2007 annual
meeting of stockholders was attended by all of our directors.
The Board of Directors has three standing committees: the
Nominating and Corporate Governance Committee; the Compensation
Committee; and the Audit Committee. The charters for the
Nominating and Corporate Governance, Compensation, and Audit
Committees can be accessed electronically in the “Corporate
Governance” section on the Investor Relations page of our
website at www.doubletake.com.
The Board conducts, and the Nominating and Corporate Governance
Committee oversees, an annual evaluation of the Board’s
operations and performance in order to enhance its
effectiveness. Recommendations resulting from this evaluation
are made by the Nominating and Corporate Governance Committee to
the full Board for its consideration.
The following table describes which directors serve on each of
the Board’s standing committees.
The Board has established a separately designated standing Audit
Committee in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, which met ten times during
2007. The Audit Committee is responsible, among its other duties
and responsibilities, for engaging, overseeing, evaluating and
replacing our independent registered public accounting firm,
pre-approving all audit and non-audit services by that firm,
reviewing the scope of the audit plan and the results of each
audit with management and our independent registered public
accounting firm, reviewing the internal audit function,
reviewing the adequacy of our system of internal accounting
controls and disclosure controls and procedures, reviewing the
financial statements and related financial information we will
include in our SEC filings, and exercising oversight with
respect to our code of conduct and other policies and procedures
regarding adherence with legal requirements. The members of our
audit committee are Mr. Birch, who serves as chair of the
committee, and Messrs. Landry and Young. The Board has
determined that Mr. Birch is an “audit committee
financial expert,” as that term is currently defined under
the SEC rules implementing Section 407 of the
Sarbanes-Oxley Act of 2002. During 2007, Mr. Goswami also
served on the Audit Committee until May 2007, at which time he
stepped down from his position on the committee. The Board has
determined that each member of the Audit Committee in 2007 was
“independent” as defined in NASDAQ’s Marketplace
Rules. Under the rules of the SEC, members of the Audit
Committee must also met heightened independence standards under
the rules of the SEC. The Board determined that in 2007 each
member of the Audit Committee met these heightened independence
standards, except for Mr. Goswami. Because Mr. Goswami
is a General Partner of ABS Capital Partners, which at the time
he was serving on the committee owned greater than 29% of our
common stock, the Board did not determine that he met the
heightened independence standards for Audit Committee members.
In appointing Mr. Goswami to the Audit Committee, the Board
relied on the exemption from these standards afforded by
Rule 10A-3(b)(iv)
of the Securities Exchange Act of 1934. The Board does not
believe that Mr. Goswami’s participation in the
affairs of the Audit Committee adversely affected the Audit
Committee’s ability to act independently or to satisfy the
requirements of the SEC rules.
The Nominating and Corporate Governance Committee (the
“Nominating Committee”) is responsible for
recommending candidates for election to the Board. The
Nominating Committee is also responsible for making
recommendations to the Board or otherwise acting with respect to
corporate governance matters, including board size and
membership qualifications, recommendations with respect to
director resignations tendered in the event a director fails to
achieve a majority of votes cast in favor of his or her
election, new director orientation, committee structure and
membership, succession planning for officers and key executives,
and communications with stockholders, among other duties and
responsibilities. The members of our Nominating Committee are
Mr. Goswami, who serves as chair of the committee,
Mr. Birch and Ms. Witt. The Board has determined that
each member of the Nominating Committee is
“independent” as defined in NASDAQ’s Marketplace
Rules. The Nominating Committee met twice during 2007.
The Compensation Committee is responsible, among its other
duties and responsibilities, for establishing the compensation
and benefits of our executive officers, monitoring compensation
arrangements applicable to our executive officers for
consistency with corporate objectives and stockholders’
interests, reviewing and evaluating director compensation, and
administering our incentive compensation plans and equity-based
plans for our employees and directors.
Mr. Goodermote works with the Compensation Committee in
developing our compensation structure. As described in more
detail in the Compensation Discussion and Analysis below with
respect to our named executive officers, he also typically makes
recommendations to the Compensation Committee for the
compensation amounts and awards for the other executive
officers. Pursuant to its charter, the Compensation Committee
may delegate its authority to subcommittees, as it deems
appropriate consistent with applicable laws, rules and
regulation; provided that any subcommittees must report any
actions taken by it to the whole Compensation Committee at its
next regularly scheduled meeting. To date, the Compensation
Committee has not delegated any of its authority to any
subcommittees.
Pursuant to its charter, the Compensation Committee has the sole
authority to retain and terminate any compensation consultants
to be used to assist the Committee in the review and evaluation
of executive officer and director compensation. The Compensation
Committee did not engage any compensation consultants in 2007.
The members of our Compensation Committee are Ms. Witt, who
serves as chair of the committee, and Messrs. Landry and
Young. The Board has determined that each member of the
Compensation Committee is “independent” as defined in
NASDAQ’s Marketplace Rules. The Compensation Committee met
eight times during 2007.
DIRECTOR
NOMINATIONS AND COMMUNICATION WITH DIRECTORS
The Nominating Committee has a policy for considering candidates
submitted by Double-Take Software stockholders, as well as
candidates recommended by directors and management, for
nomination to the Board. Pursuant to this policy, the Nomination
Committee evaluates candidates submitted by stockholders in the
same manner as other candidates identified to the Nominating
Committee. The goal of the Nominating Committee is to assemble a
Board that offers a variety of perspectives, knowledge and
skills derived from high-quality business and professional
experience. The Nominating Committee reviews the appropriate
skills and characteristics required of directors in the context
of the current composition of the Board, our operating
requirements and the long-term interests of our stockholders.
The Nominating Committee has generally identified nominees based
upon suggestions by outside directors, management and executive
recruiting firms.
Director Qualifications. To be considered by
the Nominating Committee, a director nominee must meet the
following minimum criteria:
Our Bylaws require that the Board or a committee of the Board
shall not nominate any incumbent director who, as a condition to
such nomination, does not submit a conditional and, in the case
of an uncontested election, irrevocable letter of resignation to
the Chairperson of the Board. If an incumbent nominee is not
elected, the Nominating Committee will promptly consider such
director’s conditional resignation and make a
recommendation to the Board regarding the resignation. Each
person nominated for election to the Board at the Annual Meeting
as described below under Proposal 1 has submitted the
conditional letter of resignation as required by our Bylaws.
The Nominating Committee and, as needed, a retained search firm,
will screen Board candidates, perform reference checks, prepare
a biography for each candidate for the Nominating Committee to
review and conduct interviews. The Nominating Committee and our
Chief Executive Officer will interview candidates that meet our
director nominee criteria, and the Nominating Committee will
recommend to the Board nominees that best suit the Board’s
needs.
The Nominating Committee recommends, and the Board nominates,
candidates to stand for election as directors. Stockholders may
also nominate persons to be elected as directors. If a
stockholder wishes to nominate a person for election as
director, he or she must follow the procedures contained in our
bylaws and satisfy the requirements of Regulation 14A of
the Securities Exchange Act of 1934. To nominate a person to
stand for election as a director at the annual meeting of
stockholders, our Corporate Secretary must receive such
nominations at our principal executive offices 60 days
before the meeting, unless stockholders receive less than
75 days’ notice or prior public disclosure of the date
of the meeting, in which case notice must be received no later
than the close of business on the tenth day following the notice
or public disclosure of the meeting, to ensure adequate time for
meaningful consideration by the committee. Each submission must
include the following information:
Additional information regarding requirements for stockholder
nominations for next year’s annual meeting is described in
this proxy statement under “General Matters —
Stockholder Proposals and Nominations.”
Stockholders wishing to communicate with our Board may do so by
writing to any of the Board, Chairperson of the Board, or the
non-management members of the Board as a group, at:
Double-Take Software, Inc.
257 Turnpike Road, Suite 210 Southborough, MA 01772 Attn: Corporate Secretary
Complaints or concerns relating to our accounting, internal
accounting controls or auditing matters will be referred to
members of the Audit Committee. Other correspondence will be
referred to the relevant individual or group. All correspondence
is required to prominently display the legend “Board
Communication” in order to indicate to the Secretary
that it is communication subject to our policy and will be
received and processed by the Secretary’s office. Each
communication received by the Secretary will be copied for our
files and will be promptly
forwarded to the addressee. The Board has requested that certain
items not related to the Board’s duties and
responsibilities be excluded from its communication policy. In
addition, the Secretary is not required to forward any
communication that the Secretary, in good faith, determines to
be frivolous, unduly hostile, threatening, illegal or similarly
unsuitable. However, the Secretary will maintain a list of each
communication subject to this policy that is not forwarded, and
on a quarterly basis, will deliver the list to the Chairperson
of the Board.
On March 10, 2008, Laura Witt notified us that she would
not stand for re-election to our Board of Directors at the
Annual Meeting. Ms. Witt has served on the Board since 2002
and currently serves as a member of the following standing Board
committees: the Nominating and Corporate Governance Committee
and the Compensation Committee, of which she is the Chairperson.
Ms. Witt and her leadership have been important to our
success. Ms. Witt will serve the remainder of her term as a
director, which ends at the Annual Meeting, at which point the
size of the Board will be fixed at five members.
Our Bylaws provide that our Board shall be comprised of not less
than three nor more than fifteen directors, with the exact
number to be fixed by resolution of the Board. The Board has
fixed the authorized number of directors at five directors
effective at our Annual Meeting. Our nominees for the election
of directors at the Annual Meeting include four independent
non-management directors and one member of our senior
management. Each director is elected to serve a one-year term,
with all directors subject to annual election. At the
recommendation of the Nominating Committee, the Board has
nominated the following persons to serve as directors for the
term beginning at the Annual Meeting on May 23, 2008: Dean
Goodermote, Paul D. Birch, Ashoke (Bobby) Goswami, John B.
Landry, and John W. Young. All nominees are currently serving on
the Board.
Unless proxy cards are otherwise marked, the persons named as
proxies will vote all proxies FOR the election of each nominee
named in this section. Proxies submitted for the Annual Meeting
can only be voted for those nominees named in this Proxy
Statement. If, however, any director nominee is unable or
unwilling to serve as a nominee at the time of the Annual
Meeting, the persons named as proxies may vote for a substitute
nominee designated by the Board, or the Board may reduce the
size of the Board. Each nominee has consented to serve as a
director if elected, and the Board does not believe that any
nominee will be unwilling or unable to serve. Each director will
hold office until his or her successor is duly elected and is
qualified or until his or her earlier death, resignation or
removal.
The names of each nominee for director, their ages as of
March 31, 2008, and other information about each nominee is
shown below.
Dean Goodermote joined Double-Take Software in March of
2005 as President, Chief Executive Officer and Chairperson of
the board of directors. Since July 2004 he has also served as
Chief Executive Officer of Grid-Analytics LLC, a concept-stage
company he founded focused on aggregated research. From
September 2001 to
March 2005, Mr. Goodermote served as a Venture Partner of
ABS Capital Partners. From September 2000 to August 2001,
Mr. Goodermote was Chairman and Chief Executive Officer of
Clinsoft Corporation, a developer of software for clinical
research. From 1997 to August 2001, Mr. Goodermote was
Chairman and President of Domain Solutions Corporation, a
software developer for enterprise applications and the parent of
Clinsoft. From May 2000 until December 2001, Mr. Goodermote
founded and was Chief Executive Officer and then the Chairman of
IPWorks, Inc., a developer of internet address management
software. From August 1996 to May 2000, Mr. Goodermote was
Chief Executive Officer and President of Process Software
Corporation, a developer of Internetworking software. From
August 1986 to February 1997, Mr. Goodermote served in
various positions, including eventually President and Chairman,
of Project Software and Development Corporation, later known as
MRO Software, Inc., a provider of software-based asset and
service management solutions.
Paul D. Birch has served on the Board of Double-Take
Software since September 2006. Mr. Birch has been a private
investor and business owner since August 2003. From September
2000 to July 2003, Mr. Birch held the following positions
with Geac Computer Corporation Limited, a global provider of
business-critical software applications and systems: December
2001 to July 2003, President, Chief Executive Officer, July 2001
to December 2001, Chief Operating Officer and Chief Financial
Officer, September 2000 to July 2003, Director. From July 2001
until August 2002, Mr. Birch served as President of Geac
Enterprise Solutions, Americas. From March 2000 to July 2001,
Mr. Birch was the Chief Operating Officer, Chief Financial
Officer, Treasurer and a Director of Escher Group, Ltd. From
February 1991 to February 2000, Mr. Birch was the Chief
Financial Officer, Treasurer and a Director of MRO Software,
Inc. From November 1985 to February 1991 Mr. Birch served
as a Tax Manager at PriceWaterhouseCoopers LLP, and as a Tax
Manager with Arthur Anderson & Co. from 1980 to
October 1985. Mr. Birch currently serves on the board of
CommonAngels, Inc., nimbit, Inc., and Emerson Hospital.
Ashoke (Bobby) Goswami has served on the Board of
Double-Take Software since 2002. Mr. Goswami is a general
partner of ABS Capital Partners, a private equity firm that he
joined in 2001. Prior to joining ABS Capital Partners,
Mr. Goswami served as an investment banker with Alex.
Brown, Merrill Lynch and Goldman Sachs. Previously,
Mr. Goswami spent four years in the systems practice at
Andersen Consulting.
John B. Landry has served on the Board of Double-Take
Software since September 2006. Mr. Landry serves as
Managing Director of Lead Dog Ventures LLC, a private technology
investment firm he founded in 2005. From January 2001 to
December 2007 he served as Chief Technology Officer and Chairman
of the Board of Directors of Adesso Systems, Inc., a provider of
mobile enterprise software and services. From January 2002 to
July 2003, Mr. Landry served as the founder, Chairman and
Chief Technology Officer of Adjoin Solutions, Inc. From February
1999 to June 2000, he was Chief Technology Officer and Chairman
of the Board of Directors of AnyDay.com, Inc. From August 1995
to December 2000, Mr. Landry served as Vice President of
Technology Strategy of International Business Machines
Corporation. Prior to joining International Business Machines
Corporation, Mr. Landry served as Senior Vice President,
Development and Chief Technology Officer of Lotus Development
and as a Senior Vice President and Chief Technology Officer at
Dun & Bradstreet, Cullinet Software, Distribution
Management Systems, and McCormack & Dodge.
Mr. Landry currently serves on the Board of Overseers of
Babson College and the Museum of Science — Boston.
John W. Young has served on the Board of Double-Take
Software since June 2003. Mr. Young has been Vice
President, Asset Management Development, IBM Software Group, a
division of International Business Machines Corporation since
October 2006. He served as Executive Vice President,
Products & Technology for MRO Software, Inc. from 1998
until it was acquired by IBM in October 2006. From 1995 to 1998,
he served as Vice President of Research and Development at MRO
Software and from 1992 to 1995 he was Director of Product
Management at MRO Software. From 1988 to 1992, Mr. Young
served as Vice President of Sales for Comac Systems Corporation,
an application software company.
In order to be elected as a director, a nominee must be elected
by a majority of the votes cast with respect to such nominee at
the Annual Meeting. A majority of the votes cast means that the
number of shares of common stock voted FOR a nominee must exceed
50% of the votes cast with respect to that nominee. Stockholders
do not have the right to cumulate their votes in the election of
directors. If an incumbent nominee in an uncontested election
such as
the election to be held at the Annual Meeting fails to be
elected, the incumbent nominee will continue in office and the
Board will consider whether to accept the nominee’s earlier
submitted conditional resignation. If the resignation is not
accepted the incumbent nominee may continue in office until a
successor is elected.
THE BOARD
RECOMMENDS A VOTE “FOR” ELECTION OF EACH OF
THE SIX NOMINATED DIRECTORS
Each non-employee director is compensated for his or her service
as shown in the chart below:
December 31, 2007
The following table summarizes the compensation paid to our
non-employee directors during 2007:
December 31, 2007
As of December 31, 2007, the aggregate number of vested and
unvested stock awards outstanding for each of our non-employee
directors was as follows:
Stock Ownership Guidelines. Each non-employee
director is expected to have a financial stake in the Company to
help align the director’s interests with those of the
Company’s stockholders. To meet this objective, it is the
policy of the Board to have a meaningful portion of the total
compensation of non-management directors provided and held in
common stock, stock options, restricted stock units or other
types of equity-based compensation.
Other. The Company reimburses all directors
for travel and other reasonable and necessary business expenses
incurred in the performance of their services for the Company
and extends coverage to them under the Company’s
directors’ and officers’ indemnity insurance policies.
COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE
COMPENSATION
The following compensation discussion and analysis provides
information regarding the objectives and elements of our
compensation philosophy and policies for the compensation of
our executive officers that appear in the Summary Compensation
Table below. These executives include:
We refer to these individuals collectively as our named
executive officers, or NEOs.
The compensation committee is responsible for implementing our
executive compensation policies and programs and works closely
with Mr. Goodermote. The compensation committee operates
pursuant to a charter approved by the Board of Directors. More
information on the committee’s processes and procedures can
be found above under the heading “Compensation
Committee.”
Our overall Company-wide compensation philosophy, which is also
applicable to our NEOs, is to provide competitive levels of
compensation that reflect the level of capability and effort
required to achieve our annual and long-term goals, while at the
same time keeping our compensation program both tied to our
performance and simple and straightforward.
In implementing this philosophy for our NEOs, we award
compensation to meet our three principle objectives of
(i) aligning executive compensation with our Company’s
performance goals, (ii) using equity-based awards in an
effort to further align executives’ and stockholders’
interests, and (iii) setting compensation to assist us in
attracting and retaining qualified executives.
As part of our executive compensation program, we reward the
achievement, and surpassing, of corporate goals. Our annual
incentive program is designed to reward participants for the
achievement of company-wide performance goals by providing cash
awards that are paid if Company-wide goals are met. We believe
that because a significant portion of awards are tied to
Company-wide growth and earnings goals, our officers are
rewarded for superior Company performance in the areas that we
feel are most directly related to increasing shareholder value.
Similarly, we believe that the use of annual performance goals
provides our executive officers with a straightforward reward.
If the Company does well, so will they.
Our compensation program uses equity-based awards that vest
based on continued service, the value of which is contingent on
the Company’s longer-term performance, in order to provide
our NEOs with a direct incentive to seek increased shareholder
returns. Our shareholders receive value when our stock price
increases, and by using equity-based awards our NEOs also
receive increased value when our stock price increases and
decreased value when it decreases. We believe that equity-based
awards that vest based on continued service also exemplify our
philosophy of having a straightforward structure by reminding
NEOs that a measure of long-term corporate success is increased
shareholder value over time.
We believe that the supply of qualified executive talent is
limited and have designed our compensation programs to help us
attract qualified candidates by providing compensation that is
competitive within the software industry and the broader market
for executive talent. Perhaps more importantly, we believe that
the design of our executive compensation programs is important
in helping us to keep the qualified executives that we currently
have. Our executive compensation policies are designed to assist
us in attracting and retaining qualified executives by providing
competitive levels of compensation that are consistent with the
executives’ alternatives.
Elements
of Compensation
The elements of our compensation program include cash
compensation, which is comprised of base salary and annual
incentive awards pursuant to our Executive Bonus Plan, and
equity compensation pursuant to our long-term incentive plan.
Mr. Goodermote typically makes recommendations to the
compensation committee for the other NEOs on the amount of
target cash compensation and equity awards, within parameters
determined by that committee.
In setting each of the elements of our compensation program for
2007, other than for Mr. Murciano, the compensation
committee considered the compensation levels for our NEOs in
2006, the respective performances of each of our NEOs in 2006,
their respective responsibilities, their number of reports, and
what the committee believed was required based on the
marketplace for executive talent, as well as the fact that we
completed our initial public offering in November 2006. In
evaluating what was required based on the marketplace for
executive talent, the members of our compensation committee
considered other information of which they were aware, based on
their collective experience. The members of our compensation
committee also reviewed data from the US
benchmark database from Mercer Human Resource Consulting in
connection with considering our compensation levels. We discuss
in more detail the primary factors that affected each NEO’s
particular elements of compensation for 2007 below.
Mr. Murciano joined us in 2006 as a result of our
acquisition of Double-Take EMEA. His compensation plan for 2006
and 2007 was established at that time in connection with the
acquisition and is discussed further below. The discussion below
of the cash compensation element of our compensation program
does not include a discussion of Mr. Murciano’s
compensation.
Cash compensation is an integral part of compensation for our
NEOs. The compensation committee considers both base salary and
targeted annual incentive pay together to set targeted total
cash compensation. Because Mr. Jones also takes part in a
sales commission program, described further below, the
compensation committee also takes into account amounts that he
may receive under that program when setting his targeted total
cash compensation.
When balancing the two components of our targeted total cash
compensation, we believe that it is important to have a
significant amount of compensation consist of fixed and liquid
compensation in the form of base salary to provide our NEOs with
a level of assurance of compensation. However, given our focus
on performance, we believe that it is important to also have a
strong incentive pay component when compared to what we believed
was the norm at other companies in our industry. Accordingly, in
2007, the targeted annual incentive pay comprised approximately
43% of the aggregate amount of base salary and targeted annual
incentive pay for Messrs. Beeler and Huke and approximately
44% for Mr. Jones. Mr. Goodermote’s targeted
annual incentive pay comprised approximately 33% of the
aggregate amount of base salary and targeted annual incentive
pay. Mr. Goodermote’s percentage is set at a lower
level of his total compensation based on the relatively higher
level of his base salary, which was negotiated when he became
our Chief Executive Officer in 2005. We believe that this
proportion of annual incentive pay for our NEOs comprises a
relatively high percentage of total cash compensation and
represents approximately the same percentages used in 2006.
In 2007, base salary amounts were increased by approximately 4%
for each of Mr. Huke and Mr. Beeler, by approximately
3.5% for Mr. Jones and by approximately 3% for
Mr. Goodermote. The increases for the NEOs other than
Mr. Goodermote are generally consistent with
Mr. Goodermote’s recommendations, which
recommendations were based on the compensation committee’s
determination that the base salary levels were generally already
set at appropriate levels, but that a modest increase was
appropriate to reflect annual cost of living increases. The
increase for Mr. Jones was slightly lower in recognition of
the fact that he was also expected to have significant amounts
of compensation as a result of his participation in commission
programs. The committee determined that a modest cost of living
increase was appropriate for Mr. Goodermote, although he
had not requested an increase in his compensation.
Annual incentive pay is awarded pursuant to the terms of our
Executive Bonus Plan, which is the same structure that is used
for most of our non-commission based employees. The Executive
Bonus Plan is designed to reward our NEOs for achieving
company-wide targets based on our 2007 operating budget approved
by the Board of Directors. The Executive Bonus plan provides
significantly reduced rewards for missing those numbers and
moderately increased rewards for exceeding those numbers. In
2007, the two targets were based on achieving net revenues of
approximately $82.3 million and operating profit of
approximately $15.1 million. Operating profit is calculated
as revenue less cost of revenue and operating expenses and
excludes stock-based compensation expenses related to FAS 123R
and extraordinary charges identified by the compensation
committee, which in 2007 included expenses related to our
acquisition of TimeSpring Software Corporation. We selected
these measures because we believe that they reflect our
philosophy of rewarding our executives for growth and earnings.
We believe that one of the attractive aspects of our company to
investors is the potential for revenue growth, and so we have
selected net
revenue as the best measure to provide an incentive to our
executives to achieve revenue growth. Similarly, we believe that
investors are focused on increasing earnings and that operating
income is a good proxy for earnings that is within the control
of management. Both of these measures have the advantage of also
being straightforward targets on which our executives can focus.
We expect to continue our practice of setting these targets on
the high end of realistically achievable goals.
The total targeted annual incentive pay amount for each NEO is
divided into five equal sub amounts, one for each quarter’s
performance and one for the year-end performance. Each of the
quarterly and year-end
sub-amounts
is divided equally based on achievement of the net revenue and
operating profit objectives. Thus, 10% of the total bonus is
targeted at each quarter’s net revenue, each quarter’s
operating profit, the year-end revenue, and the year-end
operating profit. If a quarterly target is missed, it cannot be
recouped based on future performance. We divide the total annual
incentive pay into these five portions because we believe that
it leads to consistent efforts to provide superior performance
throughout the year.
Target payments for achieving quarterly and annual revenue
targets are increased proportionately by the amount each
performance goal is exceeded subject to a cap of 20% above the
goal. To the extent that the net revenue target is exceeded by
more than 20%, the payments for the net revenue target will be
increased proportionately by the amount each target is exceeded,
but only to the extent that the operating profit target for the
period in which the bonus is being paid has been exceeded by a
proportionate amount or greater. (By way of illustration, for a
revenue payment to be paid at 135% of target in the first
quarter, operating profit would have to exceed its target for
that quarter by 135% or more.) Payments for achieving operating
profit targets are increased proportionately by the amount each
target is exceeded subject to a cap of 20% above the operating
profit target sub-bonus. We believe that achievement of goals at
these levels represents superior performance by the Company and
feel that our NEOs should be compensated for exceeding our
goals. However, we believe that above 120% achievement of each
goal, it is appropriate to limit the additional amounts to be
paid based on exceptionally high current period profits, and to
reward exceptionally high revenue only to the extent that
incremental revenue has generated expected incremental profits.
In the event that the net revenue and operating profit targets
are not met, we determined to award each executive with 60% of
his target payout at achievement of 92.5% of each target. The
payments are increased proportionately between 92.5% and 100%
(that is, each percentage point increase between 92.5% and 100%
achievement increases the payment by 5.3%). We selected 92.5% of
the goals as the threshold for performance because we believed
that performance at this level would be satisfactory to reward
our NEOs, but that the amounts of their rewards should be
significantly reduced. The 92.5% in 2007 reflects an increase
from the 2006 level of 87.5%. We determined to increase the
threshold level to reflect the higher standards of performance
appropriate to a public company.
In addition to the cash compensation described above,
Mr. Jones, as our Vice President of Sales and Marketing,
also participates in our sales commission plan.
Mr. Jones’ target sales commission in 2007 was
$210,000, which is the same level at which it was set in 2006.
In 2007, Mr. Jones also had an additional cash incentive of
$45,000 that was payable in escalating quarterly payments that
were tied to meeting consecutive quarterly sales objectives
under the sales commission plan. We implemented the quarterly
sales objective incentive for Mr. Jones in 2007 at the
recommendation of Mr. Goodermote in order to provide
Mr. Jones a significant additional incentive for consistent
achievement of the quarterly sales increases in his commission
plan, which reflects quarter over quarter performance that we
believe is important to our shareholders and the investing
community.
In addition to the cash compensation described above,
Mr. Huke received a $25,000 bonus in 2007 as the final
payment pursuant to a retention plan agreed to in 2005 at a time
when there were other changes to our senior management.
Long-Term
Incentive Plan
In 2007, we used stock options under our long-term incentive
plan (the “LTI Plan”) to provide an incentive to our
NEOs to produce results that will lead to long-term company
performance. As described above, we believe that a substantial
portion of NEOs compensation should be in the form of equity
awards in order to align the interests of the NEOs and our
stockholders. We selected stock options as the form of award
under our LTI Plan because they represent a straightforward
mechanism for rewarding achievement of increases in long-term
shareholder value and because stock options require an increase
in stock price to have value to the NEO. We also believed that
use of stock options was consistent with compensation practices
of other software companies, including recently public
companies. They are also easy to understand and thus support our
objectively of utilizing straightforward compensation.
In 2007, our compensation committee reviewed data from the US
benchmark database from Mercer Human Resource Consulting on
long-term incentives, and our option valuation model, which uses
a Black-Scholes methodology comparable to the data that was
reviewed. The data was used to help provide context to the
compensation committee’s decision-making process. In
deciding the size of option awards, the compensation committee
established a number of options to be granted to the NEOs after
determining an amount of shares to be used for the option awards
based on the percentage of our outstanding equity that those
shares represented. The compensation committee also considered
the vested and unvested equity ownership of the members of the
executive team, and noted that ongoing vesting of equity
incentives is a desirable retention tool.
For Mr. Goodermote’s equity award, the compensation
committee considered the performance of Mr. Goodermote,
which it assessed as being strong and meriting long-term
incentive compensation in excess of the median of the data
reviewed. The compensation committee determined that the option
award for Mr. Goodermote should be for 70,000 shares,
or approximately 0.3% of our fully diluted equity. The
compensation committee also requested that Mr. Goodermote
provide recommendations to allocate an aggregate pool of 85,000
options among the six other executives of the Company. The
decision on the size of these awards was part of the
compensation committee’s overall determination that
approximately 1.75% of our fully diluted equity should be
granted over the course of the year to all existing employees,
including executives, but not including initial grants made to
new hires. Mr. Goodermote’s recommendations for the
size of equity awards pursuant to the LTI Plan were then
reviewed, including his request to reduce the size of his award.
The compensation committee considered Mr. Goodermote’s
recommendations and granted options within the framework that it
had established at levels that were based on the
executive’s position, responsibilities and past
performance. The compensation committee did not reduce
Mr. Goodermote’s grant as requested by him because of
its belief that it is important to our shareholders and our
company that Mr. Goodermote have a significant unvested
equity interest.
Grants of stock options to our NEOs typically vest monthly based
on service to the company over four year terms from the date of
grant. We selected four years because of our belief that the
market standard was three to four years and that by selecting
four years we were providing the maximum retention benefit.
In 2007, Mr. Murciano received a relatively low salary, and
he participated in a commission plan used for the top executives
of Double-Take EMEA and based on the profits of Double-Take
EMEA. Mr. Murciano also continued to receive certain
perquisites to which he had been entitled prior to our
acquisition of Double-Take EMEA, including payment of a country
club membership and a car allowance. As noted above,
Mr. Murciano participated in the LTI Plan together with our
other executive officers.
Mr. Murciano’s compensation plan was established in
connection with our acquisition of Double-Take EMEA, which is
when Mr. Murciano joined our company. In the acquisition we
agreed to an earn-out period that ran through December 31,
2007, and we agreed that during that period Mr. Murciano
would remain as President of Double-Take EMEA or the
shareholders of Double-Take EMEA would be entitled to certain
payments. We also agreed that during the earn-out period
Mr. Murciano would continue to be compensated in the same
manner as prior to the acquisition. We determined that it was
appropriate to approve the compensation plan for
Mr. Murciano as a material
term of the acquisition and because the actual compensation
arrangements were consistent with both our general compensation
philosophy and our practice of having a strong incentive
component.
Grants of equity awards are generally made to our NEOs at one
time each year pursuant to the LTI Plan, intended to coincide
with the completion of performance reviews. We also occasionally
make grants of equity awards to NEOs at other times, including
in connection with the initial hiring of a new officer and the
promotion of officers.
In 2007, all of our option awards were made at the closing price
of our common stock on the date of grant on the NASDAQ Global
Market. We typically time equity awards to be effective three
days after the release of our earnings, which is often after the
actual date of compensation committee action, or on the date of
the compensation committee action if the award is made during
open trading windows under our insider trading plan.
Prior to 2007, we entered into employment letter agreements with
our executive officers, other than Mr. Beeler,
Mr. Murciano and a third executive officer. For
Mr. Beeler and the third executive officer, we had entered
into a non-competition and severance agreement. As discussed
above, the terms of Mr. Murciano’s employment were set
in connection with the acquisition of Double-Take EMEA. The
agreements entered into prior to 2007 were executed at various
times to assist in attracting or retaining the executive
officers. The agreements provided for various terms and
conditions and resulted in disparate treatment among our
officers, particularly with regard to severance payments. In
2007, it became apparent that having some consistency among our
executive officers with respect to severance was beneficial from
a fairness and parity perspective, as well as from a retention
perspective as we continued to believe that severance
arrangements are important to help in retaining our NEOs due to
the prevalence of similar provisions in the market in which we
compete for executives.
In 2007, we entered into severance agreements with each of our
NEOs, other than Mr. Beeler, with whom we entered into a
restated non-competition and severance agreement, and
Mr. Murciano, who during 2007 was not generally considered
with the other executive officers on compensation and employment
matters. The agreements provide generally that if we terminate
the NEOs employment without cause, then the executive is
entitled to receive one year’s severance if he abides by a
non-competition agreement. Mr. Beeler’s agreement also
provides that he is entitled to severance if he terminates his
employment for good reason. Our employment letter agreements
with Mr. Goodermote and Mr. Huke also provide for
accelerated vesting of their equity awards in the event of a
change in control.
Additional information regarding these agreements, including a
definition of key terms and a quantification of benefits that
would be received by these officers had termination occurred on
December 31, 2007, is found below under the heading
“Potential Payments On Termination or Change in
Control.”
Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally imposes a $1 million limit on the amount
that a public company may deduct for compensation paid to the
company’s CEO or any of the company’s four other most
highly compensated executive officers who are employed as of the
end of the year. This limitation does not apply to compensation
that meets the requirements under Section 162(m) for
“qualifying performance-based” compensation (i.e.,
compensation paid only if the individual’s performance
meets pre-established objective goals based on performance
criteria approved by stockholders) that is established by a
committee that consists only of “outside directors” as
defined for purposes of Section 162(m). Currently, all
members of the compensation committee qualify as “outside
directors.” We intend to consider the potential long-term
impact of Section 162(m) when establishing compensation,
and we expect to qualify our compensation programs as
performance-based compensation within the meaning of the
Internal Revenue Code to the extent that doing so remains
consistent with our compensation philosophy and objectives. In
2007, the levels of our compensation programs, other than our
equity awards, which are by their nature performance based and
fully deductible, were not at levels high enough to implicate
concerns over the deductibility of our compensation programs for
Section 162(m) purposes.
The compensation committee reviewed and discussed the above
Compensation Discussion and Analysis (“CD&A”)
with the Company’s management. Based on its review and
discussions with the Company’s management, the Compensation
Committee recommended that the CD&A be included in the
Company’s Proxy Statement and in the Company’s Annual
Report on
Form 10-K
(including by incorporation to the Proxy Statement).
Compensation
Committee (April 14, 2008)
Laura Witt
(Chairperson)
John Landry John Young
Compensation
Tables
Summary
Compensation Table
for Fiscal Year End December 31, 2007
The following table summarizes the compensation of our named
executive officers, or NEOs, for the fiscal year end
December 31, 2007. The NEOs are our Chief Executive
Officer, Chief Financial Officer, and the three other most
highly compensated executive officers ranked by their total
compensation in the table below.
Grants of
Plan-Based Awards
for Fiscal Year End December 31, 2007
Narrative to Summary Compensation Table and Grants of
Plan-Based Awards Table
Employment Letter Agreements. The amounts
disclosed in the tables above are in part a result of the terms
of agreements that we have with NEOs, other than Mr. Beeler
and Mr. Murciano.
Employment Terms for Dean Goodermote. In
August 2006, we entered into an employment letter agreement with
Mr. Goodermote, which amended and restated a letter
agreement dated March 22, 2005, entered into in connection
with the commencement of his employment. Pursuant to the current
employment letter agreement, upon the consummation of our
initial public offering, Mr. Goodermote received a grant of
shares of our common stock equivalent to 1.45% of the fully
diluted shares of our common stock outstanding immediately prior
to the offering, which amounted to a grant of
269,845 shares in the aggregate. These shares became fully
vested upon grant. In order to satisfy certain tax withholding
obligations, 111,850 of those shares were withheld from the
grant and returned to the status of authorized but unissued
shares.
On March 22, 2005, Mr. Goodermote was granted stock
options to acquire 380,182 shares of our common stock with
25% vesting on the one year anniversary of the start of his
employment and with the remainder vesting in equal quarterly
installments over the following three years, and he received a
grant of stock options on the first anniversary of the start of
his employment to acquire 152,073 shares of our common
stock with 25% vesting on the one year anniversary of the grant
date and the remainder vesting in equal quarterly installments
over the following three years. In addition, on January 5,
2006, Mr. Goodermote was granted stock options to acquire
38,018 shares of our common stock with 25% vesting on the
one year anniversary of the grant date and the remainder vesting
in equal quarterly installments over the following three years.
Pursuant to his employment letter agreement, upon the
consummation of our initial public offering, all of the options
granted on March 22, 2005 vested in full and an additional
25% of the other stock options held by Mr. Goodermote
vested in full, which represented the acceleration of options to
acquire 356,421 shares in the aggregate.
Mr. Goodermote’s employment letter agreement also
provides for the following:
Employment Terms for S. Craig Huke. In October
2006, we entered into an employment letter agreement with S.
Craig Huke setting forth the terms of his employment, which
amended and restated a letter agreement originally entered into
in May 2003, upon the commencement of his employment as our
Chief Financial Officer. Mr. Huke’s employment letter
agreement provides for the following:
Employment Terms for Daniel M. Jones. In
October, 2006, we entered into an employment letter agreement
with Daniel M. Jones setting forth the terms of his employment
as our Vice President of Sales and Marketing, which employment
agreement amended and restated a letter agreement originally
entered into in connection with the commencement of his
employment in February 2005. Mr. Jones’ employment
letter agreement provides for the following:
In addition to the above terms, these officers and
Mr. Beeler are entitled to receive various payments upon
certain terminations of their employment or a change in control,
pursuant to agreements between those officers and us. For a
discussion of those terms, and a quantification of the benefits
thereunder assuming a termination event of December 31,
2007, see the Potential Payments upon Termination or Change in
Control below.
Mr. Murciano. The amounts disclosed in
the tables above with respect to Mr. Murciano are in part a
result of the terms of agreements that we entered into in
connection with the acquisition of Double-Take EMEA. For a
discussion of applicable terms, see Certain Relationships and
Related Person Transactions — Double-Take EMEA
Acquisition and Agreements with Jo Murciano above.
Outstanding
Equity Awards at Fiscal Year-End
December 31, 2007
The section below describes the payments that may be made to
named executive officers in connection with a change in control
or pursuant to certain termination events. Each of our named
executive officers is a party to an agreement that provides for
certain benefits in the event of termination, including, in the
case of Messrs. Goodermote and Huke, following a change in
control.
Dean Goodermote. On November 9, 2007, we
entered into a severance letter agreement with
Mr. Goodermote. The letter agreement provides for a
severance payment and continued benefits in the event that
Mr. Goodermote’s employment with us is terminated
without “cause” (as defined below). Specifically,
Mr. Goodermote is entitled to an amount equal to one time
his base salary in effect as of the termination, which amount is
to be paid in accordance with our regular payroll periods, and
the continuation of health care benefits for a
12-month
period following termination. The payments and benefits under
the letter agreement are subject to Mr. Goodermoote
executing a release of claims in our favor and compliance with
the terms of a non-disclosure agreement between us and
Mr. Goodermoote.
Pursuant to an employment letter agreement with us, upon a
change in control as a result of a merger, acquisition, purchase
of all or substantially all of our assets, or a like
transaction, all unvested stock options held by
Mr. Goodermote will immediately vest.
Assuming that termination of Mr. Goodermote’s
employment had occurred on December 31, 2007, he would have
received $350,000, payable every two weeks for a
12-month
period in the amount of $13,462 (less any applicable withholding
taxes). In addition, so long as Mr. Goodermote elected to
continue the health, dental and vision insurance coverage
provided by us, for a period of 12 months after
termination, we would have paid the amount by which the cost of
such coverage exceeded the amount that he previously paid for
coverage under such health, dental and vision insurance plans,
which in the aggregate would have totaled approximately $13,602
for the
12-month
period; provided, however, that if he became eligible for group
health, dental or vision benefits under
plans maintained by a subsequent employer, these benefits would
be secondary to the benefits provided by that employer. In
addition, assuming that a change of control had occurred on
December 31, 2007, the vesting of
Mr. Goodermote’s equity awards would be accelerated
and he would be entitled to purchase an additional
117,739 shares of our common stock at a price of
$1,094,695, which shares had a market value of $2,557,291 at the
close of business on December 31, 2007.
S. Craig Huke. On November 9, 2007,
we entered into a severance letter agreement with Mr. Huke.
The letter agreement provides for a severance payment and
continued benefits in the event that Mr. Huke’s
employment with us is terminated without “cause” (as
defined below). Specifically, Mr. Huke is entitled to an
amount equal to one time his base salary in effect as of the
termination, which amount is to be paid in accordance with our
regular payroll periods, and the continuation of health care
benefits for a
12-month
period following termination. The payments and benefits under
the letter agreement are subject to Mr. Huke executing a
release of claims in our favor and compliance with the terms of
a non-disclosure agreement between us and Mr. Huke.
Pursuant to an employment letter agreement with us, in the event
that Mr. Huke’s employment is terminated without cause
in connection with a change in control as a result of a merger,
acquisition, purchase of all or substantially all of our assets,
or other like transaction, as determined by the Compensation
Committee of the Board, in which we are not the surviving
entity, all unvested options to purchase shares of our common
stock held by Mr. Huke will immediately vest.
Assuming that termination of Mr. Huke’s employment had
occurred on December 31, 2007, Mr. Huke would have
received $208,000, payable every two weeks for a
12-month
period in the amount of $8,000 (less any applicable withholding
taxes). In addition, so long as Mr. Huke elected to
continue the health, dental and vision insurance coverage
provided by us, for a period of 12 months after
termination, we would have paid the amount by which the cost of
such coverage exceeded the amount that he previously paid for
coverage under such health, dental and vision insurance plans,
which in the aggregate would have totaled approximately $13,602
for the
12-month
period; provided, however, that if he became eligible for group
health, dental or vision benefits under plans maintained by a
subsequent employer, these benefits would be secondary to the
benefits provided by that employer. In addition, assuming that a
change in control transaction had occurred on December 31,
2007, the vesting of options to purchase 56,811 shares of
our common stock at a price of $304,345 would be accelerated,
which shares had a market value of $1,233,935 at the close of
business on December 31, 2007.
Robert L. Beeler. On November 9, 2007, we
entered into an amended and restated employment and severance
agreement with Mr. Beeler. The agreement provides for a
severance payment and continued benefits in the event that
Mr. Beeler’s employment with us is terminated without
“cause” (as defined below). Specifically,
Mr. Beeler is entitled to an amount equal to one time his
base salary in effect as of the termination, which amount is to
be paid in accordance with our regular payroll periods, and the
continuation of health care benefits for a
12-month
period following termination. The payments and benefits under
the agreement are subject to Mr. Huke executing a release
of claims in our favor and compliance with the terms of a
non-disclosure agreement between us and Mr. Beeler.
Assuming that termination of Mr. Beeler’s employment
had occurred on December 31, 2007, he would have received
$173,000, payable every two weeks for a
12-month
period in the amount of $6,654 (less any applicable withholding
taxes) . In addition, so long as Mr. Beeler elected to
continue the health, dental and vision insurance coverage
provided by us, for a period of 12 months after
termination, we would have paid the amount by which the cost of
such coverage exceeded the amount that he previously paid for
coverage under such health, dental and vision insurance plans,
which in the aggregate would have totaled approximately $13,602
for the
12-month
period; provided, however, that if he became eligible for group
health, dental or vision benefits under plans maintained by a
subsequent employer, these benefits would be secondary to the
benefits provided by that employer.
Daniel M. Jones. On November 9, 2007, we
entered into a severance letter agreement with Mr. Jones.
The letter agreement provides for a severance payment and
continued benefits in the event that Mr. Jones’
employment with us is terminated without “cause” (as
defined below). Specifically, Mr. Jones is entitled to an
amount equal to one time his base salary in effect as of the
termination, which amount is to be paid in accordance with our
regular payroll periods, and the continuation of health care
benefits for a
12-month
period following termination. The payments and benefits under
the letter agreement are subject to Mr. Jones executing a
release of claims in our favor
and compliance with the terms of a non-disclosure agreement
between us and Mr. Jones. Furthermore, in the event that
Mr. Jones is required to relocate outside of a 100 mile
radius from his current home, he may decline the relocation and
be eligible for the severance payments described above.
Assuming that termination of Mr. Jones’ employment had
occurred on December 31, 2007, he would have received
$163,000, payable every two weeks for a
12-month
period in the amount of $6,269 (less any applicable withholding
taxes. In addition, so long as Mr. Jones elected to
continue the health, dental and vision insurance coverage
provided by us, for a period of 12 months after
termination, we would have paid the amount by which the cost of
such coverage exceeded the amount that he previously paid for
coverage under such health, dental and vision insurance plans,
which in the aggregate would have totaled approximately $13,602
for the
12-month
period; provided, however, that if he became eligible for group
health, dental or vision benefits under plans maintained by a
subsequent employer, these benefits would be secondary to the
benefits provided by that employer
For purposes of the descriptions above, termination for
“cause” is defined as: (i) willful disobedience
of a material and lawful instruction of the Chief Executive
Officer or the Board; (ii) conviction of any misdemeanor
involving fraud or embezzlement or similar crime, or any felony;
(iii) conduct amounting to fraud, dishonesty, negligence,
willful misconduct or recurring insubordination;
(iv) inattention to the executive’s duties; or
(v) excessive absences from work.
The Compensation Committee of the Board consisted of
Messrs. Landry and Young and Ms. Witt in 2007. None of
these individuals is currently, or has ever been, an officer or
employee of Double-Take Software or any of our subsidiaries. In
addition, during 2007, none of our executive officers served as
a member of the board of directors or on the compensation
committee of any other entity that had an executive officer
serving on our Board or our Compensation Committee.
We are asking our stockholders to ratify the selection of Eisner
LLP (“Eisner”) as our independent auditor. Although
ratification is not required by our bylaws or otherwise, the
Board is submitting the selection of Eisner to our stockholders
for ratification as a matter of good corporate practice. If the
selection is not ratified, the Audit Committee will consider
whether it is appropriate to select another registered public
accounting firm. Even if the selection is ratified, the Audit
Committee in its discretion may select a different registered
public accounting firm at any time during the year if it
determines that such a change would be in the best interests of
Double-Take Software and our stockholders.
The Board first approved Eisner as our independent auditors in
2004, and Eisner audited our financial statements for the fiscal
year ended December 31, 2007. Representatives of Eisner are
expected to be present at the meeting. They will be given an
opportunity to make a statement at the meeting if they desire to
do so, and they will be available to respond to appropriate
questions.
We regularly review the services and fees of our independent
accountants. These services and fees are also reviewed by the
Audit Committee on an annual basis. The aggregate fees billed
for the fiscal years ended December 31, 2007 and 2006 for
each of the following categories of services are as follows:
Audit Fees. Consist of fees billed for
professional services rendered in connection with the audit of
our annual financial statements and the financial statements
included in our Quarterly Reports on
Form 10-Q,
as well as services provided in connection with our securities
offerings and registration statements. In addition, for fiscal
2007 audit fees included professional services rendered in
connection with Eisner’s audit of our internal control over
financial reporting as of December 31, 2007.
Audit-Related Fees. Consist of fees billed for
assurance and related services that are reasonably related to
the performance of the audit or review of our financial
statements and are not reported under “Audit Fees.”
These fees were incurred in connection with an audit of our 401K
plan.
Tax Fees. Consist of fees billed for tax
compliance, tax advice and tax planning. In 2007, these fees
were related to services provided in connection with our review
of Section 382 of the Internal Revenue Code. In 2006, these
fees were incurred primarily in connection with the preparation
of our corporate income tax returns.
All Other Fees. Consist of fees billed for
products and services, other than those described above under
Audit Fees, Audit-Related Fees and Tax Fees, including in 2006
services performed in connection with our acquisition of Sunbelt
System Software S.A.S. and in 2007 services performed in
connection with our acquisition of TimeSpring Software
Corporation.
During the fiscal years ended December 31, 2007 and 2006,
Eisner has provided various services, in addition to auditing
our financial statements. The Audit Committee has determined
that the provision of such services is compatible with
maintaining Eisner’s independence. In 2007, all fees paid
to Eisner were pre-approved pursuant to the policy described
below.
The Audit Committee’s policy is to pre-approve all audit
and permissible non-audit services provided by Eisner. These
services may include audit services, audit-related services, tax
services and other services. Eisner and management are required
to periodically report to the Audit Committee on the extent of
services provided by Eisner in accordance with this policy, and
the fees for services performed to date. The Audit Committee, or
any designated member of the committee if consistent with
applicable law and listing standards, may also pre-approve
particular services on a
case-by-case
basis, and any designated Audit Committee member must present
his or her decision to the full Audit Committee at its next
scheduled meeting.
THE BOARD
OF DIRECTORS RECOMMEND THAT YOU VOTE FOR RATIFICATION OF
THE APPOINTMENT OF EISNER LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE
SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR
INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY US UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934,
EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE THIS REPORT.
During 2007, the Audit Committee consisted of Mr. Birch,
who serves as the Chairman, and Messrs Landry and Young. The
Audit Committee operates under a written charter adopted by the
Board, which is available on our website in the Investor
Relations section under “Corporate Governance.” The
Audit Committee reviews the charter and proposes necessary
changes to the Board on an annual basis.
During the fiscal year ended December 31, 2007, the Audit
Committee fulfilled its duties and responsibilities generally as
outlined in its charter. The Audit Committee has:
On the basis of the reviews and discussions referenced above,
the Audit Committee recommended to the Board that the audited
financial statements be included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 for filing with
the SEC.
AUDIT
COMMITTEE (March 10, 2008)
Paul D.
Birch, Chairperson
John Landry John Young
Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers and 10% stockholders
to file reports of ownership of our equity securities. In 2007,
one stock option exercise on Form 4 by each of John Landry
and Michael Lesh was not timely filed, one sale of shares on
Form 4 by Daniel M. Jones was not timely filed, and one
stock option exercise and sale on Form 4 by David Demlow
was not timely filed.
The following table sets forth certain information as of
March 14, 2008 (unless otherwise specified), with respect
to the beneficial ownership of our common stock by each person
who is known to own beneficially more than 5% of the outstanding
shares of common stock, each person currently serving as a
director, each nominee for director, each Named Executive
Officer (as defined below), and all Directors and executive
officers as a group:
GENERAL
MATTERS
A copy of our 2007 Annual Report on
Form 10-K
has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual
Meeting. We will mail without charge, upon written request, a
copy of our 2007 Annual Report on
Form 10-K,
excluding exhibits. Please send a written request to our
investor relations firm, Sapphire Investor Relations, LLC:
New York
office:
150 Broadway, Suite 808 New York, NY 10038
San
Francisco office:
250 Montgomery Street, Suite 1230 San Francisco, CA 94104
These documents can also be requested through, and are available
in, the Investor Relations section of our website, which is
located at www.doubletake.com.
If you are the beneficial owner, but not the record holder, of
shares of our stock, your broker, bank or other nominee may only
deliver one copy of this proxy statement and our 2007 Annual
Report to multiple stockholders who share an address unless that
nominee has received contrary instructions from one or more of
the stockholders Similarly, beneficial owners sharing an address
who are receiving multiple copies of proxy materials and annual
reports and who wish to receive a single copy of such materials
in the future will need to contact their broker, bank or other
nominee to request that only a single copy of each document be
mailed to all shareowners at the shared address in the future.
The charters for our Audit, Compensation and Nomination and
Corporate Governance Committees, as well as our Corporate
Governance Guidelines, our Code of Business Conduct and Ethics
and our Related Person Transactions Policy and Guidelines, are
in the Investor Relations section of our website, which is
located at www.doubletake.com, and are also available in print
without charge by writing to the addresses above.
Requirements for Stockholder Proposals to be Considered for
Inclusion in Double-Take Software’s Proxy
Materials. To be considered for inclusion in next
year’s proxy statement, stockholder proposals must be
received by our Corporate Secretary at our principal executive
offices no later than the close of business on December 23,
2008.
Requirements for Stockholder Proposals to be Brought Before
an Annual Meeting. Our bylaws provide that, for
stockholder nominations to the Board or other proposals to be
considered at an annual meeting, the stockholder must have given
timely notice thereof in writing to the Corporate Secretary at
Double-Take Software, Inc., 257 Turnpike Road, Suite 210,
Southborough, MA 01772, Attn: Corporate Secretary. To be timely
for the 2009 annual meeting, a stockholder’s notice must be
received by the Corporate Secretary of Double-Take Software at
our principal executive offices 60 days before the meeting,
unless stockholders receive less than 75 days notice or
prior public disclosure of the date of the meeting, in which
case notice must be received no later than the close of business
on the tenth day following the notice or public disclosure of
the meeting. Such notice must provide the information required
by our bylaws with respect to each matter the stockholder
proposes to bring before the 2009 annual meeting.
As of the date of this Proxy Statement, the Board does not
intend to present any matters other than those described herein
at the Annual Meeting and is unaware of any matters to be
presented by other parties. If other matters are properly
brought before the Annual Meeting for action by the
stockholders, proxies returned to us in the enclosed form will
be voted in accordance with the recommendation of the Board or,
in the absence of such a recommendation, in accordance with the
judgment of the proxy holder.
By Order of the Board of Directors
S. Craig Huke
Corporate Secretary
5 FOLD AND DETACH HERE AMD READ THE REVERSE SIDE5
REVOCABLE PROXY
DOUBLE-TAKE SOFTWARE, INC. ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2008 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Stock of Double-Take Software, Inc. (the “Company”) hereby
constitutes and appoints Dean Goodermote and Ashoke (Bobby) Goswami, or each of them acting
singularly in the absence of the other, the true and lawful proxy or proxies for and in the name
of the undersigned to vote the shares of Common Stock that the undersigned is entitled to vote at
the Annual
Meeting of Stockholders of the Company to be held at the Harvard Club of Boston located at 374
Commonwealth Avenue, Boston, Massachusetts 02215, at 9:00 a.m. local time on May 23, 2008, or any
postponement or adjournment thereof.
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure your
shares are represented at the meeting by promptly returning your proxy in the enclosed envelope.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN
PROPOSAL 1 AND FOR THE RATIFICATION OF THE APPOINTMENT OF THE AUDITORS IN PROPOSAL 2 AND IN THE
DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE ANNUAL
MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
(Continued, and to be marked, dated and signed, on the other side)
Double-Take
Software, Inc.
VOTE
BY INTERNET OR TELEPHONE
QUICK ««« EASY «««IMMEDIATE As
a stockholder of Double-Take Software, Inc., you have the option of
voting your shares
electronically through the Internet or on the telephone, eliminating the need to return the proxy
card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as
if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the
Internet or by telephone must be received by
7:00 p.m. Eastern time on May 22, 2008.
PLEASE DO NOT RETURN THE PROXY CARD YOU ARE
VOTING ELECTRONICALLY OR BY PHONE 5 FOLD AND DETACH HERE AND READ THE REVERSE SIDE 5
Note: Please sign exactly
as name appears in address. When signing as attorney, executor,
administrator, trustee, or guardian, please give your title as such. If joint account, please provide both signatures.
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