SC TO-C

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 1, 2009

Quest Software, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-26937	33-0231678
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5 Polaris Way, Aliso Viejo, California	92656
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 754-8000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

x Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On June 1, 2009, Quest Software, Inc. (“Quest”) entered into a Voting Agreement (the “Voting Agreement”) with the Executive Chairman of Quest’s Board of Directors, Vincent C. Smith, pursuant to which Mr. Smith has agreed to vote any shares of Quest voting securities held by him, subject to certain exclusions described below, that represent greater than 35% of Quest’s outstanding voting securities in the same proportion as all shares of Quest voting securities are voted, including by Mr. Smith and his affiliates, on any matter presented to Quest’s stockholders that is a Designated Proposal (as defined in the Voting Agreement).

Designated Proposals include any proposal brought to Quest’s stockholders for approval other than (i) third party proposals brought to the stockholders that a majority of Quest’s then independent and disinterested directors vote against; (ii) proposals related to a change of control for which a majority of Quest’s then independent and disinterested directors determine that Mr. Smith’s interests are not materially different from those of Quest’s other stockholders, other than due to the relative size of his stockholdings; and (iii) any other proposal that a majority of Quest’s then independent and disinterested directors agree should be excluded from the requirements of the Voting Agreement.

The Voting Agreement applies only to voting securities in excess of 35% that result from the Tender Offer (as defined below) or any subsequent stock repurchases by Quest or that result from stock options, restricted stock or restricted stock units that Quest grants, or has granted, to him, and does not apply to any shares of stock Mr. Smith may otherwise acquire after the Tender Offer. Other than as expressly set forth in the Voting Agreement, Mr. Smith continues to have the power to exercise all rights attached to the shares he owns, including the right to dispose of his shares and the right to receive any distributions thereon.

The Voting Agreement will terminate on the earliest of (i) the mutual agreement of Quest (authorized by not less than a majority vote of the then independent and disinterested directors) and Mr. Smith; (ii) the later of December 31, 2013 or December 31 of the first year in which Mr. Smith ceases to hold any Excess Voting Power, as calculated in the Voting Agreement; (iii) the death of Mr. Smith; or (iv) two years after Mr. Smith ceases to be an employee or director of Quest.

This summary of the Voting Agreement is qualified in its entirety by the terms of the Voting Agreement, which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 8.01 Other Events.

On June 1, 2009, Quest issued a press release, attached hereto as Exhibit 99.2 and incorporated herein by reference, announcing that it intends to commence a modified “Dutch Auction” tender offer for up to 10,715,000 shares of Quest’s common stock at a range of $12.50 to $14.00 per share (the “Tender Offer”).

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This Current Report on Form 8-K is neither an offer to purchase nor a solicitation of an offer to sell shares of Quest. Quest stockholders are urged to read the relevant tender offer documents when they become available because they will contain important information that stockholders should consider before making any decision regarding tendering their shares. At the time the offer is commenced, Quest will file tender offer materials with the Securities and Exchange Commission (“SEC”), including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents. The tender offer materials will contain important information which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer documents will be made available to all Quest stockholders at no expense to them. The tender offer materials will be available for free at the SEC’s website at http://www.sec.gov. In addition, Quest stockholders will be able to obtain a free copy of these documents from MacKenzie Partners, Inc., the information agent for the tender offer, whose contact information will be provided in the tender offer documents.

In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, Quest files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed by Quest at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Quest’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	Voting Agreement, dated June 1, 2009, by and between Quest Software, Inc. and Vincent C. Smith.
99.2	Press release issued by Quest Software, Inc. on June 1, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QUEST SOFTWARE, INC.
Date: June 1, 2009
	By:	/s/ David P. Cramer
		David P. Cramer Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit Number	Exhibit Title or Description
99.1	Voting Agreement, dated June 1, 2009, by and between Quest Software, Inc. and Vincent C. Smith.
99.2	Press release issued by Quest Software, Inc. on June 1, 2009.

EX-99.1

Exhibit 99.1

VOTING AGREEMENT

This VOTING AGREEMENT (the “Agreement”), dated as of June 1, 2009 is made by and between Vincent C. Smith and Quest Software, Inc. Capitalized terms shall have the meanings attributed to them in Section 1.1.

WHEREAS, on March 5, 2009, the Board of Directors of Quest authorized a Repurchase Program;

WHEREAS, the Board has conditioned its approval of the Repurchase Program on Quest and the Principal Stockholder, entering into a voting agreement with respect to the Subject Shares;

WHEREAS, as of the date hereof, the Principal Stockholder owns, with the right to vote, the Owned Shares; and

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 For purposes of this Agreement:

(a) “affiliates” of the Principal Stockholder means any person or entity that directly, or indirectly through one of more intermediaries, controls, or is controlled by, or is under common control with, the Principal Stockholder.

(b) “Agreement” shall have the meaning set forth in the first paragraph of this Voting Agreement.

(c) “Cap Amount” means 35% of the voting power represented by the Voting Securities.

(d) “Company” means Quest Software, Inc., a Delaware corporation.

(e) “Company Stockholders’ Meeting” shall have the meaning set forth in Section 2.11(a) hereof.

(f) “Designated Proposal” shall mean any proposal brought to the stockholders for approval other than: (i) proposals relating to a change of control of the Company in which a majority of the then independent and disinterested directors of the Company determine that the Principal Stockholder does not have an interest materially different from other stockholders (other than due to the relative size of his holdings), (ii) proposals brought by third parties that are voted against by a majority of the then independent and disinterested directors of the Company, and (iii) any other proposal that a majority of the then independent and disinterested directors of the Company agrees should be excluded from the requirements of Section 2.1(y).

(g) “Excess Voting Power” means the aggregate percentage voting power represented by the Subject Shares in excess of the Cap Amount that results from the Repurchase Program or any subsequent stock repurchases by the Company. For the avoidance of doubt, any excess voting

power that is attributable to the later acquisition or purchase of securities (other than any acquisition or purchase of securities as a result of stock options, shares of restricted stock or restricted stock units granted to the Principal Stockholder by the Company) shall not be considered Excess Voting Power for purposes of this Agreement.

(h) “Group” shall have the meaning set forth in Section 13(d) of the Exchange Act.

(i) “Liens” shall have the meaning set forth in Section 3.2 hereof.

(j) “Owned Shares” means 28,757,603 shares of common stock of the Company, which represent in the aggregate, based on Company share data as of May 26, 2009, approximately 30% of the voting power of the Company’s outstanding shares.

(k) “Principal Stockholder” means Vincent C. Smith, Quest’s executive chairman of the Board.

(l) “Quest” means Quest Software, Inc., a Delaware corporation, and any successor thereof.

(m) “Repurchase Program” means a stock repurchase of $100 million of Quest’s common stock.

(n) “Subject Shares” means Voting Securities that the Principal Stockholder may own or have the power to vote, directly or indirectly, from time to time, it being understood that Voting Securities shall be Subject Shares only during the period they are so owned or controlled.

(o) “Termination Date” means the earlier of (i) the date on which the Company (authorized by not less than a majority vote of the then independent and disinterested directors thereof) and the Principal Stockholder agree to terminate this Agreement, (ii) the later to occur of (A) December 31st of the first year on which the calculation of Excess Voting Power is equal to zero percent and (B) December 31, 2013, (iii) the death of the Principal Stockholder, or (iv) that date which is two years after the Principal Stockholder ceases to be an employee or director of the Company.

(p) “Voting Securities” means securities of the Company having the power generally to vote on the election of directors and other matters submitted to a vote of stockholders of the Company.

ARTICLE II

VOTING AGREEMENT

SECTION 2.1 Voting Agreement. During the time this Agreement is in effect, at any meeting of the stockholders of the Company, however called, or at any adjournment or postponement thereof (a “Company Stockholders’ Meeting”), or in any other circumstances upon which a vote, consent or other approval (including by written consent) is sought by or from the stockholders of the Company, the Principal Stockholder shall (x) when a Company Stockholders’ Meeting is held, appear at such Company Stockholders’ Meeting or otherwise cause Subject Shares that represent Excess Voting Power to be counted as present thereat for the purpose of establishing a quorum (except to the extent otherwise provided in the immediately succeeding clause (y) with respect to non-affiliated shares which are not counted as present), and (y) for all Designated Proposals cause Subject Shares that represent Excess Voting Power to be treated in the same manner (i.e., not present (and, therefore, not counted as present for quorum purposes), present but abstaining, voting for or voting against), and in proportion to, the votes or actions of all Company stockholders, including the vote or actions of the Principal Stockholder and his

affiliates on the basis, solely for the purpose of determining proportionality, at any such Company Stockholders’ Meeting or under any such other circumstances upon which a vote, consent or other approval (including by written consent) is sought by or from the stockholders of the Company.

SECTION 2.2 Irrevocable Proxy.

(a) As security for the Principal Stockholder’s obligations under Section 2.1, the Principal Stockholder hereby irrevocably constitutes and appoints the Company as his attorney and proxy in accordance with the Delaware General Corporation Law, with full power of substitution and re-substitution, to cause his Subject Shares representing Excess Voting Power to be counted as present at any Company Stockholders’ Meeting (except to the extent otherwise provided in Section 2.1(a)(y) with respect to non-affiliated shares which are not counted as present), to vote his Subject Shares representing Excess Voting Power at any Company Stockholders’ Meeting, and to execute consents in respect of his Subject Shares representing Excess Voting Power as and to the extent provided in Section 2.1. The Principal Stockholder hereby revokes all other proxies and powers of attorney with respect to his Subject Shares representing Excess Voting Power that he may have heretofore appointed or granted, and represents that any proxies heretofore given in respect of his Subject Shares representing Excess Voting Power, if any, are revocable.

(b) The Principal Stockholder hereby affirms that the irrevocable proxy set forth in this Section 2.2 is given in connection with the commencement by the Company of the Repurchase Program, and that such irrevocable proxy is given to induce the Company to so commence the Repurchase Program and to secure the performance of the duties of the Principal Stockholder under this Agreement. The Principal Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and, except as set forth in this Section 2.2 or in Section 6.1, is intended to be irrevocable in accordance with the provisions of Section 218 of the Delaware General Corporation Law. If for any reason the proxy granted herein is not irrevocable, then the Principal Stockholder shall vote his Subject Shares representing Excess Voting Power in accordance with Section 2.1 above. The parties agree that the foregoing is a voting agreement created under Section 218 of the Delaware General Corporation Law.

(c) This irrevocable proxy shall automatically terminate on the Termination Date. Prior to that date, this irrevocable proxy shall not be terminated by any act of the Principal Stockholder or by operation of law, whether by the death or incapacity of the Principal Stockholder or by the occurrence of any other event or events, it being understood that actions taken by the Company hereunder prior to the Termination Date shall be and remain valid as if such death, incapacity or other event or events had not occurred, regardless of whether or not the Company has received notice of the same.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE PRINCIPAL STOCKHOLDER

The Principal Stockholder hereby represents and warrants to the Company as follows:

SECTION 3.1 Authority for this Agreement. The Principal Stockholder has all necessary power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Principal Stockholder and the consummation by the Principal Stockholder of the transactions contemplated hereby (a) will not violate any order, writ, injunction, decree, statute, rule, regulation or law applicable to the Principal Stockholder or by which any of his Subject Shares are bound, (b) will not violate or constitute a breach or default under any agreement by which the Principal Stockholder or the Subject Shares may be bound, (c) require the consent of or any notice or other filing with any third party, including any governmental authority,

and (d) have been duly and validly authorized, and no other proceedings on the part of the Principal Stockholder are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. There is no beneficiary or holder of a voting trust certificate or other interest of any trust of which the Principal Stockholder is a trustee, or any party to any other agreement or arrangement, whose consent is required for the execution and delivery of this Agreement or the consummation by the Principal Stockholder of the transactions contemplated hereby. Except as otherwise provided to the Company, no spousal consent is required for the execution and delivery of this Agreement or the consummation by the Principal Stockholder of the transactions contemplated hereby.

SECTION 3.2 Ownership of Shares. Except as listed on Schedule 3.2 hereto, as of the date hereof, the Principal Stockholder is the sole beneficial owner of the Owned Shares, free and clear of all pledges, liens, proxies, claims, charges, security interests, preemptive rights, voting trusts, voting agreements, options, rights of first offer or refusal and any other encumbrances or arrangements whatsoever with respect to the ownership, transfer or other voting of the Owned Shares other than the encumbrances created by this Agreement and any restrictions on transfer under applicable federal and state securities laws (collectively, “Liens”). As of the date hereof, there are no outstanding options, warrants or rights to purchase or acquire, or agreements or arrangements relating to the voting of, any Subject Shares and the Principal Stockholder has the sole authority to direct the voting of the Subject Shares in accordance with the provisions of this Agreement and the sole power of disposition with respect to the Subject Shares, with no restrictions, subject to applicable federal and state securities laws on his rights of disposition pertaining thereto (other than Liens or restrictions created by this Agreement). Except as listed on Schedule 3.2 hereto, the Principal Stockholder does not own beneficially or of record any other equity securities of the Company.

ARTICLE IV

COVENANTS OF THE PRINCIPAL STOCKHOLDER

SECTION 4.1 No Inconsistent Agreement. The Principal Stockholder hereby covenants that he (a) has not entered into and shall not, at any time prior to the termination of this Agreement, enter into any agreement that would restrict, limit or interfere with the performance of his obligations hereunder and (b) shall not, at any time prior to the termination of this Agreement, knowingly take any action that would reasonably be expected to make any of his representations or warranties contained herein untrue or incorrect or have the effect of preventing or disabling him from performing his obligations under this Agreement.

SECTION 4.2 Restrictions on Certain Transfers and Proxies. (a) Other than pursuant to the terms of this Agreement, without the prior written consent of the Company or as otherwise provided in this Agreement, during the term of this Agreement, the Principal Stockholder shall not, directly or indirectly, (i) grant any proxies or enter into any voting trust or other agreement or arrangement with respect to the voting of any Subject Shares representing Excess Voting Power, or (ii) sell, assign, transfer, encumber or otherwise dispose of (including by merger, consolidation or otherwise by operation of law), or enter into any contract, option or other arrangement or understanding with respect to the direct or indirect assignment, transfer, encumbrance or other disposition (including by merger, consolidation or otherwise by operation of law), of any Subject Shares representing Excess Voting Power and in connection therewith retain any voting control or influence over the subject shares representing Excess Voting Power (or forming a Group for such purpose) unless the Principal Stockholder both agrees to and actually exerts such voting control or influence over the subject shares representing Excess Voting Power to have such shares voted in a manner consistent with the obligations set forth in Section 2.1 hereof.

(b) The Principal Stockholder is signing this Agreement solely in his capacity as a stockholder of the Company, and nothing contained herein shall limit or affect any actions taken by him in his capacity as an officer or director of the Company.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Principal Stockholder as follows:

SECTION 5.1 Authority for this Agreement. The Company has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (i) will not violate any order, writ, injunction, decree, statute, rule, regulation or law applicable to the Company, (ii) will not violate or constitute a breach or default under any agreement by which the Company may be bound, (iii) require the consent of or any notice or other filing with any third party, including any governmental authority, and (iv) have been duly and validly authorized, and no other proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming it has been duly and validly authorized, executed and delivered by the Principal Stockholder, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting enforcement of creditors’ rights generally, and general principals of equity (regardless of whether enforcement is considered in a proceeding at law or in equity.

ARTICLE VI

MISCELLANEOUS

SECTION 6.1 Termination. This Agreement and all of its provisions shall terminate upon the Termination Date; provided however, that Sections 6.3, 6.5, 6.7, 6.8 and 6.9 shall survive any termination of this Agreement. Nothing in this Section 6.1 shall be deemed to release any party from any liability for any breach by such party of his/its representations and warranties or any other terms and provisions of this Agreement.

SECTION 6.2 No Ownership Interest. Except as expressly set forth in this Agreement, including, without limitation, in Section 2.2 hereof, nothing contained in this Agreement shall be deemed to vest in the Company any direct or indirect ownership, or incidence of ownership, of or with respect to any Subject Shares. All rights, ownership and economic benefits of and relating to any Subject Shares shall remain and belong to the Principal Stockholder, and the Company shall not have any authority to exercise any power or authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of the Principal Stockholder or exercise any power or authority to direct the Principal Stockholder in the voting of any of the Subject Shares, except as otherwise expressly provided in this Agreement, including, without limitation, in Section 2.2 hereof.

SECTION 6.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be given (and shall be deemed to have been duly received if given) by hand delivery in writing or by facsimile or e-mail transmission with confirmation of receipt or by a nationally recognized overnight courier service, as follows:

If to Principal Stockholder:

Vincent C. Smith

c/o Quest Software, Inc.

5 Polaris Way

Aliso Viejo, CA 92656

With a copy to:

Charles Ruck

Latham & Watkins LLP

650 Town Center Drive, 20^th Floor

Costa Mesa, CA 92626

If to the Company:

Board of Directors of Quest Software, Inc.

5 Polaris Way

Aliso Viejo, California 92656

Attention: H. John Dirks

with an additional copy to:

Quest Software, Inc.

5 Polaris Way

Aliso Viejo, California 92656

Attention: General Counsel

or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above.

SECTION 6.4 Validity. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

SECTION 6.5 Entire Agreement; Assignment. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. The Agreement shall not be assigned by any party by operation of law or otherwise without the prior written consent of the other parties, provided that the Company may assign any of their respective rights and obligations to any affiliate thereof, but no such assignment shall relieve the Company of its obligations hereunder.

SECTION 6.6 Amendment. This Agreement may not be amended except by an instrument in writing signed by the Company (authorized by not less than a majority vote of the then independent and disinterested directors thereof) and the Principal Stockholder.

SECTION 6.7 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other person or entity any rights or remedies of any nature whatsoever under or by reason of this Agreement.

SECTION 6.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

SECTION 6.9 Enforcement of the Agreement; Jurisdiction; Venue. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the Principal Stockholder in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the termination of this Agreement in accordance with Section 6.1, the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the state and Federal courts in Orange County, California, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any such court in the event any dispute arises out of this Agreement or any transaction contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement or any transaction contemplated by this Agreement in any court other than any such court and (d) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any transaction contemplated by this Agreement. The parties irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the state and Federal courts in Orange County, California, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

SECTION 6.10 Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

SECTION 6.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

SECTION 6.12 Further Assurances. From time to time, at the request of another party and without further consideration, each party hereto shall take such reasonable further action as may reasonably be necessary or desirable to consummate and make effective the transactions contemplated by this Agreement.

IN WITNESS WHEREOF, the Principal Stockholder and the Company have caused this Agreement to be duly executed as of the date set forth above.

QUEST SOFTWARE, INC.
By:	/s/ David P. Cramer
	Name: David P. Cramer
	Title: Vice President, General Counsel and           Secretary
/s/ Vincent C. Smith
Vincent C. Smith

SCHEDULE 3.2

Subject Shares; Liens

1. 152,400 shares of common stock of the Company are held in the names of the Principal Stockholder’s minor children.

2. 1,040 shares of common stock of the Company are held by the Principal Stockholder as custodian for his minor children.

3. 47,060 shares of common stock of the Company are by the Vincent C. Smith Charitable Remainder Trust, of which the Principal Stockholder is the trustee.

4. 27,750,031 shares of common stock of the Company are pledged as collateral for the Principal Stockholder’s margin accounts.

5. The Principal Stockholder holds options to purchase 2,335,000 shares of common stock of the Company.

6. The Principal Stockholder holds 104,811 shares of common stock of the Company subject to vested Restricted Stock Units and 98,145 shares of common stock of the Company subject to unvested Restricted Stock Units.

EX-99.2

Exhibit 99.2

For Immediate Release

Editorial Contact: Daphne Kent

614-726-4787

daphne.kent@quest.com

Investor Contacts: Thomas Patterson

949-754-8336

thomas.patterson@quest.com

Stephen Wideman

949-754-8142

stephen.wideman@quest.com

QUEST SOFTWARE

ANNOUNCES INTENT TO COMMENCE MODIFIED DUTCH AUCTION

TO REPURCHASE 10,715,000 SHARES OF ITS COMMON STOCK

ALISO VIEJO, Calif., June 1, 2009 – Quest Software, Inc. (Nasdaq: QSFT) today announced its intent to commence a modified “Dutch Auction” tender offer for up to 10,715,000 common shares or approximately 11.3% of its common shares outstanding. The purchase price will not be greater than $14.00 or less than $12.50 per share for a maximum aggregate purchase price of approximately $150 million. On May 29, 2009, the closing sale price on the NASDAQ Stock Market for Quest’s common stock was $12.92. The tender offer is expected to commence on or about June 2, 2009 and will remain open for at least 20 business days. Quest intends to fund this share repurchase using its available cash resources and available borrowings under its $100 million revolving credit facility. As of March 31, 2009, Quest had approximately $310.6 million in cash and cash equivalents, restricted cash and short-term and long-term investments, and no outstanding balance under its revolving credit facility. The offer will be subject to terms and conditions to be described in an offer to purchase to be filed with the Securities and Exchange Commission on the date the tender offer is commenced.

The repurchase will be made through a modified “Dutch Auction” tender offer in which stockholders will be given the opportunity to sell a portion or all of their shares to Quest and do so without incurring any brokerage fees or commissions.

Under the modified “Dutch Auction” format, Quest will select the lowest price within the stated range that will allow it to buy 10,715,000 shares of its common stock, assuming that a sufficient number of shares is tendered. If the number of shares tendered is greater than the number sought, purchases will be made on a pro rata basis from stockholders tendering at or below the purchase price. The actual purchase price will be determined through an auction mechanism and will be the single lowest price within the offer range at which Quest can purchase up to 10,715,000 shares of common stock. The offer is not conditioned on the receipt of outside financing or upon any minimum number of shares being tendered. Quest’s board of directors and its executive officers do not intend to participate in the tender offer.

Quest’s Executive Chairman, Vincent C. Smith, has entered into a Voting Agreement with Quest pursuant to which he has agreed to vote any shares of Quest voting securities held by him, subject to certain exclusions, that represent greater than 35% of Quest’s outstanding voting securities in the same proportion as all shares of Quest voting securities are voted, including by Mr. Smith and his affiliates, on any matter presented to Quest’s stockholders, subject to certain exceptions. If the tender offer is subscribed in full, the voting securities held by Mr. Smith will increase from approximately 30.4% of Quest’s outstanding voting securities as of May 26, 2009 to approximately 34.3% immediately after consummation of the tender offer.

MacKenzie Partners, Inc. will act as the information agent for the tender offer. The depositary will be Computershare Trust Company, N.A. Neither Quest, its board of directors, the information agent nor the depositary is making any recommendation to stockholders as to whether to participate in the tender offer.

About Quest Software, Inc.

Quest Software, Inc., a leading enterprise systems management vendor, delivers innovative products that help organizations get more performance and productivity from their applications, databases, Windows infrastructure and virtual environments. Quest provides customers with client management through its ScriptLogic subsidiary and server virtualization management through its Vizioncore subsidiary. Through a deep expertise in IT operations and a continued focus on what works best, Quest helps more than 100,000 customers worldwide meet higher expectations for enterprise IT. Quest can be found in offices around the globe and at www.quest.com.

Forward-Looking Statements

This release may include predictions, estimates and other information that might be considered forward-looking statements, including statements relating to Quest’s intent to commence the tender offer and the anticipated terms of the offer. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ from those anticipated as a result of various factors, including: the impact of adverse changes in general economic conditions on Quest’s relationships with customers, strategic partners and vendors; reductions or delays in information technology spending; variations in demand or the size and timing of customer orders; competitive conditions in Quest’s various product areas; the risk that changes in economic circumstances, business conditions and Quest’s stock price may make the tender offer no longer advisable on the terms described herein, if at all; uncertainties relating to ongoing litigation arising from Quest’s stock option investigation; rapid technological change; risks associated with the development and market acceptance of new products and product strategies; disruptions caused by acquisitions of companies and/or technologies; fluctuating currency exchange rates and risks associated with international operations; the need to attract and retain qualified employees; and other risks inherent in software businesses. For a discussion of these and other related risks, please refer to Quest’s recent SEC filings, including Quest’s annual report on Form 10-K for the year ended December 31, 2008 and quarterly report on Form 10-Q for the quarter ended March 31, 2009, which are available on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Quest undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

Additional Information and Where to Find It

This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Quest. Quest stockholders are urged to read the relevant tender offer documents when they become available because they will contain important information that stockholders should consider before making any decision regarding tendering their shares. At the time the offer is commenced, Quest will file tender offer materials with the SEC, including an Offer to Purchase, a related Letter of Transmittal and certain other offer documents. The tender offer materials will contain important information which should be read carefully before any decision is made with respect to the tender offer. The Offer to Purchase, the related Letter of Transmittal and certain other offer documents will be made available to all Quest stockholders at no expense to them. The tender offer materials will be available for free at the SEC’s website at http://www.sec.gov. In addition, Quest stockholders will be able to obtain a free copy of these documents from the information agent for the tender offer by mailing requests for such materials to MacKenzie Partners, Inc., 105 Madison Avenue, New York, New York 10016, or by emailing tenderoffer@mackenziepartners.com or calling (800) 322-2885.

In addition to the Offer to Purchase, the related Letter of Transmittal and certain other offer documents, Quest files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed by Quest at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Quest’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.

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