Exhibit 10.3

 
First Amendment to
 
Retention Bonus Agreement
 
This First Amendment to Retention Bonus Agreement (“First Amendment”), effective
as of January 9, 2007 (“First Amendment Effective Date”), is made and entered
into between Rackable Systems, Inc., a Delaware corporation (the “Company”), and
Giovanni Coglitore, (the “Executive”). The Company and the Executive are each
individually referred to in this First Amendment as a “Party” and are
collectively referred to in this Agreement as the “Parties.”
 
RECITALS
 
A. The Executive and the Company are parties to a Retention Agreement dated
September 12, 2006 (the “Retention Agreement”).
 
B. The Executive and the Company wish to amend the Retention Agreement to
account for the excise tax imposed by Section 4999 of the Code.

In consideration of the mutual promises set forth herein, and other good and
valuable consideration the sufficiency of which is hereby acknowledged by each
party, the parties hereby agree as follows:
 
AMENDMENT

1. Section 1.2(z) of the Retention Agreement shall be changed to “December 31,
2007.”

2. Section 2.1 of the Retention Agreement shall be deleted and replaced with the
following:

“2.1  Cash Payment.  If the Company enters into a definitive agreement for a
Change in Control on or before the Agreement Termination Date, and if the
Closing of such Change in Control shall occur, the Company shall make a cash
payment to the Executive in an amount equal to $2,500,000 (less required
deductions and withholdings) as described in section 2.3 (the “Retention
Bonus”).”

3. Section 2.2 of the Retention Agreement shall be deleted and replaced with the
following:
 
“2.2    [Intentionally Deleted]”

3.   Section 2.3(a) of the Retention Agreement shall be deleted and replaced
with the following:

“2.3(a) Except as otherwise provided herein, the payment of the Retention Bonus
shall be paid in a lump-sum payment, subject to applicable withholding, within
five (5) business days after the close of the Change in Control.”
4. Continued Effect; Conflicts. Except as expressly amended by this First
Amendment, all terms and conditions of the Retention Agreement remain unchanged
and will continue in full force and effect. In the event of any conflict between
the terms set forth in this First Amendment and the terms set forth in the
Retention Agreement, the terms of this First Amendment will govern. Any
capitalized terms not defined in this First Amendment shall have the meaning set
forth in the Retention Agreement.
 
5. Counterparts; Facsimiles. This First Amendment may be executed in multiple
counterparts, each of which will be deemed an original, but all of which taken
together will constitute one and the same instrument.
 
 
 

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6. Complete Agreement. This First Amendment, together with the Retention
Agreement, embodies the complete agreement and understanding among the parties
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. For the avoidance of doubt, this
Agreement does not supersede or preempt any provisions of the Employment
Agreement. 
 
7. Additional Provisions. Sections 3, 4, 6, 7, 9, 10, 13, 14 and 15 of the
Retention Agreement shall apply equally to this First Amendment as if set forth
herein, with references to “this Agreement” being changed to references to “this
First Amendment”. 
 

 
IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment as of
the First Amendment Effective Date.
 

RACKABLE SYSTEMS, INC.
 
By: /s/ Thomas Barton
Name:  Thomas Barton
Title: CEO
Signature Date: January 9, 2007
GIOVANNI COGLITORE
 
By: /s/ Giovanni Coglitore
Name:  Giovanni Coglitore
Title: CTO
Signature Date: January 9, 2007