final form

SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (“Agreement”) is dated as of February 5,
2014, but effective as of the Effective Date (defined below), by and between A.
Lanham Napier (“Employee”) and Rackspace Hosting, Inc. and Rackspace US, Inc.
(together with their affiliated entities, the “Company”; the Company and
Employee are collectively referred to as the “Parties” or individually referred
to as a “Party”).
RECITALS
WHEREAS, Employee is employed by and a director of Rackspace US, Inc., the U.S.
operating subsidiary of Rackspace Hosting, Inc. (the “Parent”), and is an
officer and director of certain other subsidiaries of the Parent;
WHEREAS, Employee signed an Employment Agreement with Rackspace US, Inc.
effective as of March 31, 2009 (the “Employment Agreement”);
WHEREAS, Employee signed a Confidentiality, Intellectual Property and Dispute
Resolution Agreement with Rackspace US, Inc. on or about October 18, 2012 (the
“Confidentiality Agreement”);
WHEREAS, Employee and Rackspace, Inc. entered into an Indemnification Agreement
dated May 30, 2008 (the “Indemnification Agreement”);
WHEREAS, Parent previously granted Employee certain equity awards (collectively
referred to as the “Equity Awards”), subject to the terms and conditions therein
and the terms and conditions of the Parent’s 2005 Non-Qualified Stock Option
Plan and 2007 Amended and Restated Long Term Incentive Plan, as applicable, and
the award agreements evidencing each such grant (collectively the “Stock
Agreements”);

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WHEREAS, the Company and Employee wish to provide for an orderly transition of
Employee’s duties as Chief Executive Officer and President, and it is the
Parties’ current mutual intent that Employee’s employment terminate on February
10, 2014 (the “Separation Date”);
WHEREAS, Employee and the Company wish Employee to provide business advisory
services as an independent contractor following the Separation Date through May
11, 2014;
WHEREAS, Employee will resign from any officer and director positions affiliated
with the Company (including but not limited to the Parent) effective on the
Separation Date; and
WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that each may have against
the other and any of the Releasees as defined below, including, but not limited
to, any and all claims arising out of or in any way related to Employee’s
employment with or separation from the Company.
NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Employee hereby agree as follows:
AGREEMENT
1.Separation.
a.
Consideration. In consideration of Employee’s execution of this Agreement and
Employee’s fulfillment of all of its terms and conditions, and provided that
Employee does not revoke the Agreement under paragraph 5 below, the Company
agrees to provide Employee with the following:

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i.
Full vesting acceleration effective as of the Effective Date of the following
Restricted Stock Units: 750,000 shares of the common stock of the Company
granted to Employee on February 25, 2009 (the “Accelerated Shares”), which vest
pursuant to the achievement of the performance criteria contained in the grant
agreement that measures the total shareholder return (TSR) of the Company’s
common stock over the measurement period. The Company acknowledges that such
measurement date is being truncated by fourteen (14) calendar days from the
original five year measurement date and that the Company’s TSR performance at
the truncated measurement date is in the top 25% when compared to the Russell
2000 peer group as used in the agreement. The Company agrees to withhold a
sufficient number of shares from the Accelerated Shares to satisfy Employee’s
minimum statutory withholding tax obligations with regard to the vesting and
settlement of such Accelerated Shares.

ii.
Any unvested Equity Awards will cease vesting as of the last day on which
Employee is considered a “Service Provider” as defined in the Stock Agreements
(a “Service Provider”). The Company acknowledges and agrees that Employee shall
be considered a Service Provider during the Consulting Period (defined below).

b.
Resignation. Employee agrees to resign from the Board of Directors of the
Parent, and from any officer and/or director positions held in the Company or
any affiliates, with an effective date of the Separation Date.

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c.
Business Advisory Services.

i.
Employee agrees to be available to provide business advisory services as
reasonably requested by the Company to the Company from the Separation Date
through May 11, 2014 (the “Consulting Period”). These services will include but
not be limited to: being available upon reasonable request to (A) join
shareholder calls and conferences, (B) confer on historical operational
information, and (C) assist with transition matters; provided, however that
Employee will not be expected to provide more than eighty (80) hours per month
of business advisory services unless otherwise agreed in writing.

ii.
Employee will be compensated for his business advisory services with a one-time
consulting fee of $140,000 (the “Consulting Fee”), which will be paid on or
prior to the last day of the Consulting Period, so long as Employee has
continued to be available to provide such business advisory services as of such
date and has provided such services as reasonably requested by the Company;
provided, that $40,000 of the Consulting Fee will be paid to Employee regardless
of whether Employee continues to provide such business advisory services.

iii.
Employee will provide the business advisory services as an independent
contractor, and agrees to sign the Company’s standard form of consulting
agreement upon request by the Company. Employee’s access to the Company’s
network will be removed as of 5:00 p.m. (Central Time) on February 12, 2014 (or
such later time as may be reasonably requested by Employee and agreed by the
Company).

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iv.
The Company will not terminate the Consulting Period prior to the last day
thereof so long as Employee has been available to provide business advisory
services as reasonably requested by the Company, and has complied with the terms
of the consulting agreement.

d.
General. Employee acknowledges that without this Agreement, he is otherwise not
entitled to the consideration listed in this paragraph 1.

2.Benefits Employee’s health insurance benefits shall cease on February 28,
2014, subject to Employee’s right to continue his health insurance under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).
Employee’s participation in all benefits and incidents of employment, including,
but not limited to, the accrual of bonuses, vacation, and paid time off, will
cease as of the Separation Date.
3.Payment of Salary and Receipt of All Benefits. Employee acknowledges and
represents that, other than the consideration set forth in this Agreement, and
other than any regular salary accrued but not yet paid as of the Separation Date
per the Company’s regular payroll schedule (including, without limitation, cash
bonus amounts for 2013 that have not been paid to Employee as of the Separation
Date, even though Employee may not be employed at the time the Company
distributes such bonus payments) and outstanding reimbursable expenses, if any
(which Employee agrees to submit to the Company within thirty (30) days of the
Effective Date), the Company has paid or provided all salary, wages, bonuses,
accrued vacation/paid time off, premiums, leaves, housing allowances, relocation
costs, interest, severance, outplacement costs, fees, commissions, stock, stock
options, vesting, and any and all other benefits and compensation due to
Employee as of the Separation Date.

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4.Release of Claims. Employee agrees that, except for the consideration and any
on-going obligations set forth in this Agreement, the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its current and former officers, directors, employees, agents,
investors, attorneys, shareholders, administrators, affiliates, benefit plans,
plan administrators, insurers, trustees, parents, divisions, and subsidiaries,
and predecessor and successor corporations and assigns, including but not
limited to Rackspace Hosting, Inc. and any other affiliate entity (collectively,
the “Releasees”). Employee, on his own behalf and on behalf of his respective
heirs, family members, executors, agents, assigns and affiliates, hereby and
forever releases the Releasees from, and agrees not to sue concerning, or in any
manner to institute, prosecute, or pursue, any claim, complaint, charge, duty,
obligation, or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee may possess
against any of the Releasees arising from any omissions, acts, facts, or damages
that have occurred up until and including the Effective Date, including, without
limitation:
a.
any and all claims relating to or arising from Employee’s employment
relationship with the Company and the termination of that relationship;

b.
any and all claims relating to, or arising from, Employee’s right to purchase,
or actual purchase, of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of fiduciary duty,
breach of duty under applicable state corporate law, and securities fraud under
any state or federal law;

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c.
any and all claims for wrongful discharge of employment; constructive discharge;
termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of covenant of
good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or
intentional misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business practices;
defamation; libel; slander; negligence; personal injury; assault; battery;
invasion of privacy; false imprisonment; conversion; and disability benefits;

d.
any and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964; the
Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967; the
Older Workers Benefit Protection Act; the Equal Pay Act; the Fair Labor
Standards Act; the Fair Credit Reporting Act; the Employee Retirement Income
Security Act of 1974 (except for any claims related to Employee’s vested
benefits); the Worker Adjustment and Retraining Notification Act; the Family and
Medical Leave Act; the Sarbanes-Oxley Act of 2002; and any of the laws of the
state of Texas or any other state;

e.
any and all claims for violation of the federal or any state constitution;

f.
any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

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g.
any claim for any loss, cost, damage, or expense arising out of any dispute over
the non-withholding or other tax treatment of any of the proceeds received by
Employee as a result of this Agreement; and

h.
any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this paragraph 4 shall be and
remain in effect in all respects as a complete general release as to the matters
released. This release does not extend to the Releasees’ obligations under this
Agreement. This release does not release claims that cannot be released as a
matter of law, including, but not limited to, Employee’s right to file a charge
with or participate in a charge by the Equal Employment Opportunity Commission,
or any other local, state, or federal administrative body or government agency
that is authorized to enforce or administer laws related to employment, against
the Company (with the understanding that any such filing or participation does
not give Employee the right to recover any monetary damages against the Company;
Employee’s release of claims herein bars Employee from recovering such monetary
relief from the Company).

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5.Acknowledgment of Waiver of Claims under ADEA. Employee understands and
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and
release is knowing and voluntary. Employee understands and agrees that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Separation Date. Employee understands and acknowledges that
the consideration given for this waiver and release is in addition to anything
of value to which Employee was already entitled. Employee further understands
and acknowledges that he has been advised by this writing that: (a) he should
consult with an attorney prior to executing this Agreement; (b) he has
twenty-one (21) days within which to consider this Agreement; (c) he has seven
(7) days following his execution of this Agreement to revoke this Agreement; (d)
this Agreement shall not be effective until after the revocation period has
expired; and (e) nothing in this Agreement prevents or precludes Employee from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties, or
costs for doing so, unless specifically authorized by federal law. In the event
Employee signs this Agreement and returns it to the Company in less than the
21-day period identified above, Employee hereby acknowledges that he has freely
and voluntarily chosen to waive the time period allotted for considering this
Agreement. Employee acknowledges and understands that revocation must be
accomplished by a written notification to the Company’s General Counsel, that is
received prior to the Effective Date. The Parties agree that changes to this
Agreement, whether material or immaterial, do not restart the running of the
21-day period.

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6.Release of Claims by Company. The Company hereby and forever releases
Employee, his heirs, legal representatives, assigns and affiliates
(collectively, the “Employee Releasees”) from, and agrees not to sue concerning,
or in any matter to institute, prosecute or pursue, any claim, complaint,
charge, duty, obligation or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that the Company
may possess against any of the Employee Releasees arising from any omissions,
acts or facts that have occurred up until and including the Effective Date of
this Agreement including, without limitation, from all claims and causes of
action for breach of contract, both express and implied and including without
limitation causes of action under the Employment Agreement, the Confidentiality
Agreement and the Indemnification Agreement (except to the extent such
agreements remain in effect following the Effective Date by virtue of this
Agreement); breach of the covenant of good faith and fair dealing; promissory
estoppel; violation of public policy; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; emotional distress; any other tort; ERISA,
and any and all other federal, state or local laws and/or regulations that are
or may be applicable to Employee’s employment with the Company, as well as all
claims for attorney’s fees and costs, or any other claims or causes of action
arising out of or relating in any way to Employee’s employment with the Company.
The Company understands and agrees that this release is a full and complete
waiver of all claims against Employee Releasees; provided, however than any
release of claims against Employee’s counsel is effective only with respect to
matters handled for Employee (including, without limitation, the negotiation and
drafting of this Agreement) and his heirs, assigns and affiliates.

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7.Unknown Claims. The Parties acknowledge that they have been advised to consult
with legal counsel and that they are familiar with the principle that a general
release does not extend to claims that the releaser does not know or suspect to
exist in his/its favor at the time of executing the release, which, if known by
him/it, must have materially affected his settlement with the releasee. Employee
and the Company, being aware of said principle, each agree to expressly waive
any rights they may have to that effect, as well as under any other statute or
common law principles of similar effect.
8.No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Employee also
represents that he does not intend to bring any claims on his own behalf or on
behalf of any other person or entity against the Company or any of the other
Releasees. Company represents that it has no lawsuits, claims, or actions
pending in its name, or on behalf of any other person or entity, against
Employee or any of the other Employee Releasees. Company also represents that it
does not intend to bring any claims on its own behalf or on behalf of any other
person or entity against Employee or any of the other Employee Releasees.
9.Trade Secrets, Confidential Information/Company Property, Restrictive
Covenants.
a.
Employee reaffirms and agrees to observe and abide by the terms of the
Confidentiality Agreement, and the provisions of sections 6(a) and 6(b) of the
Employment Agreement, regarding nondisclosure of the Company’s trade secrets and
confidential and proprietary information.

b.
Employee and the Company agree to replace the provisions of sections 7 and 8 of
the Employment Agreement regarding non-competition and non-solicitation with the
following:

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i.
For a period of six (6) months following the Separation Date (the “Initial
Restricted Period”), Employee will not, within the Restricted Territory (defined
below), work as an employee or contractor for any company that (A) provides
dedicated/managed hosting and/or cloud infrastructure hosting services
(collectively, “Cloud Services”) on the Effective Date, or (B) is a Cloud
Provider (as defined below).

ii.
For six (6) months following the Initial Restricted Period (the “Secondary
Restricted Period,” together with the Initial Restricted Period, the “Restricted
Period”), Employee shall not, within the Restricted Territory, work as an
employee or contractor for any company that is listed on Gartner’s Magic
Quadrant for Cloud Infrastructure as a Service, Magic Quadrant for Managed
Hosting, Europe and/or Magic Quadrant for Managed Hosting, North America as of
the Effective Date (each, a “Cloud Provider”); provided, that the forgoing
restriction shall not prevent Employee from becoming an employee of or
contractor for a division of any Cloud Provider that does not provide Cloud
Services, as long as Employee does not, during the Secondary Restricted Period,
perform services (including but not limited to providing information, advice,
strategy, recruiting or any other interaction with regard to business matters)
for a division of such Cloud Provider that provides Cloud Services.

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iii.
For purposes of this Agreement, the “Restricted Territory” shall be: (A) the
State of Texas, (B) any other state of the United States in which the Company is
conducting business or from which it derived revenue at or within two (2) years
prior to the Separation Date, and (C) any country in the world in which the
Company is conducting business or from which it derived revenue at or within two
(2) years prior to the Separation Date.

iv.
Notwithstanding anything to the contrary in clauses (i)-(iii) above, during the
Restricted Period, Employee shall not work as an employee of or contractor for
the following companies (or any division thereof), which shall be deemed to be
Cloud Providers for all purposes under this paragraph 9: Amazon, IBM (including
Softlayer), Microsoft, Red Hat, and VMWare.

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v.
Notwithstanding the other provisions of this paragraph 9, (A) during the
Restricted Period, Employee may make direct and indirect investments (including
through private equity, venture capital or angel funds) in any company;
provided, however that, during the Restricted Period, (1) Employee shall not
make direct or indirect investments in companies that Employee and Company have
agreed to in writing represent potential strategic partners on the Effective
Date; (2) Employee shall not publicly disclose or give permission to any third
party to publicly disclose direct or indirect investments made by Employee in a
company that provides Cloud Services, unless such disclosure is required by
applicable law; and (3) for any investments made in companies that provide Cloud
Services, Employee agrees to disclose such investment to Company within five (5)
business days thereof; and (B) during the Initial Restricted Period, Employee
may serve on the board of directors (or similar governing body) of or otherwise
advise any company that does not provide Cloud Services and is not a Cloud
Provider, and during the Secondary Restricted Period, Employee may serve on the
board of directors (or similar governing body) of or otherwise advise any
company that is not a Cloud Provider. For purposes of paragraph 9(b)(v)(A) only,
an “indirect” investment is an investment made through an affiliate of Employee
where the investment decision of such affiliate is controlled by Employee
(whether through sole control or shared control).

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vi.
During the Restricted Period, Employee will not solicit or induce any employee
of the Company to terminate his or her employment with the Company; provided,
that if an employee of the Company responds to a job posting, advertisement or
announcement made to the general public or otherwise referenced publicly on a
blog or similar website or initiates contact with Employee through no effort of
Employee, Employee or any private equity or venture capital fund or company with
which Employee is associated or through which Employee invests may hire such
Employee or invest in any venture started by such Employee or with such Employee
or otherwise advise such Employee without violating this clause vi.

vii.
During the Restricted Period, Employee shall not, either on Employee’s own
behalf or as an agent, consultant, partner, employee, owner or representative of
any person or entity, directly or indirectly interfere with the Company’s
relationships with its customers and vendors, induce or encourage, directly or
indirectly, any customer, client or vendor to stop doing business with the
Company, or induce or encourage any customer to not retain the services of the
Company.

viii.
Employee affirms that the geographic boundaries, scope of prohibited
competition, and time duration of this paragraph 9 are reasonable and necessary
to maintain the value of the Company’s confidential information and to protect
the goodwill and other legitimate business interests of the Company. As used in
this paragraph 9, “company” means any corporation, limited liability company,
partnership, joint venture, or other entity.

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10.No Cooperation. Employee agrees that he will not knowingly encourage,
counsel, or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Agreement. Employee agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three (3)
business days of its receipt, a copy of such subpoena or other court order. If
approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Employee shall state no more than that
he cannot provide counsel or assistance.
11.Cooperation with Company. Employee agrees that Employee shall provide
reasonable cooperation and assistance to the Company in the resolution of any
legal matters in which Employee was involved in during the course of Employee’s
employment, or about which Employee has knowledge (including but not limited to
any matters arising from or associated with transitioning Employee’s duties),
and in the defense or prosecution of any investigations, audits, claims or
actions now in existence or which may be brought or threatened in the future
against or on behalf of the Company, including any investigations, audits,
claims or actions involving or against its officers, directors and employees.

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Employee’s cooperation in connection with such matters, actions and claims shall
include, without limitation, being available to consult with the
Company regarding matters in which Employee has been involved or has knowledge;
to assist the Company in preparing for any proceeding (including, without
limitation, depositions, consultation, discovery or trial); to provide
affidavits reflecting truthful written testimony; to assist with any audit,
inspection, proceeding or other inquiry; and to act as a witness to provide
truthful testimony in connection with any investigation, audit, litigation or
other legal proceeding affecting the Company.  Employee agrees to keep the
General Counsel of the Company apprised of his current contact information,
including telephone numbers, work address, home address, and email address(es),
and to promptly respond to communications from the Company in connection with
this paragraph 11. Where Employee’s cooperation requires travel, the Company
will purchase and provide airline tickets to the Employee, and will select,
reserve and pay directly the expenses of Employee’s lodging. Employee shall be
reimbursed for any other documented and reasonable costs and expenses incurred
in connection with providing such cooperation under this paragraph 11, within
thirty (30) business days following his submission of documentation of such
costs and expenses to the Company. Employee will also be paid a $200.00 per hour
consulting fee for his time spent in providing such assistance, excluding travel
time, for any such assistance that is requested following May 11, 2014.

12.Non-Disparagement. Employee agrees to refrain from any disparagement,
defamation, libel, or slander of the Company and/or any of the Company’s
employees and directors and agrees to refrain from any tortious interference
with the contracts and relationships of any of the Releasees. Employee shall
direct any reference inquiries by potential future employers to the office of
the Company’s General Counsel, which shall use its best efforts to provide only
the Employee’s last position and dates of employment. The Company agrees to
refrain from any disparagement, defamation, libel, or slander of any of the
Employee Releasees, and agrees to refrain from any tortious interference with
the contracts and relationships of any of the Employee Releasees; provided
however that the Company’s obligations in this regard are limited to any actions
of the Board of Directors and employees at the Senior Vice President level and
above, and only for such time as such individuals are employed by or on the
Board of Directors of the Company.
13.Breach. In addition to the rights provided under the “Attorneys’ Fees”
paragraph below, Employee acknowledges and agrees that any material breach of
this Agreement, unless such breach constitutes a legal action by Employee
challenging or seeking a determination in good faith of the validity of the
waiver herein under the ADEA, or of any provision of the Confidentiality
Agreement shall entitle the Company immediately to recover and/or cease
providing the consideration provided to Employee under this Agreement and to
obtain damages, except as provided by law.

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14.No Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee and by the Company. No action taken by the
either Party hereto, either previously or in connection with this Agreement,
shall be deemed or construed to be (a) an admission of the truth or falsity of
any actual or potential claims or (b) an acknowledgment or admission by the
Company or Employee of any fault or liability whatsoever to the Company or
Employee or to any third party.
15.Costs. The Parties shall each bear their own costs, attorneys’ fees, and
other fees incurred in connection with the preparation of this Agreement.
16.ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE
TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN
RELEASED, SHALL BE SUBJECT TO ARBITRATION IN BEXAR COUNTY, TEXAS BEFORE JAMS,
THE RESOLUTION EXPERTS (“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES &
PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF
IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN
ACCORDANCE WITH TEXAS LAW, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND
PROCEDURAL TEXAS LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS
RULES CONFLICT WITH TEXAS LAW, TEXAS LAW SHALL TAKE PRECEDENCE. THE DECISION OF
THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE
ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION
SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO
ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN
EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL
SEPARATELY PAY

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FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE
ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT
AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY
DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
NOTWITHSTANDING THE FOREGOING, THIS PARAGRAPH 16 WILL NOT PREVENT EITHER PARTY
FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT
HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE
RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.
SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH 16
CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES
AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.
17.Tax Consequences. The Company makes no representations or warranties with
respect to the tax consequences of the payments and any other consideration
provided to Employee or made on his behalf under the terms of this Agreement.
Employee agrees and understands that he is responsible for payment, if any, of
local, state, and/or federal taxes on the payments and any other consideration
provided hereunder by the Company and any penalties or assessments thereon and
agrees to indemnify and hold the Company harmless from any claims, demands,
deficiencies, penalties, interest, assessment, executions or judgments or
recoveries by any government agency against the Company for any amounts claimed
due on account of (a) Employee’s failure to pay such taxes or (b) damages
sustained by the Company by reason of any such claims, including reasonable
attorneys’ fees and costs (except for either of the forgoing arising from the
Company’s gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final non-appealable judgment).

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18.Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.
19.No Representations. Employee represents that he has had an opportunity to
consult with an attorney, and has carefully read and understands the scope and
effect of the provisions of this Agreement. Employee has not relied upon any
representations or statements made by the Company that are not specifically set
forth in this Agreement.
20.No Waiver. The failure of the Company or Employee to insist upon the
performance of any of the terms and conditions in this Agreement, or the failure
to prosecute any breach of any of the terms or conditions of this Agreement,
shall not be construed thereafter as a waiver of any such terms or conditions.
This entire Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.
21.Severability. In the event that any provision or any portion of any provision
hereof or any surviving agreement made a part hereof becomes or is declared by a
court of competent jurisdiction or arbitrator to be illegal, unenforceable, or
void, this Agreement shall continue in full force and effect without said
provision or portion of provision.
22.Attorneys’ Fees. Except with regard to a legal action challenging or seeking
a determination in good faith of the validity of the waiver herein under the
ADEA, in the event that either Party brings an action to enforce or effect its
rights under this Agreement, the prevailing Party shall be entitled to recover
its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.

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23.Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement (except as modified in this
Agreement), the surviving provisions of the Employment Agreement (except as
modified or replaced in this Agreement), the Indemnification Agreement and the
Stock Agreements (except as amended hereby).
24.No Oral Modification. This Agreement may only be amended in a writing signed
by Employee and the Company’s General Counsel.
25.Governing Law. This Agreement shall be governed by the laws of the State of
Texas, without regard for choice-of-law provisions. Employee consents to
personal and exclusive jurisdiction and venue in the State of Texas.
26.Effective Date. Employee has seven (7) days after he signs this Agreement to
revoke it. This Agreement will become effective on the eighth (8th) day after
Employee signed this Agreement, so long as it has been signed by the Parties and
has not been revoked by Employee before that date (the “Effective Date”).
Employee understands that this Agreement shall be null and void if not executed
by Employee within the twenty-one (21) day period set forth under paragraph 6
above.
27.Counterparts. This Agreement may be executed in counterparts and by facsimile
or pdf, and each counterpart and facsimile or pdf shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.

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28.Voluntary Execution of Agreement. Employee understands and agrees that he
executed this Agreement voluntarily, without any duress or undue influence on
the part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Employee acknowledges that:
a.
he has read this Agreement;

b.
he has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of his own choice or has elected not to retain legal
counsel;

c.
he understands the terms and consequences of this Agreement and of the releases
it contains; and

d.
he is fully aware of the legal and binding effect of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
A. LANHAM NAPIER, an individual

Dated: February 5, 2014            /s/ A. Lanham Napier
A. Lanham Napier

RACKSPACE US, INC.

Dated: February 5, 2014            By:     /s/ A. William
Alberts                
Name:     A. William Alberts            
Title:     Associate General Counsel        

RACKSPACE HOSTING, INC.

Dated: February 5, 2014            By:     /s/ A. William Alberts            
Name:    A. William Alberts        
Title:    Associate General Counsel        

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