Exhibit 10.1

December 23, 2008

Giovanni Coglitore

 

Re:    Amended and Restated Employment Agreement

Dear Giovanni:

Rackable Systems, Inc. (the “Company”) and you entered into an employment
agreement dated December 23, 2002 governing the terms of your employment (the
“Original Employment Agreement”). This Amended and Restated Employment Agreement
embodies the complete agreement and understanding between the Executive and the
Company and supersedes and preempts any prior understandings, agreements or
representations, including, without limitation, the Original Employment
Agreement, by or between the you and the Company, written or oral, which may
have related to the subject matter hereof in any way. For the avoidance of
doubt, this Amended and Restated Employment Agreement does not supersede or
preempt any provisions of the Retention Agreement or the Retention Bonus
Agreement.

 

1. POSITION. You will serve in an executive capacity and shall perform the
duties of “SVP of Engineering and Chief Technology Officer”, and as required by
the Company’s Chief Executive Officer (the “CEO” ). You will report to the CEO.
Of course, the Company may change your position, duties, and work location from
time to time in its discretion subject to the terms of this offer letter
agreement. The Company and you agree that you shall have flexibility, in the
form of “mutually agreed to” non-standard work hours and the ability to work
from a variety of locations, in the way in which you conduct your duties under
this Agreement.

 

2. COMPENSATION.

 

  a. Base Salary. Your current annual base salary is $250,000, less standard
payroll deductions and withholdings. You will be paid bi-weekly in accordance
with Company practice and policy.

 

  b. Performance Bonus. In addition, you are eligible to earn a quarterly
performance bonus1 target of $25,000, based upon both your performance and the
Company’s performance with respect to applicable performance targets, which are
expected to include revenue and profitability targets. The bonus payment shall
be earned upon the fulfillments of Targets and is payable within a reasonable
period of time. The Company will determine in its sole discretion whether the
Targets have been achieved, whether you have earned a bonus, and the amount of
any earned bonus. You must be employed on the bonus payment date to earn and be
eligible to receive any bonus.

 

1

Performance bonuses are aligned to the Company’s quarterly financial reporting
periods (each such quarter, a “Company Quarter”); your initial quarterly
participation will be adjusted pro rata based upon your Start Date.

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  c. Review of Compensation. Your base salary and bonus eligibility will be
reviewed on an annual or more frequent basis by the Compensation Committee and
are subject to change in the discretion of the Compensation Committee, subject
to the terms of this offer letter agreement.

 

3. OPTION GRANT.

 

  a. Equity Grants. No additional equity grants will be issued in connection
with this agreement.

 

  b. Vesting Schedule. Both the Option and the Restricted Stock Unit Award
vesting will be subject to your continuous service to the Company as an employee
or consultant (as defined in the Plan and the Stock Unit Award Agreement).

 

  c. Governing Documents. The Option will be governed in full by the terms and
conditions of the Plan and your individual Option agreement; the Restricted
Stock Unit Award will be governed in full by the terms and conditions of the
Stock Unit Award Agreement.

 

4. EMPLOYEE BENEFITS. You will be eligible to participate in the Company’s
standard employee benefit plans in accordance with the terms and conditions of
the plans and applicable policies which may be in effect from time to time, and
provided by the Company to its executive employees generally, including but not
limited to group health insurance coverage, disability insurance, life
insurance, ESPP, 401(k) Plan, and paid time off and paid holidays. You will be
eligible for reimbursement of your legitimate and documented business expenses
incurred in connection with your employment, pursuant to the Company’s standard
reimbursement expense policy and practices. The Company may modify its benefits
programs and policies from time to time in its discretion.

 

5. PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. As a condition of your
employment, you are required to sign and abide by the Company’s Proprietary
Information and Inventions Agreement (the “Non-Disclosure Agreement” ), attached
hereto as Exhibit A.

 

6. SERVICE AS EMPLOYEE; OUTSIDE ACTIVITIES.

 

  a. Location and Duties. You will work at the Company’s corporate headquarters
currently located in Fremont, California, subject to necessary business travel.
During your employment with the Company, you will devote your best efforts and
substantially all of your business time and attention (except for vacation
periods and reasonable periods of illness or other incapacity permitted by the
Company’s general employment policies) to the business of the Company.

 

  b. Company Policies. Your employment relationship with the Company shall also
be governed by the general employment policies and practices of the Company,
including but not limited to the policies contained in the Company’s Employee
Handbook (except that if the terms of this letter differ from or are in conflict
with the Company’s general employment policies or practices, this letter will
control), and you will be required to abide by such general employment policies
and practices of the Company.

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  c. Other Activities. Throughout your employment with the Company, you may
engage in civic and not-for-profit activities so long as such activities do not
interfere with the performance of your duties hereunder or present a conflict of
interest with the Company. Subject to the restrictions set forth herein and with
the prior written consent of the Board, you may serve as a director of other
corporations and may devote a reasonable amount of your time to other types of
business or public activities not expressly mentioned in this paragraph.

 

  d. Conflict of Interest. During your employment by the Company, except on
behalf of the Company, you will not directly or indirectly serve as an officer,
director, stockholder, employee, partner, proprietor, investor, joint venturer,
associate, representative or consultant for or on behalf of any other person,
corporation, firm, partnership or other entity whatsoever known by you to
compete with the Company (or is planning or preparing to compete with the
Company), anywhere in the world, in any line of business engaged in (or planned
to be engaged in) by the Company; provided, however, that you may purchase or
otherwise acquire up to (but not more than) one percent (1%) of any class of
securities of any enterprise (but without participating in the activities of
such enterprise) if such securities are listed on any national or regional
securities exchange.

 

7. AT-WILL EMPLOYMENT RELATIONSHIP. Your employment relationship with the
Company is at-will. Accordingly, both you and the Company may terminate the
employment relationship at any time, with or without Cause (as defined below),
and with or without advance notice.

 

8. DEFINITIONS.

 

  a. Definition of “Cause.” For purposes of this offer letter agreement, “Cause”
is defined as one or more of the following events: (i) the indictment or
conviction for a felony or other crime, or any misdemeanor involving moral
turpitude; (ii) the commission of any other act or omission involving fraud or
intentional deceit with respect to the Company or any of its affiliates or any
of their directors, stockholders, partners or members; (iii) any act or omission
involving dishonesty that causes material injury to the Company or any of its
affiliates or any of their directors, stockholders, partners or members;
(iv) gross negligence with respect to the Company or any of its subsidiaries;
(v) willful misconduct with respect to the Company or any of its subsidiaries;
(vi) any other material breach of this agreement or any other agreement referred
to herein (including the Non-Disclosure Agreement); provided, however, that, it
shall only be deemed Cause pursuant to clause (vi) if you are given written
notice describing the basis of Cause and, if the event is reasonably susceptible
of cure, you fail to cure within thirty (30) days.

 

  b.

Definition of “Good Reason.” For purposes of this offer letter agreement, “Good
Reason” is defined as one or more of the following conditions that occur without

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your written consent: (i) the assignment to you, or the removal from you, of any
duties or responsibilities that results in the material diminution of your
authority, duties or responsibilities as Sr. Vice President of Operations and
Service, including a Change in Control that results in your no longer serving as
the Sr. Vice President of Operations and Service or any similar position; (ii) a
material reduction by the Company of your base salary; (iii) the Company’s
material breach of its obligations to you under this offer letter agreement; or
(iv) your office relocation to a location more than fifty miles from your then
present location; provided however that, it shall only be deemed Good Reason
pursuant to the foregoing definition if (x) the Company is given written notice
from you within ninety (90) days following the first occurrence of a condition
that you consider to constitute Good Reason describing the condition and fails
to remedy such condition within thirty (30) days following such written notice,
and (y) you resign from employment within ninety (90) days following the end of
the period within which the Company was entitled to remedy the condition
constituting Good Reason but failed to do so.

 

  c. Definition of “Change in Control.” For purposes of this offer letter
agreement, “Change in Control” means the occurrence, in a single transaction or
in a series of related transactions, of either of the following events:

 

  i. There is consummated (A) a merger, consolidation or similar transaction
involving (directly or indirectly) the Company or (B) a tender offer or exchange
offer addressed to the stockholders of the Company and, in either event,
immediately after the consummation of such merger, consolidation or similar
transaction or such tender or exchange offer, the stockholders of the Company
immediately prior thereto do not own, directly or indirectly, either
(A) outstanding voting securities representing more than fifty percent (50%) of
the combined outstanding voting power of the surviving entity in such merger,
consolidation or similar transaction or (B) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving entity in such
merger, consolidation or similar transaction, in each case in substantially the
same proportions as their ownership of the outstanding voting securities of the
Company immediately prior to such transaction; or

 

  ii. There is consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of the Company and its
subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its subsidiaries
to an entity, more than fifty percent (50%) of the combined voting power of the
voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or
other disposition.

The term Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company.

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9. CHANGE IN CONTROL SEVERANCE BENEFITS. If, within 12 months following a Change
in Control, your employment is terminated by the Company without Cause, or by
you for Good Reason and such termination of employment constitutes a “separation
from service” within the meaning of the Treas. Reg. §1.409A-1(h)(1), without
regard to any alternative definitions thereunder; and if you sign, date, return
to the Company and allow to become effective a release of all claims in a form
satisfactory to the Company in its sole discretion (the “Release”); provided,
however, that such effective date shall be no later than sixty (60) days
following your termination of employment, then in lieu of any Severance Benefits
set forth in Section 10 herein, you shall be entitled to receive the following
severance benefits (the “Change in Control Severance Benefits”):

 

  a. The vesting of all unvested stock options and all unvested grants of
restricted stock herein referred to and any subsequent grants of stock options,
restricted stock or any other stock awards in future plans, shall accelerate in
such amount equal to the number of shares that would vest over an additional
twenty-four (24) month period as if you have continued to be an employee of the
Company for additional twenty-four (24) months following your termination;

 

  b. You will be eligible to receive severance pay in the total amount equal to
the sum of twelve (12) months of your base salary in effect as of the employment
termination date. For purposes of this Section 9(b), “base salary” as used
herein does not include any annual performance bonus or any other bonus payment.
The severance pay will be subject to required payroll deductions and
withholdings, and will be paid in twenty-six (26) equal installments over a
period of twelve (12) months, with such payments made on the Company’s normal
payroll schedule; provided, however, that any payments delayed pending the
effective date of the Release shall be paid in arrears on the payroll date next
following such effective date; and

 

  c. If you timely elect and continue to remain eligible for continued group
health insurance coverage under federal COBRA law or, if applicable, state
insurance laws (collectively, “COBRA” ), the Company will pay your COBRA
premiums sufficient to continue your group health insurance coverage at the same
level in effect as of your employment termination date (including dependent
coverage, if applicable) for twelve (12) months after the employment termination
date; provided that, the Company’s obligation to pay your COBRA premiums will
cease earlier if you become eligible for group health insurance coverage through
a new employer and you must provide prompt written notice to the Company if you
become eligible for group health insurance coverage through a new employer
within twelve (12) months of your employment termination date.

 

10.

SEVERANCE BENEFITS. If, at any time other than during the 12 month period
following a Change in Control, your employment is terminated by the Company
without Cause, or by you for Good Reason and such termination of employment
constitutes a “separation from service” within the meaning of the Treas. Reg.
§1.409A-1(h)(1); and if

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you sign, date, return to the Company and allow to become effective a release of
all claims in a form satisfactory to the Company in its sole discretion (the
“Release” ); provided, however, that such effective date shall be no later than
sixty (60) days following your termination of employment, then you shall be
entitled to receive the following severance benefits (the “Severance Benefits”):

 

  a. Severance pay in the total amount equal to the sum of twelve (12) months of
your base salary in effect as of the employment termination date. The severance
pay will be subject to required payroll deductions and withholdings, and will be
paid in twenty-six (26) equal installments over a period of twelve (12) months,
with such payments made on the Company’s normal payroll schedule; provided,
however, that any payments delayed pending the effective date of the Release
shall be paid in arrears on the payroll date next following such effective date.
For purposes of this Section 10(a), “base salary” as used herein does not
include any annual performance bonus or any other bonus payment; and

 

  b. If you timely elect and continue to remain eligible for COBRA, the Company
will pay your COBRA premiums sufficient to continue your group health insurance
coverage at the same level in effect as of your employment termination date
(including dependent coverage, if applicable) for twelve (12) months after the
employment termination date; provided that, the Company’s obligation to pay your
COBRA premiums will cease earlier if you become eligible for group health
insurance coverage through a new employer and you must provide prompt written
notice to the Board if you become eligible for group health insurance coverage
through a new employer within twelve (12) months of your employment termination
date.

 

11. CONDITIONS TO ELIGIBILITY TO SEVERANCE BENEFITS OR CHANGE IN CONTROL
SEVERANCE BENEFITS. Notwithstanding the foregoing, you will not be eligible for
the Severance Benefits or the Change in Control Severance Benefits if: (A) your
employment is terminated for Cause, or if you resign for any reason that does
not qualify as Good Reason; or (B) in the event that you materially breach the
Non-Disclosure Agreement, the Release of claims, or any other obligations you
owe to the Company after termination of your employment (including but not
limited to the provisions of the Non-Disclosure Agreement), and the Company’s
obligation to provide the Severance Benefits or the Change in Control Benefits
(or to continue to provide such benefits) will cease immediately and in full as
of the date of your breach.

 

12.

DEFERRED COMPENSATION. If the Company (or, if applicable, any successor entity
thereto) determines that the severance payments and benefits provided to you
pursuant to Section 9 or 10 (any such payments, the “Agreement Payments”)
constitute “deferred compensation” under Section 409A of the Internal Revenue
Code of 1986, as amended (together, with any state law of similar effect,
“Section 409A”) and if you are a “specified employee” of the Company (or, if
applicable, any successor entity thereto), as such term is defined in
Section 409A(a)(2)(B)(i) (a “Specified Employee”), then, solely to the extent
necessary to avoid the imposition of the adverse personal tax consequences under
Section 409A, the timing of the Agreement Payments with be delayed as follows:
on the earliest to

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occur of (1) the date that is six months and one day after the date of
termination of your employment, and (2) the date of your death (such earliest
date, the “Delayed Initial Payment Date”), the Company (or the successor entity
thereto, as applicable) shall (i) pay to you a lump sum amount equal to the sum
of the Agreement Payments that you would otherwise have received through the
Delayed Initial Payment Date if the commencement of the payment of the Agreement
Payments had not been delayed pursuant to this Section 10(d) and (ii) commence
paying the balance of the Agreement Payments in accordance with the applicable
payment schedule set forth in this Agreement. Prior to the imposition of any
delay on the Agreement Payments as set forth above, it is intended that (A) each
installment of the Agreement Payments be regarded as a separate “payment” for
purposes of Treas. Reg. §1.409A-2(b)(2)(i), (B) all Agreement Payments satisfy,
to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treas. Reg. §1.409A-1(b)(4) and 1.409A-1(b)(9)(iii),
and (C) the Agreement Payments consisting of COBRA premiums also satisfy, to the
greatest extent possible, the exemption from the application of Section 409A
provided under Treas. Reg. §1.409A-1(b)(9)(v).

 

13. EXCISE TAX.

 

  a. Anything in this agreement to the contrary notwithstanding, if any payment
or benefit that you would receive pursuant to this offer letter agreement or
otherwise (“Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (ii) but for this sentence, be subject
to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
such Payment shall be equal to the Reduced Amount (defined below). The “Reduced
Amount” shall be either (y) the largest portion of the Payment that would result
in no portion of the Payment (after reduction) being subject to the Excise Tax,
or (z) the entire Payment, whichever amount after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate, net of the
maximum reduction in federal income taxes which could be obtained from a
deduction of such state and local taxes), results in your receipt, on an
after-tax basis, of the greatest amount of the Payment to you.

 

  b. If a reduction in the Payment is to be made, the reduction in payments
and/or benefits shall occur, in a manner necessary to provide you with the
greatest economic benefit. If more than one manner of reduction yields the
greatest economic benefit, the payments and benefits shall be reduced pro rata.

 

  c. The accounting firm engaged by the Company for general audit purposes as of
the day prior to the effective date of the Payment Event shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Payment Event, a nationally recognized accounting firm appointed by the
Board and reasonably approved by you shall make the determinations required
hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

 

  d.

The accounting firm engaged to make the determinations hereunder shall provide
its

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calculations, together with detailed supporting documentation, to the Company
and you within fifteen (15) calendar days after the date on which your right to
a Payment is triggered (if requested at that time by the Company or you) or such
other time or times as requested by the Company or you. If the accounting firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and you with an opinion reasonably acceptable to you that no Excise Tax
will be imposed with respect to such Payment. The Company shall be entitled to
rely upon the accounting firm’s determinations, which shall be final and
binding.

 

14. DISPUTE RESOLUTION. To ensure the rapid and economical resolution of
disputes that may arise in connection with your employment, you and the Company
agree that any and all disputes, claims, or causes of action, in law or equity,
arising from or relating to the enforcement, breach, performance, execution, or
interpretation of this agreement, your employment, or the termination of your
employment, shall be resolved, to the fullest extent permitted by law, by final,
binding and confidential arbitration in San Francisco, California conducted
before a single arbitrator by Judicial Arbitration and Mediation Services, Inc.
( “JAMS”) or its successor, under the then applicable JAMS rules. By agreeing to
this arbitration procedure, both you and the Company waive the right to resolve
any such dispute through a trial by jury or judge or by administrative
proceeding. The arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be permitted by law; and (b) issue a written arbitration decision
including the arbitrator’s essential findings and conclusions and a statement of
the award. The Company shall pay all of JAMS’ arbitration fees. Nothing in this
letter agreement shall prevent either you or the Company from obtaining
injunctive relief in court if necessary to prevent irreparable harm pending the
conclusion of any arbitration. The parties agree that the arbitrator shall award
reasonable attorneys fees and costs to the prevailing party in any action
brought hereunder, and the arbitrator shall have discretion to determine the
prevailing party in an arbitration where multiple claims may be at issue.

 

15. MISCELLANEOUS.

 

  a.

General Provisions. This letter, including the attached Non-Disclosure
Agreement, constitutes the complete, final and exclusive embodiment of the
entire agreement between you and the Company with regard to the subject matter
hereof. It is entered into without reliance on any promise or representation,
written or oral, other than those expressly contained herein, and it supersedes
any other agreements, promises, warranties or representations concerning its
subject matter. Changes in your employment terms, other than those expressly
reserved herein to the Company’s discretion, only can be made in a writing
signed by a duly-authorized member of the Company and you. This letter agreement
will bind the heirs, personal representatives, successors and assigns of both
you and the Company, and inure to the benefit of both you and the Company, their
heirs, successors and assigns. If any provision of this letter agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination shall not affect any other provision of this letter agreement and
the provision in question shall be modified so as to be rendered

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enforceable in a manner consistent with the intent of the parties insofar as
possible under applicable law. This letter agreement shall be construed and
enforced in accordance with the laws of the State of California without regard
to conflicts of law principles. Any ambiguity in this letter agreement shall not
be construed against either party as the drafter. Any waiver of a breach of this
letter agreement, or rights hereunder, shall be in writing and shall not be
deemed to be a waiver of any successive breach or rights hereunder. This letter
agreement may be executed in counterparts which shall be deemed to be part of
one original, and facsimile signatures shall be equivalent to original
signatures.

 

  b. Legal Right to Work. As required by law, this offer is subject to
satisfactory proof of your right to work in the United States.

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16. ACCEPTANCE. Please sign this letter and the attached Non-Disclosure
Agreement and return them to me as soon as possible to accept employment with
the Company on the terms set forth herein. We are very excited about having you
join us as an employee and look forward to working with you.

 

Sincerely, Rackable Systems, Inc. By:  

/s/ Mark Barrenechea

  Mark Barrenechea   President and CEO

December 30, 2008

Date Understood and Agreed:

/s/ Giovanni Coglitore

Giovanni Coglitore

December 30, 2008

Date

Exhibit A – Invention and Non-Disclosure Agreement

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EXHIBIT A

INVENTION AND NON-DISCLOSURE AGREEMENT