Exhibit 10.40

 

Executive Officer Summary Compensation Sheet

 

Annual Cash Compensation for Senior Executive Officers

 

The annual cash compensation for Executive Officers of Rackable Systems, Inc. as
of January 1, 2006, was as follows:

 

Executive Officer

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   Annual
Base
Salary ($)

--------------------------------------------------------------------------------

   Annual
Target
Bonus ($)

--------------------------------------------------------------------------------

Thomas K. Barton

   $ 340,000    $ 175,000

President and Chief Executive Officer

             

Todd R. Ford

     260,500      100,000

Executive Vice President of Operations and Chief Financial Officer

             

Giovanni Coglitore

     200,000      100,000

Founder and Chief Technology Officer

             

Thomas Gallivan

     200,000      220,000

Vice President of Worldwide Sales

             

William P. Garvey

     200,000      80,000

General Counsel, Vice President of Corporate Development and Secretary

             

Madhu Ranganathan

     200,000      80,000

Vice President of Finance

             

Robert Weisickle

     220,000      80,000

Vice President of Engineering

             

 

Cash Bonus Arrangements for Executive Officers:

 

1. The bonus awards for Thomas K. Barton, Todd R. Ford and Giovanni Coglitore
(percentage of target bonus) are determined quarterly based upon Rackable
Systems’ achievement of its goals for revenues, gross margin, earnings per share
(on a normalized basis) and quarterly backlog, as such goals are specified in
the operating plan provided by management to Rackable Systems’ board of
directors.

 

2. The bonus award for Thomas Gallivan is determined based on the achievement of
certain sales targets.

 

3. The bonus awards (percentage of target bonus) for all other executive
officers is determined by the achievement of (a) individual goals and objectives
throughout each quarter and (b) certain quarterly financial achievements by
Rackable Systems.