Exhibit
      10.2

     

    Rackable
      Systems, Inc.

    


    RETENTION
      BONUS AGREEMENT

     

    This
      Retention
      Bonus Agreement
      (this
“Agreement”),
      dated
      September 12, 2006 (the “Effective
      Date”),
      is
      executed by and 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 Agreement
      as
      a “Party”
and
      are
      collectively referred to in this Agreement as the “Parties.”
      

     

    Recitals

     

    A. The
      Executive and the Company are parties to an Employment Agreement, dated December
      23, 2002, as amended effective November 16, 2005 (as so amended, the
“Employment
      Agreement”).
      The
      Employment Agreement outlines the general terms of employment for the Executive.
      

     

    B. The
      Parties desire to enter into this Agreement, which shall be in addition to,
      and
      shall not amend or modify in any way the provisions of the Employment Agreement.
      

     

    C. The
      Company wishes to incentivize the Executive to remain with the Company and
      use
      his best efforts to assist the Company in connection with any Change in
      Control.

     

    Agreement

     

    In
      consideration of the mutual promises and covenants set forth in this Agreement,
      the receipt and sufficiency of which are acknowledged by the Parties, the
      Parties agree as follows:

     

    1.  Certain
      Definitions. 

     

    1.1  Affiliate.
      Any
      Person that directly or indirectly, through one or more intermediaries,
      controls, is controlled by or is under common control with another Person.
      For
      purposes hereof, “control” means the power to vote or direct the voting of
      sufficient securities or other interests to elect a majority of the directors
      or
      to control the management of another Person.

     

    1.2  Agreement
      Termination Date.
      The
      earliest to occur of: (w) the date the Executive resigns his employment without
      “Good Reason” as defined in Section 1.13 below (x) the date the Executive is
      subject to an Involuntary Termination With Cause as defined in Section 1.7
      below; (y) the Subsidiary Plan Creation Date; and (z) June 26,
      2007.

     

    1.3  Board.
      The
      Board of Directors of the Company. 

     

    1.4  Change
      in Control.
      The
      occurrence, in a single transaction or in a series of related transactions,
      of
      either of the following events:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a)  (x)
      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 (y), 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
      

     

    (b)   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. 

     

    For
      the
      avoidance of doubt, 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.

     

    1.5  Code.
      The
      Internal Revenue Code of 1986, as amended.

     

    1.6  Entity.
      A
      corporation, partnership, limited liability company or other entity.


     

    1.7  Involuntary
      Termination With Cause.
      A
      termination by the Company or any of its Subsidiaries of the Executive’s
      employment relationship with the Company or any of its Subsidiaries for any
      of
      the following reasons:

     

    (a)  Executive’s
      willful refusal to perform in any material respect the Executive’s duties or
      responsibilities for the Company or any of its Subsidiaries or his willful
      disregard in any material respect of any lawful written financial or other
      budgetary limitations established in good faith by the Board, provided the
      Board
      provides him with written notice of such refusal or disregard and provides
      Executive with thirty (30) days to cure;

     

    (b)  Executive’s
      willful misconduct that causes material and demonstrable injury, monetarily
      or
      otherwise, to the Company or any of its Subsidiaries, including, but not limited
      to, misappropriation or conversion of assets of the Company or any of its
      Subsidiaries (other than non-material assets) provided the Board provides him
      with written notice of such misconduct and provides Executive with thirty (30)
      days to cure; or

     

    (c)  Executive’s
      conviction or plea of nolo
      contendre
      to a
      crime of moral turpitude (as defined under California Law) causing material
      and
      demonstrable injury to the Company or otherwise demonstrating gross unfitness
      to
      serve as an officer of the Company or conviction of or entry of a plea of nolo
      contendere to a felony.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    No
      act or
      failure by the Executive shall be deemed “willful” if done, or omitted to be
      done, in good faith and with the reasonable belief that the action or omission
      was in the best interest of the Company or any of its Affiliates. For the
      avoidance of doubt, a termination of employment of the Executive due to death
      or
      disability shall not qualify as an Involuntary Termination With
      Cause.

     

    1.8  Own,
      Owned, Owner, Ownership.
      A Person
      shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have
      acquired “Ownership” of securities if such Person, directly or indirectly,
      through any contract, arrangement, understanding, relationship or otherwise,
      is
      the beneficial owner of such securities. For example, a holder of stock of
      a
      corporation (the “direct corporation”) is deemed to Own such stock and to Own a
      pro rata portion (based on relative holdings of the stock of the direct
      corporation) of any stock of any other corporation Owned by the direct
      corporation. 

     

    1.9  Person.
      An
      individual, a partnership, a limited liability company, a corporation, an
      association, a joint stock company, a trust, a joint venture, an unincorporated
      organization and a governmental entity or any department, agency or political
      subdivision thereof.

     

    1.10  Subsidiary.
      With
      respect to the Company, (A) any corporation of which more than fifty percent
      (50%) of the outstanding capital stock having ordinary voting power to elect
      a
      majority of the board of directors of such corporation (irrespective of whether,
      at the time, stock of any other class or classes of such corporation shall
      have
      or might have voting power by reason of the happening of any contingency) is
      at
      the time, directly or indirectly, Owned by the Company, and (B) any Entity
      other
      than a corporation in which the Company has a direct or indirect interest
      (whether in the form of voting or participation in profits or capital
      contribution) of more than fifty percent (50%). 

     

    1.11  Subsidiary
      Plan.
      A
      business plan for the establishment of a Subsidiary of the Company (the initial
      purpose of which is the design and marketing of a self contained, mobile data
      center), to be (x) created by the Executive, (y) presented by the Executive
      to
      the Board for approval, and (z) approved by the Board and funded by the
      Company.

     

    1.12  Subsidiary
      Plan Creation Date.
      The
      date, following the approval of the Subsidiary Plan by the Board, on which
      the
      Subsidiary that is the subject to the Subsidiary Plan is first funded by the
      Company.

     

    1.13  Resignation
      for Good Reason.
      Executive shall be deemed to have resigned with “Good Reason” if he resigns
      after any of the following: (x) the reduction of Executive’s cash compensation
      by more than 10%; (y) a change in Executive’s job title, reporting structure,
      duties, or authority; or (z) the relocation of Executive’s principal place of
      work by 30 or more miles. 

     

    2.  Retention
      Bonus.
       

     

    2.1  Cash
      Payment.
      Subject
      to Section 2.2, 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 $2,000,000 (less required deductions and
      withholdings) as described in Section 2.3 and as may be reduced as set forth
      in
      Section 2.2 (the “Retention
      Bonus”).
       

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.2  Parachute
      Payments. 

     

    (a)  If
      any
      payment or benefit the Executive would receive (whether pursuant to this
      Agreement or otherwise) in connection with a Change in Control from the Company
      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
      the Retention Bonus payable pursuant to this Agreement to the Executive shall
      be
      reduced by the lesser of (x) the Retention Bonus payable pursuant to this
      Agreement to the Executive or (y) the amount necessary so that such Payment
      (after reduction) shall be equal to the Reduced Amount. The “Reduced Amount”
shall be the largest portion of the Payment (prior to reduction) that would
      result in no portion of the Payment (after reduction) being subject to the
      Excise Tax. If a reduction in payments or benefits constituting “parachute
      payments” is necessary so that the Payment (after reduction) equals the Reduced
      Amount, the Retention Bonus payable under this Agreement shall be reduced first.
      All determinations required to be made hereunder, including, without limitation,
      whether a Payment is (or will be) subject to the Excise Tax and any additional
      assumptions to be utilized in arriving at such determinations, shall be made
      in
      accordance with the provisions set forth in Section 2.2(b).

     

    (b)  The
      accounting firm engaged by the Company for the purpose of rendering general
      tax
      advice as of the day prior to the effective date of the Change in Control shall
      perform the calculations required by Section 2.2(a). If the accounting firm
      so
      engaged by the Company is serving as accountant, tax advisor or auditor for
      the
      individual, entity or group effecting the Change in Control, the Company shall
      appoint a nationally recognized accounting firm that is not so serving to 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. The accounting firm engaged to make the determinations hereunder
      shall provide its calculations, together with detailed supporting documentation,
      to the Company and the Executive within fifteen (15) calendar days after the
      date on which the Executive’s right to a Payment is triggered (if requested at
      that time by the Company or the Executive) or such other time as may be jointly
      requested by the Company and the Executive. Any good faith determinations of
      the
      accounting firm made hereunder shall be final, binding and conclusive upon
      the
      Company and the Executive.

     

    2.3  Time
      of Payment and Form Of Benefits.
      

     

    (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 and after the determinations
      required by Section 2.2(a) have been delivered to the Company and the Executive
      but in no event later than thirty (30) calendar days after the Change in Control
      is completed and shall otherwise be made in accordance with and subject to
      the
      Company’s normal payroll practices. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  If
      the
      Company determines that any cash benefit provided under Section 2.1 fails to
      satisfy the distribution requirement of Section 409A(a)(2)(A) of the Code as
      a
      result of the application of Section 409A(a)(2)(B)(i) of the Code, the payment
      of such benefit shall be accelerated to the minimum extent necessary so that
      the
      benefit is not subject to the provisions of Section 409A(a)(1) of the Code.
      (It
      is the intention of the preceding sentence to apply the short-term deferral
      provisions of Section 409A of the Code, and the regulations and other guidance
      thereunder, to such payments and benefits. The payment schedule as revised
      after
      the application of such preceding sentence shall be referred to as the
“Revised
      Payment Schedule.”)
      However, if there is no Revised Payment Schedule that would avoid the
      application of Section 409A(a)(1) of the Code, the payment of such benefits
      shall not be paid pursuant to the original payment schedule or a Revised Payment
      Schedule and instead the payment of such benefits shall be delayed to the
      minimum extent necessary so that such benefits are not subject to the provisions
      of Section 409A(a)(1) of the Code. The Company may attach conditions to or
      adjust the amounts paid pursuant to this Section 2.3 to preserve, as closely
      as
      possible, the economic consequences that would have applied in the absence
      of
      Section 409A of the Code; provided,
      however,
      that no
      such condition shall result in the payments being subject to Section 409A(a)(1)
      of the Code.

     

    2.4  Withholding.
      All
      payments under this Agreement will be subject to all applicable withholding
      obligations of the Company, including, without limitation, obligations to
      withhold for federal, state and local income and employment taxes.

     

    2.5  Indebtedness
      of the Executive. If
      the
      Executive is indebted to the Company on the date the Retention Bonus is payable
      to the Executive pursuant to this Agreement, the Company reserves the right
      to
      offset any such payment by the amount of such indebtedness and Executive hereby
      consents in writing to any such offset.

     

    3.  Notices.
      Any
      notice provided for in this Agreement shall be in writing and shall be either
      personally delivered, mailed by first class mail (return receipt requested),
      or
      sent by overnight courier service, to the recipient at the address indicated
      below:

    


    Notices
      to the Executive:

    


    Giovanni
      Coglitore

    13262
      Via
      Blanc Ct.

    Saratoga,
      CA 95070

    


    Notices
      to the Company:

    


    Rackable
      Systems, Inc. 

    1933
      Milmont Drive

    Milpitas,
      CA 95035

    Facsimile:
      (408) 321-0293 

    Attention:
      Chief
      Executive Officer

    


    or
      such
      other address or to the attention of such other person as the recipient party
      shall have specified by prior written notice to the sending party. Any notice
      under this Agreement shall be deemed to have been given when so delivered or
      mailed.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.  Severability.
      Whenever
      possible, each provision of this Agreement shall be interpreted in such manner
      as to be effective and valid under applicable law, but if 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 shall not affect any other provision; provided
      that
      such provision shall be construed to give effect to the parties intent of such
      provision to the maximum extent permitted by applicable law.

     

    5.  Complete
      Agreement. This 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. 

     

    6.  No
      Strict Construction.
      The
      language used in this Agreement shall be deemed to be the language chosen by
      the
      parties hereto to express their mutual intent, and no rule of strict
      construction shall be applied against any party.

     

    7.  Descriptive
      Headings.
      The
      descriptive headings of this Agreement are inserted for convenience only and
      do
      not constitute a substantive part of this Agreement. 

     

    8.  Counterparts.
      This
      Agreement may be executed in separate counterparts, each of which is deemed
      to
      be an original and all of which taken together constitute one and the same
      agreement.

     

    9.  Successors
      and Assigns.
      This
      Agreement is intended to bind and inure to the benefit of and be enforceable
      by
      the Executive, the Company and their respective heirs, successors and assigns,
      except that the Executive may not assign his rights or delegate his obligations
      hereunder without the prior written consent of the Company. It is hereby
      expressly agreed that the Affiliates of the Company are intended to be
      third-party beneficiaries to this Agreement, and are entitled to enforce the
      rights and remedies of the Company hereunder.

     

    10.  Choice
      of Law.
      All
      issues and questions concerning the construction, validity, enforcement and
      interpretation of this Agreement and the exhibits and schedules hereto shall
      be
      governed by, and construed in accordance with, the laws of the State of
      California, without giving effect to any choice of law or conflict of law rules
      or provisions (whether of the State of California or any other jurisdiction)
      that would cause the application of the laws of any jurisdiction other than
      the
      State of California.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.  Amendments,
      Waivers, and Termination.
      This
      Agreement will terminate, and be of no further force and effect, on the
      Agreement Termination Date, unless there shall have occurred a Change in Control
      on or prior to the Agreement Termination Date. As of any particular time, any
      term of this Agreement may be amended, the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), or this Agreement may be terminated, in each
      case only with the written consent of the Company and the Executive. Any
      amendment, waiver, or termination executed in accordance with this Section
      11
      will be binding upon the Executive, the Company, the Company’s
      successors-in-interest, and any person claiming for or on behalf of the
      Executive or the Company. The foregoing not withstanding, the provisions of
      Sections 10 and 13 shall survive any termination of the Agreement

     

    12.  Delivery
      by Facsimile.
      This
      Agreement, the agreements referred to herein, and each other agreement or
      instrument entered into in connection herewith or therewith or contemplated
      hereby or thereby, and any amendments hereto or thereto, to the extent signed
      and delivered by means of a facsimile machine, shall be treated in all manner
      and respects as an original agreement or instrument and shall be considered
      to
      have the same binding legal effect as if it were the original signed version
      thereof delivered in person. At the request of any party hereto or to any such
      agreement or instrument, each other party hereto or thereto shall reexecute
      original forms thereof and deliver them to all other parties. No party hereto
      or
      to any such agreement or instrument shall raise the use of a facsimile machine
      to deliver a signature or the fact that any signature or agreement or instrument
      was transmitted or communicated through the use of a facsimile machine as a
      defense to the formation or enforceability of a contract and each such party
      forever waives any such defense.

     

    13.  Dispute
      Resolution.
      Other
      than with respect to suits for injunctive or other equitable relief, any dispute
      under this Agreement shall be resolved by instituting, after thirty (30) days
      written notice to the other party, an arbitration to be conducted in San
      Francisco, California in accordance with the Commercial Arbitration Rules
      (except as modified below) of the American Arbitration Association and with
      the
      Expedited Procedures thereof (collectively, the “Rules”).
      Each
      of the parties hereto agrees that such arbitration shall be conducted by a
      panel
      of three arbitrators, one of whom is selected by the Company, one of whom is
      selected by the Executive and one of whom is mutually agreeable to the
      arbitrators selected by the Company and the Executive; provided that such
      arbitrators shall each be a retired judge or other qualified person with
      relevant experience in deciding cases concerning the matter which is the subject
      of the dispute. The arbitrators shall prepare a written decision containing
      the
      essential findings and conclusions on which the award is based so as to ensure
      meaningful judicial review of the decision. In rendering such decision, the
      arbitrators shall not add to, subtract from or otherwise modify the provisions
      of this Agreement and shall make their determinations in accordance therewith.
      Any award rendered by the arbitrators shall be final, binding and sole and
      exclusive with respect to the subject matter thereof and judgment may be entered
      on it in any court of competent jurisdiction. The losing party shall pay the
      fees and expenses of both parties and the arbitrators, and the arbitrators
      shall
      resolve any fee disputes. 

     

    14.  No
      Implied Employment Contract. This
      Agreement shall not be deemed (i) to give the Executive any right to be retained
      in the employ of the Company, or (ii) to interfere with the right of the Company
      to discharge the Executive at any time, with or without cause, which right
      is
      hereby reserved.

     

    15.  Effectiveness.
      This
      Agreement is effective upon the execution and delivery of this Agreement by
      the
      Company and the Executive. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Parties have executed this Retention Bonus Agreement as of the Effective
      Date.

     

    THE
      COMPANY:

     

    RACKABLE
      SYSTEMS, INC.

     

     

    By:       /s/
      Thomas Barton

    Name: 
      Thomas K. Barton

    Its:      
      Chief Executive Officer 

    


    


    THE
      EXECUTIVE:

     

     

    /s/
      Giovanni Coglitore

    Giovanni
      Coglitore