Document:

2005 Non-Qualified Stock Option Plan

 Exhibit 10.4 
 MACRO HOLDING, INC. 
  
  
 2005
NON-QUALIFIED STOCK OPTION PLAN 
  
  
 THE BOARD
OF DIRECTORS HAS ADOPTED THIS 2005 NON-QUALIFIED STOCK OPTION PLAN EFFECTIVE
DECEMBER 14, 2005 (THE “PLAN”), WHICH PROVIDES AS FOLLOWS: 
 1. Purpose of this Plan.1
 The purpose of this Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company’s business and that of its direct and indirect subsidiaries. 
 2. Administration of this
Plan. 
 (a) Administrator. This Plan shall be administered by a committee of one or more members, who need not be Directors, appointed
from time to time by the Board. Unless otherwise agreed by the Board, such committee shall always include the Company’s President and such other members as designated from time to time by the Company’s President on behalf of the Board.

 (b) Powers of the Administrator. Subject to the provisions of this Plan (including, without limitation, Section 3 hereof) and
any specific duties or restrictions set forth from time to time by the Board, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion: 
 (i) to exercise all of the powers granted to it under this Plan; 
 (ii) to determine the persons to whom Options are to be granted under this Plan, except that any Option grant to any Director or Consultant, or to the Company’s Chairman, CEO or President, or to any Vice
President or other senior level executive of the Company or of any of its operating subsidiaries or to any other member of management who otherwise reports directly to the Company’s President, CEO or Chairman, shall require prior approval by
the Board; 
 (iii) to determine the number of Shares to be covered by each Option granted hereunder to the extent that any such grant does
not exceed options for 25,000 Shares to any particular person in a calendar year (as adjusted for stock splits or the like); 
 (iv) to
determine the Fair Market Value of the Common Stock at the time that an Option is exercised to determine the applicable tax withholding obligations in connection with the exercise of any Option granted hereunder; 
  
  

	 1
	 Defined terms used in this Plan are found in Section 19 hereof. 

 (v) to construe, interpret and implement this Plan and written Option Agreements; 
 (vi) to prescribe, amend and rescind any rules and regulations relating to this Plan or any Option Agreement, including rules governing its own
operations; 
 (vii) to make all determinations necessary or advisable in administering this Plan or interpreting any Option Agreement;

 (viii) to correct any defect, supply any omission and reconcile any inconsistency in this Plan or any Option Agreement; and 

(ix) to amend this Plan to reflect changes in applicable law. 
 (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees. 
 (d) Liability of Administrator. No member of the committee that constitutes the Administrator shall be liable for any action or determination made
in good faith with respect to this Plan or any award thereunder. 
 (e) Decision Making. Actions of the Administrator shall be
determined by the Company’s President, with input from the other members of the committee that constitutes the Administrator. Notwithstanding the foregoing, the Board may overrule any action made by the Administrator. 
 3. Actions Requiring Board Approval. Notwithstanding the foregoing, the Administrator may not take the following actions without the prior
approval of the Board: 
 (a) determine the option price of shares of Common Stock purchasable under any option granted under this Plan (which
determinations shall be made in accordance with Section 9 of this Plan); 
 (b) grant Options to any Director or Consultant, or to the
Company’s Chairman, CEO or President, or to any Vice President or other senior level executive of the Company or of any of its operating subsidiaries or to any other member of management who otherwise reports directly to the Company’s
President, CEO or Chairman; 
 (c) grant Options under this Plan pursuant to an Option Agreement other than in the form attached as
Exhibit “A” hereto, which form the Board has approved; 
 (d) determine the number of Shares to be covered by each Option
granted hereunder to the extent that any such grant exceeds options for 25,000 Shares to any particular person in a calendar year (as adjusted for stock splits or the like); 
 (e) grant Options for an amount of Shares which would cause the total number of Option grants in a particular calendar year to be for greater than
250,000 Shares in the aggregate for such calendar year (as adjusted for stock splits or the like); 
  

 -2- 

 (f) determine whether to reduce the exercise price of any Option to the then current Fair Market Value if
the Fair Market Value of the Common Stock covered by such Option has declined since the date the Option was granted; 
 (g) initiate an
Option Exchange Program; 
 (h) determine whether to allow Optionees to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued upon exercise of any Option that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld; the Fair Market Value of the Shares to be withheld shall be determined as of the
date that the amount of tax to be withheld is to be determined; all elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; or

 (i) determine whether to allow Optionees to satisfy exercise price obligations under a cashless exercise program implemented by the
Company. 
 4. Eligibility. Options may be granted under this Plan to any Service Provider. In determining the Service Providers to
whom options shall be granted and the terms thereof, the Administrator (and the Board, if applicable) shall take into consideration the person’s present and potential contribution to the success of the Company and its direct and indirect
subsidiaries and such other factors as the Administrator (and the Board, if applicable) may deem proper and relevant. 
 5. Stock Subject
to Options. Subject to the provisions of Section 14 below, the maximum aggregate number of Shares that may be subject to option and sold under this Plan shall not exceed an amount equal to 5,429,356 Shares, less the total aggregate number
of Shares subject to options granted by the Company outside of this Plan that are outstanding at that time (including, without limitation, shares subject to options granted under the Company’s 2003 Stock Option Plan and its 1999 Assumed Stock
Option Plan). The Shares may be authorized but unissued, or reacquired Common Stock. If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares which were subject thereto shall become available for future grant or sale under this Plan (unless this Plan has terminated) provided that the granting and terms comply in all respects with this Plan. However, Shares that have actually been
issued under this Plan, upon exercise of an Option, shall not be returned to this Plan and shall not become available for future distribution under this Plan. 
 6. Limitations. Neither this Plan nor any Option Agreement shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as an Employee with the Company, nor shall it
interfere in any way with the Employee’s right or the Company’s, a Parent’s or a Subsidiary’s right to terminate such relationship at any time, with or without cause, and with or without notice. 
 7. Expiration and Termination of Plan. This Plan shall become effective upon its adoption by the Board and shall continue in effect until it is
terminated in accordance with 

  

 -3- 

 
Section 16 hereof. Options may be granted under this Plan at any time and from time to time prior to the expiration or termination of this Plan, except
as to options then outstanding under this Plan. Such options shall remain in effect until they have been exercised or have expired. Except with respect to any options then outstanding under this Plan, this Plan may be terminated or amended with
advance approval of the proposed amendment in accordance with Section 16. No modification, extension, renewal or other change in any option granted under this Plan shall be made after the grant of such option unless the same is consistent with
the provisions of this Plan. 
 8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however,
that the term shall be no more than ten (10) years from the date of grant thereof. 
 9. Option Price. The option price of each
share of Common Stock purchasable under any Option granted under this Plan shall be determined by at least a majority of the whole Board of Directors and such price shall be set forth in each respective Option Agreement entered into pursuant to this
Plan. In no event shall the option price be less than 100% of the Fair Market Value of the Common Stock at the time the option is granted. The Board’s determination of the Fair Market Value shall be conclusive and the purchase price of shares
of Common Stock under Options granted on any particular date shall be set forth in the minutes of the meeting of the Board when such price was determined. 
 10. Consideration, and Duration of Options. 
 (a) Forms of Consideration. The consideration to
be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Board if other than by check or cash. Such consideration may consist of, without limitation, (1) cash, (2) check,
(3) promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless exercise program, if any, implemented by the Company in connection with
this Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Board shall consider if acceptance of such consideration may be reasonably expected to benefit the
Company. In the event an Optionee is allowed to exercise such Optionee’s Option by delivery of a promissory note, such note shall be a full-recourse promissory note secured by the purchased Shares. The terms of such promissory note shall be
determined by the Board in its sole discretion; provided, however, the par value of the Shares purchased upon the exercise of an Option shall not be paid through the use of a promissory note. 
 (b) Duration of Options. As to any person who is granted an option hereunder, the unexercised portion of any option granted under this Plan shall
automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: 
 (1) The expiration of ten (10) years from the date on which such option was granted; 
  

 -4- 

 (2) The expiration of such period of time or the occurrence of such event as the
Administrator, in its discretion, may provide upon the granting thereof; 
 (3) In accordance with the terms of the Option
Agreement as approved by the Administrator; or 
 (4) If an Optionee ceases to be a Service Provider (including, without
limitation, by reason of death), such Optionee (or his or her estate or legal representative) may exercise such Optionee’s Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested and
exercisable on the date of termination or as otherwise provided in the Option Agreement (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). If, on the date of termination, the Optionee is not
vested as to such Optionee’s entire Option, the Shares covered by the unvested portion of the Option shall revert to this Plan. If, after termination, the Optionee does not exercise such Optionee’s Option (or it is otherwise unexercisable)
within the time specified in the Option Agreement, the Option shall terminate to the extent not exercised, and the Shares covered by such Option shall revert to this Plan. 
 11. Exercise of Option. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence. An Option may not be exercised for a
fraction of a Share. 
 To determine applicable tax withholding obligations in connection with the exercise of any Option granted hereunder,
the Administrator shall determine the Fair Market Value of the Common Stock at the time the Option is exercised. 
 An Option shall be deemed
exercised when the Company receives: (i) written notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, (ii) full payment for the Shares with respect to which the Option is exercised,
and (iii) satisfaction of the other conditions outlined in this Plan or the Option Agreement, including, without limitation, payment of an amount equal to the income taxes required to be withheld from the Optionee. Shares issued upon exercise
of an Option shall be issued in the name of the Optionee. 
 Until the Shares are issued (as evidenced by the issuance of an appropriate
stock certificate, or the appropriate entry on the books of the Company or of a fully authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14. 
  

 -5- 

 Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter
available, both for purposes of this Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
 12.
Additional Conditions Upon Issuance of Shares. 
 (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of
an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
 (b) Investment Representations. As a condition to the exercise of an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, if in the opinion of counsel for the Company, such a representation
is required. 
 (c) Other Conditions. As a condition to the exercise of an Option, the Administrator may require the person exercising
such Option to execute (a) all documents that the Company or the Administrator determine, in their sole discretion, are necessary to ensure that Optionee will comply with the terms and provisions of (1) this Plan, and (2) the Option
Agreement (including the attached Exhibits), (b) any stockholder agreement, voting agreement or other agreement generally required by the Company to be entered into by the stockholders of the Company or otherwise required to be executed by
persons exercising options under any option plan or compensation plan maintained by the Company, (c) a non-disclosure agreement in a form provided by the Administrator in connection with any disclosures made by the Company to the Optionee
pursuant to Rule 701 of the Securities Act or otherwise, and (d) any other agreement(s) that the Administrator may reasonably request. 
 13. Limited Transferability of Options; Divorce. Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee. Any Option purported to be transferred to the spouse or former spouse of an Optionee pursuant to any court order or decree or settlement agreement issued or entered into incident to any
divorce action shall terminate to the extent transferred, whether or not any such court order or decree or settlement agreement purports to merely recognize or document a community interest of such spouse or former spouse. 
 14. Changes in Capitalization; Merger or Change of Control. 
 (a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number and type of Shares that have been authorized for issuance under this Plan but as to which no Options
have yet been granted or which have been returned to this Plan upon cancellation or expiration of an Option, and the number and type of 

  

 -6- 

 
Shares covered by each outstanding Option, as well as the price per Share covered by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number or type of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of
the Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of Shares subject to an Option. 
 (b) Merger or Change of Control. In the event of (x) a merger of the Company with or into another entity or (y) a Change of Control, each outstanding Option may be assumed or an equivalent option substituted by the
successor entity (or a Parent or Subsidiary of the successor entity) without the need for consent or approval by the Optionee. In the event that a proposed successor entity (or a Parent or Subsidiary of the successor entity) chooses not to assume or
substitute for an Option, the Company shall give the Optionee written notice that the proposed successor entity chooses not to assume or substitute for an Option at least ten (10) days prior to completion of the merger or Change of Control, at
which time each outstanding Option that is not fully vested and exercisable will conditionally vest on an accelerated basis and become conditionally exercisable, such accelerated vesting and exercise to be conditioned upon the completion of the
merger or Change of Control. Notwithstanding the foregoing, in the event that the proposed successor entity (or a Parent or Subsidiary of the successor entity) chooses not to assume or substitute for an Option, then all options (including those
where vesting accelerated pursuant to the previous sentence as well as Options that were already vested) shall terminate and be forfeited if not exercised prior to completion of the merger or Change of Control, such exercise to be conditioned upon
completion of the merger or Change of Control. If the merger or Change of Control is not completed, any conditional acceleration of vesting and conditional exercise pursuant to this paragraph shall have no effect and the Option shall vest and become
exercisable in accordance with its terms. For purposes of this paragraph, the determination of whether the terms of a proposed merger or Change of Control include appropriate provisions for an Option to be substituted for an equivalent option shall
be made by the Administrator, which determination shall be final and binding on the Optionee. For the purposes of this paragraph, an Option shall be considered assumed if, following the merger or Change of Control, the Option will confer the right
to purchase or receive, for each Share of Optioned Stock subject to such Option immediately prior to the merger or Change of Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change Control
(and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if consideration received in the merger or Change of Control is not
solely common stock of the successor entity or its Parent, the Administrator may, with the consent of the successor entity, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor entity or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change of Control. 
  

 -7- 

 15. Time of Granting Options. The Administrator may make the determination to grant Options
hereunder on an annual, semi-annual or quarterly basis, or more often as the Administrator deems appropriate (understanding, however, that Fair Market Value must be determined at the time of each grant). 
 16. Amendment and Termination of this Plan. 
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate this Plan. Amendments to this Plan may include, but are not limited to, such matters as vesting requirements, the form of payment of awards,
and the effects of employment termination. 
 (b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan
amendment only to the extent necessary and desirable to comply with Applicable Laws. 
 (c) Effect of Amendment or Termination. No
amendment, alteration, suspension or termination of this Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the
Company. Termination of this Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under this Plan prior to the date of such termination. 
 17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained. 
 18. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of this Plan. 
 19. Definitions. As used
herein, the following definitions shall apply: 
 (a) “Administrator” means the committee appointed by the Board in
accordance with Section 2 hereof, which governs this Plan in accordance with Section 2 hereof and as otherwise provided in this Plan. The Administrator may sometimes be referred to as the “Stock Option Plan Administrative
Committee.” 
 (b) “Applicable Laws” means all applicable laws, regulations, requirements and statutes relating to the
administration of non-qualified stock option plans and agreements under U.S. state corporate laws, U.S. federal and state securities laws, and the Code. 
 (c) “Board” means the Company’s Board of Directors, including any Board committee (such as its Compensation Committee) having authority to act on behalf of the Board for certain purposes.

  

 -8- 

 (d) “Change of Control” means (i) the acquisition of the Company by another entity
by means of any transaction or series of related transactions (including, without limitation, any merger, consolidation or other form of reorganization in which outstanding shares of the Company are exchanged for securities or other consideration
issued, or caused to be issued, by the acquiring entity or its subsidiary, but excluding any transaction effected primarily for the purpose of changing the Company’s state of incorporation), unless the Company’s stockholders of
record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions, hold at least thirty-five (35%) of the voting power of the surviving or
acquiring entity, or (ii) a sale of all or substantially all of the assets of the Company. “Change of Control” shall not include a Change of Control resulting directly or indirectly from the sale of Common Stock to the public pursuant
to a registration statement under the Securities Act. 
 (e) “Code” means the Internal Revenue Code of 1986, as amended.

 (f) “Common Stock” means the Company’s common stock. 
 (g) “Company” means Macro Holding, Inc., a Delaware corporation. 
 (h) “Consultant” means any person who has a written agreement with the Company or any Parent or Subsidiary to render consulting or
advisory services to such entity or entities. 
 (i) “Director” means a member of the Board. 
 (j) “Employee” means any person employed by the Company or any Parent or Subsidiary of the Company. An Employee shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. 
 (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (l) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
 (i) if the Common Stock is listed on a national securities exchange (which term shall include, without limitation, the Nasdaq Stock Market), the last
reported sales price of the Common Stock on such exchange on the date on which the option is granted (or if there shall be no trading on such date, then on the next previous date on which there shall have been trading of the Common Stock);

 (ii) if the Common Stock is not listed on a national securities exchange, if applicable, the average of the highest bid and the lowest
ask prices at the close of business in the over-the-counter market on the date on which the option is granted; or 
 (iii) if the Common
Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, as determined by the Board (in connection with determining the option in accordance with Section 9 hereof) or the Administrator (in 

  

 -9- 

 
connection with determining tax withholding obligations in accordance with Section 2(b)(iv) and Section 11 hereof), in good faith on the basis of
available financial information (including, if available and without limitation, information regarding recent sales of Common Stock), using any reasonable valuation method. The Board’s or the Administrator’s (as the case may be)
determination of the fair market value shall be conclusive. 
 (m) “Non-Qualified Stock Option” means an Option not intended
to qualify as an incentive stock option within the meaning of Section 422 of the Code. 
 (n) “Option” means a
Non-Qualified Stock Option granted pursuant to this Plan. 
 (o) “Option Agreement” means a written agreement between the
Company and a Service Provider evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of this Plan. 
 (p) “Option Exchange Program” means a program whereby outstanding Options are exchanged for Options with a lower exercise price.

 (q) “Optioned Stock” means the Common Stock subject to an Option. 
 (r) “Optionee” means the holder of an outstanding Option granted under this Plan. 
 (s) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 (t) “Plan” means this 2005 Non-Qualified Stock Option Plan. 
 (u) “Securities Act” means the Securities Act of 1933, as amended. 
 (v) “Service Provider” means an Employee, Director or Consultant. 
 (w) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14. 
 (x) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the
Code. 
  

							
	MACRO HOLDING, INC.	  		  	
				
	By:	  	  
	  		  	
			
		  	                                       
                      , on behalf of the Board of Directors
	  	

  

 -10- 

 Exhibit “A” 
 [Attach Copy of Stock Option Agreement Approved by the Board] 
  

 -11- 

 2005 NON-QUALIFIED STOCK OPTION PLAN 
 EXERCISE NOTICE AND AGREEMENT 
 Rackspace, Inc. 
 9725 Datapoint Drive, Suite 100 
 San Antonio, Texas 78229 
 Attn: Secretary 
 1. Exercise of Option.
Effective as of today,                     , 200    , the undersigned (“Optionee”) hereby elects
to exercise Optionee’s option to purchase              shares of Common Stock (the “Shares”, which term for purposes of this Exercise Notice and Agreement
includes any securities issued in exchange for or as a result of the Common Stock) of Rackspace, Inc. (the “Company”) pursuant to the Company’s 2005 Non-Qualified Stock Option Plan (the “Plan”) and the Stock
Option Agreement dated              (the “Option Agreement”). Capitalized terms not otherwise herein shall have the same meaning as in the Option Agreement.

 2. Delivery of Payment. Optionee herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option
Agreement, and any and all withholding taxes due in connection with the exercise of the Option. 
 3. Representations of Optionee.
Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
 4. Right as Stockholder. Until the issuance of the Shares (as evidenced by the issuance of an appropriate stock certificate, or the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Shares shall be issued to the Optionee as soon as practicable
after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 14 of the Plan.

 5. Company’s Right of First Refusal. Optionee shall not sell or otherwise transfer any Shares except in compliance with
applicable securities laws and except in accordance with terms and conditions set forth in this Section 5 and any other applicable restrictions on the Shares. Before any Shares held by Optionee or any transferee (either being sometimes
referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and
conditions set forth in this Section 5 (the “Right of First Refusal”). 
 (a) Notice of Proposed
Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) Holder’s bona fide intention to sell or otherwise transfer such Shares and that the Holder has entered into,
subject to this Right of First Refusal, a binding agreement to sell or otherwise transfer such Shares (a “Proposed Sale 

 
Agreement”); (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of
Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at
the Offered Price to the Company or its assignee(s). Along with such Notice, the Holder shall deliver to the Company a complete copy of the fully executed Proposed Sale Agreement. 
 (b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase up to all of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.

 (c) Purchase Price. The purchase price (the “Purchase Price”) for the Shares purchased by the Company or its
assignee(s) under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good
faith. 
 (d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by
check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within sixty (60) days after receipt of the
Notice or, if later, at the time set forth in the Notice. If the Company, or its assignee, makes the consideration available, at the time and place and in the amount and form provided for in this Section for the Shares to be purchased pursuant to
the Right of First Refusal, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of the Shares (other than the right to receive payment of such consideration as set forth herein). Such
Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefore have been delivered as required by this Section. 
 (e) Holder’s Right to Transfer. To the extent the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to the Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer
is consummated within 90 days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee executes each agreement requested by the Company with
respect to such Shares and agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee
within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. 
 (f) Exception for Certain Family Transfers. Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the
Shares during the Optionee’s lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate 

 
family or a trust for the benefit of the Optionee’s immediate family shall be exempt from the provisions of the Right of First Refusal.
“Immediate Family” as used herein shall mean spouse or lineal descendant. In such case, (i) the transferee or other recipient shall (A) receive and hold the Shares so transferred subject to the provisions of this Section
and (B) execute each agreement requested by the Company with respect to such Shares, and (ii) there shall be no further transfer of such Shares except in accordance with the terms of this Section. 
 (g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act. 
 6. Company’s Right to Repurchase Shares. 
 (a) Termination of Employment; Competition. The
Company shall have the right to purchase any Shares acquired by Optionee in the event that Optionee (i) is terminated for “cause”, (ii) before being continuously employed by the Company for more than 36 months, resigns or is
terminated without “cause”, or (iii) at any time Engages in Competition. The purchase price for the Shares shall be the exercise price paid by Optionee plus an amount necessary to provide an annualized 6% rate of return from the date
the Shares were acquired upon exercise of the Option. However, if (i) Optionee’s employment is terminated without “cause,” and (ii) at such time the Company is a reporting company under the Exchange Act, the purchase price
for the Shares shall equal the Fair Market Value. For the purposes hereof, termination for “cause” shall mean termination of employment by the Company, a Parent or a Subsidiary made on the basis of the conduct (whether acts or omissions)
or performance of Optionee. The Administrator shall have the sole right to make the determination of whether or not the termination is for “cause.” Optionee agrees to notify the Company in writing of each employer of Optionee and each
person and entity to whom Optionee provides services for compensation from and after the date hereof so long as this Option remains outstanding and thereafter so long as Optionee or any of Optionee’s transferees hold or has any interest in any
Shares. 
 (b) Exercise of Right. If the Company desires to exercise its right to purchase such Shares, it shall within 120 days after
the date employment terminates or the Company knows that Optionee Engages in Competition, as applicable, (i) deliver a notice of exercise to Optionee, and (ii) make available at the offices of the Company, a check in the amount of the
purchase price for the Shares. If the Company makes the consideration available, at the time and place and in the amount and form provided for in this Section for the Shares to be purchased pursuant to the Company’s repurchase rights, then
after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of the Shares (other than the right to receive payment of such consideration as set forth herein). Such Shares shall be deemed to have
been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therfor have been delivered as required by this Section. 
 7. Tax Consultation. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee represents that Optionee has consulted
and will consult with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company or any of its agents or representatives for any tax advice. 

 8. Restrictive Legends and Stop-Transfer Orders. 
 (a) Legends. Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws: 
 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS, IN THE OPINION OF COUNSEL (WHICH MAY BE COUNSEL TO THE CORPORATION) SATISFACTORY TO THE
CORPORATION, SUCH REGISTRATION IS NOT REQUIRED. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER,
INCLUDING A 180-DAY MARKET STANDOFF AGREEMENT, A RIGHT OF FIRST REFUSAL AND REPURCHASE RIGHTS HELD BY THE CORPORATION AS SET FORTH IN AN EXERCISE NOTICE BETWEEN THE CORPORATION AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED
AT THE PRINCIPAL OFFICE OF THE CORPORATION. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THE SHARES. 
 (b) Stop-Transfer Notices. Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfer its own securities, it may make appropriate notations to the same effect in its own records. 
 (c) Refusal
to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice and Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 
 9. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice and Agreement to single or multiple assignees, and this Exercise Notice and Agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice and Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

 10. Interpretation. Any dispute regarding the interpretation of this Exercise Notice and Agreement shall be submitted by Optionee
or by the Company forthwith to the Administrator which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties. 

 11. Notices. All notices and other communications required or permitted hereunder shall be in
writing and shall be delivered personally by hand or by courier, mailed by United States first-class mail, postage prepaid, sent by facsimile or sent by electronic mail directed (a) if to the Optionee, at the Optionee’s address, facsimile
number or electronic mail address set forth on the signature page to the Option Agreement, or at such other address, facsimile number or electronic mail address as the Optionee may designate by ten (10) days’ advance written notice to the
Company or (b) if to the Company, to its principal executive office and directed to the attention of the President, or at such other address as the other address as the Company may designate by ten (10) days’ advance written notice to
the Optionee. All such notices and other communications shall be deemed given upon personal delivery, on the date of mailing, upon confirmation of facsimile transfer or when directed to the electronic mail address set forth on the signature page to
the Option Agreement. With respect to any notice given by the Company under any provision of the Delaware General Corporation Law or the Company’s charter or bylaws, the Optionee agrees that such notice may be given by facsimile or by
electronic mail. 
 12. Governing Law; Severability. This Exercise Notice and Agreement is governed by the internal substantive
laws, but not the choice of law rules, of Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remaining provisions hereof will continue in full force
and effect. 
 13. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice and
Agreement, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. 
  

							
	Submitted by:	 		 	Accepted by:
			
	OPTIONEE:	 		 	RACKSPACE, INC.
				
	  
	 		 	By:	 	  

	  
	 		 	Name:	 	  

		 		 	Title:	 	  

			
		 		 	  

		 		 	Date Received2007 Long Term Incentive Plan

 Exhibit 10.5 
 RACKSPACE, INC. 2007 LONG-TERM 
 INCENTIVE PLAN 
  

 [ 2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 1 of 29] 

					
	ARTICLE I ESTABLISHMENT, PURPOSE AND DURATION 1	  	
			
	1.1	  	Establishment	  	1
	1.2	  	Purpose of the Plan	  	1
	1.3	  	Duration of Plan	  	1
		
	ARTICLE II DEFINITIONS 1	  	
			
	2.1	  	“Affiliate”	  	1
	2.2	  	“Annual Incentive Award”	  	1
	2.3	  	“Award”	  	1
	2.4	  	“Award Agreement”	  	1
	2.5	  	“Beneficial Owner” or “Beneficial Ownership”	  	2
	2.6	  	“Board”	  	2
	2.7	  	“Cash-Based Award”	  	2
	2.8	  	“Change in Control of the Company”	  	2
	2.9	  	“Code”	  	3
	2.10	  	“Committee”	  	3
	2.11	  	“Company”	  	3
	2.12	  	“Corporate Change”	  	3
	2.13	  	“Covered Employee”	  	3
	2.14	  	“Director”	  	3
	2.15	  	“Director Award”	  	3
	2.16	  	“Disability”	  	3
	2.17	  	“Dividend Equivalent”	  	3
	2.18	  	“Employee”	  	3
	2.19	  	“Fair Market Value”	  	3
	2.20	  	“Fiscal Year”	  	3
	2.21	  	“Freestanding SAR”	  	3
	2.22	  	“Full Value Award”	  	4
	2.23	  	“Holder”	  	4
	2.24	  	“Incentive Stock Option” or “ISO”	  	4
	2.25	  	“Insider”	  	4
	2.26	  	“Minimum Statutory Tax Withholding Obligation”	  	4
	2.27	  	“Nonqualified Stock Option” or “NQSO”	  	4
	2.28	  	“Option”	  	4
	2.29	  	“Option Price”	  	4
	2.30	  	“Other Stock-Based Award”	  	4
	2.31	  	“Participant”	  	4
	2.32	  	“Performance-Based Compensation”	  	4
	2.33	  	“Performance Goals”	  	4
	2.34	  	“Performance Stock Award”	  	4
	2.35	  	“Performance Unit Award”	  	4
	2.36	  	“Period of Restriction”	  	4
	2.37	  	“Permissible under Section 409A”	  	5
	2.38	  	“Plan”	  	5
	2.39	  	“Restricted Stock”	  	5
	2.40	  	“Restricted Stock Award”	  	5
	2.41	  	“RSU”	  	5
	2.42	  	“RSU Award”	  	5
	2.43	  	“SAR”	  	5
	2.44	  	“Section 409A”	  	5
	2.45	  	“Stock”	  	5

  

 -i 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 2 of 29] 

					
	2.46	  	“Substantial Risk of Forfeiture”	  	5
	2.47	  	“Tandem SAR”	  	5
	2.48	  	“Ten Percent Stockholder”	  	5
	2.49	  	“Termination of Employment”	  	5
	2.50	  	“Third Party Service Provider”	  	5
		
	ARTICLE III ELIGIBILITY 6	  	
		
	ARTICLE IV GENERAL PROVISIONS RELATING TO AWARDS 6	  	
			
	4.1	  	Authority to Grant Awards	  	6
	4.2	  	Dedicated Shares; Maximum Awards	  	6
	4.3	  	Non-Transferability	  	7
	4.4	  	Requirements of Law	  	7
	4.5	  	Changes in the Company’s Capital Structure	  	8
	4.6	  	Election Under Section 83(b) of the Code	  	10
	4.7	  	Forfeiture for Cause	  	10
	4.8	  	Forfeiture Events	  	11
	4.9	  	Award Agreements	  	11
	4.10	  	Amendments of Award Agreements	  	11
	4.11	  	Rights as Stockholder	  	11
	4.12	  	Issuance of Shares of Stock	  	11
	4.13	  	Restrictions on Stock Received	  	11
	4.14	  	Compliance With Section 409A	  	11
		
	ARTICLE V OPTIONS 11	  	
			
	5.1	  	Authority to Grant Options	  	11
	5.2	  	Option Agreement	  	12
	5.3	  	Option Price	  	12
	5.4	  	Duration of Option	  	12
	5.5	  	Amount Exercisable	  	12
	5.6	  	Exercise of Option	  	12
	5.7	  	Transferability–Incentive Stock Options	  	12
	5.8	  	Notification of Disqualifying Disposition	  	13
	5.9	  	$100,000 Limitation on ISOs	  	13
		
	ARTICLE VI STOCK APPRECIATION RIGHTS 13	  	
			
	6.1	  	Authority to Grant SAR Awards	  	13
	6.2	  	General Terms	  	13
	6.3	  	SAR Agreement	  	13
	6.4	  	Term of SAR	  	13
	6.5	  	Exercise of SAR	  	13
	6.6	  	Payment of SAR Amount	  	14
	6.7	  	Termination of Employment	  	14
		
	ARTICLE VII RESTRICTED STOCK AWARDS 14	  	
			
	7.1	  	Restricted Stock Awards	  	14
	7.2	  	Restricted Stock Award Agreement	  	14
	7.3	  	Holder’s Rights as Stockholder	  	14

  

 -ii 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 3 of 29] 

					
		
	ARTICLE VIII RESTRICTED STOCK UNIT AWARDS	  	
			
	8.1	  	Authority to Grant RSU Awards	  	15
	8.2	  	RSU Award	  	15
	8.3	  	RSU Award Agreement	  	15
	8.4	  	Form of Payment Under RSU Award	  	15
	8.5	  	Time of Payment Under RSU Award	  	15
		
	ARTICLE IX PERFORMANCE STOCK AWARDS AND PERFORMANCE UNIT AWARDS 15	  	
			
	9.1	  	Authority to Grant Performance Stock Awards and Performance Unit Awards	  	15
	9.2	  	Performance Goals	  	15
	9.3	  	Time of Establishment of Performance Goals	  	16
	9.4	  	Written Agreement	  	16
	9.5	  	Form of Payment Under Performance Unit Award	  	16
	9.6	  	Time of Payment Under Performance Unit Award	  	16
	9.7	  	Holder’s Rights as Stockholder With Respect to a Performance Stock Award	  	16
	9.8	  	Increases Prohibited	  	16
	9.9	  	Stockholder Approval	  	17
		
	ARTICLE X DIRECTOR AWARDS 17	  	
		
	ARTICLE XI DIVIDEND EQUIVALENTS 17	  	
		
	ARTICLE XII ANNUAL INCENTIVE AWARDS 17	  	
			
	12.1	  	Authority to Grant Annual Incentive Awards	  	17
	12.2	  	Covered Employees	  	17
	12.3	  	Written Agreement	  	17
	12.4	  	Form of Payment Under Annual Incentive Award	  	17
	12.5	  	Time of Payment Under Annual Incentive Award	  	17
		
	ARTICLE XIII OTHER STOCK-BASED AWARDS 18	  	
			
	13.1	  	Authority to Grant Other Stock-Based Awards	  	18
	13.2	  	Value of Other Stock-Based Award	  	18
	13.3	  	Payment of Other Stock-Based Award	  	18
	13.4	  	Termination of Employment	  	18
	13.5	  	Time of Payment of Other Stock-Based Award	  	18
		
	ARTICLE XIV CASH-BASED AWARDS 18	  	
			
	14.1	  	Authority to Grant Cash-Based Awards	  	18
	14.2	  	Value of Cash-Based Award	  	18
	14.3	  	Payment of Cash-Based Award	  	18
	14.4	  	Time of Payment of Cash-Based Award	  	19
	14.5	  	Termination of Employment	  	19
		
	ARTICLE XV SUBSTITUTION AWARDS 19	  	
			
		  	ARTICLE XVI CHANGE IN CONTROL OF THE COMPANY 19	  	
			
	16.1	  	Change in Control of the Company	  	19
	16.2	  	Delay of Payment due to Section 409A	  	20
		
	ARTICLE XVII ADMINISTRATION 20	  	
			
	17.1	  	Awards	  	20

  

 -iii 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 4 of 29] 

					
	17.2	  	Authority of the Committee	  	21
	17.3	  	Decisions Binding	  	21
	17.4	  	No Liability	  	22
		
	ARTICLE XVIII AMENDMENT OR TERMINATION OF PLAN 22	  	
			
	18.1	  	Amendment, Modification, Suspension, and Termination	  	22
	18.2	  	Awards Previously Granted	  	22
		
	ARTICLE XIX MISCELLANEOUS 22	  	
			
	19.1	  	Unfunded Plan/No Establishment of a Trust Fund	  	22
	19.2	  	No Employment Obligation	  	22
	19.3	  	Tax Withholding	  	22
	19.4	  	Gender and Number	  	23
	19.5	  	Severability	  	23
	19.6	  	Headings	  	23
	19.7	  	Other Compensation Plans	  	23
	19.8	  	Retirement and Welfare Plans	  	23
	19.9	  	Other Awards	  	24
	19.10	  	Successors	  	24
	19.11	  	Law Limitations/Governmental Approvals	  	24
	19.12	  	Delivery of Title	  	24
	19.13	  	Inability to Obtain Authority	  	24
	19.14	  	Investment Representations	  	24
	19.15	  	Persons Residing Outside of the United States	  	24
	19.16	  	Arbitration of Disputes	  	24
	19.17	  	Governing Law	  	24

  

 -iv 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 5 of 29] 

 ARTICLE I 
 ESTABLISHMENT, PURPOSE AND DURATION 
 1.1 Establishment. The Company hereby establishes an incentive
compensation plan, to be known as the “Rackspace, Inc. 2007 Long-Term Incentive Plan,” as set forth in this document. The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, SARs, Restricted Stock,
RSUs, Performance Stock Awards, Performance Unit Awards, Annual Incentive Awards, Dividend Equivalents, Cash-Based Awards and Other Stock-Based Awards. Subject to approval by the Company’s stockholders, the Plan will become effective as of
November 1, 2007 (the “Effective Date”). 
 1.2 Purpose of the Plan. The Plan is intended to advance the best interests
of the Company, its Affiliates and its stockholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional performance incentives and an opportunity to obtain or
increase their proprietary interest in the Company, thereby encouraging them to continue in their employment or affiliation with the Company or its Affiliates. 
 1.3 Duration of Plan. Unless sooner terminated as provided herein, the Plan shall terminate ten years from the Effective Date. After the Plan is terminated, no Awards may be granted but Awards previously granted shall remain
outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten years after the earlier of (a) adoption of the
Plan by the Board, and (b) the Effective Date. 
 ARTICLE II 
 DEFINITIONS 
 The words and phrases defined in this Article shall have the meaning set out below
throughout the Plan, unless the context in which any such word or phrase appears reasonably requires a broader, narrower or different meaning. 
 2.1
“Affiliate” means any corporation, partnership, limited liability company or association, trust or other entity or organization which, directly or indirectly, controls, is controlled by, or is under common control with, the
Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall
mean the possession, directly or indirectly, of the power (a) to vote more than fifty percent (50%) of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or (ii) to
direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise. 
 2.2 “Annual Incentive Award” means an Award granted to a Holder pursuant to Article XII. 
 2.3
“Award” means, individually or collectively, a grant under the Plan of Incentive Stock Options, Nonqualified Stock Options, SARs, Restricted Stock, RSUs, Performance Stock Awards, Performance Unit Awards, Annual Incentive
Awards, , Dividend Equivalents, Cash-Based Awards and Other Stock-Based Awards, in each case subject to the terms and provisions of the Plan. 
 2.4
“Award Agreement” means an agreement that sets forth the terms and conditions applicable to an Award granted under the Plan. 
  

 1 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 6 of 29] 

 2.5 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. 
 2.6 “Board” means the board of
directors of the Company. 
 2.7 “Cash-Based Award” means an Award granted pursuant to Article XIV. 
 2.8 “Change in Control of the Company” means the occurrence of any of the following the Effective Date: 
 (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended from time to time, (the “Exchange Act”) (a “Covered Person”) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the
then outstanding shares of the common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a) of this Section 2.8, the following acquisitions shall not
constitute a Change in Control of the Company: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company, or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (c) of this Section 2.8; or 
 (b) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at
least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or 

(c) Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition
of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Covered Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the

  

 2 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 7 of 29] 

 
board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board of Directors, providing for such Business Combination. 
 2.9 “Code” means the
United States Internal Revenue Code of 1986, as amended from time to time. 
 2.10 “Committee” means the Compensation Committee of
the Board. 
 2.11 “Company” means Rackspace, Inc., a Delaware corporation, or any successor (by reincorporation, merger or
otherwise). 
 2.12 “Corporate Change” shall have the meaning ascribed to that term in Section 4.5(c). 
 2.13 “Covered Employee” means an Employee who is a “covered employee,” as defined in section 162(m) of the Code and the regulations or
other guidance promulgated by the Internal Revenue Service under section 162(m) of the Code, or any successor statute. 
 2.14
“Director” means a director of the Company who is not an Employee. 
 2.15 “Director Award”
means any NQSO, SAR, or Full Value Award granted to a Director pursuant to such applicable terms, conditions, and limitations as the Board or Committee may establish in accordance with this Plan. 
 2.16 “Disability” means as determined by the Committee in its discretion exercised in good faith, a physical or mental condition of the Holder
that would entitle him to payment of disability income payments under the Company’s long-term disability insurance policy or plan for Employees as then in effect; or in the event that the Holder is not covered, for whatever reason, under the
Company’s long-term disability insurance policy or plan for Employees or in the event the Company does not maintain such a long-term disability insurance policy, “Disability” means a permanent and total disability as defined in
section 22(e)(3) of the Code. A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Holder shall submit to an examination by such physician upon request by the Committee. 

2.17 “Dividend Equivalent” means a payment equivalent in amount to dividends paid to the Company’s stockholders.

 2.18 “Employee” means a person employed by the Company or any Affiliate as a common law employee. 
 2.19 “Fair Market Value” of the Stock as of any particular date means (1) if the Stock is traded on a stock exchange, the closing sale price
of the Stock on that date as reported on the principal securities exchange on which the Stock is traded, or (2) if the Stock is traded in the over-the-counter market, the average between the high bid and low asked price on that date as reported
in such over-the-counter market; provided that (a) if the Stock is not so traded, (b) if no closing price or bid and asked prices for the stock was so reported on that date or (c) if, in the discretion of the Committee, another means of
determining the fair market value of a share of Stock at such date shall be necessary or advisable, the Committee may provide for another means for determining such fair market value. 
 2.20 “Fiscal Year” means the calendar year. 
 2.21 “Freestanding SAR” means
an SAR that is granted independently of any Options, as described in Article VI. 
  

 3 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 8 of 29] 

 2.22 “Full Value Award” means an Award other than in the form of an ISO, NQSO, or SAR, and
which is settled by the issuance of shares of stock. 
 2.23 “Holder” means a person who has been granted an Award or any person who
is entitled to receive shares of Stock or cash under an Award. 
 2.24 “Incentive Stock Option” or “ISO”
means an option to purchase Stock granted pursuant to Article V that is designated as an Incentive Stock Option and that is intended to satisfy the requirements of section 422 of the Code. 
 2.25 “Insider” shall mean an individual who is, on the relevant date, an officer, a Director, or more than ten percent (10%) Beneficial
Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act. 
 2.26 “Minimum Statutory Tax Withholding Obligation” means, with respect to an Award, the amount the Company or an Affiliate is required to
withhold for federal, state, local and foreign taxes based upon the applicable minimum statutory withholding rates required by the relevant tax authorities. 
 2.27 “Nonqualified Stock Option” or “NQSO” means a “nonqualified stock option” to purchase Stock granted pursuant to Article V that does not satisfy the requirements of section 422
of the Code. 
 2.28 “Option” means an Incentive Stock Option or a Nonqualified Stock Option. 
 2.29 “Option Price” shall have the meaning ascribed to that term in Section 5.3. 
 2.30 “Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described by the terms and provisions of the Plan that
is granted pursuant to Article XIII. 
 2.31 “Participant” means any eligible person as set forth in Article III to whom an Award is
granted. 
 2.32 “Performance-Based Compensation” means compensation under an Award that satisfies the requirements of section 162(m)
of the Code for deductibility of remuneration paid to Covered Employees. 
 2.33 “Performance Goals” means one or more of the
criteria described in Section 9.2 on which the performance goals applicable to an Award are based. 
 2.34 “Performance Stock
Award” means an Award designated as a performance stock award granted to a Holder pursuant to Article IX. 
 2.35 “Performance Unit
Award” means an Award designated as a performance unit award granted to a Holder pursuant to Article IX. 
 2.36 “Period of
Restriction” means the period during which Restricted Stock is subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the
Committee, in its discretion), as provided in Article VII. 
  

 4 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 9 of 29] 

 2.37 “Permissible under Section 409A” means with respect to a particular action (such as,
the grant, payment, vesting, settlement or deferral of an amount or award under the Plan) that such action shall not subject the compensation at issue to be subject to the additional tax or interest applicable under Section 409A. 
 2.38 “Plan” means the Rackspace, Inc. 2007 Long-Term Incentive Plan, as set forth in this document as it may be amended from time to time.

 2.39 “Restricted Stock” means shares of restricted Stock issued or granted under the Plan pursuant to Article VII. 
 2.40 “Restricted Stock Award” means an authorization by the Committee to issue or transfer Restricted Stock to a Holder. 
 2.41 “RSU” means a restricted stock unit credited to a Holder’s ledger account maintained by the Company pursuant to Article VIII.

 2.42 “RSU Award” means an Award granted pursuant to Article VIII. 
 2.43 “SAR” means a stock appreciation right granted under the Plan pursuant to Article VI. 
 2.44 “Section 409A” means section 409A of the Code and Department of Treasury rules and regulations issued thereunder. 
 2.45 “Stock” means the common stock of the Company, $0.001 par value per share (or such other par value as may be designated by act of the Company’s stockholders). 
 2.46 “Substantial Risk of Forfeiture” shall have the meaning ascribed to that term in Section 409A. 
 2.47 “Tandem SAR” means an SAR that is granted in connection with a related Option pursuant to Article VI herein, the exercise of which shall
require forfeiture of the right to purchase a share of Stock under the related Option (and when a share of Stock is purchased under the Option, the Tandem SAR shall similarly be canceled). 
 2.48 “Ten Percent Stockholder” means an individual, who, at the time the applicable Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. An individual shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the
whole or half blood), spouse, ancestors, and lineal descendants; and stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, shall be considered as being owned proportionately by or for its stockholders,
partners, or beneficiaries. 
 2.49 “Termination of Employment” means the termination of the Award recipient’s employment
relationship with the Company and all Affiliates. 
 2.50 “Third Party Service Provider” means any consultant, agent, representative,
advisor, or independent contractor who renders services to the Company or an Affiliate that (a) are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, and (b) do not directly or
indirectly promote or maintain a market for the Company’s securities. 
  

 5 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 10 of 29] 

 ARTICLE III 
 ELIGIBILITY 
 The persons who are eligible to receive Awards under the Plan are Employees, Directors and Third Party
Service Providers. The persons who are eligible to receive Annual Incentive Awards under the Plan are Employees who, by the nature and scope of their positions, regularly directly make or influence policy decisions which significantly impact the
overall results or success of the Company. Directors and Third Party Service Providers are only eligible to receive NQSO, SAR or Full Value Awards. 
 ARTICLE IV 
 GENERAL PROVISIONS RELATING TO AWARDS 
 4.1 Authority to Grant Awards. The Committee may grant Awards to those Employees, Directors and Third Party Service Providers as the Committee shall from time to time determine, under the terms and conditions
of the Plan. Subject only to any applicable limitations set out in the Plan, the number of shares of Stock or other value to be covered by any Award to be granted under the Plan shall be as determined by the Committee in its sole discretion.

 4.2 Dedicated Shares; Maximum Awards.  
 (a) Number of Shares of Stock Dedicated under the Plan for Awards. 
 (i) Subject to adjustment as set forth in
Section 4.2(c) and Section 4.5 herein, Awards may be made under the Plan for up to 4,600,000 shares of Stock (the “Aggregate Limit”). 
 (ii) The aggregate number of shares of Stock with respect to which Full Value Awards may be granted under the Plan is fifty percent (50%) of the Aggregate Limit. 
 (b) Annual Award Limits. Unless and until the Committee determines that an Award to a Covered Employee shall not be designed to qualify as
Performance-Based Compensation, the following limits (each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of such Awards under the Plan: 
 (i) The maximum number of shares of Stock with respect to which Awards may be granted to any Participant under the Plan shall be 1,000,000 per
calendar year. 
 (ii) For purposes of the foregoing limit, the combination of an Option in tandem with an SAR (as each is hereafter defined)
shall be treated as a single Award. The per-Participant limit described in this Section 4.2(b) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder.

 (c) Share Usage. Each of the foregoing numerical limits stated in this Section 4.2 shall be subject to adjustment in accordance
with the provisions of this Section 4.2(c) and this Section 4.5. The Aggregate Limit shall also be increased by such number of shares of Stock as become subject to substitute Awards granted pursuant to Article XV; provided, however,
that such increase shall be conditioned upon the approval of the stockholders of the Company to the extent stockholder approval is required by law or applicable stock exchange rules. If shares of Stock are withheld from payment of an Award to
satisfy tax obligations with respect to the Award, such shares of Stock will count against the 

  

 6 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 11 of 29] 

 
aggregate number of shares of Stock with respect to which Awards may be granted under the Plan. If shares of Stock are tendered in payment of an Option Price
of an Option, such shares of Stock will not be added to the aggregate number of shares of Stock with respect to which Awards may be granted under the Plan. To the extent that any outstanding Award is forfeited or cancelled for any reason or is
settled in cash in lieu of shares of Stock, the shares of Stock allocable to such portion of the Award shall revert or again be available for the grant of Awards under the Plan. In addition, to the extent that any outstanding stock award or option
granted under the Company’s 2005 Nonqualified Stock Option Plan, the 2003 Stock Option Plan, the 1999 Assumed Stock Option Plan or the Webmail.us, Inc. 2004 Stock Incentive Plan as Amended in 2006, is forfeited or cancelled for any reason or is
settled in cash in lieu of shares of Stock, the shares of Stock allocable to such portion of the stock award or option granted under the Company’s 2005 Nonqualified Stock Option Plan, the 2003 Stock Option Plan, the 1999 Assumed Stock Option
Plan or the Webmail.us, Inc. 2004 Stock Incentive Plan, as Amended in 2006 shall become available for the grant of Awards under the Plan and the Aggregate Limit shall also be increased by such number of shares of Stock. When a SAR is settled in
shares of Stock, the number of shares of Stock subject to the SAR under the SAR Award Agreement will be counted against the aggregate number of shares of Stock with respect to which Awards may be granted under the Plan as one share for every share
subject to the SAR, regardless of the number of shares used to settle the SAR upon exercise. The maximum number of shares of Stock available for issuance under the Plan shall not be reduced to reflect any dividends or Dividend Equivalents that are
reinvested into additional shares of Stock or credited as additional Restricted Stock, Restricted Stock Units, Performance Shares, or other Stock-Based Awards. 
 4.3 Non-Transferability. Except as specified in the applicable Award Agreements or in domestic relations court orders, an Award shall not be transferable by the Holder other than by will or under the laws of descent and
distribution, and shall be exercisable, during the Holder’s lifetime, only by him or her. Any attempted assignment of an Award in violation of this Section shall be null and void. In the discretion of the Committee, any attempt to transfer an
Award other than under the terms of the Plan and the applicable Award Agreement may terminate the Award. 
 4.4 Requirements of Law. The Company shall
not be required to sell or issue any shares of Stock under any Award if issuing those shares of Stock would constitute or result in a violation by the Holder or the Company of any provision of any law, statute or regulation of any governmental
authority. Specifically, in connection with any applicable statute or regulation relating to the registration of securities, upon exercise of any Option or pursuant to any other Award, the Company shall not be required to issue any shares of Stock
unless the Committee has received evidence satisfactory to it to the effect that the Holder will not transfer the shares of Stock except in accordance with applicable law, including receipt of an opinion of counsel satisfactory to the Company to the
effect that any proposed transfer complies with applicable law. The determination by the Committee on this matter shall be final, binding and conclusive. The Company may, but shall in no event be obligated to, register any shares of Stock covered by
the Plan pursuant to applicable securities laws of any country or any political subdivision. In the event the shares of Stock issuable on exercise of an Option or pursuant to any other Award are not registered, the Company may imprint on the
certificate evidencing the shares of Stock any legend that counsel for the Company considers necessary or advisable to comply with applicable law, or, should the shares of Stock be represented by book or electronic entry rather than a certificate,
the Company may take such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law. The Company shall not be obligated to take any other affirmative action in order
to cause or enable the exercise of an Option or any other Award, or the issuance of shares of Stock pursuant thereto, to comply with any law or regulation of any governmental authority. 
 4.5 Changes in the Company’s Capital Structure.  
 (a) The existence of outstanding Awards shall
not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, 

  

 7 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 12 of 29] 

 
reorganizations or other changes in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference shares ahead of or affecting the Stock or Stock rights, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its assets or business or any other corporate act or
proceeding, whether of a similar character or otherwise. 
 (b) If the Company shall effect a subdivision or consolidation of Stock or other
capital readjustment, the payment of a Stock dividend, or other increase or reduction of the number of shares of Stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class or series and
per share price of Stock subject to outstanding Options or other Awards under the Plan shall be appropriately adjusted in such a manner as to entitle a Holder to receive upon exercise of an Option or other Award, for the same aggregate cash
consideration, the equivalent total number and class or series of Stock the Holder would have received had the Holder exercised his or her Option or other Award in full immediately prior to the event requiring the adjustment, and (2) the number
and class or series of Stock then reserved to be issued under the Plan shall be adjusted by substituting for the total number and class or series of Stock then reserved, that number and class or series of Stock that would have been received by the
owner of an equal number of outstanding shares of Stock of each class or series of Stock as the result of the event requiring the adjustment. 
 (c) If while unexercised Options or other Awards remain outstanding under the Plan (1) the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity
other than an entity that was wholly-owned by the Company immediately prior to such merger, consolidation or other reorganization), (2) the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its
assets to any other person or entity (other than an entity wholly-owned by the Company), (3) the Company is to be dissolved or (4) the Company is a party to any other corporate transaction (as defined under section 424(a) of the Code and
applicable Department of Treasury regulations) that is not described in clauses (1), (2) or (3) of this sentence (each such event is referred to herein as a “Corporate Change”), then, except as otherwise provided in
an Award Agreement or another agreement between the Holder and the Company (provided that such exceptions shall not apply in the case of a reincorporation merger), or as a result of the Committee’s effectuation of one or more of the
alternatives described below, there shall be no acceleration of the time at which any Award then outstanding may be exercised, and no later than ten days after the approval by the stockholders of the Company of such Corporate Change, the Committee,
acting in its sole and absolute discretion without the consent or approval of any Holder, shall act to effect one or more of the following alternatives, which may vary among individual Holders and which may vary among Awards held by any individual
Holder (provided that, with respect to a reincorporation merger in which Holders of the Company’s ordinary shares will receive one ordinary share of the successor corporation for each ordinary share of the Company, none of such alternatives
shall apply and, without Committee action, each Award shall automatically convert into a similar award of the successor corporation exercisable for the same number of ordinary shares of the successor as the Award was exercisable for ordinary shares
of Stock of the Company): 
 (1) accelerate the time at which some or all of the Awards then outstanding may be exercised so that such Awards
may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all such Awards that remain unexercised and all rights of Holders
thereunder shall terminate; 
 (2) require the mandatory surrender to the Company by all or selected Holders of some or all of the then
outstanding Awards held by such Holders (irrespective of whether such Awards are then exercisable under the provisions of the Plan or the 

  

 8 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 13 of 29] 

 
applicable Award Agreement evidencing such Award) as of a date, before or after such Corporate Change, specified by the Committee, in which event the
Committee shall thereupon cancel such Award and the Company shall pay to each such Holder an amount of cash per share equal to the excess, if any, of the per share price offered to stockholders of the Company in connection with such Corporate Change
over the exercise prices under such Award for such shares; 
 (3) with respect to all or selected Holders, have some or all of their then
outstanding Awards (whether vested or unvested) assumed or have a new award of a similar nature substituted for some or all of their then outstanding Awards under the Plan (whether vested or unvested) by an entity which is a party to the transaction
resulting in such Corporate Change and which is then employing such Holder or which is affiliated or associated with such Holder in the same or a substantially similar manner as the Company prior to the Corporate Change, or a parent or subsidiary of
such entity, provided that (A) such assumption or substitution is on a basis where the excess of the aggregate fair market value of the Stock subject to the Award immediately after the assumption or substitution over the aggregate exercise
price of such Stock is equal to the excess of the aggregate fair market value of all Stock subject to the Award immediately before such assumption or substitution over the aggregate exercise price of such Stock, and (B) the assumed rights under
such existing Award or the substituted rights under such new Award, as the case may be, will have the same terms and conditions as the rights under the existing Award assumed or substituted for, as the case may be; 
 (4) provide that the number and class or series of Stock covered by an Award (whether vested or unvested) theretofore granted shall be adjusted so that
such Award when exercised shall thereafter cover the number and class or series of Stock or other securities or property (including, without limitation, cash) to which the Holder would have been entitled pursuant to the terms of the agreement or
plan relating to such Corporate Change if, immediately prior to such Corporate Change, the Holder had been the holder of record of the number of shares of Stock then covered by such Award; or 
 (5) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole and absolute discretion that no such adjustment is necessary). 
 Any adjustment effected by the Committee
under Section 4.5 shall be designed to provide the Holder with the intrinsic value of his or her Award, as determined prior to the Corporate Change, or, if applicable, equalize the Fair Market Value of the Award before and after the Corporate
Change. 
 In effecting one or more of the alternatives set out in paragraphs (3), (4) or (5) immediately above, and except as
otherwise may be provided in an Award Agreement, the Committee, in its sole and absolute discretion and without the consent or approval of any Holder, may accelerate the time at which some or all Awards then outstanding may be exercised. 

(d) In the event of changes in the outstanding Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges
or other relevant changes in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 4.5, any outstanding Award and any Award Agreement evidencing such Award shall be subject to
adjustment by the Committee in its sole and absolute discretion as to the number and price of Stock or other consideration subject to such Award. In the event of any such change in the outstanding Stock, the aggregate number of shares of Stock
available under the Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive. 
  

 9 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 14 of 29] 

 (e) After a merger of one or more corporations into the Company or after a consolidation of the Company
and one or more corporations in which the Company shall be the surviving corporation, each Holder shall be entitled to have his Restricted Stock appropriately adjusted based on the manner in which the shares of Stock were adjusted under the terms of
the agreement of merger or consolidation. 
 (f) The issuance by the Company of stock of any class or series, or securities convertible into,
or exchangeable for, stock of any class or series, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe for them, or upon conversion or exchange of stock or obligations of the
Company convertible into, or exchangeable for, stock or other securities, shall not affect, and no adjustment by reason of such issuance shall be made with respect to, the number, class or series, or price of shares of Stock then subject to
outstanding Options or other Awards. 
 4.6 Election Under Section 83(b) of the Code. No Holder shall exercise the election permitted under
section 83(b) of the Code with respect to any Award without the written approval of the Chief Financial Officer or General Counsel of the Company. Any Holder who makes an election under section 83(b) of the Code with respect to any Award without the
written approval of the Chief Financial Officer or General Counsel of the Company shall forfeit any or all Awards granted to him or her under the Plan. 
 4.7 Forfeiture for Cause. Notwithstanding any other provision of the Plan or an Award Agreement, if the Committee finds by a majority vote that a Holder, before or after his Termination of Employment (a) committed fraud,
embezzlement, theft, felony or an act of dishonesty in the course of his employment by the Company or an Affiliate which conduct damaged the Company or an Affiliate or (b) disclosed trade secrets of the Company or an Affiliate, then as of the
date the Committee makes its finding, any Awards awarded to the Holder that have not been exercised by the Holder (including all Awards that have not yet vested) will be forfeited to the Company. The findings and decision of the Committee with
respect to such matter, including those regarding the acts of the Holder and the damage done to the Company, will be final for all purposes. No decision of the Committee, however, will affect the finality of the discharge of the individual by the
Company or an Affiliate. 
 4.8 Forfeiture Events. The Committee may specify in an Award Agreement that the Holder’s rights, payments, and
benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such
events may include, but shall not be limited to, Termination of Employment for cause, termination of the Holder’s provision of services to the Company or its Affiliates, violation of material policies of the Company and its Affiliates, breach
of noncompetition, confidentiality, or other restrictive covenants that may apply to the Holder, or other conduct by the Holder that is detrimental to the business or reputation of the Company and its Affiliates. 
 4.9 Award Agreements. Each Award shall be embodied in a written agreement that shall be subject to the terms and conditions of the Plan. The Award Agreement shall
be signed by an executive officer of the Company, other than the Holder, on behalf of the Company, and may be signed by the Holder to the extent required by the Committee. The Award Agreement may contain any other provisions that the Committee in
its discretion shall deem advisable which are not inconsistent with the terms and provisions of the Plan. 
 4.10 Amendments of Award Agreements. The
terms of any outstanding Award under the Plan may be amended from time to time by the Committee in its discretion in any manner that it deems appropriate and that is consistent with the terms of the Plan. However, no such amendment shall adversely
affect in a material manner 

  

 10 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 15 of 29] 

 
any right of a Holder without his or her written consent. Except as specified in Section 4.5(b), the Committee may not directly or indirectly lower the
exercise price of a previously granted Option or the grant price of a previously granted SAR. 
 4.11 Rights as Stockholder. A Holder shall not have
any rights as a stockholder with respect to Stock covered by an Option, a SAR, an RSU, a Performance Stock Unit, or an Other Stock-Based Award until the date, if any, such Stock is issued by the Company; and, except as otherwise provided in
Section 4.5, no adjustment for dividends, or otherwise, shall be made if the record date therefor is prior to the date of issuance of such Stock. 
 4.12 Issuance of Shares of Stock. Shares of Stock, when issued, may be represented by a certificate or by book or electronic entry. 
 4.13
Restrictions on Stock Received. The Committee may impose such conditions and/or restrictions on any shares of Stock issued pursuant to an Award as it may deem advisable or desirable. These restrictions may include, but shall not be limited
to, a requirement that the Holder hold the shares of Stock for a specified period of time. 
 4.14 Compliance With Section 409A. Awards shall be
designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A. The Plan and each Award Agreement under the Plan is intended to meet the requirements of
Section 409A shall be construed and interpreted in accordance with such intent. To the extent that an award or payment, or the settlement or deferral thereof, is subject to Section 409A the award shall be granted, paid, settled or deferred
in a manner that will meet the requirements of Section 409A of the Code, including regulations or other guidance issued with respect thereto, such that the grant, payment, settlement or deferral shall not be subject to the additional tax or
interest applicable under Section 409A. 
 ARTICLE V 
 OPTIONS 
 5.1 Authority to Grant Options. Subject to the terms and provisions of the Plan, the Committee, at
any time, and from time to time, may grant Options under the Plan to eligible persons in such number and upon such terms as the Committee shall determine; provided that ISOs may be granted only to eligible Employees of the Company or of any
parent or subsidiary corporation (as permitted by section 422 of the Code and the regulations thereunder). 
 5.2 Option Agreement. Each Option grant
under the Plan shall be evidenced by an Award Agreement that shall specify (a) the Option Price, (b) the duration of the Option, (c) the number of shares of Stock to which the Option pertains, (d) the exercise restrictions, if
any, applicable to the Option and (e) such other provisions as the Committee shall determine that are not inconsistent with the terms and provisions of the Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO
or a NQSO. 
 5.3 Option Price. The price at which shares of Stock may be purchased under an Option (the “Option Price”) shall
not be less than one hundred percent (100%) of the Fair Market Value of the shares of Stock on the date the Option is granted; provided, however, if the Option is an ISO granted to a Ten Percent Stockholder, the Option Price must not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares of stock on the date of grant. Subject to the limitations set forth in the preceding sentences of this Section 5.3, the Committee shall determine the Option
Price for each grant of an Option under the Plan. 
 5.4 Duration of Option. An Option shall not be exercisable after the earlier of (i) the
general term of the Option specified in the applicable Award Agreement (which shall not exceed ten years, or, in the case of a 

  

 11 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 16 of 29] 

 
Ten Percent Stockholder, no ISO shall be exercisable later than the fifth (5th) anniversary of the date of its grant) or (ii) the period of time specified in the applicable Award Agreement that follows the Holder’s Termination of Employment or severance of affiliation
relationship with the Company. 
 5.5 Amount Exercisable. Each Option may be exercised at the time, in the manner and subject to the conditions the
Committee specifies in the Award Agreement in its sole discretion. 
 5.6 Exercise of Option.  
 (a) General Method of Exercise. Subject to the terms and provisions of the Plan and the applicable Award Agreement, Options may be exercised in
whole or in part from time to time by the delivery of written notice in the manner designated by the Committee stating (1) that the Holder wishes to exercise such Option on the date such notice is so delivered, (2) the number of shares of
Stock with respect to which the Option is to be exercised and (3) the address to which a stock certificate, if any, representing such shares of Stock should be mailed. Except in the case of exercise by a third party broker as provided below, in
order for the notice to be effective the notice must be accompanied by payment of the Option Price by any combination of the following: (a) cash, certified check, bank draft or postal or express money order for an amount equal to the Option
Price under the Option, (b) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Committee or an executive officer of the Company) or (c) any other form of payment which is acceptable to
the Committee. 
 (b) Exercise Through Third-Party Broker. The Committee may permit a Holder to elect to pay the Option Price and any
applicable tax withholding resulting from such exercise by authorizing a third-party broker to sell all or a portion of the shares of Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to
pay the Option Price and any applicable tax withholding resulting from such exercise. 
 5.7 Transferability–Incentive Stock Options.
Notwithstanding anything in the Plan or an Award Agreement to the contrary, no ISO granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and
distribution, and all ISOs granted to an Employee under this Article V shall be exercisable during his or her lifetime only by such Employee. 
 5.8
Notification of Disqualifying Disposition. If any Employee shall make any disposition of shares of Stock issued pursuant to the exercise of an ISO under the circumstances described in section 421(b) of the Code (relating to certain
disqualifying dispositions), such Employee shall notify the Company of such disposition within ten (10) days thereof. 
 5.9 $100,000 Limitation on
ISOs. To the extent that the aggregate Fair Market Value of shares of Stock with respect to which ISOs first become exercisable by a Holder in any calendar year exceeds $100,000, taking into account both shares of Stock subject to ISOs under the
Plan and Stock subject to ISOs under all other plans of the Company, such Options shall be treated as NQSOs. For this purpose, the “Fair Market Value” of the shares of Stock subject to Options shall be determined as of the date the Options
were awarded. In reducing the number of Options treated as ISOs to meet the $100,000 limit, the most recently granted Options shall be reduced first. To the extent a reduction of simultaneously granted Options is necessary to meet the $100,000
limit, the Committee may, in the manner and to the extent permitted by law, designate which shares of Stock are to be treated as shares acquired pursuant to the exercise of an ISO. 
  

 12 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 17 of 29] 

 ARTICLE VI 
 STOCK APPRECIATION RIGHTS 
 6.1 Authority to Grant SAR Awards. Subject to the terms and provisions of the
Plan, the Committee, at any time, and from time to time, may grant SARs under the Plan to eligible persons in such number and upon such terms as the Committee shall determine. Subject to the terms and conditions of the Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each Holder and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to such SARs. The Committee may grant Freestanding SARs, Tandem SARs, or
any combination of these forms of SARs. 
 6.2 General Terms. Subject to the terms and conditions of the Plan, a SAR granted under the Plan shall
confer on the recipient a right to receive, upon exercise thereof, an amount equal to the excess of (a) the Fair Market Value of one share of the Stock on the date of exercise over (b) the grant price of the SAR, which shall not be less
than one hundred percent (100%) of the Fair Market Value of one share of the Stock on the date of grant of the SAR. The grant price of Tandem SARs shall be equal to the Option Price of the related Option. 
 6.3 SAR Agreement. Each Award of SARs granted under the Plan shall be evidenced by an Award Agreement that shall specify (a) the grant price of the SAR,
(b) the term of the SAR, (c) the vesting and termination provisions of the SAR and (d) such other provisions as the Committee shall determine that are not inconsistent with the terms and provisions of the Plan. The Committee may
impose such additional conditions or restrictions on the exercise of any SAR as it may deem appropriate. 
 6.4 Term of SAR. The term of a SAR granted
under the Plan shall be determined by the Committee, in its sole discretion; provided that no SAR shall be exercisable on or after the tenth anniversary date of its grant. Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will expire no later than the expiration of the underlying ISO; (b) the value of the payout with respect to the Tandem SAR may be for no more than one hundred percent
(100%) of the excess of the Fair Market Value of the shares of Stock subject to the underlying ISO at the time the Tandem SAR is exercised over the Option Price of the underlying ISO; and (c) the Tandem SAR may be exercised only when the
Fair Market Value of the shares of Stock subject to the ISO exceeds the Option Price of the ISO. 
 6.5 Exercise of SAR. A SAR may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes; provided, however, that Tandem SARs may be exercised for all or part of the shares of stock subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option and may be exercised only with respect to the shares of Stock for which its related Option is then exercisable. 
 6.6 Payment of SAR Amount. Upon the exercise of a SAR, a Holder shall be entitled to receive payment from the Company in an amount determined by multiplying the excess of the Fair Market Value of a share of
Stock on the date of exercise over the grant price of the SAR by the number of shares of Stock with respect to which the SAR is exercised. At the discretion of the Committee, the payment upon SAR exercise may be in cash, in Stock of equivalent
value, in some combination thereof or in any other manner approved by the Committee in its sole discretion. The Committee’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the
SAR. 
 6.7 Termination of Employment. Each Award Agreement shall set forth the extent to which the Holder of a SAR shall have the right to exercise
the SAR following the Holder’s Termination of Employment. Such provisions shall be determined in the sole discretion of the Committee, may be included in the Award Agreement entered into with the Holder, need not be uniform among all SARs
issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination. 
  

 13 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 18 of 29] 

 ARTICLE VII 
 RESTRICTED STOCK AWARDS 
 7.1 Restricted Stock Awards. The Committee may make Awards of
Restricted Stock to eligible persons selected by it. The amount of, the vesting and the transferability restrictions applicable to any Restricted Stock Award shall be determined by the Committee in its sole discretion. If the Committee imposes
vesting or transferability restrictions on a Holder’s rights with respect to Restricted Stock, the Committee may issue such instructions to the Company’s share transfer agent in connection therewith as it deems appropriate. The Committee
may also cause the certificate for shares of Stock issued pursuant to a Restricted Stock Award to be imprinted with any legend which counsel for the Company considers advisable with respect to the restrictions or, should the shares of Stock be
represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law. 
 7.2 Restricted Stock Award Agreement. Each Restricted Stock Award shall be evidenced by an Award Agreement that contains any vesting, transferability restrictions
and other provisions not inconsistent with the Plan as the Committee may specify. 
 7.3 Holder’s Rights as Stockholder. Subject to the terms and
conditions of the Plan, each recipient of a Restricted Stock Award shall have all the rights of a stockholder with respect to the shares of Restricted Stock included in the Restricted Stock Award during the Period of Restriction established for the
Restricted Stock Award. Dividends paid with respect to Restricted Stock in cash or property other than shares of Stock or rights to acquire shares of Stock shall be paid to the recipient of the Restricted Stock Award currently. Dividends paid in
shares of Stock or rights to acquire shares of Stock shall be added to and become a part of the Restricted Stock. During the Period of Restriction, certificates representing the Restricted Stock shall be registered in the Holder’s name and bear
a restrictive legend to the effect that ownership of such Restricted Stock, and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms, and conditions provided in the Plan and the applicable Award Agreement. Such
certificates shall be deposited by the recipient with the Secretary of the Company or such other officer of the Company as may be designated by the Committee, together with all stock powers or other instruments of assignment, each endorsed in blank,
which will permit transfer to the Company of all or any portion of the Restricted Stock which shall be forfeited in accordance with the Plan and the applicable Award Agreement. 
 ARTICLE VIII 
 RESTRICTED STOCK UNIT AWARDS 
 8.1 Authority to Grant RSU Awards. Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time, may grant RSU Awards under
the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine. The amount of, the vesting and the transferability restrictions applicable to any RSU Award shall be determined by the Committee in its sole
discretion. The Committee shall maintain a bookkeeping ledger account which reflects the number of RSUs credited under the Plan for the benefit of a Holder. 
 8.2 RSU Award. An RSU Award shall be similar in nature to a Restricted Stock Award except that no shares of Stock are actually transferred to the Holder until a later date specified in the applicable Award Agreement. Each RSU shall
have a value equal to the Fair Market Value of a share of Stock. 
  

 14 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 19 of 29] 

 8.3 RSU Award Agreement. Each RSU Award shall be evidenced by an Award Agreement that contains any Substantial
Risk of Forfeiture, transferability restrictions, form and time of payment provisions and other provisions not inconsistent with the Plan as the Committee may specify. 
 8.4 Form of Payment Under RSU Award. Payment under an RSU Award shall be made in either cash or shares of Stock as specified in the applicable Award Agreement. 
 8.5 Time of Payment Under RSU Award. A Holder’s payment under an RSU Award shall be made at such time as is specified in the applicable Award Agreement. The
Award Agreement shall specify that the payment will be made (1) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the Fiscal Year in which the RSU Award payment is no longer subject to a
Substantial Risk of Forfeiture or (2) at a time that is Permissible under Section 409A. 
 ARTICLE IX 
 PERFORMANCE STOCK AWARDS AND PERFORMANCE UNIT AWARDS 
 9.1 Authority to Grant Performance Stock Awards and Performance Unit Awards. Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time, may grant Performance Stock Awards and Performance Unit
Awards under the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine. The amount of, the vesting and the transferability restrictions applicable to any Performance Stock Award or Performance Unit Award shall
be based upon the attainment of such Performance Goals as the Committee may determine. If the Committee imposes vesting or transferability restrictions on a Holder’s rights with respect to Performance Stock or Performance Unit Awards, the
Committee may issue such instructions to the Company’s share transfer agent in connection therewith as it deems appropriate. The Committee may also cause the certificate for shares of Stock issued pursuant to a Performance Stock or Performance
Unit Award to be imprinted with any legend which counsel for the Company considers advisable with respect to the restrictions or, should the shares of Stock be represented by book or electronic entry rather than a certificate, the Company may take
such steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary or advisable to comply with applicable law. 
 9.2
Performance Goals. Unless and until the Committee proposes for stockholder vote and the stockholders approve a change in the general Performance Goals set forth in this Article IX, the Performance Goals upon which the payment or vesting of an
Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to one or more of the following Performance Goals, which may be based on one or more business criteria that apply to the Holder, one or more
business units of the Company, or the Company as a whole: earnings per share, total stockholder return, cash return on capitalization, increased revenue, revenue ratios (per employee or per customer), net income, EVA, stock price, market share,
return on equity, return on assets, return on capital, return on capital compared to cost of capital, return on capital employed, return on invested capital, stockholder value, net cash flow, operating income, earnings before interest and taxes,
cash flow, cash flow from operations, cost reductions and cost ratios (per employee or per customer). Goals may also be based on performance relative to a peer group of companies. 
 Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting
economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Performance Goals and Performance Stock or Performance Unit Awards, it is intended that the Plan will conform with
the standards of section 162(m) of the Code and Treasury Regulations § 1.16227(e)(2)(i), and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based
on the achievement of Performance Goals, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Performance Stock or Performance Unit Awards made pursuant to the Plan shall be determined by the Committee. 
  

 15 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 20 of 29] 

 9.3 Time of Establishment of Performance Goals. With respect to a Covered Employee, a Performance Goal for a
particular Performance Stock Award or Performance Unit Award must be established by the Committee prior to the earlier to occur of (a) 90 days after the commencement of the period of service to which the Performance Goal relates or (b) the
lapse of 25 percent of the period of service, and in any event while the outcome is substantially uncertain. 
 9.4 Written Agreement. Each
Performance Stock Award or Performance Unit Award shall be evidenced by an Award Agreement that contains any vesting, transferability restrictions and other provisions not inconsistent with the Plan as the Committee may specify. 
 9.5 Form of Payment Under Performance Unit Award. Payment under a Performance Unit Award shall be made in cash and/or shares of Stock as specified in the
Holder’s Award Agreement. 
 9.6 Time of Payment Under Performance Unit Award. A Holder’s payment under a Performance Unit Award shall be
made at such time as is specified in the applicable Award Agreement. The Award Agreement shall specify that the payment will be made (1) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the
calendar year in which the Performance Unit Award payment is no longer subject to a Substantial Risk of Forfeiture or (2) at a time that is Permissible under Section 409A. 
 9.7 Holder’s Rights as Stockholder With Respect to a Performance Stock Award. Subject to the terms and conditions of the Plan, each Holder of a Performance Stock Award shall have all the
rights of a stockholder with respect to the shares of Stock issued to the Holder pursuant to the Award during any period in which such issued shares of Stock are subject to forfeiture and restrictions on transfer, including without limitation, the
right to vote such shares of Stock. 
 9.8 Increases Prohibited. None of the Committee or the Board may increase the amount of compensation payable
under a Performance Stock or Performance Unit Award. If the time at which a Performance Stock or Performance Unit Award will vest or be paid is accelerated for any reason, the number of shares of Stock subject to, or the amount payable under, the
Performance Stock or Performance Unit Award shall be reduced pursuant to Department of Treasury Regulation section 1.162-27(e)(2)(iii) to reasonably reflect the time value of money. 
 9.9 Stockholder Approval. No payments of Stock or cash will be made to a Covered Employee pursuant to this Article IX unless the stockholder approval requirements of Department of Treasury Regulation section
1.162-27(e)(4) are satisfied. 
 ARTICLE X 
 DIRECTOR AWARDS 
 All Awards to Directors shall be determined by the Board or Committee. 
  

 16 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 21 of 29] 

 ARTICLE XI 
 DIVIDEND EQUIVALENTS 
 Any eligible person selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on shares of Stock that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or additional shares by such formula and at such time and subject to such limitations as may be determined by the Committee. 
 ARTICLE XII 
 ANNUAL INCENTIVE AWARDS 
 12.1 Authority to Grant Annual Incentive Awards. Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time, may grant
Annual Incentive Awards under the Plan to Employees who, by the nature and scope of their positions, regularly directly make or influence policy decisions which significantly impact the overall results or success of the Company in such amounts and
upon such terms as the Committee shall determine. Subject to the following provisions in this Article XII, the amount of any Annual Incentive Awards shall be based on the attainment of such Performance Goals as the Committee may determine.

 12.2 Covered Employees. The Performance Goals upon which the payment or vesting of an Annual Incentive Award to a Covered Employee that is intended
to qualify as Performance-Based Compensation must meet the requirements of Sections 9.2, 9.3, 9.8 and 9.9 as applied to such Annual Incentive Award. In interpreting Plan provisions applicable to Performance Goals with respect to Covered Employees,
it is intended that the Plan will conform with the standards of section 162(m) of the Code and Treasury Regulations § 1.16227(e)(2)(i), and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions.
Prior to the payment of any compensation to a Covered Employee based on the achievement of Performance Goals, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied.

 12.3 Written Agreement. Each Annual Incentive Award shall be evidenced by an Award Agreement that contains any vesting, transferability
restrictions and other provisions not inconsistent with the Plan as the Committee may specify. 
 12.4 Form of Payment Under Annual Incentive Award.
Payment under an Annual Incentive Award shall be made in cash. 
 12.5 Time of Payment Under Annual Incentive Award. A Holder’s payment under an
Annual Incentive Award shall be made at such time as is specified in the applicable Award Agreement. The Award Agreement shall specify that the payment will be made (1) by a date that is no later than the date that is two and one-half (2 1/2)
months after the end of the calendar year in which the Annual Incentive Award payment is no longer subject to a Substantial Risk of Forfeiture or (2) at a time that is Permissible under Section 409A. 
 ARTICLE XIII 
 OTHER STOCK-BASED
AWARDS 
 13.1 Authority to Grant Other Stock-Based Awards. The Committee may grant to eligible persons other types of equity-based or
equity-related Awards not otherwise described by the terms and provisions of the Plan (including the grant or offer for sale of unrestricted shares of Stock) in such amounts and subject to such 

  

 17 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 22 of 29] 

 
terms and conditions, as the Committee shall determine. Such Awards may involve the transfer of actual shares of Stock to Holders, or payment in cash or
otherwise of amounts based on the value of shares of Stock and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States. 
 13.2 Value of Other Stock-Based Award. Each Other Stock-Based Award shall be expressed in terms of shares of Stock or units based on shares of Stock, as
determined by the Committee. 
 13.3 Payment of Other Stock-Based Award. Payment, if any, with respect to an Other Stock-Based Award shall be made in
accordance with the terms of the Award, in cash or shares of Stock as the Committee determines. 
 13.4 Termination of Employment. The Committee shall
determine the extent to which a Holder’s rights with respect to Other Stock-Based Awards shall be affected by the Holder’s Termination of Employment. Such provisions shall be determined in the sole discretion of the Committee and need not
be uniform among all Other Stock-Based Awards issued pursuant to the Plan. 
 13.5 Time of Payment of Other Stock-Based Award. A Holder’s payment
under an Other Stock-Based Award shall be made at such time as is specified in the applicable Award Agreement. If a payment under the Award Agreement is subject to Section 409A, the Award Agreement shall specify that the payment will be made
(1) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the calendar year in which the Annual Incentive Award payment is no longer subject to a Substantial Risk of Forfeiture or (2) at a time
that is Permissible under Section 409A. 
 ARTICLE XIV 
 CASH-BASED AWARDS 
 14.1 Authority to Grant Cash-Based Awards. Subject to the terms and
provisions of the Plan, the Committee, at any time, and from time to time, may grant Cash-Based Awards under the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine. 
 14.2 Value of Cash-Based Award. Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee. 
 14.3 Payment of Cash-Based Award. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award, in cash.

 14.4 Time of Payment of Cash-Based Award. Payment under a Cash-Based Award shall be made at such time as is specified in the applicable Award
Agreement. If a payment under the Award Agreement is subject to Section 409A, the Award Agreement shall specify that the payment will be made (1) by a date that is no later than the date that is two and one-half (2 1/2) months after the
end of the calendar year in which the Annual Incentive Award payment is no longer subject to a Substantial Risk of Forfeiture or (2) at a time that is Permissible under Section 409A. 
 14.5 Termination of Employment. The Committee shall determine the extent to which a Holder’s rights with respect to Cash-Based Awards shall be affected by
the Holder’s Termination of Employment. Such provisions shall be determined in the sole discretion of the Committee and need not be uniform among all Cash-Based Awards issued pursuant to the Plan. 
  

 18 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 23 of 29] 

 ARTICLE XV 
 SUBSTITUTION AWARDS 
 Awards may be granted under the Plan from time to time in substitution for stock options and
other awards held by employees of other entities who are about to become Employees, or whose employer is about to become an Affiliate as the result of a merger or consolidation of the Company with another corporation, or the acquisition by the
Company of substantially all the assets of another corporation, or the acquisition by the Company of at least fifty percent (50%) of the issued and outstanding stock of another corporation as the result of which such other corporation will
become a subsidiary of the Company. The terms and conditions of the substitute Awards so granted may vary from the terms and conditions set forth in the Plan to such extent as the Board at the time of grant may deem appropriate to conform, in whole
or in part, to the provisions of the Award in substitution for which they are granted. 
 ARTICLE XVI 
 CHANGE IN CONTROL OF THE COMPANY 
 16.1 Change in
Control of the Company. Upon the occurrence of a Change in Control of the Company, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or national securities
exchanges, or unless the Committee shall determine otherwise in the Award Agreement: 
 (a) Any and all Options and SARs granted hereunder
shall become immediately vested and exercisable to the extent that their Option Price or grant price, as adjusted pursuant to Section 4.5 is less than the Fair Market Value of a share of stock on such date and the Participant shall have until
the earlier of: (i) twelve (12) months following such termination date, or (ii) the expiration of the Option or SAR term, to exercise any such Option or SAR; 
 (b) any Period of Restriction and restrictions imposed on Restricted Stock or Restricted Stock Units shall lapse; 
 (c) the target payout opportunities attainable under all outstanding Awards of performance-based Restricted Stock, performance-based Restricted Stock
Units, Performance Units, and Performance Shares, shall be deemed to have been fully earned based on targeted performance being attained as of the effective date of the Change in Control of the Company; 
 (i) The vesting of all Awards denominated in shares of Stock shall be accelerated as of the effective date of the Change in Control of the Company, and
shall be paid out to Participants within thirty (30) days following the effective date of the Change in Control of the Company. The Committee has the authority to pay all or any portion of the value of the shares of stock in cash; 

(ii) Awards denominated in cash shall be paid to Participants in cash within thirty (30) days following the effective date of the Change in Control of
the Company; and 
 (d) unless otherwise specifically provided in a written agreement entered into between the Participant and the Company,
the Committee shall pay out all Other Stock-Based Awards. 
 (e) Subject to the acceleration of vesting of outstanding Options, the Committee,
in its discretion, may provide that in the event of a Change in Control of the Company pursuant to 

  

 19 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 24 of 29] 

 
Section 2.8(b) or (c), no later than ten (10) days after the approval by the stockholders of the Company of such merger, consolidation,
reorganization, sale, lease, or exchange or assets or dissolution or such election of directors, or in the event of a Change in Control of the Company pursuant to Section 2.8(a), no later than thirty (30) days after the occurrence of such
Change in Control of the Company, that (i) Options may be exercised in full only for a limited period of time on or before a specified date (before or after such Change in Control of the Company) fixed by the Committee, after which specified
date all unexercised Options and all rights of the Participants thereunder shall terminate, or (ii) require the mandatory surrender to the Company by selected Participants of some or all of the outstanding Options held by such Participants as
of a date, before or after such Change in Control of the Company, specified by the Committee, in which event the Committee shall thereupon cancel such Options and the Company shall pay to each Participant an amount of cash per share of stock equal
to the excess, if any of the “Change in Control of the Company Value” of the shares of stock subject to such Option over the Option Price(s) under such Options for such shares of stock. 
 For the purpose of this Section 16.1(e), “Change in Control of the Company Value” shall equal the amount determined in clause
(i), (ii), or (iii), whichever is applicable, as follows: (i) the per share price of the Stock offered to stockholders of the Company in any such merger, consolidation, reorganization, sale of assets, or dissolution transaction, (ii) the
per share price of the Stock offered to stockholders of the Company in any tender offer or exchange offer whereby a Change in Control of the Company takes place, or (iii) if such Change in Control of the Company occurs other than pursuant to a
tender or exchange offer, the Fair Market Value per share of the shares in which such Options being surrendered are exercisable, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender
of such Options. In the event that the consideration offered to stockholders of the Company in any transaction consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered
which is other than cash. 
 16.2 Delay of Payment due to Section 409A. Notwithstanding Section 16.1, if a payment under an Award Agreement
is subject to Section 409A and if the Change of Control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Section 409A of the Code, then
any payment of an amount that is otherwise accelerated under this Article shall be delayed until the earliest time that such payment would be Permissible under Section 409A. 
 ARTICLE XVII 
 ADMINISTRATION 
 17.1 Awards. The Plan shall be administered by the Committee or, in the absence of the Committee, the Plan shall be administered by the Board. The members of the
Committee shall serve at the discretion of the Board. The Committee shall have full and exclusive power and authority to administer the Plan and to take all actions that the Plan expressly contemplates or are necessary or appropriate in connection
with the administration of the Plan with respect to Awards granted under the Plan. 
 17.2 Authority of the Committee. The Committee shall have full
and exclusive power to interpret and apply the terms and provisions of the Plan and Awards made under the Plan, and to adopt such rules, regulations and guidelines for implementing the Plan as the Committee may deem necessary or proper, all of which
powers shall be exercised in the best interests of the Company and in keeping with the objectives of the Plan. A majority of the members of the Committee shall constitute a quorum for the transaction of business relating to the Plan or Awards made
under the Plan, and the vote of a majority of those members present at any meeting shall decide any question brought before that meeting. Any decision or determination reduced to writing and signed by a majority of the members shall be as effective
as if it had been made by a majority vote at a meeting properly called and held. All questions of interpretation and application of the Plan, or as to Awards 

  

 20 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 25 of 29] 

 
granted under the Plan, shall be subject to the determination, which shall be final and binding, of a majority of the whole Committee. No member of the
Committee shall be liable for any act or omission of any other member of the Committee or for any act or omission on his own part, including but not limited to the exercise of any power or discretion given to him under the Plan, except those
resulting from his own gross negligence or willful misconduct. In carrying out its authority under the Plan, the Committee shall have full and final authority and discretion, including but not limited to the following rights, powers and authorities
to (a) determine the persons to whom and the time or times at which Awards will be made; (b) determine the number and exercise price of shares of Stock covered in each Award subject to the terms and provisions of the Plan;
(c) determine the terms, provisions and conditions of each Award, which need not be identical and need not match the default terms set forth in the Plan; (d) accelerate the time at which any outstanding Award will vest; (e) prescribe,
amend and rescind rules and regulations relating to administration of the Plan; and (f) make all other determinations and take all other actions deemed necessary, appropriate or advisable for the proper administration of the Plan. 

The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award to a Holder in the manner and to the extent the
Committee deems necessary or desirable to further the Plan’s objectives. Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan. As permitted by law and the terms and
provisions of the Plan, the Committee may delegate to one or more of its members or to one or more officers of the Company, and/or its Affiliates or to one or more agents or advisors such administrative duties or powers as it may deem advisable, and
the Committee or any person to whom it has delegated duties or powers as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may, by
resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Employees, Directors or Third Party Service Providers to be recipients of Awards;
(b) designate Third Party Service Providers to be recipients of Awards; and (c) determine the size of any such Awards; provided, however, (i) the Committee shall not delegate such responsibilities to any such officer for Awards
granted to an Employee that is considered an Insider; (ii) the resolution providing such authorization sets forth the total number of Awards such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee
regarding the nature and scope of the Awards granted pursuant to the authority delegated. The Committee may employ attorneys, consultants, accountants, agents, and other persons, any of whom may be an Employee, and the Committee, the Company, and
its officers and Board shall be entitled to rely upon the advice, opinions, or valuations of any such persons. 
 17.3 Decisions Binding. All
determinations and decisions made by the Committee or the Board, as the case may be, pursuant to the provisions of the Plan and all related orders and resolutions of the Committee or the Board, as the case may be, shall be final, conclusive and
binding on all persons, including the Company, its Affiliates, its stockholders, Holders and the estates and beneficiaries of Holders. 
 17.4 No
Liability. Under no circumstances shall the Company, its Affiliates, the Board or the Committee incur liability for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether
or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan or the Company’s, its Affiliates’, the Committee’s or the Board’s roles in connection with the Plan.

 ARTICLE XVIII 
 AMENDMENT OR TERMINATION OF PLAN 
 18.1 Amendment, Modification, Suspension, and Termination. Subject to Section 18.2, the
Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate the Plan and any Award Agreement in whole or in part; provided, however, that, without the prior approval of the Company’s 

  

 21 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 26 of 29] 

 
stockholders and except as provided in Section 4.5, the Committee shall not directly or indirectly lower the Option Price of a previously granted
Option, and no amendment of the Plan shall be made without stockholder approval if stockholder approval is required by applicable law or stock exchange rules. 
 18.2 Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary, no termination, amendment, suspension, or modification of the Plan or an Award Agreement shall adversely affect in any material way any
Award previously granted under the Plan, without the written consent of the Holder holding such Award. 
 ARTICLE XIX 
 MISCELLANEOUS 
 19.1 Unfunded Plan/No Establishment
of a Trust Fund. Holders shall have no right, title, or interest whatsoever in or to any investments that the Company or any of its Affiliates may make to aid in meeting obligations under the Plan. Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Holder, beneficiary, legal representative, or any other person. To the extent that any person
acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts, except as expressly set forth in the Plan. No property shall be set aside nor shall a trust fund of any kind
be established to secure the rights of any Holder under the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended. 
 19.2 No Employment Obligation. The granting of any Award shall not constitute an employment contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or continue to
employ, or utilize the services of, any Holder. The right of the Company or any Affiliate to terminate the employment of any person shall not be diminished or affected by reason of the fact that an Award has been granted to him, and nothing in the
Plan or an Award Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate any Holder’s employment at any time or for any reason not prohibited by law. 
 19.3 Tax Withholding. The Company or any Affiliate shall be entitled to deduct from other compensation payable to each Holder any sums required by federal, state,
local or foreign tax law to be withheld with respect to the vesting or exercise of an Award or lapse of restrictions on an Award. In the alternative, the Company may require the Holder (or other person validly exercising the Award) to pay such sums
for taxes directly to the Company or any Affiliate in cash or by check within one day after the date of vesting, exercise or lapse of restrictions. In the discretion of the Committee, and with the consent of the Holder, the Company may reduce the
number of shares of Stock issued to the Holder upon such Holder’s exercise of an Option to satisfy the tax withholding obligations of the Company or an Affiliate; provided that the Fair Market Value of the shares of Stock held back shall
not exceed the Company’s or the Affiliate’s Minimum Statutory Tax Withholding Obligation. 
 The Committee may, in its discretion, permit a Holder
to satisfy any Minimum Statutory Tax Withholding Obligation arising upon the vesting of an Award by delivering to the Holder a reduced number of shares of Stock in the manner specified herein. If permitted by the Committee and acceptable to the
Holder, at the time of vesting of shares under the Award, the Company shall (a) calculate the amount of the Company’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation on the assumption that all such shares of Stock
vested under the Award are made available for delivery, (b) reduce the number of such shares of Stock made available for delivery so that the Fair Market Value of the shares of Stock withheld on the vesting date approximates the 

  

 22 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 27 of 29] 

 
Company’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation and (c) in lieu of the withheld shares of Stock, remit cash to the
United States Treasury and/or other applicable governmental authorities, on behalf of the Holder, in the amount of the Minimum Statutory Tax Withholding Obligation. The Company shall withhold only whole shares of Stock to satisfy its Minimum
Statutory Tax Withholding Obligation. Where the Fair Market Value of the withheld shares of Stock does not equal the amount of the Minimum Statutory Tax Withholding Obligation, the Company shall withhold shares of Stock with a Fair Market Value
slightly less than the amount of the Minimum Statutory Tax Withholding Obligation and the Holder must satisfy the remaining minimum withholding obligation in some other manner permitted under this Section 19.3. The withheld shares of Stock not
made available for delivery by the Company shall be retained as treasury shares or will be cancelled and the Holder’s right, title and interest in such shares of Stock shall terminate. 
 The Company shall have no obligation upon vesting or exercise of any Award or lapse of restrictions on an Award until the Company or an Affiliate has received payment
sufficient to cover the Minimum Statutory Tax Withholding Obligation with respect to that vesting, exercise or lapse of restrictions. Neither the Company nor any Affiliate shall be obligated to advise a Holder of the existence of the tax or the
amount which it will be required to withhold. 
 19.4 Gender and Number. If the context requires, words of one gender when used in the Plan shall
include the other and words used in the singular or plural shall include the other. 
 19.5 Severability. In the event any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 
 19.6 Headings. Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in
construing the terms and provisions of the Plan. 
 19.7 Other Compensation Plans. The adoption of the Plan shall not affect any other option,
incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive compensation arrangements for Employees, Directors or Third Party
Service Providers. 
 19.8 Retirement and Welfare Plans. Neither Awards made under the Plan nor shares of Stock or cash paid pursuant to such Awards,
may be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company’s or any Affiliate’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such
other plan expressly provides that such compensation shall be taken into account in computing a participant’s benefit. 
 19.9 Other Awards. The
grant of an Award shall not confer upon the Holder the right to receive any future or other Awards under the Plan, whether or not Awards may be granted to similarly situated Holders, or the right to receive future Awards upon the same terms or
conditions as previously granted. 
 19.10 Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be
binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

 19.11 Law Limitations/Governmental Approvals. The granting of Awards and the issuance of shares of Stock under the Plan shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
  

 23 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 28 of 29] 

 19.12 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of title for shares of
Stock issued under the Plan prior to (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and (b) completion of any registration or other qualification of the Stock under any
applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable. 
 19.13 Inability to
Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Stock
hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such shares of Stock as to which such requisite authority shall not have been obtained. 
 19.14 Investment Representations. The Committee may require any person receiving Stock pursuant to an Award under the Plan to represent and warrant in writing that the person is acquiring the shares of Stock
for investment and without any present intention to sell or distribute such Stock. 
 19.15 Persons Residing Outside of the United States.
Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company or any of its Affiliates operates or has Employees, the Committee, in its sole discretion, shall have the power and
authority to (a) determine which Affiliates shall be covered by the Plan; (b) determine which persons employed outside the United States are eligible to participate in the Plan; (c) amend or vary the terms and provisions of the Plan
and the terms and conditions of any Award granted to persons who reside outside the United States; (d) establish subplans and modify exercise procedures and other terms and procedures to the extent such actions may be necessary or advisable
— any subplans and modifications to Plan terms and procedures established under this Section 19.15 by the Committee shall be attached to the Plan document as Appendices; and (e) take any action, before or after an Award is made, that
it deems advisable to obtain or comply with any necessary local government regulatory exemptions or approvals. Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the
Securities Exchange Act of 1934, as amended, the Code, any securities law or governing statute or any other applicable law. 
 19.16 Arbitration of
Disputes. Any controversy arising out of or relating to the Plan or an Award Agreement shall be resolved by arbitration conducted pursuant to the arbitration rules of the American Arbitration Association. The arbitration shall be final and
binding on the parties. 
 19.17 Governing Law. The provisions of the Plan and the rights of all persons claiming thereunder shall be construed,
administered and governed under the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Texas, to resolve any and all issues that may arise out of or
relate to the Plan or any related Award Agreement. 
  

 24 
 [
2.4.1 ] [2007 Long Term Incentive Plan.pdf] [Page 29 of 29] 

 RACKSPACE, INC. 
 2007 LONG-TERM INCENTIVE PLAN 
 NOTICE OF GRANT OF STOCK OPTION 
 Unless otherwise defined herein, the terms defined in the 2007 Long-Term Incentive Plan (the “Plan”) shall have the same defined meanings in
this Notice of Grant of Stock Option (the “Notice of Grant”) and Terms and Conditions of Stock Option Grant, attached hereto as Exhibit A (together, the “Agreement”). 
  

							
			
	Participant:	 	  
	 	
			
	Address:	 	  
	 	
			
		 	  
	 	

 Participant has been granted an Option to purchase Common Stock of the Company, subject to the
terms and conditions of the Plan and this Agreement, as follows: 
  

							
			
	Grant Number	 	  
	 	
			
	Date of Grant	 	  
	 	
			
	Vesting Commencement Date	 	  
	 	
			
	Number of Shares Granted	 	  
	 	
				
	Exercise Price per Share	 	$	 	  
	 	
				
	Total Exercise Price	 	$	 	  
	 	
				
	Type of Option	 	  
	 	Incentive Stock Option	 	
				
		 	  
	 	Nonstatutory Stock Option	 	
			
	Term/Expiration Date	 	  
	 	

 Vesting Schedule: 
 Subject to accelerated vesting as set forth below or in the Plan, this Option will be exercisable, in whole or in part, in accordance with the following
schedule: 
  

 -1- 

 Termination Period: 
 This Option will be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability, in which case this Option will be
exercisable for twelve (12) and six (6) months, respectively, after Participant–ceases to be a Service Provider (the “Post-Termination Exercise Period”) . To the extent not exercised during such
Post-Termination Exercise Period, Options under the Option Agreement shall terminate.–Notwithstanding the foregoing, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to
earlier termination as provided in Section 20(c) of the Plan. 
 Participant and the Company agree that this Option is granted under and
governed by the terms and conditions of the Plan and this Agreement. Participant has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting this Agreement and fully
understands all provisions of the Plan and Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Agreement. Participant
further agrees to notify the Company upon any change in the residence address indicated above. 
 Notwithstanding anything herein to the
contrary: 
 If, at any time while this Option remains outstanding, Participant provides services to a competitor of the Company or an
Affiliate whether as an employee, officer, director, independent contractor, consultant, agent or otherwise, Participant lends to or makes an investment in any such competitor, or Participant competes with the products or services of the Company
(“Engages in Competition”), then this Option shall terminate and be forfeited, subject only to a determination by the Administrator to the contrary. Participant agrees to notify the Company in writing of each employer of Participant and
each person and entity to whom Participant provides services from and after the date hereof, so long as this Option remains outstanding. For all purposes of the Plan, the Option Agreement and the Exercise Notice, the Administrator shall have the
right to determine the date on which Participant ceases to be a Service Provider and whether or not the Participant Engages in Competition and such determination shall be conclusive and binding on the Participant. 
 Electronic Signature: 
 Participant
acknowledges and agrees that by clicking the “ACCEPT” button on the E*TRADE on-line grant agreement response page, it will act as Participant’s electronic signature to this Agreement and will result in a contract between Participant
and the Company with respect to this Option. 
  

 -2- 

 EXHIBIT A 
 TERMS AND CONDITIONS OF STOCK OPTION GRANT 
 1. Grant of Option. 
 The Company hereby grants to the Participant named in the Notice of Grant (the “Participant”) an option (the
“Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to all of the terms and
conditions in this Agreement and the Plan, which is incorporated herein by reference. 
 If designated in the Notice of Grant as an Incentive
Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule
of Code Section 422(d) it will be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a NSO granted under the Plan. In no event shall the Administrator, the Company or an Affiliate or any of their respective employees or directors have any liability to Participant (or any other person) due to the
failure of the Option to qualify for any reason as an ISO. 
 2. Exercise of Option. 
 (a) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and
applicable provisions of the Plan. Shares scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Agreement, unless Participant will have been
continuously a Service Provider from the Date of Grant until the date such vesting occurs 
 (b) Method of Exercise. 
 (i) This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit B (the “Exercise Notice”)
or in a manner and pursuant to such procedures as the Administrator may determine, including, without limitation, the establishment of procedures for the submission of the Exercise Notice through an online or electronic system, which shall state the
election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise
Price, together with any applicable tax withholding. 
  

 -3- 

 (ii) No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such
exercise comply with applicable laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares. 
 3. Participant’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended, (the
“Securities Act”) at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation
Statement in the form attached hereto as Exhibit C. 
 4. Lock-Up Period. Participant hereby agrees that Participant
shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the
Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days
following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication
or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments
thereto).  
 Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company,
Participant shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a
registration statement filed under the Securities Act. The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in
the future, or a registration relating solely to a Securities and Exchange Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the
shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period. Participant agrees that any transferee of the Option or shares acquired pursuant to the
Option shall be bound by this Section 4. 
 5. Method of Payment. Payment of the aggregate Exercise Price shall be by cash or
check, unless agreed otherwise by the Participant and the Company in a manner consistent with the Plan. 
  

 -4- 

 6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon
such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable law. 
 7.
Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant. The terms of the
Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Participant. 
 8.
Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option. 
 9. Tax Obligations. 
 (a) Tax
Withholding. Participant agrees to make appropriate arrangements with the Company (or an Affiliate employing or retaining Participant) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding
requirements applicable to the Option exercise. Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise. 

(b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant shall notify
the Company in writing of such disposition within ten (10) days thereof. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant. 
 (c) Code Section 409A. Under Code Section 409A, an Option that vests after December 31, 2004 (or that vested on or prior to such
date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a
Share on the date of grant (a “discount option”) may be considered “deferred compensation.” An Option that is a “discount option” may result in (i) income recognition by Participant prior to the exercise of the
Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The “discount option” may also result in additional state income, penalty and interest tax to the
Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later
examination. Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for
Participant’s costs related to such a determination. 
  

 -5- 

 10. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents
related to Options awarded under the Plan or future Options that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means. Participant hereby consents to receive such
documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company. 
 11. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to
the Participant’s interest except by means of a writing signed by the Company and Participant. This Agreement is governed by the internal substantive laws but not the choice of law rules of Delaware. 
 12. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR AN AFFILIATE EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR
ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR AN AFFILIATE EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE. 
 13. Acknowledgment. Participant acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of the Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the
Plan or this Option. Participant further agrees to notify the Company upon any change in the residence address. 
 14. Change In Control
Of The Company. In the event of a Change in Control of the Company, Section 16.1(a) of the Plan shall not apply to this Option, and this Option shall not become immediately vested and exercisable in accordance with such Section. In
connection with a Change in Control of the Company, this Option shall be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary thereof. In the event that the successor corporation refuses to assume or
substitute for this Option, the Participant shall fully 

  

 -6- 

 
vest in and have the right to exercise this Option, including Shares as to which such Option would not otherwise be vested or exercisable, for a limited
period of time on or before a specified date (before or after such Change in Control of the Company) fixed by the Committee, after which specified date all unexercised Options and all rights of the Participant shall terminate. 
  

 -7- 

 EXHIBIT B 
 2007 LONG TERM INCENTIVE PLAN 
 EXERCISE NOTICE 
 Rackspace, Inc. 
 9725 Datapoint Drive, Suite 100 
 San Antonio, TX 78229 
 Attention: Stock Plan Administrator 
 1. Exercise of Option. Effective as of today,
                    ,         , the undersigned (“Participant”) hereby
elects to exercise Participant’s option (the “Option”) to purchase              shares of Common Stock (the “Shares”) of
Rackspace, Inc. (the “Company”) pursuant to the Company’s 2007 Long Term Incentive Plan (the “Plan”) and the Stock Option Agreement dated
                    , 20         (the “Option Agreement”). 

2. Delivery of Payment. Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option
Agreement, and any and all withholding taxes due in connection with the exercise of the Option. 
 3. Representations of Participant.
Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
 4. Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall be
issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as
provided in the Plan. 
 5. Company’s Right of First Refusal. Before any Shares held by Participant or any transferee (either
being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the
Shares on the terms and conditions set forth in this Section 5 (the “Right of First Refusal”). 
 (a)
Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares;
(ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s). 

 (b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of
the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price
determined in accordance with subsection (c) below. 
 (c) Purchase Price. The purchase price (the “Purchase
Price”) for the Shares purchased by the Company or its assignee(s) under this Section 5 shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith. 
 (d) Payment. Payment of the Purchase
Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or, in the manner and at the times set forth in the Notice. 
 (e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this
Section 5, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred twenty (120) days
after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to apply to
the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall
again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. 
 (f) Exception
for Certain Family Transfers. Anything to the contrary contained in this Section 5 notwithstanding, the transfer of any or all of the Shares during the Participant’s lifetime or on the Participant’s death by will or intestacy to
the Participant’s immediate family or a trust for the benefit of the Participant’s immediate family shall be exempt from the provisions of this Section 5. “Immediate Family” as used herein shall mean spouse, or
lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 5 and there shall be no further
transfer of such Shares except in accordance with the terms of this Section 5. 
 (g) Termination of Right of First Refusal. The
Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that
are publicly traded. 
  

 -2- 

 6. Company’s Right to Repurchase Shares. 
 (a) Termination of Service; Competition. The Company shall have the right to purchase any Shares acquired by Participant in the event that
Participant (i) is terminated for “cause” (as defined in subsection (b) of the Termination Period in the Notice of Grant) or (ii) at any time Engages in Competition. The purchase price for the Shares shall be the Exercise
Price paid by Participant plus an amount necessary to provide an annualized six percent (6%) rate of return from the date the Shares were acquired upon exercise of the Option. However, if (i) Participant’s service is terminated
without “cause,” and (ii) at such time the Company is a reporting company under the Exchange Act, the purchase price for the Shares shall equal the Fair Market Value. The Administrator shall have the sole right to make the
determination of whether or not the termination is for “cause.” Participant agrees to notify the Company in writing of each employer of Participant and each person and entity to whom Participant provides services for compensation from and
after the date hereof so long as this Option remains outstanding and thereafter so long as Participant or any of Participant’s transferees hold or has any interest in any Shares. 
 (b) Exercise of Right. If the Company desires to exercise its right to purchase such Shares, it shall within one hundred and twenty
(120) days after the date employment terminates or the Company knows that Participant Engages in Competition, as applicable, (i) deliver a notice of exercise to Participant, and (ii) make available at the offices of the Company, a
check in the amount of the purchase price for the Shares. If the Company makes the consideration available, at the time and place and in the amount and form provided for in this Section for the Shares to be purchased pursuant to the Company’s
repurchase rights, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of the Shares (other than the right to receive payment of such consideration as set forth herein). Such Shares
shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) thereof have been delivered as required by this Section. 
 (c) Termination of Repurchase Rights. The right to repurchase Shares hereunder shall terminate as to any Shares upon the earlier of (i) the
first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded. 
 7. Tax Consultation. Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s purchase or
disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for
any tax advice. 
 8. Restrictive Legends and Stop-Transfer Orders. 
 (a) Legends. Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws: 
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

  

 -3- 

 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT
OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS
AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER. 
 (b) Stop-Transfer Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 
 (c) Refusal
to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares
or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 
 9. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. 
  

 -4- 

 10. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be
submitted by Participant or by the Company forthwith to the Committee which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Committee shall be final and binding on all parties. 
 11. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be delivered personally by hand or
by courier, mailed by United States first-class mail, postage prepaid, sent by facsimile or sent by electronic mail directed (a) if to the Participant, at the Participant’s address, facsimile number or electronic mail address set forth on
the signature page to the Notice of Grant, or at such other address, facsimile number or electronic mail address as the Participant may designate by ten (10) days’ advance written notice to the Company or (b) if to the Company, to its
principal executive office and directed to the attention of the President, or at such other address as the other address as the Company may designate by ten (10) days’ advance written notice to the Participant. All such notices and other
communications shall be deemed given upon personal delivery, on the date of mailing, upon confirmation of facsimile transfer or when directed to the electronic mail address set forth on the signature page to the Agreement. With respect to any notice
given by the Company under any provision of the Delaware General Corporation Law or the Company’s charter or bylaws, the Participant agrees that such notice may be given by facsimile or by electronic mail. 
 12. Governing Law; Severability. This Exercise Notice is governed by the internal substantive laws, but not the choice of law rules, of
Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect. 
 13. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Option Agreement and
the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the
subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. 
 [Signature Page Follows] 
  

 -5- 

			
	Submitted by:	  	Accepted by:
	PARTICIPANT	  	RACKSPACE, INC.
		
	  
	  	  

	Signature	  	By
		
	  
	  	  

	Print Name	  	Print Name
		
		  	  

		
	Address:	  	Address:
		
	  
	  	  

		
	  
	  	  

		
		  	  

		  	Date Received

  

 -6- 

 EXHIBIT C 
 INVESTMENT REPRESENTATION STATEMENT 
  

			
	PARTICIPANT	  	:
	COMPANY	  	:             RACKSPACE, INC.
	SECURITY	  	:             COMMON STOCK
	AMOUNT	  	:
	DATE	  	:

 In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the
Company the following: 
 Participant is aware of the Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment for Participant’s own account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 
 Participant acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant’s investment intent as expressed herein. In this connection, Participant understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if Participant’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for
a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Participant further understands that the Securities must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant
understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws. 
 Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the
exercise shall be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates
(1) the availability 

 
of certain public information about the Company, (2) the amount of Securities being sold during any three (3) month period not exceeding specified
limitations, (3) the resale being made in an unsolicited “broker’s transaction”, transactions directly with a “market maker” or “riskless principal transactions” (as those terms are defined under the
Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable. 
 In the event that the Company does not
qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information
about the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the
satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above. 
 Participant
further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk. Participant understands that no assurances can be given that any such other registration exemption shall be available in such event. 
  

	
	PARTICIPANT
	
	  

	Signature
	
	  

	Print Name
	
	  

	Date

  

 -2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]