Exhibit
10.1
Rackable Systems,
Inc.
RETENTION
AGREEMENT
This Retention Agreement (this
“ Agreement ”), effective as of
the date of the last signature on the signature page hereof (the
“ Effective Date ”), is
executed by and between Rackable Systems, Inc., a Delaware
corporation (the “ Company ”),
and Giovanni Coglitore (the “
Executive ”). The Company and the
Executive are each individually referred to in this Agreement as a
“ Party ” and are collectively
referred to in this Agreement as the “
Parties .”
Recitals
A. The Executive and the Company are parties to an
Employment Agreement, dated December 23, 2002, as amended effective
November 16, 2005 (as so amended, the “ Employment
Agreement ”), and a Retention Bonus Agreement,
dated September 12, 2006, as amended effective January 9, 2007 as
so amended, the “ Bonus Agreement
”). The Employment Agreement outlines the general terms of
employment for the Executive, and the Bonus Agreement provides for
a bonus to be paid to the Executive in the event of a change in
control of the Company.
B. The Parties desire to enter into this
Agreement, which shall be in addition to, and shall not amend or
modify in any way the provisions of, the Employment Agreement or
the Bonus Agreement.
C.
The Company wishes to incentivize
the Executive to remain with the Company and use his best efforts
to assist the Company in connection with the conduct of the
Company’s business.
Agreement
In consideration of the mutual promises and
covenants set forth in this Agreement, the receipt and sufficiency
of which are acknowledged by the Parties, the Parties agree as
follows:
1.1
Affiliate
.
Any Person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with another Person. For
purposes hereof, “control” means the power to vote or
direct the voting of sufficient securities or other interests to
elect a majority of the directors or to control the management of
another Person.
1.2
Board
.
The Board of Directors of the
Company.
1.3
Code
.
The Internal Revenue Code of 1986,
as amended.
1.4
Entity . A corporation, partnership, limited liability
company or other entity.
1.5
Involuntary Termination
With Cause . A termination by the Company or any of its
Subsidiaries of the Executive’s employment relationship with
the Company or any of its Subsidiaries for any of the following
reasons:
(a) the Executive’s willfull refusal to
perform in any material respect the Executive’s duties or
responsibilities for the Company or any of its Subsidiaries or his
willful disregard in any material respect of any lawful written
financial or budgetary limitations established in good faith by the
Board, provided the Board provides him with written notice of such
refusal or disregard and provides the Executive with thirty (30)
days to cure such refusal or disregard, and the Executive fails to
cure such refusal or disregard within such thirty (30)
days;
(b) the Executive’s willful misconduct that
causes material and demonstrable injury, monetarily or otherwise,
to the Company or any of its Subsidiaries, including, but not
limited to, misappropriation or conversion of assets of the Company
or any of its Subsidiaries (other than non-material assets),
provided the Board provides him with written notice of such
misconduct and provides the Executive with thirty (30) days to cure
such misconduct, and the Executive fails to cure such misconduct
within such thirty (30) days; or
(c) the Executive’s conviction or plea of
nolo contendre to a crime of moral turpitude causing
material and demonstrable injury to the Company or otherwise
demonstrating unfitness to serve as an officer of the Company or
conviction of or entry of a plea of nolo contendere to a
felony.
No act or
failure by the Executive shall be deemed “willful” if
done, or omitted to be done, in good faith and with the reasonable
belief that the action or omission was in the best interest of the
Company or any of its Affiliates. For the avoidance of doubt, a
termination of employment of the Executive due to death or
disability shall not qualify as an Involuntary Termination With
Cause.
1.6
Own, Owned, Owner,
Ownership . A Person shall be deemed to “Own,”
to have “Owned,” to be the “Owner” of, or
to have acquired “Ownership” of securities if such
Person, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, is the beneficial owner
of such securities. For example, a holder of stock of a corporation
(the “direct corporation”) is deemed to Own such stock
and to Own a pro rata portion (based on relative holdings of the
stock of the direct corporation) of any stock of any other
corporation Owned by the direct corporation.
1.7
Person . An individual, a partnership, a limited
liability company, a corporation, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political
subdivision thereof.
1.8
Resignation for Good
Reason . The
Executive shall be deemed to have resigned with “Good
Reason” if he resigns after any of the following actions are
taken without his written consent: (x) the reduction of the
Executive’s cash compensation by more than 10%; (y) a
material change in the Executive’s job title, reporting
structure, duties, or authority; or (z) the relocation of the
Executive’s principal place of work by 30 or more
miles.
1.9
Subsidiary
.
With respect to the Company, (A) any
corporation of which more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time,
directly or indirectly, Owned by the Company, and (B) any Entity
other than a corporation in which the Company has a direct or
indirect interest (whether in the form of voting or participation
in profits or capital contribution) of more than fifty percent
(50%).
2.1
Cash
Payment. The
Company shall make a cash payment to the Executive in an amount
equal to $250,000 (less required deductions and withholdings) on
each of December 31, 2007, December 31, 2008, December 31, 2009,
and December 31, 2010 (each such date, a “
Retention Bonus Date ”), for a total
of $1,000,000 (each such bonus payment on a Retention Bonus Date, a
“ Retention Bonus Payment ”);
provided, however , that:
(a) if the Executive’s employment with the
Company is terminated as a result of either an Involuntary
Termination With Cause or the Executive’s resignation of
employment other than a Resignation for Good Reason, then no
Retention Bonus Payment will be made relating to any Retention
Bonus Date following the date of such termination of employment;
and
(b) if the Executive’s employment with the
Co
