RACKSPACE, INC. 2008 NON-EMPLOYEE DIRECTOR COMPENSATION SCHEDULE

1.

Compensation for Non-Employee Directors . Each Rackspace, Inc. (the “Company”) Non-Employee Director shall be entitled to receive the following compensation for service on the Board:

(a)

$60,000 to be paid in shares of restricted Common Stock annually; plus

(b)

$36,000 annually; plus

(c)

$19,000 annually if such Company Non-Employee Director serves as chairperson of the audit committee or as “lead director” (as may be designated by the Company Non-Employee Directors); plus

(d)

$14,000 annually for each standing Board committee, other than the audit committee, for which such Company Non-Employee Director serves as chairperson; plus

(e)

$9,000 annually for each standing Board committee for which such Company Non-Employee Director serves as a member (other than the chairperson of such committee).

2.

Subsidiary Directors . If the Board designates by resolution that directors of any Subsidiary are to participate in the Plan, then each such Subsidiary Non-Employee Director shall receive such amount of shares of Common Stock and/or cash as shall be specified by resolution of the Compensation Committee.

3.

Chairman’s Right to Reduce or Withhold Compensation . Notwithstanding anything contained herein to the contrary, the amount of cash or shares of Common Stock payable to any Non-Employee Director may be reduced or withheld by the Chairperson of the Board for failure to attend meetings of the Board, or the Boards of Directors of any Subsidiary upon which such Non-Employee Director serves, or for failure to otherwise perform the duties of such Non-Employee Director’s office.

4.

Compensation Committee’s Right to Revise Compensation Terms . Notwithstanding anything contained herein to the contrary, the Compensation Committee may, in its discretion, cause the number of shares and/or amount of cash determined pursuant to Section 1 above, to be issued and paid at such time or times as it shall determine in its discretion.

5.

Effective Date. This Compensation Schedule shall be effective as of April 1, 2008.

6.

Common Stock Compensation .

(a)

Annual Common Stock Compensation Pursuant to Section 1(a) . Common Stock paid pursuant to Section 1(a) shall be paid in the form of Common Stock only, payable as of the last day of each calendar quarter for services relating to that quarter and shall be delivered to the Non-Employee Director promptly thereafter. The shares of Common Stock to be issued pursuant to Section 1(a) shall be valued at the fair market value of the Common Stock as of the date the Common Stock becomes payable. For example, on June 30, 2008, each Non-Employee Director shall be entitled to receive shares of Common Stock valued at $15,000.00 (one-fourth of the annual compensation amount under Section 1(a)) and the number of shares of Common Stock payable would be derived by dividing the $15,000.00 by the fair market value of a share of Common Stock as of June 30, 2008. Therefore, if the fair market value of the Common Stock on June