50 of the Top 250 law firms use our Products every day
Exhibit 10.59
November 29, 2004
Mr. William Garvey
Dear Bill:
Rackable Systems, Inc. (“Rackable”
or the “Company”) is pleased to offer you the position
of General Counsel, Vice President of Corporate Development,
reporting to the Chief Financial Officer. This letter sets forth
the terms of this offer:
|
|
1.
|
Base
Salary . Annual base
salary of $190,000. You will be paid 1/26 of this amount every 2
weeks, or a total of $6,923.08 (gross) less payroll deductions and
all required withholdings. You shall devote your best efforts and
your full business time, business judgment, business skill,
knowledge and attention to advancing the business and affairs of
Rackable and its affiliates.
|
|
|
2.
|
MBO Bonus
Program . You will be
eligible for a quarterly bonus potential of up to $11,250 (gross),
less payroll deductions and all required withholding. Actual bonus
amounts will be assessed by the Chief Financial Officer based upon
performance to predetermined, written objectives. While these
bonuses are performance based, most Rackable employees who are on
this program have a history of strong performance to objectives and
generally achieve 80-90% of the bonus potential. Bonus amounts will
be prorated based upon the period of time you are employed during a
particular quarter. Bonus amounts will be determined and paid
during the first regular payroll run following quarter
close.
|
|
|
3.
|
Equity
position . It will be
recommended to the Board of Directors that you be granted a stock
option to purchase 70,000 shares of Common Stock under
Rackable’s Employee Stock Option Plan. Your options will be
subject to a five year vesting schedule, with vesting to commence
as of your start date as an employee under this Agreement. Your
options shall only vest if you have been continuously employed by
Rackable from the Start Date listed below through the applicable
option vesting date (e.g., at the end of the first year of
employment or the applicable monthly period thereafter as set forth
in the next sentence). Under the vesting schedule, your option
shares would vest at the rate of 20% upon completion of the first
year of employment, with an additional 1.6667% of such shares
vesting for each full month of continuous employment completed
after the first anniversary. Your options, if approved, shall be
granted subject to all of the terms and conditions set forth in an
option agreement prepared by Rackable and executed by you and
Rackable (the “Stock Option Agreement”) and the grant
of such options shall be conditioned upon the execution of such
Stock Option Agreement.
|
|
