First Amendment to Retention Bonus Agreement
Exhibit
10.3
First
Amendment to
This
First Amendment to Retention Bonus Agreement (“First
Amendment”),
effective as of January 9, 2007 (“First
Amendment Effective Date”),
is
made and entered into between Rackable Systems, Inc., a Delaware corporation
(the “Company”),
and
Xxxxxxxx Xxxxxxxxx, (the “Executive”).
The
Company and the Executive are each individually referred to in this First
Amendment as a “Party”
and
are
collectively referred to in this Agreement as the “Parties.”
RECITALS
A. The
Executive and the Company are parties to a Retention Agreement dated September
12, 2006 (the “Retention
Agreement”).
B. The
Executive and the Company wish to amend the Retention Agreement to account
for
the excise tax imposed by Section 4999 of the Code.
In
consideration of the mutual promises set forth herein, and other good and
valuable consideration the sufficiency of which is hereby acknowledged by each
party, the parties hereby agree as follows:
AMENDMENT
1. Section
1.2(z) of the Retention Agreement shall be changed to “December 31,
2007.”
2. Section
2.1 of the Retention Agreement shall be deleted and replaced with the
following:
“2.1
Cash
Payment. If
the
Company enters into a definitive agreement for a Change in Control on or before
the Agreement Termination Date, and if the Closing of such Change in Control
shall occur, the Company shall make a cash payment to the Executive in an amount
equal to $2,500,000 (less required deductions and withholdings) as described
in
section 2.3 (the “Retention
Bonus”).”
3. Section
2.2 of the Retention Agreement shall be deleted and replaced with the
following:
“2.2
[Intentionally
Deleted]”
3.
Section
2.3(a) of the Retention Agreement shall be deleted and replaced with the
following:
“2.3(a)
Except as otherwise provided herein, the payment of the Retention Bonus shall
be
paid in a lump-sum payment, subject to applicable withholding, within five
(5)
business days after the close of the Change in Control.”
4. Continued
Effect; Conflicts.
Except
as expressly amended by this First Amendment, all terms and conditions of the
Retention Agreement remain unchanged and will continue in full force and effect.
In the event of any conflict between the terms set forth in this First Amendment
and the terms set forth in the Retention Agreement, the terms of this First
Amendment will govern.
Any
capitalized terms not defined in this First Amendment shall have the meaning
set
forth in the Retention Agreement.
5. Counterparts;
Facsimiles.
This
First Amendment may be executed in multiple counterparts, each of which will
be
deemed an original, but all of which taken together will constitute one and
the
same instrument.
6. Complete
Agreement. This First Amendment, together with the
Retention Agreement, embodies the complete agreement and understanding among
the
parties and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. For the avoidance of doubt, this
Agreement does not supersede or preempt any provisions of the Employment
Agreement.
7. Additional
Provisions. Sections 3, 4, 6, 7, 9, 10, 13, 14 and
15 of the Retention Agreement shall apply equally to this First Amendment as
if
set forth herein, with references to “this Agreement” being changed to
references to “this First Amendment”.
IN
WITNESS WHEREOF,
the
Parties hereto have executed this First Amendment as of the First Amendment
Effective Date.
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By:
/s/ Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
CEO
Signature
Date: January 9, 0000
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XXXXXXXX
XXXXXXXXX
By:
/s/ Xxxxxxxx Xxxxxxxxx
Name:
Xxxxxxxx Xxxxxxxxx
Title:
CTO
Signature
Date: January 9, 2007
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