RACKABLE SYSTEMS, INC. EXECUTIVE CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

Exhibit 10.1

RACKABLE SYSTEMS, INC.

EXECUTIVE CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

The Rackable Systems, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”) is hereby established by Rackable Systems, Inc. (the “Company”) effective October 3, 2006 (the “Effective Date”). The purpose of the Plan is to provide for the payment of certain severance benefits to certain eligible executive employees of the Company and any of its Subsidiaries if such employees are subject to qualifying employment terminations. This Plan shall supersede, as to any Participant, any severance or change in control benefit plan, policy, or practice previously maintained by the Company or any Subsidiary that is not in writing. For the avoidance of doubt, any written severance and/or change in control benefit provisions of any offer letter, employment agreement, equity incentive plan (or an associated award agreement) or other contract between the Company or any Subsidiary and a Participant is not superseded by the Plan except as may be set forth in such other plan or agreement or in a Participation Notice. This Plan shall not supersede or otherwise amend any written or unwritten severance or change in control benefit plan, policy or practice of the Company with respect to individuals who are not Participants.

For purposes of the Plan, except as may be provided in an individual Participation Notice, the following terms are defined as follows:

(a) “Announcement” means the public announcement of the signing of an agreement pursuant to which a Change in Control is effectuated that results in the payment of benefits pursuant to this Plan.

(b) “Base Value” means the amount equal to the Pre-Announcement Average Value multiplied by the Fully Diluted Shares Outstanding immediately prior to the Announcement. The “Pre-Announcement Average Value” means the average of the closing sales price per share of the Company’s common stock as reported on the Nasdaq Global Market (or if the Nasdaq Global Market is not the primary exchange or national reporting system upon which the Company’s common stock is traded or quoted, then such other primary exchange or national reporting system upon which the Company’s common stock is traded or quoted) for the ten (10) trading days immediately prior to the date of the Announcement. In the event there is a stock split, stock dividend or similar adjustment in the outstanding common stock of the Company during the period when the Pre-Announcement Average Value is determined, an adjustment shall be made by the Plan Administrator to the Pre-Announcement Average Value so as to most closely approximate the Pre-Announcement Average Value that would have resulted had the change in the outstanding common stock of the Company occurred prior to the period in which the Pre-Announcement Average Value was computed.

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(c) “Benefit Percentage” for a Participant shall be set forth on the Participant’s Participation Notice.

(d) “Board” means the Board of Directors of Rackable Systems, Inc.

(e) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of either of the following events:

(i) (x) there is consummated (A) a merger, consolidation or similar transaction involving (directly or indirectly) the Company or (B) a tender offer or exchange offer addressed to the stockholders of the Company and (y), immediately after the consummation of such merger, consolidation or similar transaction or such tender or exchange offer, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; or

(ii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition.

For the avoidance of doubt, the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.

(f) “Change in Control Termination” means a Covered Termination that occurs within the period commencing three (3) months prior to a Change in Control and ending on the Participant’s Participation Termination Date; provided, however, that the foregoing notwithstanding, a Participant shall not have incurred a Change in Control Termination if a Change in Control shall not have occurred on or prior to the Participant’s Participation Termination Date.

(g) “Change in Control Value” means the Value per share of common stock received by the stockholders of the Company pursuant to a Change in Control multiplied by the Fully Diluted Shares Outstanding immediately prior to the Change in Control.

(h) “Code” means the Internal Revenue Code of 1986, as amended.

(i) “Company” means Rackable Systems, Inc., or any successor entity thereto.

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(j) “Constructive Termination” means a resignation of employment by a Participant within ninety (90) days after one of the following is undertaken without the Participant’s express written consent:

(i) the Company or any of its Subsidiaries significantly reduces the Participant’s duties, authority or responsibilities, relative to the Participant’s duties, authority or responsibilities as in effect immediately prior to such reduction, taken as a whole; provided, however, that a change in the Participant’s title shall not be taken into account in determining if the Participant’s duties, authority or responsibilities have been reduced for the purposes of this Section 2(j)(i);

(ii) the Company or any of its Subsidiaries reduces the Participant’s base salary, target bonus and/or other cash compensation programs, taken as a whole, unless such reduction is made in connection with an across-the-board, proportionate reduction of substantially all executives’ annual base salaries, bonuses, plans and/or other cash compensation programs instituted because the Company and its Subsidiaries, taken as a whole, are in financial distress;

(iii) the Company or any of its Subsidiaries reduces or eliminates the Participant’s eligibility to participate in (or the benefits associated with participating in) the Company or any of its Subsidiaries’ benefit programs that is inconsistent with the eligibility to participate in (and benefits associated with participation in) such programs enjoyed by similarly situated employees of the Company or any of its Subsidiaries; or

(iv) a relocation of the Participant’s primary business office to a location more than thirty (30) miles from the location at which the Participant predominately performed duties prior to such relocation, except for required travel by the Participant on the Company or any of its Subsidiaries’ business to an extent substantially consistent with the Participant’s prior business travel obligations.

Notwithstanding the foregoing, a termination shall not constitute a Constructive Termination based on conduct described above unless (A) within the fifteen (15) day period following the occurrence of the conduct, the Participant provides the Chief Executive Officer of the Company (provides the Board in the case of a Participant who is the Chief Executive Office) with written notice (the “Constructive Termination Notice”) specifying (x) the particulars of the conduct and (y) that the Participant deems such conduct to be described in (i), (ii), (iii) or (iv) of this Section 2(j), and (B) the conduct described has not been cured within fifteen (15) days following receipt by the Chief Executive Officer of the Company (by the Board in the case of a Participant who is the Chief Executive Office) of such notice.

(k) “Covered Termination” means either (A) an Involuntary Termination Without Cause or (B) a Constructive Termination. For the avoidance of doubt, a termination of employment of a Participant due to death or disability shall not qualify as a Covered Termination.

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(l) “Eligible Employee” means any individual (A) who is an officer of the Company or any of its Subsidiaries and (B) who has been designated as an Eligible Employee by the Plan Administrator, in its sole discretion.

(m) “Entity” means a corporation, partnership, limited liability company or other entity.

(n) “Fully Diluted Shares Outstanding” means, as of any relevant date, the number of shares of common stock outstanding using the treasury stock method as described in SFAS No. 128 – Earnings Per Share.

(o) “Incremental Change in Control Value” means the amount, if any, by which the Change in Control Value exceeds the Base Value.

(p) “Involuntary Termination Without Cause” means a termination by the Company or any of its Subsidiaries of a Participant’s employment relationship with the Company or any of its Subsidiaries for any reason other than the Participant:

(i) willfully refuses to perform in any material respect the Participant’s duties or responsibilities for the Company or any of its Subsidiaries or willfully disregards in any material respect any financial or other budgetary limitations established in good faith by the Board;

(ii) willfully engages in conduct 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); or

(iii) engages in an act of moral turpitude causing material and demonstrable injury to the Company or otherwise demonstrates 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 Participant 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 affiliates. For the avoidance of doubt, a transfer of employment of a Participant from (x) the Company or one of its Subsidiaries to (y) the Company, one of its Subsidiaries or an Entity that acquires control of the Company shall not be deemed an Involuntary Termination Without Cause; however, depending on the facts and circumstances, such a transfer of employment may, in conjunction with a resignation by the Participant, result in a Constructive Termination.

(q) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, 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.

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(r) “Participant” means an Eligible Employee (A) who has received, signed and returned to the Company a Participation Notice, (B) either (x) who has remained continuously employed by the Company or a Subsidiary from the commencement of the Eligible Employee’s participation in the Plan until the Change in Control or (y) whose employment with the Company or any of its Subsidiaries terminates due to a Covered Termination prior to such Change in Control, and (C) whose participation in the Plan did not otherwise terminate prior to the Change in Control.

(s) “Participation Notice” means the latest notice delivered by the Company to an Eligible Employee informing the Eligible Employee that the Eligible Employee is a participant in the Plan. A Participation Notice shall be in such form as may be determined by the Company. The Company reserves the right to amend a Participation Notice in any way and at any time; provided, however, that no such amendment shall be effective as to any Participant who would be adversely affected by such amendment unless such Participant consents in writing to such amendment.

(t) “Participation Termination Date” means the date a Participant’s participation in the Plan ends as set forth in the Participant’s Participation Notice.

(u) “Plan Administrator” means the Board or any committee duly authorized by the Board to administer the Plan. The Plan Administrator may, but is not required to be, the Compensation Committee of the Board. The Board may at any time administer the Plan, in whole or in part, notwithstanding that the Board has previously appointed a committee to act as the Plan Administrator.

(v) “Subsidiary” means, 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%).

(w) “Value” means, with respect to (i) cash, such amount in cash, (ii) with respect to a share of stock of another Entity, and such stock is publicly traded, such Value shall be deemed to be the last closing sales price of such stock as reported on the primary exchange or national reporting system upon which such Entity’s stock it traded or quoted, and (iii) any other consideration, such Value shall be deemed to be the fair market value as determined in good faith by the Plan Administrator on the date such determination is made.

(a) General Rules. Subject to the limitations set forth in this Section 3 and in Section 6, in the event of a Change in Control Termination, the Company shall provide the severance benefits described in Section 4 to each affected Participant.

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(b) Exceptions to Benefit Entitlement. An employee, including an employee who otherwise is a Participant, will not receive benefits under the Plan (or will receive reduced benefits under the Plan) in the following circumstances, as determined by the Plan Administrator in its sole discretion:

(i) The employee’s employment terminates or is terminated for any reason other than a Change in Control Termination.

(ii) The employee does not confirm in writing that he or she shall be subject to the provisions of the employee’s proprietary information agreement with the Company or the employee’s confidentiality agreement with the Company.

(c) Termination or Return of Benefits. In the event of a Change in Control Termination, a Participant’s right to receive benefits under this Plan shall terminate immediately (and any benefits received pursuant to this Plan shall be immediately returned to the Company) if, at any time prior to or during the twelve (12) month period following such Change in Control Termination, the Participant, without the prior written approval of the Plan Administrator:

(i) willfully breaches a material provision of the Participant’s proprietary information or confidentiality agreement with the Company, as referenced in Section 3(b)(ii);

(ii) encourages or solicits any of the Company’s then current employees to leave the Company’s employ for any reason or interferes in any other manner with employment relationships at the time existing between the Company and its then current employees; or

(iii) induces any of the Company’s then current clients, customers, suppliers, vendors, distributors, licensors, licensees or other third party to terminate or materially diminish their existing business relationship with the Company or interferes in any other manner with any existing business relationship between the Company and any then current client, customer, supplier, vendor, distributor, licensor, licensee or other third party.

In the event a Participant incurs a Change in Control Termination, the Participant shall receive the benefits set forth in this Section 4, subject, however, to the payment provisions set forth in Section 5 and the other limitations and exclusions set forth in this Plan.

(a) Cash Benefits. Subject to Section 4(b), the Company shall make cash payments to each such Participant in an amount equal to the Incremental Change in Control Value multiplied by the Participant’s Benefit Percentage.

(b) Parachute Payments.

(i) Except as otherwise provided in an agreement between a Participant and the Company, if any payment or benefit the Participant would receive (whether pursuant to this Plan or otherwise) in connection with a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of

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the Code (the “Excise Tax”), then the benefits payable pursuant to this Plan to such Participant shall be reduced by the lesser of (x) all of the benefits payable pursuant to this Plan to such Participant or (y) the amount necessary so that such Payment (after reduction) shall be equal to the Reduced Amount. The “Reduced Amount” shall be the largest portion of the Payment (prior to reduction) that would result in no portion of the Payment (after reduction) being subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment (after reduction) equals the Reduced Amount, the benefits under this Plan shall be reduced first unless the Participant elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment occurs). All determinations required to be made hereunder, including, without limitation, whether a Payment is (or will be) subject to the Excise Tax and any additional assumptions to be utilized in arriving at such determinations, shall be made in accordance with the provisions set forth in Section 4(b)(ii).

(ii) The accounting firm engaged by the Company for the purpose of rendering general tax advice as of the day prior to the effective date of the Change in Control shall perform the calculations required by Section 4(b)(i). If the accounting firm so engaged by the Company is serving as accountant, tax advisor or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm that is not so serving to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and the Participant within fifteen (15) calendar days after the date on which the Participant’s right to a Payment is triggered (if requested at that time by the Company or the Participant) or such other time as may be jointly requested by the Company and the Participant. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and the Participant.

(c) Mitigation. Except as otherwise specifically provided herein, a Participant shall not be required to mitigate damages or the amount of any payment provided under this Plan by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Plan be reduced by any compensation earned by a Participant as a result of employment by another employer or any retirement benefits received by such Participant after the date of the Participant’s Change in Control Termination.

(d) Non-Duplication of Benefits. Except as otherwise specifically provided for herein, no Participant is eligible to receive benefits under this Plan more than one time. This Plan is designed to provide certain severance pay and benefits to Participants pursuant to the terms and conditions set forth in this Plan. Subject to Section 6(b) below, the payments pursuant to this Plan are in addition to, and not in lieu of, any unpaid salary, bonuses, severance or other benefits to which a Participant may be entitled (except to the extent expressly waived in writing) under any other written employment or severance agreement or otherwise for the period ending with the Participant’s Change in Control Termination.

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(a) General Rules. Except as otherwise provided herein, the payment of benefits in Section 4 shall be paid in a lump-sum payment, subject to applicable withholding, within five (5) business days after the determinations required by Section 4(b)(i) have been delivered to the Company and the Participant but in no event later than thirty (30) calendar days after the later of the Change in Control Termination and the Change in Control, and shall otherwise be made in accordance with and subject to the Company’s normal payroll practices.

(b) Application of Section 409A. If the Plan Administrator determines that any cash benefit provided under Section 4(a) fails to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be accelerated to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409A(a)(1) of the Code. (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Code, and the regulations and other guidance thereunder, to such payments and benefits. The payment schedule as revised after the application of such preceding sentence shall be referred to as the “Revised Payment Schedule.”) However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Code, the payment of such benefits shall not be paid pursuant to the original payment schedule or a Revised Payment Schedule and instead the payment of such benefits shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions of Section 409A(a)(1) of the Code. The Plan Administrator may attach conditions to or adjust the amounts paid pursuant to this Section 5(b) to preserve, as closely as possible, the economic consequences that would have applied in the absence of Section 409A of the Code; provided, however, that no such condition shall result in the payments being subject to Section 409A(a)(1) of the Code.

(c) Withholding. All payments under the Plan will be subject to all applicable withholding obligations of the Company, including, without limitation, obligations to withhold for federal, state and local income and employment taxes.

(d) Indebtedness of Participants. If a Participant is indebted to the Company on the date any benefits are payable to the Participant pursuant to this Plan, the Plan Administrator reserves the right to offset any such benefits by the amount of such indebtedness.

(a) Release. In order to be eligible to receive benefits under the Plan, a Participant must execute a general waiver and release in substantially the form attached hereto as Exhibit A, Exhibit B, or Exhibit C, as appropriate, and such release must become effective in accordance with its terms. Unless a Change in Control has occurred, the Plan Administrator, in its sole discretion, may modify the form of the required release to comply with applicable law and shall determine the form of the required release, which may be incorporated into a termination agreement or other agreement with the Participant.

(b) Certain Reductions. The Plan Administrator, in its sole discretion, shall have the authority to reduce a Participant’s severance benefits hereunder, in whole or in part, by the

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amount of any other severance benefits, pay in lieu of notice, or other similar benefits payable to the Participant by the Company that become payable in connection with the Participant’s termination of employment pursuant to any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act (the “WARN Act”). The Plan Administrator’s decision to apply such reductions to the severance benefits of one Participant and the amount of such reductions shall in no way obligate the Plan Administrator to apply the same reductions in the same amounts to the severance benefits of any other Participant, even if similarly situated.

(a) Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan, and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.

(b) Amendment or Termination. The Company reserves the right to amend or terminate this Plan or the benefits provided hereunder at any time; provided, however, that no such amendment or termination shall be effective as to any Participant who would be adversely affected by such amendment or termination unless such Participant consents in writing to such amendment or termination. Any action amending or terminating the Plan shall be in writing and executed by the Chief Executive Officer or General Counsel of the Company.

The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company, or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.

(a) Notices. Any notice, demand or request required or permitted to be given by either the Company or a Participant pursuant to the terms of this Plan shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties, in the case of the Company, at 1933 Milmont Drive, Milpitas, CA 95035, Attention General Counsel, and, in the case of a Participant, at the address as set forth in the Company’s employment file maintained for the Participant as previously furnished by the Participant or such other address as a party may request by notifying the other in writing.

(b) Legal Construction. This Plan is intended to be governed by and shall be construed in accordance with the laws of the State of California.

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(c) Basis of Payments to and from Plan. The Plan shall be unfunded, and all benefits hereunder shall be paid only from the general assets of the Company.

(d) Transfer and Assignment. The rights and obligations of a Participant under this Plan may not be transferred or assigned without the prior written consent of the Company. This Plan shall be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person or entity actively assumes the obligations hereunder.

(e) Waiver. Any Party’s failure to enforce any provision or provisions of this Plan shall not in any way be construed as a waiver of any such provision or provisions, nor prevent any Party from thereafter enforcing each and every other provision of this Plan. The rights granted the Parties herein are cumulative and shall not constitute a waiver of any Party’s right to assert all other legal remedies available to it under the circumstances.

(f) Severability. Should any provision of this Plan be declared or determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

(g) Section Headings. Section headings in this Plan are included for convenience of reference only and shall not be considered part of this Plan for any other purpose.

To record the adoption of the Plan as set forth herein, Rackable Systems, Inc. has caused its duly authorized officer to execute the same as of the Effective Date.

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For Employees Age 40 or Older

Individual Termination

EXHIBIT A

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Rackable Systems, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release Agreement (“Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and inventions agreement.

Except as otherwise set forth in this Release, I hereby generally and completely release Rackable Systems, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, Company and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing of this Release. My general release of claims includes, but is not limited to, a release of: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other equity or ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing, express or implied; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the California Constitution, the constitution of any other state, or the federal constitution, the California Labor Code, and the California Fair Employment and Housing Act (as amended) or similar statute of any other state; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from: (i) its obligation to indemnify me pursuant to agreement or applicable law; or (ii) any obligations undertaken by the Company in the Plan; or (iii) the Company’s statutory obligations to provide payment of all accrued but unpaid wages (including all accrued but unpaid vacation pay); or (iv) any obligations it has under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account) or the express terms of any vested stock option or restricted stock awards[; or (v) the Company’s obligations to pay you severance benefits as set forth in Section              of your offer letter/employment agreement dated             ]. I hereby represent that I have no lawsuits, claims or actions pending in my name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the release granted in this paragraph.

1.

For Employees Age 40 or Older

Individual Termination

I acknowledge that I am knowingly and voluntarily waiving and releasing any claims and rights I may have under the ADEA. I also acknowledge that the consideration given for my release of ADEA claims and rights is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my release of ADEA claims and rights does not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign it sooner); (d) I have seven (7) days following the date I sign this Release to revoke the Release by providing written notice of revocation to the Company; and (e) this Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Effective Date”).

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under Section 1542 and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder, including but not limited to unknown and unsuspected claims.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that to become effective, I must sign this Release not later than twenty-one (21) days following the date it is provided to me and I must promptly provide the signed Release to the Company.

2.

For Employees Age 40 or Older

Group Termination

EXHIBIT B

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Rackable Systems, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release Agreement (“Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and inventions agreement.

Except as otherwise set forth in this Release, I hereby generally and completely release Rackable Systems, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, Company and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing of this Release. My general release of claims includes, but is not limited to, a release of: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other equity or ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing, express or implied; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the California Constitution, the constitution of any other state, or the federal constitution, the California Labor Code, and the California Fair Employment and Housing Act (as amended) or similar statute of any other state; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from: (i) its obligation to indemnify me pursuant to agreement or applicable law; or (ii) any obligations undertaken by the Company in the Plan; or (iii) the Company’s statutory obligations to provide payment of all accrued but unpaid wages (including all accrued but unpaid vacation pay); or (iv) any obligations it has under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account) or the express terms of any vested stock option or restricted stock awards[; or (v) the Company’s obligations to pay you severance benefits as set forth in Section              of your offer letter/employment agreement dated             ]. I hereby represent that I have no lawsuits, claims or actions pending in my name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the release granted in this paragraph.

1.

For Employees Age 40 or Older

Group Termination

I acknowledge that I am knowingly and voluntarily waiving and releasing any claims and rights that I may have under the ADEA. I also acknowledge that the consideration given for my release of ADEA claims and rights is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my release of ADEA claims and rights does not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release; (c) I have forty-five (45) days to consider this Release (although I may choose voluntarily to sign it sooner); (d) I have seven (7) days following the date I sign this Release to revoke the Release by providing written notice of revocation to the Company; and (e) this Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Effective Date”).

I hereby represent that, when I received this Release, the Company informed me in writing of: (1) any class, unit, or group of individuals covered by the exit incentive or other employment termination program offered to me in connection with this Release, and any time limits applicable to such program; and (2) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under Section 1542 and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder, including but not limited to unknown and unsuspected claims.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that to become effective, I must sign this Release not later than forty-five (45) days following the date it is provided to me and I must promptly provide the signed Release to the Company.

2.

For Employees Under Age 40

Individual and Group Termination

EXHIBIT C

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Rackable Systems, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release Agreement (“Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and inventions agreement.

Except as otherwise set forth in this Release, I hereby generally and completely release Rackable Systems, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, Company and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing of this Release. My general release of claims includes, but is not limited to, a release of: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other equity or ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the California Constitution, the constitution of any other state, or the federal constitution, the California Labor Code, and the California Fair Employment and Housing Act (as amended) or similar statute of any other state; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from: (i) its obligation to indemnify me pursuant to agreement or applicable law; or (ii) any obligations undertaken by the Company in the Plan; or (iii) the Company’s statutory obligations to provide payment of all accrued but unpaid wages (including all accrued but unpaid vacation pay); or (iv) any obligations it has under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account) or the express terms of any vested stock option or restricted stock awards[; or (v) the Company’s obligations to pay you severance benefits as set forth in Section              of your offer letter/employment agreement dated             ]. I hereby represent that I have no lawsuits, claims or actions pending in my name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the release granted in this paragraph.

For Employees Under Age 40

Individual and Group Termination

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under Section 1542 and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder, including but not limited to unknown and unsuspected claims.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than fourteen (14) days following the date it is provided to me.

RACKABLE SYSTEMS, INC.

EXECUTIVE CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

PARTICIPATION NOTICE

Rackable Systems, Inc. (the “Company”) has adopted the Rackable Systems, Inc. Executive Change in Control Severance Benefit Plan (the “Plan”). The Company is providing you with this Participation Notice to inform you that you qualify as a participant in the Plan. A copy of the Plan document is attached to this Participation Notice. [Except as provided below, the] [The] terms and conditions of your participation in the Plan are as set forth in the Plan, and in the event of any conflict between this Participation Notice and the Plan, the terms of the Plan shall prevail.

Your Benefit Percentage is [            ].¹

Your Participation Termination Date is [June 8, 2007][                        ]

Written severance and/or change in control benefit provisions of any offer letter, employment agreement, equity incentive plan (or an associated award agreement) or other contract between the Company or any Subsidiary and Participant superseded by the Plan and this Notice in the event that the undersigned receives or becomes entitled to receive any payment under the Plan:

Please retain a copy of this Participation Notice, along with the Plan document, for your records.

ACKNOWLEDGEMENT [AND AGREEMENT]

The undersigned hereby acknowledges receipt of the foregoing Participation Notice. The undersigned acknowledges that the undersigned has been advised to obtain tax and financial advice regarding the consequences of participating in the Plan, including the effect, if any, of Sections 409A and 4999 of the Internal Revenue Code. [Further, the undersigned acknowledges and agrees that (1) if the undersigned receives or becomes entitled to receive any payment under the Plan, the undersigned waives, with respect to any written severance and/or change in control benefit provisions of any offer letter, employment agreement, equity incentive plan (or an associated award agreement) or other contract between the Company or any Subsidiary and Participant superseded by the Plan and this Notice, as set forth above, any rights to receive such severance and/or change in control benefits and (2) that this waiver is a material condition to the undersigned becoming a Participant in the Plan, and that the Company has relied on this waiver in causing the undersigned to become a Participant in the Plan.]