Rackable Rejects the Nomination of Two Directors

Rackable Systems, Inc. announced that the
Nominating and Corporate Governance Committee of the Rackable Systems
Board of Directors has unanimously determined to reject the proposed
nomination to the Rackable Systems Board of two individuals, Richard L.
Leza, Jr. of Sierra Madre, Calif. and Steve Montoya of Los Gatos, Calif.

As previously announced, Rackable Systems had received the nominations
from Mr. Leza, who informed the company that he owns 2,600 shares of
Rackable stock.
In making its decision to reject the proposed nominations, the
Nominating and Corporate Governance Committee carefully reviewed and
evaluated the candidacy of these two individuals and determined that
they did not have the qualifications that the Committee believes would
be critical to maintaining a strong, independent, diverse and effective
Board. Among other things, the Committee determined that the proposed
candidates lacked sufficient relevant experience in Rackable Systems’
industry or with its potential customers, and lacked other
qualifications that would make them valuable additions to Rackable
Systems’ experienced and highly knowledgeable
Board. In addition, the Committee took into consideration that Mr. Leza,
during a meeting with the company, did not offer any new ideas or plans
for the company.

“Over the past nine months we have recruited
two new and highly qualified independent directors, as well as a number
of new senior executives, including new CEO Mark J. Barrenechea,”
said Gary Griffiths, Chair of Rackable Systems’
Nominating and Corporate Governance Committee.

Furthermore, the Board also reviewed the advisory stockholder proposal
that Mr. Leza also sent the company.

“We recognize the value and emerging trend of
boards soliciting and considering stockholders’
views on executive compensation and disclosure. We believe, however,
there are more effective means for stockholders to communicate their
views directly to the Board, and that this proposal is not the best
approach at this time for the company, particularly in light of the
highly competitive environment in which mid-sized technology firms
operate,” said Ronald Verdoorn, Chairman of
the Board. “We continue to work to improve our
corporate governance policies and we look forward to further discussing
executive compensation and disclosure directly with our stockholders."

Rackable Systems, Inc.