8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 1, 2011

Rackspace Hosting, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 001-34143

Delaware	74-3016523
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

5000 Walzem Rd.

San Antonio, Texas 78218

(Address of principal executive offices, including zip code)

(210) 312-4000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On December 1, 2011, Rackspace Limited, a subsidiary of Rackspace Hosting, Inc. (the “Company”) and David Kelly entered into a Compromise Agreement as described in Item 5.02.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On December 2, 2011, the Company issued a press release to announce the appointment of Taylor Rhodes as its Managing Director, International to lead the company's business in Europe, the Middle East, Africa, and the Asia-Pacific region. Rhodes is replacing David Kelly, Rackspace's Senior Vice President, International.

On December 1, 2011, Mr. Kelly and Rackspace Limited, a subsidiary of the Company, entered into a Compromise Agreement, pursuant to which Mr. Kelly will be on garden leave from December 9, 2011 (“Garden Leave Date”) until February 29, 2012 (the “Departure Date”). Up until the Departure Date, Mr. Kelly will continue to receive his normal salary, bonus for 2011 and two months' pro-rated bonus in respect of 2012 (approximately £26,180) and normal benefits. Mr. Kelly's employment with Rackspace will end on the Departure Date and Mr. Kelly will receive lump sum payments in the aggregate amount of £150,244 within fourteen days following the Departure Date. The Compromise Agreement also provides for (i) a noncompetition agreement for a six (6) month period following the Garden Leave Date, (ii) a nine (9) month non-solicitation agreement following the Garden Leave Date and (iii) a comprehensive release of claims against the Company and its affiliates by Mr. Kelly.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1 Press release announcing the appointment of the managing director to lead the company's international operations

- 2 -

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Rackspace Hosting, Inc.
Date:	December 2, 2011	By:	/s/ Alan Schoenbaum
			Alan Schoenbaum
			Senior Vice President, General Counsel and Secretary

- 3 -

EX-99.1

Rackspace Appoints Taylor Rhodes as Managing Director,

to Lead the Company's International Operations

SAN ANTONIO, TX (December 2, 2011) - Rackspace^® Hosting (NYSE: RAX), the service leader in cloud computing, today announced that Taylor Rhodes has been appointed as Managing Director, International to lead the company's business in Europe, the Middle East, Africa, and the Asia-Pacific region. Rhodes is replacing David Kelly, Rackspace's Senior Vice President, International. Kelly will be leaving Rackspace on February 29, 2012, to pursue entrepreneurial interests.

Rhodes joined Rackspace in 2007 to lead the Intensive business unit, where he was responsible for delivering Fanatical Support^® to more than 1,000 of the company's largest and most complex customers. Rhodes then went on to start up Rackspace Enterprise Services, a business unit that launched Rackspace up-market from its SMB roots. Rhodes was most recently appointed in January 2011 to lead the Rackspace Enterprise business in Europe.

“Having been a Racker for over four years, I'm passionate about the company's vision of delivering an exceptional customer service experience through Fanatical Support, and that vision is alive across our international business,” said Rhodes. “The international team is doing something very special here and we have reached some major milestones, including the successful launch of the European Cloud and recognition by the Sunday Times, Financial Times and National Business Awards as a top employer. I'm excited about the future.”

Rhodes joined Rackspace from EDS, where he held a series of progressive leadership roles managing end-to-end relationships with large global customers. Rhodes is also an ex-US Marine Corps officer, and holds a MBA degree from The University of North Carolina at Chapel Hill, a top US business school. Rhodes' new role will be responsible for developing the company's strategic priorities and creating business growth across International Markets.

“I am thrilled to have veteran Racker Taylor Rhodes step into this role, said Lanham Napier, president and CEO of Rackspace. “Taylor has consistently demonstrated strong leadership and has our Fanatical Support promise at the heart of everything he does. We are confident that we will see our international business continue to grow.”

“I appreciate the contributions that David Kelly has made to help our international operations and want to thank him for his leadership and wish him well as he pursues his entrepreneurial dreams,” added Napier.

About Rackspace

Rackspace Hosting (NYSE: RAX) is the service leader in cloud computing, and a founder of OpenStack™, an open source cloud operating system. The San Antonio-based company provides Fanatical Support^® to its customers and partners, across a portfolio of IT services, including Managed Hosting and Cloud Computing. Rackspace has been recognized by Bloomberg BusinessWeek as a Top 100 Performing Technology Company and was featured on Fortune's list of 100 Best Companies to Work For. The company was also positioned in the Leaders Quadrant by Gartner Inc. in the "2010 Magic Quadrant for Cloud Infrastructure as a Service and Web Hosting." For more information, visit www.rackspace.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements concerning anticipated operational and financial benefits from Rackspace strategies related to additions or changes in leadership, the success of leadership transition, company growth or success of new operational initiatives, any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the integration and effectiveness of new leadership into the Rackspace culture and business operations, instability or downturns in the economy, the effectiveness of managing company growth, infrastructure failures and other risks that are described in Rackspace Hosting's Form 10-Q for the quarter ended September 30, 2011, filed with the SEC on November 9, 2011. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.