Exhibit 10.6

EXECUTION COPY

LOGO [g30293redhat.jpg]

December 29, 2008

Matthew J. Szulik

c/o Red Hat, Inc.

1801 Varsity Drive

Raleigh, NC 27606

Dear Matthew:

To ensure compliance with Section 409A of the Internal Revenue Code of 1986, as
amended, and to make certain other agreed changes, Red Hat, Inc., a Delaware
corporation (the “Company”), and you hereby agree to amend the non-executive
chairman agreement dated as of February 28, 2008 by and between the Company and
you (the “Agreement”) as follows:

 

1. Section 4.5 of the Agreement is amended by inserting the following at the
end:

“Any payments or expenses provided in this Section 4.5 shall be paid in
accordance with Section 5.4.”

 

2. The second and following sentences of Section 5.2 shall be revised to read as
follows:

“In addition, notwithstanding anything herein, in the Transition Agreement, or
the underlying equity award agreements to the contrary, if, at any time,
Chairman’s service as a member of the Board ceases as a result of Chairman’s
death, Disability, or any other reason other than the removal of the Chairman
with cause in accordance with the Company’s By-Laws, Chairman’s voluntary
resignation from the Board, or Chairman’s notification to the Company and/or the
Board of Chairman’s intent not to stand for re-election to the Board, then
(a) effective as of immediately prior to the Chairman’s cessation from service
as a member of the Board, the vesting of that portion of each of the Equity
Awards that would have vested had he continued as a member of the Board through
the remainder of his otherwise applicable current term as a Director or over the
12 months following the date the Chairman ceased to be a member of the Board,
whichever period is longer, shall accelerate and be deemed vested and, to the
extent applicable, exercisable, provided that the vesting shall not accelerate
the distribution of shares underlying equity awards if such acceleration would
trigger taxation under Section 409A(a)(1)(B), and (b) on the timing provided in
this Section, the Chairman shall be entitled to receive a lump sum payment equal
to the annual cash compensation he would have received pursuant to Section 4.1
above had he continued as a member of the Board for the remainder of his
otherwise applicable current

--------------------------------------------------------------------------------

term as a Director. As a condition of receiving the additional vesting and cash
payments set forth in this Section 5.2, except in the event of the provision of
benefits under this Section 5.2 on account of Chairman’s death or Disability (in
which case payment will be made within ten (10) days), Chairman shall execute
the form of release of claims substantially in the form set forth as Exhibit C
to the Transition Agreement (with such changes as the Company may reasonably
make to reflect applicable law and the nature of Chairman’s service with the
Board at such time) within sixty (60) days following the date of Chairman’s
ceasing to be a member of the Board, and benefits shall be paid or commence no
later than thirty (30) days after such release becomes effective; provided,
however, that if the last day of the sixty (60) day period falls in the calendar
year following the year of Chairman’s ceasing to be a member of the Board, the
severance payments shall be paid or commence no earlier than January 1 of such
subsequent calendar year. For purposes of this Agreement, “Disability” means
either (i) that Chairman is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) that Chairman is by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under the Company’s accident and health plan. Chairman will be
deemed disabled if either determined to be totally disabled by the Social
Security Administration, or if determined to be disabled by the Company or under
the Company’s disability insurance program provided that such determination
complies with the above definition.”

 

3. Section 5.4 shall be amended to read as follows:

“Effect of Section 409A of the Code.

A. If and to the extent any portion of any payment, compensation or other
benefit provided to Chairman in connection with Chairman’s separation from
service (as defined in Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”)) is determined to constitute “nonqualified deferred
compensation” within the meaning of Section 409A and Chairman is a specified
employee as defined in Section 409A(a)(2)(B)(i) of the Code, as determined
by the Company in accordance with its procedures, by which determination
Chairman hereby agrees that he is bound, such portion of the payment,
compensation or other benefit shall not be paid before the earlier of (i) the
day that is six months plus one day after the date of separation from service
(as determined under Section 409A) or (ii) the tenth (10th) day after the date
of Chairman’s death (as applicable, the “New Payment Date”). The aggregate of
any payments that otherwise would have been paid to Chairman during the period

 

-2-

--------------------------------------------------------------------------------

between the date of separation from service and the New Payment Date shall be
paid to Chairman in a lump sum on such New Payment Date, and any remaining
payments will be paid on their original schedule.

B. For purposes of this Agreement, each amount to be paid or benefit to be
provided shall be construed as a separate identified payment for purposes of
Section 409A, and any payments that are due within the “short term deferral
period” as defined in Section 409A shall not be treated as deferred compensation
unless applicable law requires otherwise. Neither the Company nor Chairman shall
have the right to accelerate or defer the delivery of any such payments or
benefits except to the extent specifically permitted or required by
Section 409A. This Agreement is intended to comply with the provisions of
Section 409A and the Agreement shall, to the extent practicable, be construed in
accordance therewith. Terms defined in the Agreement shall have the meanings
given such terms under Section 409A if and to the extent required to comply with
Section 409A. In any event, the Company makes no representations or warranty and
shall have no liability to Chairman or any other person if any provisions of or
payments under this Agreement are determined to constitute deferred compensation
subject to Section 409A but not to satisfy the conditions of that section.

C. Payments with respect to reimbursements of business expenses or arbitration
expenses shall be made on or before the last day of the calendar year following
the calendar year in which the relevant expense is incurred. The amount of
expenses eligible for reimbursement during a calendar year may not affect the
expenses eligible for reimbursement in any other calendar year.

Except as modified by this letter or by other intervening amendments, all other
terms and conditions of the Agreement shall remain in full force and effect.
This letter may be executed in counterparts, each of which shall be deemed to be
an original, and all of which shall constitute one and the same document.

 

RED HAT, INC. By:  

/s/ Michael R. Cunningham

  Michael R. Cunningham   General Counsel

 

Acknowledged and agreed:

/s/ Matthew J. Szulik

Matthew J. Szulik Date: December 29, 2008

 

-3-