Exhibit 10.1

 

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June 17, 2015

Dear Frank,

I am pleased to invite you to join Red Hat, Inc. (“Red Hat” or “the Company”).

People join Red Hat for many reasons: Our technology expertise and the chance to
work among the best open source developers, the reach of the Red Hat brand, our
growing market opportunity. Some people just want to change the world. We pride
ourselves on collaboration and openness and are guided by four values: Freedom,
Courage, Commitment, Accountability. At Red Hat, you will have the freedom to do
your best work and the opportunity to help fashion our future.

Compensation and Benefits

 

Position:    Executive Vice President, Operations and Chief Financial Officer
Reporting to:    President and CEO Location:    Raleigh, North Carolina Annual
Base Salary:    $685,000 Executive Variable Compensation Plan Target (as a % of
annual salary – prorated):    100% of Base Salary Sign-on and Relocation Bonuses
(subject to 24-month pro-rated claw back)   

Sign on: $4,000,000

 

Relocation: $500,000 plus relocation services (packing, moving)

New Hire Equity Grant Value at Target:   

$9,000,000 (target)

 

Consisting of:

 

$4.5M RSAs

 

$2.25M/$4.5M Operating PSU (target/max)

 

$2.25M/$4.5M TSR PSU (target/max)

Anticipated Ongoing Annual Grant Value Starting in FY17 (subject to annual Board
approval):    $4,000,000 (target)

 

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Other Executive Programs:    Described below Non-compete:    1 year
post-employment Start date:    June 22, 2015 Offer expires if not executed and
returned by:    June 17, 2015, 12:00 p.m. (noon) Eastern Time Participation in
Senior Management Severance Plan and Senior Management Change in Control
Severance Policy    For the Senior Management Severance Plan, the lump sum
payment pursuant to IV.A.1. shall be at 2.0x Base Salary (as defined in that
Plan)

Your salary will be paid according to the customary Company pay procedures,
which may be modified from time to time. Salaries are currently paid twice a
month. In addition, you will be eligible to participate in Red Hat’s Executive
Variable Compensation Plan and our other regular benefit plans, as they may
change from time to time. Here’s what Red Hat currently offers:

 

  •   Comprehensive major medical/dental/vision insurance plan

 

  •   Flexible benefits plan for payment of medical and/or dependent care
expenses

 

  •   Life Insurance

 

  •   401(k)

 

  •   Short and Long Term Disability

 

  •   Educational Reimbursement

You will be eligible to participate in these and other benefit programs,
including those identified in the table above, subject to the terms and
conditions established by the Company, as the same may change from time to time.
Additional information on the programs, like details on benefits and eligibility
requirements, will be made available to you in the summary plan descriptions.
The Company has the right to change or modify the items listed above in the
compensation and benefits section.

The number of shares of Red Hat common stock subject to the equity incentive
awards referenced above will be determined by dividing the target grant value by
the closing price of Red Hat common stock on the grant pricing date in
accordance with the Company’s normal practice. Performance stock units are
awarded for a target number of shares and can pay out at up to 200% of target
based on the Company’s performance on the applicable performance metrics. These
awards and any future equity awards are subject to the terms and conditions of
the Company’s 2004 Long-Term Incentive Plan, 2011 Performance Compensation Plan
and grant plan and guidelines, as the same may be amended from time to time,
(the “Administration Documents”). New hire equity awards are issued on the next
applicable grant date following the date of hire, in accordance with the
Administration Documents.

Section 5 of the Senior Management Change in Control Severance Policy entitled
“Additional Payment” shall not be applicable to you and is deleted in its
entirety, and in lieu of that provision, you will be entitled to the benefits
set forth in Appendix A to this letter.

 

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Your participation in the Senior Management Severance Plan is subject to your
execution of a restrictive covenants agreement, substantially in the form set
forth in the Executive Agreement accompanying this Offer Letter.

Terms and Conditions of Employment

Your start date as a Red Hat employee will be June 22, 2015. You will assume
your responsibilities as Executive Vice President, Operations and Chief
Financial Officer on Monday, July 13, 2015.

By accepting this offer of employment, you warrant to the Company that you are
available to render these services. It is a specific condition of this offer
that you have no restrictions or prohibitions that would prevent you from
working in this capacity. For example, you represent and warrant that you are
not subject to any agreements with previous employers that conflict with your
obligations to Red Hat. Your signature on this document assures your agreement
and promise to abide by all Red Hat corporate policies and procedures, as they
may be amended from time to time. The policies and procedures can be found on
the Company’s intranet.

Your employment and terms and conditions of employment will be terminable at
will, which means, among other things, that either you or the Company can end
your employment at any time and for any or no reason and with or without notice.

With respect to our external board service policy, we agree to an exception to
the public company board numerical limit to permit (i) your continued service as
a board member (not employee or executive) of Adobe Systems and Nimble Storage
and (ii) your service on any additional public company boards, subject to the
approval of the CEO. We are also comfortable with the position that the
compensation you receive from Adobe and Nimble for such service, as disclosed in
their most recent respective proxy statements, is de minimis under that policy
relative to the compensation you would receive from Red Hat.

This offer of employment is subject to approval by the Board of Directors and
the Compensation Committee and completion of a background check satisfactory to
the Company.

You’ll need to sign and return the following documents to me:

 

  •   This signed offer letter; all pages

 

  •   Bonus Agreement

 

  •   Personal Data Form

 

  •   Insider Trading Policy

 

  •   Code of Business Conduct & Ethics

 

  •   Indemnification Agreement

The Company collects and uses employee personal information (including sensitive
data such as medical data) to administer human resource and benefits programs,
to aid in compliance with government and regulatory compliance activities and
for other business purposes that require the transfer of personal information
with subsidiaries and third party business partners.

 

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The personal information that is collected and used by the Company may also need
to be shared with other companies within the Company’s group of companies or
with third party service providers (including, but not limited to, payroll
administrators and benefits providers) in the United States and other countries.
The Company will, of course, take reasonable measures to keep your personal
information private, confidential, and accurate. You can get more details about
access and use of your personal information, and request to correct or update
that information, by contacting the People team.

By signing this letter, you explicitly acknowledge that you have been given
notice that your personal information may be collected and used in the manner
described above and that you agree to such collection and use.

Red Hat began as a better way to build software – using openness, transparency,
and collaboration – and has shifted the balance of power in an entire industry.
A key part of our mission is to be a catalyst in communities of customers,
partners and contributors, making better technology the open source way. We
offer you something important and worthwhile: a chance to do meaningful work, to
be a part of technology history, and along the way build a great, lasting
company.

Ready?

We look forward to hearing back from you.

Sincerely,

/s/ DeLisa Alexander

DeLisa Alexander

Executive Vice President and

Chief People Officer

Agreed to and accepted: /s/Frank A. Calderoni

Date: June 21, 2015

 

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APPENDIX A

If payments under Section 4 of the CIC Severance Policy entitled “Computation of
Severance Benefit” to you (“Covered Benefits”) or through other compensatory
plans or arrangements (collectively with Covered Benefits, “Parachute
Compensation”) (i) constitute “parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or
any comparable successor provisions, and (ii) but for this provision would be
subject to the excise tax imposed by Section 4999 of the Code, or any comparable
successor provisions (the “Excise Tax”), then the Covered Benefits under the CIC
Severance Policy shall be either (a) provided to you in full, or (b) provided to
you as to such lesser extent that would result in the least portion of such
Parachute Compensation being subject to the Excise Tax, whichever of the
foregoing approaches, when taking into account applicable Federal, state, local
and foreign income and employment taxes, the Excise Tax, and any other
applicable taxes, appears reasonably likely to result in your receipt, on an
after-tax basis, of the greatest amount of Parachute Compensation,
notwithstanding that all or some portion of such Parachute Compensation may be
taxable under the Excise Tax.

The independent, certified public accounting firm serving as the Company’s
independent auditor immediately prior to an event covered by Section 4999, or
such other independent, certified public accounting firm, or a nationally
recognized compensation consulting firm, as may be appropriate, selected by the
Compensation Committee of the Company’s Board of Directors (the “Committee”), as
constituted immediately prior to the event covered by Section 4999, will
determine whether and to what extent payments under the CIC Severance Policy are
required to be reduced in accordance with the preceding sentence. For purposes
of the foregoing, any reduction or elimination of amounts and benefits
contemplated herein shall be implemented by determining the “Parachute Payment
Ratio” (as defined below) for each “parachute payment” and then reducing the
“parachute payments” in order beginning with the “parachute payment” with the
highest Parachute Payment Ratio. For “parachute payments” with the same
Parachute Payment Ratio, such “parachute payments” shall be reduced based on the
time of payment of such “parachute payments,” with amounts having later payment
dates being reduced first. For “parachute payments” with the same Parachute
Payment Ratio and the same time of payment, such “parachute payments” shall be
reduced on a pro rata basis (but not below zero) prior to reducing “parachute
payments” with a lower Parachute Payment Ratio. The term “Parachute Payment
Ratio” shall mean a fraction the numerator of which is the value of the
applicable “parachute payment” that must be taken into account by the Executive
for purposes of Section 4999(a) of the Code, and the denominator of which is the
actual amount to be received by the Executive in respect of the applicable
“parachute payment”. For example, in the case of an equity grant that is treated
as contingent on the change in control because the time at which the payment is
made or the payment vests is accelerated, the denominator shall be determined by
reference to the fair market value of the equity at the acceleration date, and
not in accordance with the methodology for determining the value of accelerated
payments set forth in Treasury Regulation Section 1.280G-1Q/A-24(b) or (c)).

 

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