Exhibit 10.1

 

RED HAT, INC.

 

Amendment to

Non-Qualified Stock Option Agreement

 

WHEREAS, Red Hat, Inc. (the “Company”), a Delaware corporation, and Matthew
Szulik (the “Optionee”) entered into a Non-Qualified Stock Option Agreement (the
“Agreement), as of December 17, 2003, in connection with the grant by the
Company to the Optionee of an option to purchase 500,000 shares of the Company’s
common stock, $.0001 par value per share at a per share exercise price of $6.70;
and

 

WHEREAS, the Company and the Optionee desire to amend the Agreement in certain
respects; and

 

NOW, THEREFORE, the Agreement is amended as set forth below, effective as of
December 30, 2005, only with respect to the option shares that were not vested
shares as of December 31, 2004. The Agreement shall be applied without regard to
this Amendment with respect to the option shares that were vested shares as of
December 31, 2004.

 

1. Section 5 is amended in its entirety to read as follows:

 

5. Death; Disability; Change of Control.

 

(a) Death. If the Optionee dies while maintaining a Business Relationship with
the Company, this option shall expire on the earlier of 180 days after the date
of death or the scheduled expiration date, except as provided in the Employment
Agreement between the Company and the Employee entered into effective July 24,
2002 (the “Employment Agreement”).

 

(b) Disability. If the Optionee’s Business Relationship with the Company is
terminated by reason of his disability, this option shall expire on the earlier
of 180 days after such cessation of the Business Relationship or the scheduled
expiration date, except as provided in the Employment Agreement. For purposes
hereof, “disability” shall mean “permanent and total disability” as defined in
Section 22(c)(3) of the Code.

 

(c) Change of Control. For purposes of this Agreement, “Change of Control” shall
have the meaning set forth on Appendix 1.

 

2. Section 6 is amended in its entirety to read as follows:

 

6. Exercise. This option shall be exercised in accordance with the Optionee’s
election of Stock Option Exercise Dates executed in December, 2005 (the
“Election”).

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3. Section 9 is amended in its entirety to read as follows:

 

9. Exercise Price; Certificates. On each exercise date specified in the
Election, the Optionee shall make payment to the Company of the full purchase
price of such shares in accordance with Section 7, and the Company shall deliver
a certificate or certificates representing such shares as soon as practicable
after each such exercise date. Such certificate or certificates shall be
registered:

 

(a) If the exercise date is prior to the Optionee’s death, in the name of the
Optionee (or, if the Optionee shall so request in writing prior to the exercise
of this option, in the name of the Optionee and another person jointly, with
right of survivorship); or

 

(b) If the exercise date is on or after the Optionee’s death in the name of the
Optionee’s estate, personal representative or beneficiary to whom this option
has been transferred pursuant to Section 10.

 

4. A new Appendix 1 is added to read as follows:

 

APPENDIX 1

 

“Change of Control” means and shall be deemed to have occurred as of the date of
the first to occur of the following events:

 

(a) Any Person or Group acquires stock of the Company that, together with stock
held by such Person or Group, constitutes more than 50% of the total fair market
value or total voting power of the stock of the Company. However, if any Person
or Group is considered to own more than 50% of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional
stock by the same Person or Group is not considered to cause a Change of
Control. An increase in the percentage of stock owned by any Person or Group as
a result of a transaction in which the Company acquires its stock in exchange
for property will be treated as an acquisition of stock for purposes of this
subsection. This paragraph (a) applies only when there is a transfer of stock of
the Company (or issuance of stock of the Company) and stock in the Company
remains outstanding after the transaction;

 

(b) Any Person or Group acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person or Group)
ownership of stock of the Company possessing 35% or more of the total voting
power of the stock of the Company. However, if any Person or Group is considered
to own 35% of the total voting power of the stock of the Company, the
acquisition of additional stock by the same Person or Group is not considered to
cause a Change of Control;

 

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(c) A majority of members of the Company’s Board is replaced during any 12-month
period by Directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board prior to the date of the appointment or
election; or

 

(d) Any Person or Group acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person or Group)
assets from the Company that have a total gross fair market value equal to or
more than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions. For this purpose,
gross fair market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. However, no Change of Control shall be
deemed to occur under this paragraph (d) as a result of a transfer to:

 

(i) A shareholder of the Company (immediately before the asset transfer) in
exchange for or with respect to its stock;

 

(ii) An entity, 50% or more of the total value or voting power of which is
owned, directly or indirectly, by the Company;

 

(iii) A Person or Group that owns, directly or indirectly, 50% or more of the
total value or voting power of all the outstanding stock of the Company; or

 

(iv) An entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly, by a person described in clause (iii) above.

 

For these purposes, the term “Person” shall mean an individual, Company,
association, joint stock company, business trust or other similar organization,
partnership, limited liability company, joint venture, trust, unincorporated
organization or government or agency, instrumentality or political subdivision
thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the
Securities Exchange Commission, modified to the extent necessary

 

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to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any
successor thereto in effect at the time a determination of whether a Change of
Control has occurred is being made.

 

IN WITNESS WHEREOF, the Company and the Optionee have caused this Amendment to
be executed effective as of the date set forth above.

 

    RED HAT, INC. December 31, 2005   By:  

/s/ Mark E. Cook

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        VP and Treasurer     OPTIONEE December 20, 2005  

/s/ Matthew Szulik

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    Matthew Szulik

 

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