Document:

Employment Agreement

 Exhibit 10.2 
 RED HAT, INC. 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT is made effective 24 July, 2002, by and between Red Hat, Inc., a Delaware corporation with its offices at 1801 Varsity
Drive, Raleigh, North Carolina 27606 (the “Company”), and Matthew Szulik, an individual residing at 3717 William J. Cowan Wynd, Raleigh, North Carolina 27612 (the “Executive”). 
 The following terms of employment are agreed to by the Parties: 
 1. Engagement. During the term of this Agreement, the Company will employ Executive
as Chief Executive Officer and President of the Company. Executive shall report directly to the Board of Directors of the Company (the “Board”). Executive shall have responsibilities, duties and authorities commensurate with chief
executive officers of public entities of similar size, and shall be the chief external representative of the Company. All other employees of the Company will report for organizational purposes to Executive or his designee and not to the Board;
provided, however, nothing in this statement shall be construed as limiting or interfering with the legal obligation of any officer of the Company to report to or advise the Board or the Board’s right to request information from any officer of
the Company. The Board shall, in good faith, consider Executive’s advice and recommendations, if any, in connection with any appointments or nominations to the Board. For so long as Executive remains Chief Executive Officer and President of the
Company, the Board will nominate Executive to the Board and, if elected, Executive shall serve in such capacity without additional consideration. While it is not a condition of this Agreement, it is the Board’s intent to have Executive serve as
Chairman of the Board. of Directors so long as he serves on the Board of Directors. 
 2. Commitment. During and throughout the Employment Term (defined below), Executive will devote his full working time. and attention to the
Company. During such term, Executive shall not engage in any other employment, occupation, or consulting activity unless approved by the Board of Directors; provided, however, that Executive may (i) serve in any capacity with any professional,
community, industry, civic (including governmental boards), educational or charitable organization, (ii) serve as a member of corporate boards of directors on which Executive currently serves and, with the consent of the Board (which consent
shall not be unreasonably withheld or delayed), other corporate boards of directors, and (iii) subject to the Company’s policies applicable to all employees, make investments in other businesses and manage his and his family’s
personal investments and legal. affairs so long as such activities do not materially interfere with the discharge of Executive’s duties. 
 3. Employment Term. Executive’s employment with the Company pursuant to this Agreement shall begin on the date of this Agreement and shall continue until Employee is terminated under this Agreement (such employment period
being the “Employment Term”). 
 4. COMPENSATION AND BENEFITS. 
  

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 4.1 Base Salary. During his employment hereunder, Executive shall be entitled to receive a
base salary (“Base Salary”) at a rate of three hundred fifty thousand dollars ($350,000) per annum. The Company shall pay Executive’s Base Salary periodically in arrears not less frequently than monthly in accordance with the
Company’s regular payroll practices as in effect from time to time. The Board will consider increases in Executive’s Base Salary no less frequently than annually, and, when approved by the Board, any such increase shall become the new Base
Salary under this Agreement. 
 4.2 Incentive Bonus. Executive, upon meeting the terms and conditions stated in this
Section 4.2, shall be eligible to receive an annual incentive bonus in an amount up to the greater of two hundred thousand dollars ($200,000) or fifty percent (50%) of his Base Salary for the fiscal year for which the bonus is calculated.
Except as otherwise provided, Executive must be an Employee of the Company at the end of the fiscal year for which the bonus is calculated. Executive shall receive the maximum bonus for a given fiscal year if all business milestones specified by
agreement of the Board and Executive for completion during that calculation year have been substantially and timely completed as of the end of the calculation year, as determined by the Board in its discretion. When the list of milestones for each
year has been agreed between the parties, it shall be appended to and become a part of this Agreement. In the event that all such milestones for a given year have not been completed, the Board in its discretion may award a partial bonus (or no
bonus) based upon the degree to which the specified business milestones were successfully completed, the relative importance of those completed and any other factor that the Board may deem relevant. Any bonus awarded under this Section will be paid
in first month of the fiscal year following the calculation year. Nothing in this Section shall preclude the Board, at its discretion, from authorizing the payment of a supplemental bonus to Executive in addition to any bonus to which he may be
entitled under this Section. The Compensation Committee of the Board shall make its recommendations concerning Executive’s bonus for each year by January 31 of the following year, and the Board shall make its determination at the first
regularly scheduled Board meeting in February of said following year. 
 4.3 Life Insurance. The Company shall purchase for
Executive a one million dollar ($1,000,000) term life insurance policy (the “Policy”) on the life of Executive from USAA, Northwestern Mutual Life or other highly rated national insurance carrier mutually agreed upon by Company and
Executive. Executive shall be the owner of the Policy and shall establish the beneficiaries thereon. Upon any termination of Executive’s employment with Company Executives shall have the right to assume of all obligations to pay premiums coming
due thereafter so that the policy may remain in full force and effect. 
 4.4 Stock Options and Change of Control with Respect to Stock
Options.  
 A. Grant of Option. Effective on July 24, 2003 and each anniversary thereafter during the term of this agreement
or any extension hereof, Executive will receive a grant of options to purchase shares of no par value common stock of the Company (“Common Stock”) at an option price equal to the closing fair market value of the common stock of the
Company as traded on the NASDAQ exchange on the date of 

  

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the grant. The number of such options to be granted shall be determined by the Board prior to each anniversary but shall not be less than five hundred
thousand (500,000) for any given one-year period. Such options shall vest in equal amounts on a quarterly basis over a four year period following the date of grant. Upon a Change in Control (defined below) during the Employment Term, all
non-vested options granted pursuant to this Section will become vested. The Board shall provide to Executive a Stock Option Agreement specifying terms and conditions that will reflect the provisions of this Agreement, provisions of the
Company’s employee stock option plan pursuant to which this option grant will be made and other usual and customary provisions for such instruments. 
 B. Vesting of Options Upon Change of Control. Upon a Change of Control (defined below) during the Employment Term, all non-vested options to purchase Company stock granted to Executive will immediately become
vested. This provision shall supercede any term to the contrary in all stock option agreements entered into between the Company and Employee, whether now existing or hereinafter executed. Company agrees that during the term of this Agreement any
stock option agreement hereafter entered into between the Company and Executive will reflect the terms of this Agreement. 
 C. Change of
Control. For the purpose of this Agreement, “Change of Control” is defined as: 
 (1) Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 35% or more of the total voting power represented by the Company’s then outstanding voting securities; or 
 (2) A change in the composition of the Board occurring within any two-year period as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean
directors who either (i) are directors of the Company as of the date hereof, or (ii) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such
election or nomination, but, in the case of clause (ii), was not elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors to the Company (any person elected to the Board after being
nominated as provided in clause (ii) shall then be considered an Incumbent Director); or 
 (3) The consummation of a
merger or consolidation of the Company with any other corporation in which: the voting securities of the Company outstanding immediately prior thereto would not continue to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent, as the case may be) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent, as the case may be, outstanding immediately
after such merger 

  

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or consolidation; or 
 (4) The
consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets (“Asset Sale); or 
 (5) The approval by the stockholders of the Company of a plan of complete liquidation of the Company. 
 D. Registration. At all times, the Company shall maintain registration on Form S-8 or another applicable form so that the Common Stock issued upon exercise of the options are immediately saleable by Executive on the public market.

 5. EMPLOYEE BENEFITS. 
 5.1 Employee Welfare Plans. Executive shall, to the extent eligible, be entitled to participate at a level commensurate with his position in all employee benefit welfare and retirement plans and programs, as well as equity
plans, provided by the Company to its executives in accordance with the terms thereof as in effect from time to time. Such plans and programs currently include, without limitation, the 401(k) Plan, and the group term life insurance, comprehensive
health, major medical, dental and disability plans. 
 5.2 Executive Benefits. The Company shall provide to Executive, at the
Company’s cost, all perquisites to which other senior executives of the Company are entitled to receive and such other perquisites which are suitable to the character of Executive’s position with the Company and adequate for the
performance of his duties hereunder. To the extent consistent with applicable law, the Company shall not treat such amounts as income to Executive. 
 5.3 Business and Entertainment Expenses. Upon submission of appropriate documentation in accordance with its policies in effect from time to time, the Company shall pay or reimburse Executive for all business expenses which
Executive incurs in performing his duties under this Agreement, including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees, and expenses associated with membership in various professional, business,
and civic associations and societies in which Executive participates in accordance with the Company’s policies in effect from time to time. 
 5.4 Flexible Time Off. Executive shall be entitled to paid time off in accordance with the standard written policies of the Company with regard to executives, but in no event less than sixteen (16) days per calendar year
in addition to Company holidays. 
 5.5 Legal Expenses Related to Performance of Duties. Company shall reimburse Executive for
reasonable legal fees associated with personal legal advice 

  

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sought by Executive on matters related to prevention of personal liability Executive might incur during the performance his duties of behalf of the Company,
such as, but not limited to federal and state legislation governing the conduct of company executives. 
 6. TERMINATION OF EMPLOYMENT.

 6.1 General. Subject to the provisions of this Section 6, nothing in this Agreement shall interfere with or limit
in any way the right of the Company to terminate Executive’s employment at any time, nor confer on Executive any right to continue in the employ of the Company. 
 6.2 Termination Without Cause, Voluntary Termination with Good Reason.  
 A. General.
If, during the Employment Term, Executive’s employment is terminated by the Company without Cause (defined below), or Executive voluntarily resigns from the Company for Good Reason (defined below), Executive shall be entitled to the
following severance benefits: 
 (1) Base Salary, Incentive Bonus, and Benefits. The Company shall continue to pay
Executive the sum of the Base Salary plus an amount equal to the average annual bonus paid to Executive in the two (2) previous years in each of the next two years commencing the day after his Date of Termination (such period being referred to
hereinafter as the “Severance Period”), at such intervals as it would have been paid had Executive remained in the active service of the Company; provided that in the event of a Change of Control after the Date of Termination, the
Company shall, within fifteen (15) days of such change, pay Executive in a lump sum the full amount of the remaining Base Pay that would be due through lapse of time under this sentence; provided further, however, if such termination occurs in
contemplation of, at the time of, or within two (2) years after a Change in Control, Executive shall instead be entitled to receive a lump sum cash payment within fifteen (15) days after such termination equal to three times the sum of the
Base Salary plus an amount equal to the average annual bonus paid to Executive in the two previous years. In addition, the Company shall provide for continuation of his and his eligible dependents’ coverage under the Company’s welfare
benefit plans (group life insurance, and comprehensive health, major medical, dental, disability plans) as in effect on his Date of Termination (defined below) during the Severance Period. In addition, Executive shall receive the incentive bonus (if
any) to which he would have been entitled in accordance with Section 4.2 calculated as if he had been employed through the end of the fiscal year of his termination, but based on the milestones achieved prior to his Date of Termination.

 (2) Stock Options. Any stock options heretofore granted to Executive by the Company or granted by the Company during
the Employment Term which are still outstanding but unvested on Executive’s Date of Termination and which would normally have vested during the calendar year in which his Date of 

  

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Termination occurs, will vest and become exercisable immediately on Executive’s Date of Termination. In addition, Executive’s right to exercise
stock options shall continue throughout the Severance Period as though Executive’s employment with the Company were continuing and for such time after the end of the Severance Period as prescribed for exercise following termination of
employment in each stock option grant agreement. Any sale of Company stock by Executive shall continue to conform to the Company’s Insider Trading Policy, as now in existence and as hereinafter amended, for so long as Executive is subject to
the rules and restrictions of Section 16 of the Securities Exchange Act of 1934, as amended. 
 (3) Outplacement
Services. The Company shall provide Executive outplacement services at a level commensurate with Executive’s position, including use of an executive office and secretary, for a period of one (1) year commencing on Executive’s date
of termination but in no event extending beyond the date on which Executive commences other full time employment. 
 (4)
Death During Severance Period. In the event of Executive’s death during the Severance Period, payments of Base Salary under this Section 6 shall continue to be made during the remainder of the Severance Period to the beneficiary
designated in writing for this purpose by Executive or, if no such beneficiary is specifically designated, to Executive’s estate. Similarly, Executive’s designated beneficiary or estate, as the case may be, may exercise Executive’s
remaining rights under the stock options granted him under Section 4.4. 
 B. No Mitigation/No Offset. Executive shall not be
required to seek other employment or otherwise mitigate the value of any severance benefits contemplated by this Agreement, nor shall any such benefits be reduced by any earnings or benefits that Executive may receive from any other source. The
amounts payable hereunder shall not be subject to setoff, counterclaim, recoupment, defense or other right which the Company may have against Executive or others. 
 6.3 Termination for Cause, Voluntary Resignation Without Good Reason.  
 A. General.
If, during the Employment Term, Executive’s employment is terminated by the Company for Cause, or Executive voluntarily resigns from his employment hereunder other than for Good Reason, Executive shall be entitled only to payment of his
Base Salary through and including the Date of Termination or resignation. Executive shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance
with the normal terms of the employee benefit plans or programs of the Company or as required by law. 
 B. Cause. Termination for
“Cause” shall mean termination of Executive’s employment because of: 
 (1) the failure by Executive to
materially perform his duties with the 

  

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Company (other than any such failure resulting from (i) his incapacity due to physical or mental impairment or (ii) such factors as are outside
Executive’s control, including, but not limited to, economic downturns, litigation against the Company, or natural disasters), unless any such failure is corrected within thirty (30) days following written notice by the Board that
specifically identifies the manner in which the Board believes Executive has substantially failed to materially perform his duties; or 
 (2) the gross misconduct by Executive with regard to the Company or any employee of the Company that is materially injurious to the Company or such employee. 
 No act, or failure to act, by Executive shall be “gross misconduct” unless committed without good faith and without a reasonable belief
that the act or omission was in the best interest of the Company. No event shall be deemed the basis for Cause unless the Board initiates action to terminate Executive’s employment within sixty (60) days after such event is known to the
Chairman of the Company, or, if Executive is Chairman, known to the chairman of any committee of the Board. 
 Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause without (i) advance written notice provided to Executive not less than fourteen (14) days prior to the proposed date of termination setting forth the Company’s intention
to consider terminating Executive and including a statement of the proposed date of termination and the specific detailed basis for such consideration of termination for Cause, (ii) an opportunity of Executive, together with his counsel, to be
heard before the Board no less than five (5) days after the giving of such notice and prior to the proposed date of termination, (iii) a duly adopted resolution of the Board stating that the actions of Executive constituted Cause and the
basis thereof, and (iv) a written determination provided by the Board setting forth the acts and omissions that form the basis of such termination of employment. Any determination of Cause by the Board hereunder shall be made by the affirmative
vote of at least a two-thirds (2/3) majority of all of the members of the Board (other than Executive). Any purported termination of employment of Executive by the Company which does not meet each and every substantive and procedural
requirement of this Section 6.3(B), other than such failure resulting from Executive’s action or inaction, shall be treated for all purposes under this Agreement as a termination of employment without Cause. 
 C. Good Reason. For the purposes of this Agreement “Good Reason” means, the occurrence, without the express written consent of
Executive, of any of the following events: (i) any reduction or diminution (except temporarily during any period of disability) in Executive’s titles or positions assured in Section 1(a) under this Agreement, or any material
diminution in Executive’s authority, duties or responsibilities with the Company; (ii) a breach by the Company of any material provision of this Agreement, including, but not limited to, any reduction (other than a reduction (not to exceed
ten percent (10%)) that applies, in equal percentages, to all officers (within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended) of the Company), in Executive’s Base Salary or any material failure to timely
pay any part of Executive’s compensation (including, without limitation, Base Salary, and incentive 

  

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bonus) or to materially provide in the aggregate the level of benefits contemplated in this Agreement; (iii) the failure of the Company to obtain and
deliver to Executive a satisfactory written agreement from any successor to the Company to assume and agree to perform this Agreement in accordance with Section 9.4; or (iv) the failure to nominate Executive to the Board during the
Employment Term or the removal of Executive from the Board without Cause or as a result of a stockholder election in connection with an actual or threatened proxy contest relating to the election of directors to the Company. 
 6.4 Death or Disability. Executive’s employment hereunder shall terminate immediately upon his death, or if the Board, based upon
appropriate medical evidence, determines Executive has become physically or mentally incapacitated so as to render him incapable of performing his usual and customary duties as Chief Executive Officer and President of the Company for a continuous
period in excess of one hundred eighty (180) days. If Executive’s employment with the Company terminates because of death or disability, he or his estate will be entitled to the severance benefits described in Section 6.2 as if
Executive had been terminated without Cause by the Company. 
 6.5 Date of Termination. For purposes of this Agreement, the
(“Date of Termination”) of Executive shall be as follows: (i) in the case of termination without Cause as referenced in Section 6.2, the later of the date upon which Executive receives written notice of termination by the
Company or the date specified in such written notice; (ii) in the case of termination for Cause as referenced in Section 6.3, the later of the date upon which Executive receives written notice of termination by the Company or the date
specified in such written notice; (iii) in the case of Executive’s voluntary resignation as referenced in Section 6.2 or 6.3, the date specified in the written notice of resignation from Executive to the Company, or if no date is
specified, the date upon which the Company receives such written notice; (iv) in the case of the death of Executive, his date of death; and (v) in the case of termination because of disability, the date specified by the Board in its
determination of such disability under Section 6.4. 
 7. EXCISE TAX 
 7.1 Gross-up Payment. In the event that Executive shall become entitled to payments and/or benefits provided by this Agreement or any other
amounts in the nature of compensation (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by
Section 280G(b)(2) of the Code or any person affiliated with the Company or such person) as a result of such change in ownership or effective control (collectively the “Company Payments”), and such Company Payments will be
subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (and any similar tax that may hereafter be imposed by any taxing authority) the Company shall pay to Executive at the time specified in paragraph
(d) below an additional amount (the “Gross-up Payment”) such that the net amount retained by Executive, after deduction of any Excise Tax on the Company Payments and any U.S. federal, state, and for local income or payroll tax
upon the Gross-up Payment provided for by this paragraph 7.1, but before deduction for any U.S. federal, state, and local income or payroll tax on the Company Payments, shall be equal to the Company 

  

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Payments. 
 7.2 Determination of Excise
Tax Payments. For purposes of determining whether any of the Company Payments and Gross-up Payments (collectively the “Total Payments”) will be subject to the Excise Tax and the amount of such Excise Tax, (i) the Total
Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “parachute payments” in excess of the “base amount” (as defined under
Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and except to the extent that, in the opinion of the Company’s independent certified public accountants appointed prior to any change in ownership (as
defined under Section 280G(b)(2) of the Code) or tax counsel selected by such accountants (the “Accountants”) such Total Payments (in whole or in part) either do not constitute “parachute payments,” represent
reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the “base amount” or are otherwise not subject to the Excise Tax, and (ii) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. 
 7.3 Adjustment of Gross-Up Payments. For purposes of determining the amount of the Gross-up Payment, Executive shall be deemed to pay U.S. federal income taxes at the highest marginal rate of U.S.
federal income taxation in the calendar year in which the Gross-up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence for the calendar year in which
the Company Payment is to be made, net of the maximum reduction in U.S. federal income taxes which could be obtained from deduction of such state and local taxes if paid in such year. In the event that the Excise Tax is subsequently determined by
the Accountants to be less than the amount taken into account hereunder at the time the Gross-up Payment is made, Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of
the prior Gross-up Payment attributable to such reduction (plus the portion of the Gross-up Payment attributable to the Excise Tax and U.S. federal, state and local income tax imposed on the portion of the Gross-up Payment being repaid by Executive
if such repayment results in a reduction in Excise Tax or a U.S. federal, state and local income tax deduction), plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Gross-up Payment to be refunded to the Company has been paid to any U.S. federal, state and local tax authority, repayment thereof (and related amounts) shall not be required until actual refund or credit
of such portion has been made to Executive, and interest payable to the Company shall not exceed the interest received or credited to Executive by such tax authority for the period it held such portion. Executive and the Company shall mutually agree
upon the course of action to be pursued (and the method of allocating the expense thereof) if Executive’s claim for refund or credit is denied. 
 In the event that the Excise Tax is later determined by the Accountant or the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Gross-up Payment is made (including by reason of
any payment the existence or amount of which cannot be determined at the time of the Gross-up Payment), the Company shall make an additional Gross-up Payment in respect of such excess (plus any 

  

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interest or penalties payable with respect to such excess) at the time that the amount of such excess is finally determined. 
 7.4 Payment Date. The Gross-up Payment or portion thereof provided for in Section 7.3 shall be paid not later than the thirtieth
(30th) day following an event occurring which subjects Executive to the Excise Tax; provided, however, that if the amount of such Gross-up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay to
Executive on such day an estimate, as determined in good faith by the Accountant, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code), subject to further payments pursuant to Section 7.3 hereof, as soon as the amount thereof can reasonably be determined, but in no event later than the ninetieth (90th) day after the occurrence of the event subjecting Executive to
the Excise Tax. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to Executive, payable on the fifth (5th) day after demand by
the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 
 7.5 IRS Controversy. In
the event of any controversy with the Internal Revenue Service (or other taxing authority) with regard to the Excise Tax, Executive shall permit the Company to control issues related to the Excise Tax (at its expense), provided that such issues do
not potentially materially adversely affect Executive, but Executive shall control any other issues. In the event the issues are interrelated, Executive and the Company shall in good faith cooperate so as not to jeopardize resolution of either
issue, but if the parties cannot agree Executive shall make the final determination with regard to the issues. In the event of any conference with any taxing authority as to the Excise Tax or associated income taxes, Executive shall permit the
representative of the Company to accompany Executive, and Executive and Executive’s representative shall cooperate with the Company and its representative. 
 7.6 Accountant Charges. The Company shall be responsible for all charges of the Accountant. 
 7.7 Copies of Communications. The Company and Executive shall promptly deliver to each other copies of any written communications, and summaries of any verbal communications, with any taxing authority regarding the Excise Tax
covered by this Section 7. 
 8. LIABILITY INSURANCE  
 8.1 Coverage. The Company shall cover Executive under directors and officers liability insurance both during and, while potential liability
exists, after the Employment Term in the same amount and to the same extent, if any, as the Company covers its other officers and directors. 
 8.2 Indemnification. The Company shall during and after the Employment Term indemnify and hold harmless Executive to the fullest extent permitted by applicable 

  

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law with regard to actions or inactions taken by Executive in the performance of his duties as an officer, director and employee of the Company and its
affiliates or as a fiduciary of any benefit plan of the Company and its affiliates. 
 9. MISCELLANEOUS. 
 9.1 Payment of Legal Fees. The Company shall pay Executive’s reasonable legal and financial consulting fees and costs associated with
entering into this Agreement, such fees and costs to not exceed $10,000 and to be itemized to the extent they exceed $4,000. 
 9.2
Notices. All notices or communications hereunder shall be in writing, addressed as follows: 
 To the Company: 
 Red Hat, Inc. 
 1801 Varsity Drive 
 Raleigh, North Carolina 27606 
 ATTN: Board of Directors 
 and 
 General Counsel 
 Red Hat, Inc. 
 1801 Varsity Drive 
 Raleigh, North Carolina 27606 
 To Executive: 
 Mr. Matthew J. Szulik 
 3717 William J. Cowan Wynd 
 Raleigh, North Carolina 27612 
 and 
 Walter E. Daniels, Esq. 
 Daniels & Daniels, P.A. 
 Post Office Drawer 12218 
 Research Triangle Park, NC 27709 
 FAX (919) 544-5920 
 All such notices
shall be conclusively deemed to be received and shall be effective, (i) if sent by hand delivery or courier, upon receipt, (ii) if sent by telecopy or facsimile transmission, upon confirmation of receipt by the sender of such transmission,
or (iii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed. Each party shall promptly notify the other of any change in its notification address, and until such notice is received, each party
is entitled to rely on the address in 

  

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this Agreement or the last revised address actually supplied by the other party. 
 9.3 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. 
 9.4 Assignment. This Agreement shall be binding upon and inure to the benefit of
(a) the heirs, beneficiaries, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company, provided that any successor shall within ten (10) days of such assumption deliver to
Executive a written assumption in a form reasonably acceptable to Executive. Any such successor of the Company shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein,
“successor” shall mean any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the
Company. 
 Notwithstanding such assignment, the Company shall remain, with such successor, jointly and severally liable for all of its
obligations hereunder. This Agreement may not otherwise be assigned by the Company. 
 None of the rights of Executive to receive any form of
compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon the death of Executive or as provided in Section 9.8 hereof. Any
attempted assignment, transfer, conveyance or other disposition (other than as aforesaid) of any interest in the rights of Executive to receive any form of compensation hereunder shall be null and void; provided, however, that notwithstanding the
foregoing, Executive shall be allowed to transfer vested shares subject to stock options or equity awards and vested restricted s. Any attempted assignment, transfer, conveyance or other disposition (other than as aforesaid) of any interest in the
rights of Executive to receive any form of compensation hereunder shall be null and void; provided, however, that notwithstanding the foregoing, Executive shall be allowed to transfer vested shares subject to the Stock Option or other stock options
or equity awards and vested Restricted Stock consistent with the rules for transfers to “family members” as defined in Securities Act Form S-8. 
 9.5 Arbitration of Disputes.  
 A. Arbitration. In the event that the parties hereto
have any dispute under this Agreement, the parties shall first attempt in good faith amicably to settle the matter by mutual negotiations or mediation. If such negotiations are unsuccessful, the parties agree that all disputes that may arise between
them arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof shall be settled by binding arbitration to be held in Raleigh, North Carolina, or such
other location agreed by the parties hereto, in 

  

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accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association. The arbitrator may grant
injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction. 
 B. Governing Law. The arbitrators shall apply North Carolina law to the merits of dispute or claim, without reference
to rules of conflicts of law. Executive and the Company hereby expressly consent to the personal jurisdiction of the state and federal courts located in North Carolina for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants. 
 C. Costs and Fees of Arbitration. Executive shall pay the
initial arbitration filing (not to exceed $200), and the Company shall pay the remaining costs and expenses of such arbitration (unless Executive requests that each party pay one-half of the costs and expenses of such arbitration or unless otherwise
required by law). Unless otherwise required by law or pursuant to an award by the arbitrator, the Company and Executive shall each pay separately its counsel fees and expenses. Notwithstanding the foregoing, the arbitrator may, but need not, award
the prevailing party in any dispute its or his legal fees and expenses. 
 9.6 No Oral Modification, Cancellation or Discharge.
This Agreement may only be amended, canceled or discharged in writing signed by Executive and the Company’s General Counsel, the Chairman of the Company (provided Executive is not Chairman) or a member of the Compensation Committee. 

9.7 Survivorship. The respective rights and obligations of Company and Executive hereunder shall survive any termination of Executive
upon his employment to the extent necessary to the intended preservation of such rights and obligations. 
 9.8 Beneficiaries.
Executive shall be entitled, to the extent permitted under any applicable law, to select and change the beneficiary or beneficiaries to receive any compensation or benefit payable hereunder upon his death by giving the Company written notice
thereof. If Executive dies, severance then due or other amounts due hereunder shall be paid to his designated beneficiary or beneficiaries or, if none are designated or none survive Executive, his estate. 
 9.9 Withholding. The Company shall be entitled to withhold, or cause to be withheld, any amount of federal, state, city or other
withholding taxes required by law with respect to payments made to Executive in connection with his employment hereunder. 
 9.10
Governing Law. This Agreement shall be construed, interpreted, and governed in accordance with the laws of North Carolina without reference to rules relating to conflict of law. 
  

 Page 13 

 9.11 Entire Agreement. This Agreement represents the entire agreement of the parties and
shall supersede any and all previous contracts, arrangements or understandings between the Company and Executive. 
 IN WITNESS WHEREOF, the
Company has caused this Agreement to be duly executed and Executive has hereunto set his hand, as of the day and year first above written, to be effective as of the Effective Date. 
  

									
	EXECUTIVE:	 		 	RED HAT, INC.
				
	By:    	 	/S/    MATTHEW
SZULIK          	 		 	/S/ KEVIN B. THOMPSON
		 	Matthew Szulik	 		 	Its:	 	 Kevin B. Thompson    
 Executive Vice President & CFO    

  

 Page 14Restricted Stock Award Agreement

 EXHIBIT 10.3 
 RED HAT, INC. 
 RESTRICTED STOCK AWARD AGREEMENT 
 THIS RESTRICTED STOCK AWARD AGREEMENT is made and entered into on the 27th day of June, 2001, by and between RED HAT, INC., a Delaware corporation (the “Company”), and Matthew J. Szulik (the
“Employee”). 
 1. Discounted Sale. Subject to the restrictions and conditions set forth in this Agreement, the
Company hereby agrees to sell to the Employee, not in lieu of salary or other compensation, one million (1,000,000) shares of the Company’s Common Stock at the price of $0.50 per share (the “Restricted Shares”), upon
Employee’s delivery to the Company of a check in the amount of the total purchase price for the Restricted Shares. Employee hereby agrees with the restrictions and conditions set forth in this Agreement. 
 2. Forfeiture Restrictions. The Restricted Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of voluntarily, by operation of law, pursuant to a court decree or legal process (including without limitation any interspousal transfer by court decree or order in connection with an equitable distribution of marital assets) or
otherwise to the extent the Restricted Shares are then subject to forfeiture and the Company’s right to repurchase the Restricted Shares to the Company upon the occurrence of certain events pursuant to paragraph 3 below (the “Forfeiture
Restrictions”). 
 3. Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse with respect to the
Restricted Shares in accordance with the following schedule provided that the Employee has been continuously employed by the Company from the date of this Agreement through the lapse date and no other event of forfeiture has occurred: 
  

			
	 Lapse Date
	  	 Number of Restricted
 Shares as to which
 Forfeiture Restrictions Lapse

	September 27, 2001	  	125,000
	December 27, 2001	  	125,000
	March 27, 2002	  	125,000
	June 27, 2002	  	125,000
	September 27, 2002	  	125,000
	December 27, 2002	  	125,000
	March 27, 2003	  	125,000
	June 27, 2003	  	125,000

 In the event the Employee voluntarily elects to terminate employment with the Company, the Company shall have the
right to repurchase from the Employee all such Restricted Shares at their sale price of $0.50 per share to the extent such shares are then subject to the Forfeiture Restrictions; provided, however, any such repurchase shall not take place sooner
than thirty (30) days following Employee’s last day of employment with the Company, during which thirty-day period Employee’s exercise rights shall continue. The rights set forth in Section 1, and as limited by Sections 2 and 3,
are cumulative and may be exercised only before the earlier of (a) the date which is ten (10) years from the date of this Agreement or (b) the date which is 120 days following Employee’s last date of employment with the Company.

 4. Certificates. Upon payment of the purchase price, a certificate evidencing the Restricted Shares shall be issued by the Company
in the Employee’s name, and the Employee shall have voting 

 
rights and shall be entitled to receive all dividends paid with respect to the Restricted Shares unless and until the Restricted Shares are repurchased
pursuant to the provisions of this Agreement. The certificate shall bear a legend evidencing the Forfeiture Restrictions, if any, remaining in effect. The Company shall cause the certificate to be delivered upon issuance to the Secretary of the
Company as a depository for safekeeping until a forfeiture occurs or the Forfeiture Restrictions lapse pursuant to the terms of this Agreement, and the Employee shall deliver to the Company a stock power relating to the Restricted Shares in the form
attached hereto as Exhibit A. Upon the lapse of the Forfeiture Restrictions without forfeiture, the Company shall cause a new certificate or certificates to be issued without legend in the name of the Employee for the shares as to which the
Forfeiture Restrictions have lapsed. Notwithstanding any other provisions of this Agreement, the issuance or delivery of any shares (whether subject to restrictions or unrestricted) may be postponed for such period as may be required to comply with
applicable requirements of any national securities exchange or any requirements under any law or regulation applicable to the issuance or delivery of such shares. 
 5. Withholding of Tax. To the extent that the sale of the Restricted Shares or the lapse of the Forfeiture Restrictions results in income to the Employee for federal, state or local income or employment tax
purposes, the Employee shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations, and, if the
Employee fails to do so, the Company is authorized to withhold from any cash remuneration then or thereafter payable to the Employee any tax required to be withheld by reason of such income. 
 6. Status of Restricted Shares. The Employee agrees that the Restricted Shares will not be sold or otherwise disposed of in any manner which would
constitute a violation of any applicable federal or state securities laws. 
 7. No Right to Employment. This Agreement shall not
confer upon the Employee any right to continued employment with the Company, nor shall it interfere in any way with the right of the Company to terminate the employment of the Employee. 
 8. Binding Effect. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully
claiming under the Employee. 
 9. Multiple Originals. This Agreement is executed in multiple originals, one of which is being
retained by each of the parties hereto and each of which shall be deemed an original hereof. 
 10. Governing Law. The Agreement and
all actions taken thereunder shall be governed by and construed in accordance with the laws of the State of North Carolina. 
 IN WITNESS
WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant has hereunto set the Participant’s hand and seal, all as of the day and year first above written. 

			
	RED HAT, INC.
		
	 By:  
	 	 
		 	Kevin B. Thompson, Executive Vice President and CFO

  

			
		
	 	 	    [SEAL]
	Matthew J. Szulik

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