Red Hat, Inc. (NYSE:RHT) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02

(d) On January18, 2017, the Board of Directors (the Board) of Red
Hat, Inc. (the Company) appointed Eric R. Shander, 48, to serve
as the Companys acting chief financial officer and principal
financial officer, effective January20, 2017, pending a decision
on a permanent replacement. Mr.Shander replaces Frank Calderoni,
whose resignation was previously disclosed by the Company in a
report on Form 8-K filed on December21, 2016. Mr.Shander joined
the Company in November 2015 and currently serves as the Companys
Vice President, Finance and Accounting and principal accounting
officer. Prior to joining the Company, Mr.Shander spent over
twenty years in a variety of business and finance roles at
International Business Machines Corporation (NYSE: IBM), a
provider of integrated solutions and products that leverage data,
information technology, deep expertise in industries and business
processes. Most recently, Mr.Shander served as VP/Global Services
Automation Competitiveness from January 2015 until November 2015,
VP/Americas Strategic IT Outsourcing Delivery from May 2011 until
December 2014 and VP/Global Finance Accounting Solutions Delivery
from September 2008 until April 2011. Mr.Shander left IBM in
March 2005 to serve as VP/Chief Accountant at Lenovo Group Ltd.
(SEHK: 992), a manufacturer and marketer of technology products
and services, from April 2005 until August 2008, when he rejoined
IBM. Mr.Shander entered into no new compensation arrangements
with the Company in connection with his appointment as principal
financial officer.

(e) Mr.Shander currently participates in the same compensation
arrangements as the Companys non-executive employees except where
noted below.

Annual Base Salary: Mr.Shanders annual base salary is
$385,000. He is eligible for discretionary base salary increases.

Employee Variable Incentive Compensation Plan:
Mr.Shander participates in the Companys variable incentive
compensation plan (the VIC Plan), under which he is eligible to
receive a cash bonus determined quarterly at the discretion of
his manager based upon:

Mr.Shander must be employed by the Company on the bonus payment
date in order to receive any award.

Equity Awards: Mr.Shander is eligible for discretionary
grants of restricted stock units (RSUs), subject to the terms and
conditions of the form of RSU Agreement filed as Exhibit 10.1 to
the Companys Form 10-Q filed on October8, 2010 (the RSU
Agreement). The amount and timing of any RSU award is at his
managers discretion and is subject to approval by the Companys
Compensation Committee. The shares of restricted stock subject to
the award vest ratably on the anniversary of the awards grant
date over the course of the subsequent four-year period, provided
that Mr.Shander maintains continuous service with the Company or
any of its affiliates as an employee, consultant or director (a
Business Relationship) as of the vesting date. If Mr.Shanders
Business Relationship ceases for any reason prior to the vesting
date, any unvested RSUs will be forfeited.

If a change in control of the Company occurs (a CIC Event), and
provided that Mr.Shanders Business Relationship has not ceased,
all outstanding RSUs shall vest if (x)the RSU Agreement is
continued, assumed converted or substituted for immediately
following the CIC Event and (y)Mr.Shanders Business Relationship
with the Company is terminated without Good Cause (as defined in
the RSU Agreement). If the RSU Agreement is not continued,
assumed, converted or substituted for immediately following the
CIC Event, Mr.Shander will receive a lump sum cash payment within
30 days of the CIC Event in an amount equal to the amount that
would have been delivered had the RSUs fully vested upon the CIC
Event.

The foregoing description of the terms of the RSU awards and the
RSU Agreement does not purport to be complete and is qualified in
its entirety by the provisions of the RSU Agreement.

Severance Arrangements: Mr.Shander is eligible for a
cash payment equal to 1.4 times his then current annual base
salary in the event that his employment with the Company is
terminated by the Company without Good Cause (as defined below)
or by Mr.Shander with Good Reason (as defined below), subject to
the Companys receipt of a valid release of claims and his
compliance with non-compete, non-solicitation, non-disparagement,
protection of confidential information and other covenants. This
severance benefit is not available to all of the Companys
non-executive employees.

Good Cause is defined as one of the following:

Good Reason is defined as one of the following:

Change in Control Severance Arrangements: Mr. Shander is
eligible for benefits under our Senior Management Change in
Control Policy (the CIC Policy). Under this policy, Mr. Shander
will be eligible for lump sum cash payments if his employment is
terminated under certain circumstances after a Change in Control
(as defined in the CIC Policy) of the Company. These payments
will be in lieu of, and not in addition to, any other cash
severance payments to which he may be entitled following a Change
in Control. He will not be entitled to receive any excise tax
gross-up payments under the CIC Policy. This severance benefit is
not available to all of the Companys non-executive employers.

The summary of the terms of the CIC Policy in the Current Report
on Form8-K filed with the SEC on February 28, 2007 (the February
2007 Form 8-K) is incorporated herein by reference and is
qualified in its entirety by the provisions of the CIC Policy
filed as Exhibit 10.14 to our Annual Report on Form 10-K filed
with the SEC on April 25, 2012; provided, however, that in
February 2015, the Board adopted a policy that it would no longer
enter into any new agreements to make gross-up payments for
excise taxes paid under Section 4999 of the Internal Revenue Code
of 1986, as amended, by any Company executive.

Other Arrangements: Mr.Shander received a one-time
sign-on bonus of $300,000 when he joined the Company in 2015. If
Mr.Shander resigns or is terminated by the Company for Cause
within twenty-four months of his November16, 2015 start date, he
must repay a pro-rata amount of the bonus.

Cause is defined as one of the following:

About Red Hat, Inc. (NYSE:RHT)

Red Hat, Inc. (Red Hat) provides open source software solutions, using a community-powered approach to develop and offer operating system, virtualization, management, middleware, cloud, mobile and storage technologies. Red Hat operates through three geographical segments: the Americas, including the United States, Canada and Latin America; EMEA, including Europe, Middle East and Africa, and Asia Pacific. Its products and services include infrastructure-related offerings, application development-related and other technology offerings, and consulting, support and training services. Its infrastructure-related offerings include Red Hat Enterprise Linux, Red Hat Satellite and Red Hat Enterprise Virtualization. Its application development-related and other technology offerings include Red Hat JBoss Middleware, Red Hat cloud offerings, Red Hat Mobile and Red Hat Storage. Its consulting services include upgrade planning, platform migrations, solution integration and application development.

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