SENIOR MANAGEMENT CHANGE IN CONTROL SEVERANCE POLICY

1.

Purpose

2.

Eligibility for Severance Benefits

(a)

A Covered Executive shall qualify for severance benefits under this Policy if within one year after a Change in Control (as defined below) the Covered Executive is terminated from employment by the Company without Good Cause (as defined below) or the Covered Executive voluntarily resigns from the Company for Good Reason (as defined below).

(b)

For purposes of this Policy, a Covered Executive shall be any employee of the Company who at the occurrence of the Change in Control (i) is a direct report to the Company’s Chief Executive Officer (or, if it is so determined by the Board of Directors of Red Hat, Inc. (the "Board"), any employee of the Company at the occurrence of the Change in Control who was within the one-year period prior to the Change in Control such a direct report) and (ii) who is not covered under any individual employment agreement (other than a stock option or restricted stock agreement) that provides special cash benefits following such a Change in Control.

(c)

For purposes of this Policy, "Good Cause" means conduct involving one or more of the following:

(i)

the conviction of the Covered Executive of, or plea of nolo contendere by the Covered Executive to, a felony;

(ii)

the willful misconduct by the Covered Executive resulting in material harm to the Company;

(iii)

fraud, embezzlement, theft or dishonesty by the Covered Executive against the Company or any subsidiary or repeated and continuing failure to substantially perform the Covered Executive’s duties with the Company after written notice of such failure to perform resulting in any case in material harm to the Company; or

(iv)

the Covered Executive’s material breach of any term of confidentiality and/or non-competition agreements with the Company.

(d)

For purposes of this Policy, "Good Reason" means:

(i)

a reduction by the Company or its successor of more than 10% in the Covered Executive’s rate of annual base salary as in effect immediately prior to such Change in Control;

(ii)

a reduction by the Company or its successor of more than 10% of the Covered Executive’s individual annual target bonus opportunity;

(iii)

a significant and substantial reduction of the Covered Executive’s responsibilities and authority, as compared with the Covered Executive’s responsibilities and authority in effect immediately preceding the Change in Control, or a material adverse change in the Covered Executive’s reporting relationship as compared with the Covered Executive’s reporting relationship in effect immediately in effect prior to the Change in Control; or

(iv)

any requirement of the Company that the Covered Executive be based anywhere more than fifty (50) miles from the Covered Executive’s primary office location at the time of the Change in Control and in a new office location that is a greater distance from the Covered Executive’s principal residence at the time of the Change in Control than the distance from the Covered Executive’s principal residence to the Covered Executive’s primary office location at the time of the Change in Control.

3.

Change in Control

(a)

individuals who, on the date of adoption of this Policy by the Board, constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date of adoption of this Policy by the Board whose election or nomination for election was approved by a vote of at least a majority of the Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

(b)

any "person" (as such term is defined in the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the "Company Voting Securities"); provided, however, that the event described in this paragraph (b) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any subsidiary, (B) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary, (C) by any underwriter temporarily holding securities pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying Transaction, as defined in paragraph (c), or (E) by any person of Voting Securities from the Company, if a majority of the Incumbent Board approves in advance the acquisition of beneficial ownership of 35% or more of Company Voting Securities by such person;

(c)

the consummation of a merger, consolidation, statutory share exchange, reorganization or similar form of corporate transaction involving the Company or any of

its subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination: (A) more than 40% of the total voting power of (x) the corporation resulting from such Business Combination (the "Surviving Corporation"), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation"), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (C) at least half of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying Transaction");

(d)

the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or the consummation of a sale of all or substantially all of the Company’s assets; or

(e)

the occurrence of any other event that the Board determines by a duly approved resolution constitutes a Change in Control.