RHT Red Hat

(e) On May 31, 2019, Red Hat, Inc. (the “Company”) entered into an agreement with Eric Shander, EVP and Chief Financial Officer of the Company, to grant Mr. Shander a cash retention award (a “Retention Payment”) under a special bonus program created by the Company to assist in retaining key employees in the period through and after the closing (the “Closing Date”) of the transaction contemplated by the Agreement and Plan of Merger by and among International Business Machines Corporation, Socrates Acquisition Corp. and the Company, dated as of October 28, 2018. The grant of the award and the form of award agreement used for such grants was approved by the Compensation Committee of the Board of Directors of the Company. Mr. Shander is eligible to receive a Retention Payment in the amount of $4,000,000 that vests in two installments with the first installment of 50% of the Retention Payment vesting on the six-month anniversary of the Closing Date and the second installment of the remaining 50% of the Retention Payment vesting on the one-year anniversary of the Closing Date. In order to receive a Retention Payment installment, Mr. Shander must remain continuously employed by the Company or at an affiliate of the Company through the applicable vesting date. In the event that Mr. Shander is involuntarily terminated without Cause after the Closing Date and prior to payment in full of the Retention Payment, he will receive any unpaid portion of the Retention Payment. The foregoing description of the terms of the award agreement for the Retention Payment does not purport to be complete and is qualified in its entirety by the provisions of the form of cash retention agreement filed as Exhibit 99.3 to the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on May 21, 2019, and incorporated by reference herein.

Capitalized terms not defined in this 8-K are defined in the award agreement for the Retention Payment.