Sales effected outside of the stock trading plan in January 2006, plus the maximum sales effected pursuant to the stock trading plan, are in the aggregate expected to constitute "not more than approximately 27% of the shares of Company's common stock that Mr. Szulik beneficially owns."

Szulik, who has been Red Hat's CEO for over six years and a senior executive since 1998, stated: "These arrangements will permit me to engage in diversification of my personal investment portfolio in an orderly manner and facilitate additional personal financial and tax planning."

Rule 10b5-1 allows corporate officers and directors to adopt written, pre-arranged stock trading plans. These plans can be used to diversify portfolios and to spread trades over a period of time. So long as such a plan is adopted at a time when the seller does not have material, non-public information, the transactions called for under the trading plan will be deemed not to have been made on the basis of material non-public information.

Red Hat also announced that certain of its other executive officers plan to enter into Rule 10b5-1 stock trading plans and may also engage in transactions in the Company's common stock outside of such plans.