¨    Preliminary

Proxy Statement                                 ¨    Confidential, for Use of the Commission

Only (as permitted by Rule 14a-6(e)(2)) x    Definitive Proxy Statement

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x    No

fee required.

¨    Fee

computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)    Title

of each class of securities to which transaction applies:

(2)    Aggregate

number of securities to which transaction applies:

(3)    Per

unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

(4)    Proposed

maximum aggregate value of transaction:

(5)    Total

fee paid:

¨    Fee

paid previously with preliminary materials.

¨    Check

box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing.

(1)    Amount

Previously Paid:

(2)    Form,

Schedule or Registration Statement no.:

(3)    Filing

Party:

(4)    Date

Filed:

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1.

To elect two members to the Board of Directors to serve for a three-year term as Class III Directors;

2.

To ratify the selection of the firm of PricewaterhouseCoopers LLP as auditors for the fiscal year ending February 28, 2003; and

3.

To transact such other business as may properly come before the meeting and any adjournments thereof.

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(1)	Officers of the Company are elected annually by the Board of Directors and serve until the next Annual Meeting of the Board of Directors and until their respective successors are elected and qualified or until their earlier resignation or removal.

(2)	Member of Compensation Committee.

(3)	Member of Audit Committee.

(4)	Member of Nominating/Corporate Governance Committee.

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*	Less than one percent of the outstanding common stock.

(1)	Unless otherwise indicated, the address for each beneficial owner is c/o Red Hat, Inc., 1801 Varsity Drive, Raleigh, North Carolina 27606.

(2)	The persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, except as noted in the footnotes below and subject to community property laws, if applicable.

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(3)	The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.

(4)	Includes 1,785,753 shares held of record by the 1988 Batten Trust and 19,840,475 shares held of record by the 1998 Frank Batten, Jr. Grantor Annuity Trust.

(5)	Based on a Schedule 13G/A filed with the Securities and Exchange Commission on March 11, 2002.

(6)

Includes 5,003,215 shares held of record by Nancy Young, Mr. Young’s wife, 471,576 held by the Nancy R. Young GRAT dated April 28, 1999, 338,502 shares held of record by the Young Family Trust dated April 28, 1999 and 2,399,220 shares held of record by trusts for the benefit of Mr. Young’s children. Mr. Young disclaims beneficial ownership of these shares. Also includes 471,576 shares held of record by the Robert F. Young GRAT dated April 28, 1999.

(7)

Includes 72,000 shares held of record by trusts for the benefit of Mr. Szulik’s children. Mr. Szulik disclaims beneficial ownership of these shares. Also includes 44,150 shares held of record by the Matthew J. Szulik GRAT dated May 26, 1999. Also includes 4,095,139 shares of common stock issuable upon exercise of stock options and 500,000 shares of common stock issuable upon exercise of restricted stock purchase rights.

(8)	Includes 2,817,239 shares of common stock issuable upon exercise of stock options.

(9)	Includes 51,666 shares of common stock issuable upon exercise of stock options.

(10)	Includes 158,749 shares of common stock issuable upon exercise of stock options.

(11)	Includes 140,625 shares of common stock issuable upon exercise of stock options.

(12)	Includes 106,250 shares of common stock issuable upon exercise of stock options.

(13)	Includes 45,310 shares of common stock issuable upon exercise of stock options.

(14)	Includes 25,000 shares of common stock issuable upon exercise of stock options.

(15)	Includes 23,333 shares of common stock issuable upon exercise of stock options.

(16)	Includes 7,295,811 shares of common stock issuable upon exercise of stock options and 500,000 shares of common stock issuable upon exercise of restricted stock purchase rights.

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(1)

Excludes perquisites and other personal benefits, the aggregate annual amount of which for each officer was less than the lesser of $50,000 or 10% of the total salary and bonus reported.

(2)

Bonuses are reported in the year earned, even if actually paid in a subsequent year.

(3)

Relocation compensation.

(4)

Mr. Jacobson, who previously served as an executive officer of the Company, was no longer serving in that capacity as of February 28, 2002.

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(1)	Stock options were granted under the Company’s 1999 Stock Option and Incentive Plan at an exercise price equal to the fair market value of the Company’s common stock on the date of grant.

(2)	Represents all options granted to the individual during fiscal 2002 as a percentage of all options granted to employees during fiscal 2002.

(3)

Amounts reported in these columns represent amounts that may be realized upon exercise of the options immediately prior to the expiration of their term assuming the specified compounded rates of appreciation (5% and 10%) on the market value of the Company’s common stock on the date of option grant over the term of the options. These numbers are calculated based on rules promulgated by the Securities and Exchange Commission and do not reflect the Company’s estimate of future stock price growth. Actual gains, if any, on stock option exercises and common stock holdings are dependent on the timing of such exercise and the future performance of the Company’s common stock. There can be no assurance that the rates of appreciation assumed in this table can be achieved or that the amounts reflected will be received by the individuals.

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(1)

Amounts disclosed in this column do not reflect amounts actually received by the Named Officers but are calculated based on the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of the options. The Named Officers will receive cash only if and when they sell the common stock issued upon exercise of the options, and the amount of cash received by such individuals is dependent on the price of the Company’s common stock at the time of such sale.

(2)	Value is based on the difference between the option exercise price and the fair market value at February 28, 2002, the fiscal year-end ($5.89 per share as quoted on the Nasdaq National Market), multiplied by the number of shares underlying the option.

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compensation levels should be competitive with compensation generally being paid to executives in the electronic commerce industry to ensure the Company’s ability to attract and retain superior executives;

•

each individual executive officer’s compensation should reflect the performance of the Company as a whole, the performance of the officer’s business unit, if applicable, and the performance of the executive officer; and

•

a significant portion of executive officer compensation should be paid in the form of equity-based incentives to link closely stockholder and executive interests and to encourage stock ownership by executive officers.

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reviewed and discussed the audited financial statements with management;

•

discussed with the Company’s independent accountants the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU § 380), as modified or supplemented;

•

received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees), as modified or supplemented, and discussed with the independent accountants the basis for their independence; and

•

based on the review and discussions referred to in paragraphs 1-3 above, recommended to the Board of Directors that the audited financial statements be included in the company’s Annual Report on Form 10-K for the last fiscal year for filing with the Securities and Exchange Commission.

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A.	The lines represent monthly index levels derived from compounded daily returns that include all dividends.

B.	If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

C.	The Index level for all series was set to 100.0 on August 11, 1999.

D.

This graph is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

E.

The stock price performance shown on the graph is not necessarily indicative of future price performance. Information used on the graph was obtained from the Media General Financial Services, Richmond, Virginia, a source management believes to be reliable, but the Company is not responsible for any errors or omissions in such information.

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1.	To elect two members to the Board of Directors to serve for a three-year term as a Class II Director:

2.	To ratify the selection of PricewaterhouseCoopers LLP as the Company’s auditors for the year ending February 28, 2003.

3.	To transact such other business as may properly come before the meeting and any adjournment thereof.