Exhibit 10.1

Sun Microsystems, Inc.

4150 Network Circle

Santa Clara, CA 95054

 

December 8, 2008

 

Southeastern Asset Management, Inc.

6410 Poplar Avenue, Suite 900

Memphis, TN 38119

Re: Letter Agreement

Ladies and Gentlemen:

This letter agreement confirms the understanding and agreement between Sun
Microsystems, Inc., a Delaware corporation (the “Company”), on the one hand, and
Southeastern Asset Management, Inc. (“Southeastern”), on the other hand, as
follows:

1. Board Matters. As soon as reasonably practicable, the Company agrees to
appoint two persons nominated by Southeastern (the “Board Designees”) to the
Board of Directors and agrees to, if necessary, expand its Board of Directors by
up to two members to create vacancies for such purpose; provided, however, that
no such appointments shall be required unless each such Board Designee shall
(i) be qualified and suitable to serve as a member of the Board of Directors
under all applicable corporate governance policies or guidelines of the Company
and the Board of Directors and applicable legal, regulatory and stock market
requirements, (ii) meet the independence requirements with respect to the
Company of Section 4200(a)(15) of the Rules of The Nasdaq Global Select Market
or any successor thereto, and (iii) be acceptable to the Board of Directors
(including the Corporate Governance and Nominating Committee of the Board of
Directors) in its good faith discretion. The Southeastern Parties will take all
necessary action to cause any nominee for Board Designee to make himself or
herself reasonably available for interviews, to consent to such reference and
background checks or other investigations and to provide such information
(including information necessary to determine the nominee’s independence status
under various requirements and institutional investor guidelines as well as
information necessary to determine any disclosure obligations of the Company) as
the Board of Directors or its Corporate Governance and Nominating Committee may
reasonably request. Each Board Designee shall be subject to the policies and
requirements of the Company and its Board of Directors, including the Corporate
Governance Guidelines of the Board of Directors and the Company’s Standards of
Business Conduct, in a manner consistent with the application of such policies
and requirements to other members of the Board of Directors. The Company shall
indemnify the Board Designees and provide the Board Designees with director and
officer insurance to the same extent it indemnifies and provides insurance for
the members of the Board of Directors pursuant to its organizational documents,
applicable law or otherwise.

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2. Insider Trading. Southeastern hereby acknowledges that it is aware that the
United States securities laws prohibit, among other things, any person who has
obtained from the Company or any of its agents material, non-public information
with respect to the Company from transacting in the securities of the Company or
from communicating such information to any other person under circumstances in
which it is reasonably foreseeable that such person is likely to transact in
such securities. Southeastern hereby agrees to comply with such laws.

3. Public Disclosure. Promptly after execution of this letter agreement, the
Company and Southeastern shall issue a joint press release concerning the
subject matter of this letter agreement in a form mutually agreeable to the
parties. In addition, Southeastern agrees to participate in reasonable joint
marketing efforts with the Company relating to the content of the press release.
All statements attributable to Southeastern in any public disclosure must be
approved by Southeastern prior to use.

4. Entire Agreement. This letter agreement contains the entire agreement between
and among the parties concerning the subject matter of this letter agreement and
supersedes all prior agreements and understandings with respect to such subject
matter.

5. Governing Law. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.

6. Assignment. This letter agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assignees.
This letter agreement may not be assigned by the Company without the consent or
other approval of Southeastern. This letter agreement may not be assigned by
Southeastern without the prior written consent of the Company.

7. Amendment. Except as expressly provided herein, neither this letter agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

8. Termination. This letter agreement shall automatically terminate and be of no
further force or effect, without any action on the part of any of the parties
hereto, in the event of the sale of substantially all of the Company’s assets or
a change of control of the Company, which shall be deemed to include, among
other things, (i) any transaction or series of related transactions pursuant to
which the stockholders of the Company prior to such transaction or series of
transactions hold less than a majority of the voting power of the Company or any
successor in interest thereto or less than a majority in interest of all or
substantially all of the assets of the Company, and (ii) any transaction or
series of related transactions pursuant to which the members of the Board prior
to such transaction or series of transactions constitute less than a majority of
the members of the Board or the board of directors of any successor in interest
thereto.

 

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9. Notices. All notices and other communications pursuant to this letter
agreement shall be in writing and shall be delivered personally, sent by
facsimile (with receipt confirmed), sent by nationally-recognized overnight
courier or mailed by registered or certified mail (return receipt requested),
postage prepaid, to the respective parties at the following address (or at such
other address for a party as shall be specified by like notice):

If to the Company:

Sun Microsystems, Inc.

10 Network Circle

Mailstop MPK 10-141

Menlo Park, CA 94025

Attention: Michael A. Dillon

                  Executive Vice President, General Counsel

                  and Corporate Secretary

Telephone: (650) 786-3690

Facsimile: (650) 786-2368

 

If to Southeastern:

Southeastern Asset Management, Inc.

6410 Poplar Avenue, Suite 900

Memphis, TN 38119

Attention: Andrew R. McCarroll

                  Vice President & General Counsel

Telephone: (901) 761-2474

Facsimile: (901) 260-0885

Each such notice or other communication shall for all purposes of this letter
agreement be treated as effective or having been given: (i) if delivered
personally, when delivered, (ii) if sent by facsimile, upon confirmation of
facsimile transfer, (iii) if sent by nationally-recognized overnight courier, on
the first business day after the business day on which the same has been
deposited with such overnight courier, or (iv) if sent by registered or
certified mail, at the earlier of its receipt or 72 hours after the same has
been deposited in a regularly-maintained receptacle for the deposit of the
United States mail, addressed and mailed as aforesaid.

10. Further Assurances. The parties hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments or documents as any
other party may reasonably request from time to time in order to carry out the
intent and purposes of this letter agreement and the consummation of the
transactions contemplated hereby. Neither the Company nor Southeastern shall
voluntarily undertake any course of action inconsistent with satisfaction of the
requirements applicable to them set forth in this letter agreement and each
shall promptly do all such acts and take all such measures as may be

 

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appropriate to enable them to perform as early as practicable the obligations
herein and therein required to be performed by them.

11. Facsimile; Counterparts. This letter agreement may be executed by facsimile
and in two or more counterparts, each of which may be executed by fewer than all
of the parties hereto, each of which shall be fully enforceable against each of
the other parties hereto actually executing such counterparts, and all of which
together shall constitute one and the same instrument, enforceable against all
of the parties hereto.

12. Severability. In the event that any term or provision of this letter
agreement shall become, or is declared by a court of competent jurisdiction to
be, illegal, unenforceable or void, this letter agreement shall continue in full
force and effect without said term or provision as close as possible to the
intent of the parties hereto.

[Remainder of page intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this letter
agreement as of the date first written above.

 

SUN MICROSYSTEMS, INC. By:   /s/ Craig Norris     Name:    Craig Norris Title:  
Vice President, Corporate Law, and Assistant Secretary SOUTHEASTERN ASSET
MANAGEMENT, INC. By:   /s/ Andrew R. McCarroll     Title:   Andrew R. McCarroll
Name:   VP & General Counsel By:   /s/ Jason E. Dunn     Name:   Jason E. Dunn
Title:   VP

 

 

 

 

 

 

 

 

 

 

 

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