Letter Agrmnt btwn Sun Micorsystems, Inc. and Southeastern Asset Management, Inc



 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. 







 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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