Document:

Representative Form of Stock Option Grant Agreement under the ECAP

 Exhibit 10.7 
  
 NON-STATUTORY STOCK OPTION AGREEMENT 
  

SUN MICROSYSTEMS, INC. (the “Company”), a Delaware corporation, hereby grants to
             (the “Optionee”), an option to purchase a total of              shares of
Common Stock (the “Shares”), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the 1996 Equity Compensation Acquisition Plan (the “Plan”) adopted by the Company
which is incorporated herein by reference. The terms defined in the Plan shall have the same defined meanings herein. 
  
 1) NATURE OF THE OPTION 
  
 This option is intended by the Company and the Optionee to be a nonstatutory stock option, and does not qualify for any special tax benefits to the
Optionee. This option is not an Incentive Stock Option and is not subject to Section 7(g) of the Plan. 
  
 2) OPTION PRICE 
  
 The option Price is      for each share of Common Stock. 
  
 3) EXERCISE OF OPTION 
  
 This option shall be exercisable during its term in accordance with the provisions of Section 7 of the Plan as follows:

  
 (i) RIGHT TO EXERCISE 
  
 (a) Subject to subsections 3(i)(b), (c) and (d), below, this option shall be
exercisable cumulatively, to the extent of 20% of the Shares subject to the option on or after              and to the extent of an additional 20% of the Shares on each yearly
anniversary of such date thereafter. 
  
 (b) Notwithstanding
subsection 3(i)(a), above, and subject to subsections 3(i)(c), 7 and 8, below, in the event of Optionee’s death or disability, this option shall be exercisable cumulatively, to the extent of 1.6667% of the Shares subject to the option on or
after one month following the vesting commencement date and to the extent of an additional 1.6667% of the Shares on each monthly anniversary of such date thereafter. 
  
 (c) This option may not be exercised for a fraction of a share. 
  
 (d) In the event of Optionee’s termination of employment, the
exercisability of the option is governed by Section 6 below. 
  
 (ii) METHOD OF EXERCISE 
  
 This option shall be exercisable by written notice which shall state the election to exercise the option, the number of Shares in respect of which the option is being exercised, and such other representations and agreements as to the
holder’s investment intent with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee, shall be delivered in person or by certified
mail to the Treasury Department of the Company, and shall be accompanied by payment of the purchase price. 
  
 4) METHOD OF PAYMENT 
  
 Payment of the purchase price shall be by any of the following, or a combination thereof, at the election of the Optionee: cash, check, surrender of other
shares of Common Stock of the Company of a value equal to the purchase price of the shares as to which the option is exercised, or the Optionee may elect to transact a “same-day-sale” thereby executing a “cash-less” option
exercise provided such a sale does not violate any applicable Federal or State laws or regulations”. 
  
 5) RESTRICTIONS ON EXERCISE 
  
 This option may not be exercised if the issuance of such shares upon such exercise would constitute a violation of any applicable Federal or State
Securities or other law or regulation, including any rule under Regulation G as promulgated by the Federal Reserve Board. As a condition to the exercise of this option, the Company may require the Optionee to make any representation and warranty to
the Company as may be required by any applicable law or regulation. 
  
 6) TERMINATION OF STATUS AS AN EMPLOYEE 
  
 (i) Subject to Sections 6(ii) and 10 below, if Optionee ceases to serve as an Employee, he may, but only within 90 days after the date he ceases to be an Employee of the Company, exercise his option to the extent that
he was entitled to exercise it at the date of such termination. To the extent that he was not entitled to exercise the option at the date of such termination, and to the extent that he does not exercise the exerciseable portion of the option within
the time specified herein, the option shall terminate. 
  
 (ii)
Retirement 
  
 (a) For purposes of this Agreement the term
“retirement” shall mean the Optionee’s voluntary resignation from the Company: (1) at or after attaining age 55 and (2) with a number of full years of service with the Company that when added to Optionee’s age (in full years),
the sum equals or exceeds 65, (b) Notwithstanding subsection 6(i) above, in the case of an Optionee who is not in a job classification of director-level or above and who ceases to serve as an Employee by reason of retirement (as defined above), then
for purposes of this Agreement, the option shall remain outstanding and shall be exercisable as though the Optionee had remained in Continuous Status as an Employee for twelve (12) months after the date of retirement. Subject to earlier termination
under Section 10 below, such Optionee may, but only within ninety (90) days after the end of such twelve (12)-month period, exercise his/her option to the extent that Optionee was entitled to exercise it at the end of such twelve (12)-month period.
To the extent that Optionee was not entitled to exercise the option at the end of such twelve (12)-month period and to the extent Optionee does not exercise the exercisable portion of the option within the time specified herein, the option shall
terminate. 
  
 (c) Nothwithstanding Section 6(i) above, in the
case of an Optionee (1) who is in a job classification of director-level or above, (2) who ceases to serve as an Employee by reason of retirement (as defined above) and (3) who during the period beginning on the date of retirement and ending fifteen
(15) months thereafter, does not directly or indirectly solicit, encourage or take any other action which is intended to induce or encourage, or has the effect of inducing or encouraging any employee of the Company to terminate his or her employment
with the Company, then, subject to earlier termination under Section 10 below, for purposes of this Agreement, the option shall remain outstanding and exerciseable for fifteen (15) months after the date of retirement, to the extent that Optionee was
entitled to exercise it at the date of retirement. To the extent the Optionee was not entitled to exercise the option on the date of retirement and to the extent the Optionee does not exercise the exerciseable portion of the option within the time
specified herein, the option shall terminate. Notwithstanding the foregoing, in the event Optionee breaches the terms set forth in Section 6(ii)(c)(3), the option shall immediately terminate and no longer be exerciseable. 
  
 7) DISABILITY OF OPTIONEE 
  
 Notwithstanding the provisions of Section 6 above and subject to earlier
termination as set forth in Section 10 below, if Optionee is unable to continue his employment relationship with the Company as a result of his total and permanent disability (as defined in Section 22(e)(3) of the Code), he may, but only within six
(6) months after the date he ceases to be an Employee of the Company and only to the extent of the right to exercise that would have accrued in accordance with Section 3(i)(b) hereof had Optionee remained in Continuos Status as an employee for 12
months after the date of such termination. To the extent that he was not entitled to exercise the option at the date of such termination, and into the extent that he does not exercise the exerciseable portion of the option within the time specified
herein, the option shall terminate. 
  
 8) DEATH
OF OPTIONEE 
  
 Notwithstanding the provisions of Section 6 above
and subject to Section 10 below, in the event of the death of Optionee: 
  
 (i) during the option period while an Employee of the Company and having been in Continuous Status as an Employee since the date of grant of the option, the option may be exercised, at any time within six (6) months
following the date of death, by the Optionee’s estate or by a person who acquired the right to exercise the option by bequest or inheritance, but only to the extent of the right to exercise that would have accrued in accordance with Section
3(i)(b) hereof had the Optionee continued living and remained in Continuous Status as an Employee for 12 months after the date of death; or 
  
 (ii) within one (1) month after the termination of the Optionee’s Continuous Status as an Employee, the option may be exercised, at any time within
six (6) months following the date of death, by the Optionee’s estate or by a person who acquired the right to exercise the option by bequest or inheritance, but only to the extent of the right to exercise that had accrued in accordance with
Section 3(i)(b) hereof at the date of termination. To the extent that he was not entitled to exercise the option at the date of death (in accordance with the above), and to the extent that he does not exercise the exerciseable portion of the option
within the times specified herein, the option will terminate. 
  
 Revised June
2004 – Michael Dillon 

 9) NON-TRANSFERABILITY OF OPTION 
  
 This option may not be transferred in any manner otherwise than by will or
by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by him. The terms of this option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 10) TERM OF OPTION 
  
 This Option may not be exercised more than eight years from the date of
grant of this option, and may be exercised during such term only in accordance with the Plan and the terms of this option. 
  
 11) ADDITIONAL TERMS FOR OPTIONS GRANTED TO EMPLOYEES OUTSIDE THE UNITED STATES 
  
 (i) DATA PRIVACY 
  
 Optionee hereby explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of personal data as described in this document by and among, as applicable, employer (“Employer”), and Company, including its subsidiaries and affiliates, for the exclusive purpose of
implementing, administering and managing Optionee’s participation in the Plan. Optionee understands that the Company and Optionee’s Employer hold certain personal information, including, but not limited to, Optionee’s name, home
address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares
of stock awarded, canceled, exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Optionee understands that Data may be transferred to any third
parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Optionee’s country, or elsewhere, and that the recipient’s country may have different data privacy laws and
protections than Optionee’s country. Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Optionee’s
participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Optionee may elect to deposit any shares of stock acquired upon exercise of the option. Optionee understands that
Data will be held only as long as is necessary to implement, administer and manage Optionee’s participation in the Plan. Optionee understands that he or she may, at any time, view Data, request additional information about the storage and
processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting in writing Optionee’s local human resources representative. Optionee understands that withdrawal of consent may affect his or her ability
to exercise or realize benefits from the option. 
  
 (ii)
NATURE OF GRANT 
  
 In accepting the grant, Optionee
acknowledges that: (i) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (ii) the grant of the options is voluntary and occasional and does not create any contractual or other right to receive future
grants of options, or benefits in lieu of options even if options have been granted repeatedly in the past; (iii) all decisions with respect to any such future grants will be at the sole discretion of the Company; (iv) Optionee’s participation
in the Plan shall not create a right to further employment with Optionee’s Employer and shall not interfere with the ability of Optionee’s Employer to terminate Optionee’s employment relationship at any time with or without cause; (v)
Optionee’s participation in the Plan is voluntary; (vi) the value of the option is an extraordinary item of compensation which is outside the scope of Optionee’s employment contract, if any; (vii) the options are not part of normal or
expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (viii) in
the event of involuntary termination of Optionee’s employment, Optionee’s right to receive the options and vest in the options under the Plan, if any, will terminate effective as of the date that Optionee is no longer actively employed
regardless of any reasonable notice period mandated under local law; furthermore, in the event of involuntary termination of employment, Optionee’s right to exercise the options after termination of employment, if any, will be measured by the
date of termination of Optionee’s active employment and will not be extended by any reasonable notice period mandated under local law; (ix) the options have been granted to Optionee in his or her status as an employee of Optionee’s
Employer, and, in the event that Optionee’s Employer is not the Company the option grant can in no event be understood or interpreted to mean that the Company is the Optionee’s employer or that Optionee has an employment relationship with
the Company; (x) the future value of the underlying shares is unknown and cannot be predicted with certainty; (xi) if the underlying shares do not increase in value, the options will have no value; and (xii) no claim or entitlement to compensation
or damages arises from termination of the options or diminution in value of the options or Shares purchased through exercise of the options and Optionee irrevocably releases the Company and Employer from any such claim that may arise. 
  
 (iii) RESPONSIBILITY FOR TAXES  
  
 Optionee hereby acknowledges and agrees that the ultimate liability for any
and all tax, social insurance and payroll tax withholding (“Tax-Related Items”) is and remains Optionee’s responsibility and liability and that the Company and/or Optionee’s Employer (a) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect of the option grant, including the grant, vesting or exercise of the option and the subsequent sale of Shares acquired pursuant to such exercise; and (b) do not commit to
structure the terms of the grant or any aspect of the option to reduce or eliminate Optionee’s liability for Tax-Related Items. Prior to exercise of the option, Optionee shall pay or make adequate arrangements satisfactory to the Company and/or
Optionee’s Employer to satisfy all withholding obligations of the Company and/or Optionee’s Employer. In this regard, Optionee authorizes the Company and/or the Optionee’s Employer to withhold all applicable Tax-Related Items legally
payable by Optionee from Optionee’s wages or other cash compensation paid to Optionee by the Company and/or Optionee’s Employer or from proceeds of sale. Alternatively, or in addition, if permissible under local law, the Company may sell
or arrange for the sale of Shares that Optionee is due to acquire to meet the minimum withholding obligation for Tax Related Items. Any estimated withholding which is not required in satisfaction of any Tax Related Items will be repaid to Optionee
by the Company or Optionee’s Employer. Finally, Optionee shall pay to the Company or Optionee’s Employer any amount of any Tax Related Items that the Company or Optionee’s Employer may be required to withhold as a result of
Optionee’s participation in the Plan or Optionee’s purchase of Shares that cannot be satisfied by the means previously described. 
  

					
	 DATE OF GRANT:
 <GRANT_DATE>
	 	 APPROVED BY:
 SUN MICROSYSTEMS, INC.,
	 	  

	 	 	 	 	Michael Dillon
	 	 	 	 	Sr. Vice President, General Counsel & Secretary

  
 The Optionee acknowledges receipt of a
copy of the Plan Summary, a copy of which is annexed hereto, and represents that Optionee is familiar with the terms and provisions thereof, and hereby accepts this option subject to all of the terms and provisions thereof. The Optionee hereby
agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or of the Committee upon any questions arising under the Plan. 
  

							
	OPTIONEE SIGNATURE	 	  

	 	DATE SIGNED (DD/MM/YY)	 	  

  
 Revised June 2004 – Michael
DillonU.S. Vice President Severance Plan

 Exhibit 10.10 
  
 SUN MICROSYSTEMS, INC. 
 U.S. VICE PRESIDENT SEVERANCE PLAN 
 AND 
 SUMMARY PLAN DESCRIPTION 
  
 Purpose of Plan 
  
 The Sun Microsystems, Inc. U.S. Vice
President Severance Plan (the “Plan”) provides Notification Benefits and Severance Benefits if your employment terminates because of a Workforce Reduction, Retirement, Mutual Agreement or Involuntary Termination (all defined below).
However, this Plan does not provide benefits if you voluntarily terminate employment or if you are terminated for Cause. You must sign, and not revoke, a Release and Waiver Agreement in order to receive Severance Benefits. 
  
 The Plan is intended to satisfy, where applicable, the obligations of Sun under the Federal
Worker Adjustment and Retraining Notification (“WARN”) Act. 
  
 This
Plan is adopted effective July 1, 2005. In this document “Sun” means Sun Microsystems, Inc., its subsidiaries and its successor or successors. 
  
 This document constitutes both the official plan document and the required summary plan description under ERISA. 
  
 Highlights 
  
 Under this Plan, you are eligible to receive two types of benefits: Notification Benefits and Severance Benefits. 
  
 “Notification Benefits” consist of Notification Pay and employment
transition services. You need not sign a Release and Waiver Agreement in order to receive Notification Benefits. 
  
 “Severance Benefits” consist of a lump sum Severance Payment and Severance COBRA Payment (if eligible). You will not receive Severance Benefits if you do
not sign a Release and Waiver Agreement, or if you sign a Release and Waiver Agreement but revoke it within the seven (7) calendar day revocation period. 
  
 The amount of Severance Benefits available to you depends on whether you are a member of Sun’s Executive Management Group (“EMG”) or a Vice President who
is not a member of the EMG. 
  
 Eligibility 
  
 You are an Eligible Employee under the Plan if you are: 
  

	 	•	 	A regular full-time or part-time Sun employee on the U.S. Payroll; 

  

	 	•	 	Not on the payroll of, or considered an employee of, any Sun subsidiary outside the U.S.; 

  

					
	 Effective Date July 1, 2005
	  	Page 1 of 15	  	 

	 	•	 	Employed at the Vice President level or above; and 

  

	 	•	 	Not a Contingent Worker or Partner Worker (includes independent contractor, consultant or vendor) as defined in Sun’s Headcount Policy. 

  
 If Sun has not classified you as an employee on the date your service with Sun is terminated
and, for that reason, has not withheld employment taxes with respect to you, and you are later determined retroactively to have been a common-law employee of Sun, whether by Sun, a governmental agency or a court, you will nevertheless be ineligible
to receive Plan benefits. 
  
 Conditions For Receiving Plan Benefits

  
 You will receive Plan benefits if you are an Eligible Employee and
meet all of the following conditions: 
  

	 	•	 	You receive a formal written notice that states the date your employment will terminate and that your termination is because of a Workforce Reduction, Retirement, Mutual Agreement,
or Involuntary Termination (“Termination Letter”); 

  

	 	•	 	You abide by any written terms and requirements that Sun may establish as a condition to your receiving Plan benefits; and 

  

	 	•	 	For Severance Benefits only, you sign the Release and Waiver Agreement within a reasonable period of time (as determined by Sun in its sole discretion) after your employment
termination date and do not revoke the Release and Waiver Agreement within the seven (7) calendar day revocation period. 

  
 “Workforce Reduction” for purposes of this Plan means your employment is terminated because of the elimination or coordinated reduction of jobs within
your group, division, department or branch due to a corporate transaction or reorganization, technology change, funding reduction, reduced workload or similar occurrence (including an outsourcing arrangement). A Workforce Reduction also includes a
Material Job Change. A Material Job Change means your job is re-leveled downward and Sun has determined, in its sole discretion, that the re-leveling constitutes a Material Job Change as described in the Global Compensation Treatment for Job Level
Downgrades Policy. 
  
 “Retirement” for the purposes of this Plan
means your voluntary resignation from Sun at or after attaining age 55 and with a number of full years of service with Sun that when added to your age (in full years), the sum equals or exceeds 65. Notwithstanding the foregoing sentence, you must
have a minimum of five (5) full years of service in order to qualify for Retirement. Your resignation will not be considered Retirement if you work in the same or similar profession during the six month period following your termination of
employment. You will be considered to have retired if you perform services for a nonprofit organization following your termination of employment. Sun shall make the determination of whether you have retired in its sole discretion. 

 
 “Mutual Agreement” for purposes of this Plan means that both you and Sun
agree that your employment should terminate. 
  
 “Involuntary
Termination” for purposes of this Plan means termination of your employment for any reason by Sun except for Cause. 
  

					
	 Effective Date July 1, 2005
	  	Page 2 of 15	  	 

 Conditions Under Which You Will Not Receive Plan Benefits 
  
 Even if you are an Eligible Employee, you will not receive Plan benefits if any of the
following apply: 
  

	 	•	 	You are terminated for Cause. “Cause” means (i) misconduct as described in Sun’s Misconduct Policy (HR503) or (ii) documented unsatisfactory job performance. Sun
shall make this determination in its sole discretion. 

  

	 	•	 	You voluntarily terminate employment (including as a result of disability) even if you claim “constructive termination,” prior to your termination date as set forth in
your Termination Letter. 

  

	 	•	 	You decline an offer of a “Comparable Job” at Sun for which, in Sun’s judgment, you are reasonably qualified. A “Comparable Job” is a job
within 50 miles of your current job location at the same or higher salary/job grade as the current job and with at least the same total target cash compensation opportunity. A Comparable Job need not involve the same duties and responsibilities as
your current job. 

  

	 	•	 	You accept another regular job at Sun before your employment at Sun terminates (i.e., a job other than a Temporary Job Assignment, defined below). 

  

	 	•	 	You are on an unpaid personal non-FMLA, non-Military Leave of Absence on the date of the Termination Letter. 

  

	 	•	 	You begin working for another employer (whether regular or temporary) before your employment at Sun terminates. You are required to immediately notify Sun in writing if you begin
another job prior to your termination date. 

  

	 	•	 	Your job is re-leveled for any reason, for example, to reflect your current job duties and responsibilities or to reflect any changes in your job duties and responsibilities. A job
re-leveling is not a Workforce Reduction unless Sun determines, in its sole discretion, that you have experienced a Material Job Change as defined above. 

  

	 	•	 	For Severance Benefits only, you do not timely sign a Release and Waiver Agreement or you timely sign a Release and Waiver Agreement but you revoke it within the seven calendar day
revocation period. 

  
 Temporary Job Assignments

  
 For purposes of this Plan, a “Temporary Job
Assignment” is a job as a Sun employee that is not expected to last more than two years at the time it is offered to you and which is offered to you after you receive a Termination Letter but prior to your employment termination. If you
accept a job which, at the time it is offered to you, is expected to last more than two years, you will be treated as a regular Sun employee and will not receive Plan benefits in connection with the Workforce Reduction, Retirement, Mutual 

  

					
	 Effective Date July 1, 2005
	  	Page 3 of 15	  	 

 
Agreement or Involuntary Termination that occurred immediately prior to your acceptance of your new job at Sun. 
  
 While you are on a Temporary Job Assignment you will not receive Plan benefits. However, at
the end of the Temporary Job Assignment, provided you meet the conditions of the Plan, you will receive Plan benefits in accordance with the terms of the Plan in effect as of the date of the Termination Letter. 
  
 If you accept a Temporary Job Assignment and it has not ended after two years, you will be
treated as if you are in a regular position and will not be eligible for Plan benefits unless and until the new job is part of a Workforce Reduction or you terminate employment as a result of Retirement, Mutual Agreement or Involuntary Termination.
In other words, you will not receive Plan benefits in connection with the Workforce Reduction, Retirement, Mutual Agreement or Involuntary Termination that occurred immediately prior to your acceptance of your new job at Sun. 
  
 Outsourcing Situations 
  
 Additional eligibility requirements apply if your job is eliminated due to outsourcing.
Outsourcing is the transfer of work, a function, a group or an organization at Sun to a vendor The vendor (the “Outsourcing Service Provider”) may seek to hire Sun employees who were previously performing that function or who were
members of the group being outsourced. 
  
 If your position is outsourced, you
will be able to receive Plan benefits, but only if all the following apply: 
  

	 	•	 	You are an Eligible Employee (described above). 

  

	 	•	 	 You do not receive an offer of a Comparable Outsource Job, which is Regular Employment. A “Comparable Outsource Job” is a job at the Outsourcing
Service Provider for which you are qualified, providing the same level of base pay or higher as your Sun job, and which is not anticipated, pursuant to the outsourcing agreement between Sun and the Outsourcing Service Provider, to require you to
relocate to a job location more than 50 miles away from your Sun job location within the first 12 months of your employment with the Outsourcing Service Provider. For purposes of the Plan, if you participate in the iWork program, Sun job location
means your home if you are a home assigned employee or the location of your mailstop if you are a flexible employee. If you work from home or a flexible office based on any arrangement outside of the iWork program, your Sun mailstop is your job
location. For purposes of the Plan, “Regular Employment” is employment with the Outsourcing Service Provider that is on the same terms and conditions as those provided to their other employees and that is anticipated to be ongoing
for an indefinite period. If you are currently working part-time for Sun and you are offered a full-time job by the Outsourcing Service Provider or you are offered a job by the Outsourcing Service Provider that is outside the outsourcing
agreement between the Outsourcing Service Provider and 

  

					
	 Effective Date July 1, 2005
	  	Page 4 of 15	  	 

	 	 
Sun (i.e., your job would not support Sun), you will not be considered to have received an offer of a Comparable Outsource Job, which is Regular Employment.

  

	 	•	 	You fulfill all the regular duties of your Sun job from the date of the outsourcing notice until your last day of work (which may be prior to your termination date) as set forth in
the Termination Letter. For purposes of the Plan, outsourcing notice is a written notice of termination due to outsourcing, which does not contain the date your employment will terminate. 

  

	 	•	 	You meet all the Conditions For Receiving Plan Benefits (described above). 

  
 You will be ineligible to receive Plan benefits if: 
  

	 	•	 	You receive an offer of a Comparable Outsource Job, which is Regular Employment, 

  

	 	•	 	You accept an offer of a Comparable Outsource Job, which is Short-Term Employment (for purposes of the Plan, Short-Term Employment is employment with the Outsourcing Service
Provider that is anticipated, at the time of the job offer, to last less than 12 months), with the Outsourcing Service Provider and the outsourcing agreement between the Outsourcing Service Provider and Sun provides that severance benefits
equivalent to the severance benefits under this Plan will be paid by the Outsourcing Service Provider, or 

  

	 	•	 	You meet any of the Conditions Under Which You Will Not Receive Plan Benefits (described above). 

  
 Notification Benefits 
  
 You need not sign a Release and Waiver Agreement in order to be eligible for Notification Benefits. 
  
 If you are an Eligible Employee and you receive a written Termination Letter that your employment will terminate, you will receive the
following Notification Benefits: 
  

	 	•	 	Notification Pay. You will remain employed for sixteen (16) weeks following the date of your Termination Letter. During this sixteen (16) week period, you will receive your
regularly bi-weekly Pay (defined below under Severance Benefits) and your Sun Flex benefits will continue, but you are not required to work during this time. 

  

	 	•	 	Employment Transition Services (career service assistance) for thirty-nine (39) weeks. The period of Employment Transition services available to you begins running on the
date of your Termination Letter. 

  

	 	•	 	Vesting of Stock Options. If you are eligible for benefits under the Plan due to your Retirement, vesting of your stock options will continue for 15 months after the date of
your Retirement. 

  

					
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 Severance Benefits 
  
 When you receive a Termination Letter, you may choose to sign a Release and Waiver Agreement in order to also receive Severance Benefits.
You will have at least 45 calendar days after your employment termination date to sign the Agreement. If you do not sign and return to Sun a Release and Waiver Agreement within a reasonable period of time after your employment termination
date (as determined by Sun in its sole discretion) or you subsequently revoke the Agreement during the seven (7) calendar day revocation period, you will not be eligible to receive the Severance Payment and the Severance COBRA Payment described
below. You may not sign the Release and Waiver Agreement prior to your employment termination date. 
  
 You will receive the following benefits as soon as administratively practical after Sun receives your signed Release and Waiver Agreement and the revocation period has ended: 
  

	 	•	 	Severance Payment. This is a lump sum payment equal to four (4) weeks Pay (defined below) for each Year of Service (defined below), up to a maximum determined by your
Position (defined below) plus sixteen (16) or thirty-two (32) weeks Pay determined by your Position, and 

  

	 	•	 	Severance COBRA Payment (defined below). This is a lump sum payment based on four (4) weeks of COBRA premiums for each Year of Service up to a maximum determined by your
Position plus sixteen (16) or thirty-two (32) weeks of COBRA premiums determined by your Position. 

  
 The Severance Payment and Severance COBRA Payment will be paid no later than the later of (i) March 15 following the calendar year in which such payments are no longer
subject to a substantial risk of forfeiture or (ii) September 15 following Sun’s fiscal year in which such payments are no longer subject to a substantial risk of forfeiture. Notwithstanding any other provision of the Plan to the contrary, if
the Plan is considered a nonqualified deferred compensation plan under Section 409A(d) of the Internal Revenue Code and the regulations thereunder and you are a “key employee” as defined under Section 409A(a)(2)(B)(i) of the Internal
Revenue Code (in general, one of Sun’s top 50 officers based on compensation), your Severance Payment and Severance COBRA Payment may not be made for 6 months following your employment termination date. 
  
 “Year of Service” for purposes of this Plan means a full or partial year of
service with Sun prior to your employment termination date. A partial year of service will be treated as a full year of service. 
  
 A “Severance COBRA Payment” for purposes of this Plan is based on the monthly COBRA premiums that you would have to pay to continue for a certain period
of time, the medical, dental, and/or vision coverage you had immediately prior to terminating employment. The Severance COBRA Payment is calculated based on the COBRA premiums in effect on your employment termination date. If you are not eligible
for COBRA continuation coverage at the time you terminate employment, for example, 

  

					
	 Effective Date July 1, 2005
	  	Page 6 of 15	  	 

 
because you waived Sun medical, dental and vision coverage, you will not receive a Severance COBRA Payment under this Plan. 
  
 “Pay” for purposes of this Plan (other than for sales-related incentive
based positions) means your base pay as of the date of the Termination Letter, which does not include car allowance, draws or any non-base compensation. “Pay” for sales-related incentive based positions is based on the On-Target
Earnings rate (OTE) effective on the date of the Termination Letter. 
  
 “Position” for purposes of this Plan means an employee’s position as either a member of the EMG or a Vice President who is not a member of the EMG on the date of the Termination Letter as recorded in Sun’s HR
Database. 
  
 Example of Calculation of Severance Payment

  
 Assume you are a Vice President with eight years of service. The
calculation of your Severance Payment is as follows: 
  
 16 weeks
Pay based on the Pay you would have received had you worked for those 16 weeks, plus 20 weeks Pay*, for a total of 36 weeks of Pay. 
  
 *4 weeks Pay per Year of Service x 8 years = 32 weeks but the maximum allowed payment based on Years of Service is 20 weeks Pay. The 16 weeks of Pay is
not included in calculating the maximum payment based on Years of Service. 
  
 Stock Options 
  
 If your employment terminates because of
Retirement and you are eligible to receive benefits under the Plan, your stock options will continue to vest for fifteen (15) months after your employment termination date. Except as provided in the previous sentence, all other terms and conditions
of your option agreement remain the same. 
  
 Sales-Related Incentive Based
Positions 
  
 If you are in a sales-related incentive based position,
commission earnings end effective the date of your Termination Letter. Base pay will be used to determine the payment of unused, accrued vacation in your final paycheck. 
  
 Obligation to Repay Sun 
  
 If you are reemployed by Sun (in any capacity) before the end of the number of weeks used to determine your Severance Benefits, you must repay to Sun the portion of your
Severance Payment for the period that you have been reemployed. 
  
 For example,
if you are a Vice President with eight years of service, you would have received 36 weeks of Pay. If you were then reemployed by Sun 4 weeks following your employment termination date, you would be required to repay to Sun an amount calculated as
follows: 
  
 36 weeks of Severance Payment paid minus 4 weeks of
actual unemployment equals 32 weeks of Severance Payment to be repaid to Sun. 
  

					
	 Effective Date July 1, 2005
	  	Page 7 of 15	  	 

 Reduction of Other Benefits 
  
 Any Notification Pay received under this Plan will reduce the amount of any short term and long term disability benefits you are entitled to
receive under the Sun Microsystems, Inc. Comprehensive Welfare Plan. 
  
 Taxes and Other Deductions 
  
 Sun will withhold all
appropriate federal, state, local, income and employment taxes from your Plan benefit payments. Contributions to Sun’s 401(k) plan and employee stock purchase plan will not be deducted from your Severance Payment or any Notification Pay paid
after your employment termination date. 
  
 Incentive Pay Programs

  
 The Plan does not change the terms of any incentive pay program for
which you may have been eligible at the time of your termination with Sun. 
  
 Accordingly, if you are eligible for incentive pay under a program operated on a quarterly or fiscal year basis (such as SMI Bonus) and terminate employment prior to the last day of a quarter or fiscal year, you will not be eligible to
receive incentive pay for the quarter or fiscal year in which you terminate employment, except to the extent the incentive pay program provides otherwise. Unless the incentive pay program provides otherwise, incentive plan payments will not be
prorated for a partial quarter’s or year’s participation. 
  
 Disability Prior to Employment Termination 
  
 If you
become disabled after receiving a Termination Letter but before you terminate employment, your employment termination date will not change. You should contact SunDial to discuss the employment disability benefits for which you may be eligible.

  
 Death Prior to Employment Termination 
  
 If you die after receiving a Termination Letter but before you sign the Release and Waiver
Agreement, neither you nor your estate will be entitled to any further Plan benefits. 
  
 Leaves of Absence 
  
 If you are on a full-time Medical,
FMLA, State Family Care Leave or Military Leave and your job is part of a Workforce Reduction, you may, in Sun’s sole discretion, be given your Termination Letter either during your leave or at the end of your leave. If you receive the
Termination Letter at the end of your leave of absence, you will receive the Plan benefits for which you are eligible and your employment will be terminated sixteen (16) weeks after your leave of absence ends. If you receive the Termination Letter
while on leave, you may choose to (i) end your leave early and terminate your employment after 

  

					
	 Effective Date July 1, 2005
	  	Page 8 of 15	  	 

 
sixteen (16) weeks (you will receive the Plan benefits for which you are eligible) or (ii) continue your leave (at the end of your leave, you will receive
the Plan benefits for which you are eligible and your employment will be terminated sixteen (16) weeks after your leave of absence ends). In no event will your employment termination date extend beyond 24 months after your Medical Leave began. If
you are on an intermittent Medical, FMLA or State Family Care Leave, the provisions of this section will not apply to you and your employment will be terminated on the employment termination date indicated on the Termination Letter. 
  
 Employees on leaves of absence who are eligible to receive Plan benefits at the end of their
leave, will be covered by the terms of the Plan in effect as of the date their positions were designated by Sun to be part of a Workforce Reduction. 
  
 SUN MICROSYSTEMS, INC. 
 U.S. VICE
PRESIDENT SEVERANCE PLAN 
 SUMMARY OF PLAN BENEFITS 
  
 To receive the Severance Payment and Severance COBRA Payment, 
 the Release and Waiver Agreement must be signed and not revoked. 
 See
Important Notes at the end of Summary. 
  

									
	 SALARY/JOB GRADE

	  	 NOTIFICATION PAY

	  	 EMPLOYMENT
TRANSITION SERVICES

	  	 SEVERANCE PAYMENT

	  	 SEVERANCE COBRA
PAYMENT

	Vice President	  	16 weeks of Pay	  	39 weeks career service assistance	  	16 weeks Pay plus 4 weeks Pay per Year of Service up to 20 weeks	  	16 weeks of COBRA premiums plus 4 weeks of COBRA premiums per Year of Service up to 20 weeks
					
	Executive Management Group	  	16 weeks of Pay	  	39 weeks career service assistance	  	32 weeks Pay plus 4 weeks Pay per Year of Service up to 32 weeks	  	32 weeks of COBRA premiums plus 4 weeks of COBRA premiums per Year of Service up to 32 weeks

  

					
	 Effective Date July 1, 2005
	  	Page 9 of 15	  	 

  
 IMPORTANT NOTES TO SUMMARY
OF PLAN BENEFITS 
  

							
	 NOTIFICATION PAYMENT

	  	 EMPLOYMENT TRANSITION
SERVICES

	  	 SEVERANCE PAYMENT

	  	 SEVERANCE COBRA
PAYMENT

	 1. A Signed Release and Waiver Agreement is not required.
  
 2. Calculated as number of days Pay (base pay or OTE, as applicable). “Pay” has the same meaning as used for Severance Payment.
	  	 1. Career assistance will be provided by an agency designated by Sun.
  
 2. The period of Employment Transition Services begins running on the date of the Termination Letter.
  
 3. A signed Release and Waiver Agreement is not required.
  
 4. Instructions on initiating Employment Transition Services is provided with the
Termination Letter.
	  	 1. Lump sum Severance Payment paid after Sun receives signed Release and Waiver Agreement and period for revoking Agreement has ended.
  
 2. “Pay” (other than for sales-related incentive based positions) means base pay
and does not include any non-base compensation.
  
 3. “Pay” for
sales-related incentive based positions is based on on-target earnings (OTE) effective on the date of the Termination Letter.
  
 4. “Years of Service” for calculating benefits means each full or partial year of service with Sun prior to your employment termination date.
  
 5. The 16 weeks/32 weeks additional payment is not included for purpose of calculating the
maximum payment based on Years of Service.
	  	 1. Lump sum Severance COBRA Payment paid after Sun receives signed Release and Waiver Agreement and period for revoking Agreement has
ended.
  
 2. “Years of Service” for calculating benefits means each
full or partial year of service with Sun prior to your employment termination date.
  
 3. Severance COBRA Payment is based on COBRA premiums in effect on employment termination date.
  
 4. The 16 weeks/32 weeks additional COBRA payment is not included for purpose of calculating the maximum COBRA payment based on Years of Service.

  
 Plan Operation, Administration
and General Provisions 
  
 Other Benefit Plans/Agreements

  
 Your rights and participation in any other Sun benefit plan at
termination of employment are governed solely by the terms of those other plans. Amounts you receive under the Plan will be reduced by any pay in lieu of notice you receive under the Worker Adjustment and Retraining Notice Act (“WARN”), if
any, and by any other type of severance payment you receive under any plan, or agreement, if any (including any payments pursuant to a Sun foreign subsidiary’s or an acquired company’s plan or agreement). 
  
 Amendment and Termination 
  
 Sun reserves the right to modify, suspend or terminate the Plan at any time and for any
reason. Any action amending or terminating the Plan shall be in writing and shall be approved by the Leadership and Development Compensation Committee of the Board of Directors of Sun. 
  

					
	 Effective Date July 1, 2005
	  	Page 10 of 15	  	 

 Unfunded Plan 
  
 All Plan benefits are paid from Sun’s general funds, and each participant is an unsecured general creditor of Sun. Nothing contained in the Plan creates a trust fund
of any kind for your benefit or creates any fiduciary relationship between you and Sun with respect to any of Sun’s assets. Sun is under no obligation to fund the benefits provided under the Plan prior to payment. 
  
 Plan Benefits Cannot Be Assigned 
  
 The rights of any person to any benefit under the Plan may not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of law, including bankruptcy, garnishment, attachment or other creditor’s process. Any act in violation of this rule shall be void. 
  
 No Employment Rights 
  
 Nothing in the Plan may be deemed to give any individual a right to remain employed by Sun or affect Sun’s right to terminate an
individual’s employment at any time, with or without cause. 
  
 Legal
Construction 
  
 The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and, to the extent not preempted by ERISA, California law. 
  
 Plan Administrator 
  
 Sun is the “Plan Administrator” of the Plan as that term is used in ERISA. Sun has full discretionary authority to administer and interpret the plan, including the exclusive right to adopt rules and
procedures to implement the Plan, to interpret in its sole discretion, provisions of the Plan, to decide any questions in connection with the administration of the Plan, or relating to any claim for Plan benefits, including, whether an individual is
eligible for Plan benefits and the amount of Plan benefits. Sun may delegate its responsibilities to other persons, which includes delegation of discretion. Subject to the claims and appeal procedures, the decisions of Sun and its delegatees
relating to the Plan are final and binding on all persons. 
  
 Claims and
Appeal Procedures 
  
 If you disagree with Sun’s determination of
the amount of your benefits or with any other decision Sun may have made regarding your interest in the Plan, you may file a claim with Sun. You must send your claim in writing to: Director, Executive Compensation – U.S. Vice President
Severance Plan, Sun Microsystems, Inc., 4230 Network Circle, M/S USCA23-106, Santa Clara, CA 95054. You should file the claim as soon as possible, but no later than one (1) year after the determination /decision. 
  
 In the event that your claim for benefits is denied in whole or in part, Sun must provide you
written or electronic notification of the denial of the claim, and of your right to appeal the denial. The notice of denial will be set forth in a manner designed to be 

  

					
	 Effective Date July 1, 2005
	  	Page 11 of 15	  	 

 
understood by you, and will include (i) the specific reason or reasons for the denial, (ii) reference to the specific Plan provisions upon which the denial
is based, (iii) a description of any information or material that Sun needs to complete the review and an explanation of why such information or material is necessary, and (iv) an explanation of the Plan’s appeal procedures and the time limits
applicable to such procedures, including a statement of your right to bring a civil action under Section 502(a) of ERISA following a denial on appeal. This notice will be given to you within 90 calendar days after Sun receives the claim, unless
special circumstances require an extension of time – in which case Sun has up to an additional 90 calendar days for processing the claim. If an extension of time for processing is required, notice of the extension will be furnished to you
before the end of the initial 90-day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which Sun expects to render its decision on the claim. 
  
 If your claim for benefits is denied, in whole or in part, you (or your authorized
representative) may appeal the denial by submitting a written appeal to the Appeal Committee within 60 calendar days after you receive the denial. If you fail to appeal a denial within the 60-day period, Sun’s determination will be final and
binding. If you appeal to the Appeal Committee, you (or your authorized representative) may submit comments, documents, records and other information relating to your claim for benefits. You may request (free of charge) reasonable access to, and
copies of, all documents, records, and other information relevant to your claim. 
  
 The Appeal Committee will make a decision on each appeal no later than 60 calendar days following receipt of the appeal. If special circumstances require an extension of time for processing the appeal, the Appeal Committee will make a
decision on the appeal no later than 120 calendar days following receipt of the appeal. If an extension for review is required, notice of the extension will be furnished to you before the extension begins. The extension notice will indicate the
special circumstances requiring an extension and the date by which the Appeal Committee expects to render a decision. The Appeal Committee will give written or electronic notice of its decision to you after its decision is made. In the event that
the Appeal Committee confirms the denial of the claim for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by you, (i) the specific reason or reasons for the decision, (ii) reference to the specific Plan
provisions upon which the decision is based, (iii) a statement that you may request (free of charge) reasonable access to, and copies of, all documents, records, and all other information relevant to your claim, and (iv) a statement of your right to
bring an action under Section 502(a) of ERISA. 
  
 No legal action for benefits
under the Plan may be brought until you (i) have submitted a written claim for benefits in accordance with the procedures described above, have been notified by Sun that the claim is denied, have filed a written appeal in accordance with the appeal
procedures described above, and have been notified that the Appeal Committee has denied the appeal, or (ii) Sun or the Appeal Committee fail to follow these procedures. No legal action may be commenced or maintained against the Plan, Sun or 

  

					
	 Effective Date July 1, 2005
	  	Page 12 of 15	  	 

 
the Appeal Committee more than two (2) years after the Appeal Committee denies your appeal or Sun or the Appeal Committee fail to follow these procedures.

  
 If you wish to take legal action after exhausting the appeal procedures, you
may serve process on Sun at the address indicated in the section below entitled “Plan Information.” 
  
 Plan Information 
  
 Plan
Governed by ERISA 
  
 The Plan is an employee welfare benefit plan subject to
ERISA. The Plan is subject to most of the provisions of Title I of ERISA. However, it is not subject to Title IV of ERISA, which includes the plan termination insurance provisions. 
  
 Address of Sun 
  
 The principal executive office of Sun Microsystems, Inc. is 4150 Network Circle, Santa Clara, California 95054. Its telephone number is (650) 960-1300. 
  
 Identification Numbers 
  
 Sun’s Employer Identification Number (EIN) is 94-2805249. The Plan Number assigned to the Plan is 540. 
  
 Type of Plan 
  
 The Plan is a welfare benefit plan providing special severance benefits to eligible employees. All benefits under the Plan are paid directly
by Sun to participants. 
  
 Plan Year 
  
 The Plan’s year ends on December 31. 
  
 Service of Process 
  
 The Plan’s agent for service of legal process is: 
  
 General Counsel 
 Legal Department 
 Sun Microsystems, Inc. 
 4120 Network Circle, MS USCA 12-202 
 Santa Clara, CA 95054 
  
 Statement of ERISA Rights and Protections 
  
 As a participant in the Sun Microsystems, Inc. U.S. Vice President Severance Plan, you are
entitled to certain rights and protections under ERISA. ERISA provides that all plan participants are entitled to: 
  
 Receive Information About your Plan and Benefits 
  
 Examine, without charge, at the plan administrator’s office - and at other specified locations - all documents governing the Plan and a copy of the latest annual
report (Form 

  

					
	 Effective Date July 1, 2005
	  	Page 13 of 15	  	 

 
5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security
Administration. 
  
 Obtain, upon written request to the plan administrator, copies
of documents governing the operation of the plan, copies of the latest annual report (Form 5500 Series) and updated summary plan description (there may be a reasonable charge for the copies). 
  
 Prudent Actions by Plan Fiduciaries 
  
 In addition to creating rights for plan participants, ERISA imposes obligations on those
responsible for the operation of the Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including Sun or
any other individual, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. 
  
 Enforce Your Rights 
  
 If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision
without charge, and to appeal any denial, all within certain time schedules. 
  
 Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan administrator and do not receive them within 30 days, you may file suit
in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive them, unless the materials were not sent because of reasons beyond the administrator’s
control. If your claim for benefits is denied or ignored, in whole or in part, and you have been through the Plan’s appeal procedures, you may sue in a state or Federal court. If it should happen that plan fiduciaries misuse the Plan’s
money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are
successful, the court may order the person you sued to pay these legal costs and fees. If you lose, the court may order you to pay these costs and fees (for example, if it finds your claim is frivolous). 
  
 Assistance With Your Questions 
  
 If you have questions about the Plan, you should contact the plan administrator. If you have
questions about this statement or your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C., 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. 
  

					
	 Effective Date July 1, 2005
	  	Page 14 of 15	  	 

 Execution 
  
 To record the adoption of the Plan effective July 1, 2005 as set forth herein, Sun Microsystems, Inc. has caused its authorized representative to sign this document the
         day of June, 2005. 
  

			
	Sun Microsystems, Inc.
		
	By:	 	 

			
	 Printed Name:
	 	 William N. MacGowan

			
	 Title:
	 	 Senior Vice President, Human Resources

  

					
	 Effective Date July 1, 2005
	  	Page 15 of 15

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