SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
Amendment No. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
Of 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________ to _______________
Commission file number: 0-15086
SUN MICROSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
--------------------------------------
Delaware 94-2805249
(State of incorporation) (I.R.S. Employer
Identification No.)
901 San Antonio Road (650)-960-1300
Palo Alto, CA 94303
(Address of principal executive (Registrant's telephone number,
offices, including zip code) including area code)
------------------------------
Securities pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act:
Common Stock
Common Share Purchase Rights
------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference on Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
The aggregate market value of the voting stock held by non-affiliates
of the Registrant, as of September 16, 1997, was approximately $19,019,000,000
based upon the last sale price reported for such date on the Nasdaq National
Market System. For purposes of this disclosure, shares of Common Stock held by
persons who hold more than 5% of the outstanding shares of Common Stock and
shares held by officers and directors of the Registrant have been excluded
because such persons may be deemed to be affiliates. This determination is not
necessarily conclusive.
The number of shares of the Registrant's Common Stock outstanding as of
September 16, 1997 was 374,288,574.
----------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the Annual Report to Stockholders for the fiscal year ended June
30, 1997 are incorporated by reference into Items 1,5,6,7,8 and 14 hereof.
Parts of the Proxy Statement for the 1997 Annual Meeting of Stockholders
are incorporated by reference into Items 10, 11, 12 and 13 hereof.
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements that are incorporated herein by reference to the
following in Sun's 1997 Annual Report to Stockholders.
Consolidated Statements of Income for each of the three years in the
period ended June 30, 1997 (page 26).
Consolidated Balance Sheets at June 30, 1997 and 1996 (page 27).
Consolidated Statements of Cash Flows for each of the three years in
the period ended June 30, 1997 (page 28).
Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended June 30, 1997 (page 29).
Notes to Consolidated Financial statements (pages 30 through 43).
Report of Ernst & Young LLP, Independent Auditors (page 44).
The Company's 1997 Annual Report to Stockholders is not deemed filed as
part of this report except for those parts specifically incorporated herein
by reference.
2. Financial Statement schedule:
Page Schedule Title
-------------------------------------------------
S-1 II Valuation and Qualifying Accounts
All other schedules have been omitted since the required information is not
present or is not present in amounts sufficient to require submission of
the schedule, or because the information required is included in the
consolidated financial statements, including the notes thereto.
19
<PAGE>
3. Exhibits
Exhibit
Number Description
------ -----------
3.2(9) Bylaws of Registrant, as amended. 3.3(8) Certificate of Amendment
of the Restated Certificate of Incorporation of Registrant.
3.3(19) Registrant's Amended and Restated Certificate of Incorporation
(as amended to date).
4.3(9) First Amended and Restated Common Shares Rights Agreement dated
December 14, 1990, between Registrant and The First National Bank
of Boston.
4.4(11) Amendment dated as of October 28, 1991 to the First Amended and
Restated Common Shares Rights Agreement dated December 14, 1990.
4.5(12) Second Amendment dated as of August 5, 1992 to the First Amended
and Restated Common Shares Rights Agreement dated December 14,
1990.
4.6(17) Third Amendment dated as of November 2, 1994 to First Amended and
Restated Common Shares Rights Agreement dated December 14, 1990.
4.7(17) Fourth Amendment dated as of November 1, 1995 to First Amended
and Restated Common Shares Rights Agreement dated December 14,
1990.
10.1(1) Technology Transfer Agreement dated February 27, 1982, for the
purchase by the Registrant of certain technology for cash, and
related Assumption Agreement dated February 27, 1982.
10.3(1) Form of Founders' Restricted Stock Purchase Agreement.
10.8(1) Registration Rights Agreement dated as of November 26, 1984.
10.8A(1) Amendment to Registration Rights Agreement.
10.9(3) Registrant's 1982 Stock Option Plan, as amended, and
representative forms of Stock Option Agreement.
10.10(3) Registrant's Restricted Stock Plan, as amended, and
representative form of Stock Purchase Agreement.
10.11(10) Registrant's 1984 Employee Stock Purchase Plan, as amended.
10.21(1) License Agreement dated July 26, 1983, by and between Registrant
and The Regents of the University of California.
10.22(1) Software Agreement effective as of April 1, 1982 by and between
Registrant and American Telephone and Telegraph Company, and
Supplemental Agreement dated effective as of May 28, 1983.
10.48(3) Registrant's 1987 Stock Option Plan and representative form of
Stock Option Agreement.
10.56(4) Building Loan Agreement dated May 11, 1989, between Sun
Microsystems Properties, Inc. and the Toyo Trust and Banking
Company Limited, New York Branch and the related Promissory Note;
First Deed of Trust, Assignment of Leases, Rents and Other Income
and Security Agreement; Guaranty of Payment; Guaranty of
Completion (Sun Microsystems Properties, Inc.); Guaranty of
Completion (Sun Microsystems, Inc.; Shortfall Agreement and
Indemnity.
20
<PAGE>
Exhibit
Number Description
------ -----------
10.64(8) Registrant's 1988 Directors' Stock Option Plan and representative
form of Stock Option Agreement.
10.65(16) Registrant's 1990 Employee Stock Purchase Plan, as amended on
August 9, 1995.
10.66(15) Registrant's 1990 Long-Term Equity Incentive Plan, as amended on
August 15, 1996.
10.66A(10) Representative form of agreement to Registrant's 1990 Long-Term
Equity Incentive Plan.
10.73(10) Representative form of letter dated June 25, 1991 between the
Registrant and the insurance companies who are parties to the
Note and Warrant Purchase Agreements dated September 16, 1986 and
December 15, 1989.
10.74(10) Software Distribution Agreement dated January 28, 1991 by and
between the Registrant and UNIX Systems Laboratories, Inc.
10.77(14) Lease Agreement between BNP Leasing Corporation and Registrant,
effective as of September 25, 1992.
10.82(20) Restated Revolving Credit Agreement dated August 27, 1997,
between the Registrant; Citicorp USA, Inc.; Bank of America
National Trust and Savings Association; ABN AMRO Bank N.V.; The
First National Bank of Boston; Barclays Bank PLC; Morgan Guaranty
Trust Company of New York; The Fuji Bank Limited, San Francisco
Agency: The Toyo Trust and Banking Co. Ltd.: The Sumitomo Bank,
Limited; The Sakura Bank Limited, San Francisco Agency; Banque
Nationale de Paris; Bayerische Vereinsbank AG, Los Angeles
Agency; The Industrial Bank of Japan, Limited, San Francisco
Agency; The Bank of New York; Cariplo - Cassa Di-Risparmio Delle
Provincie Lombade SPA; Corestes Bank NA; The Northern Trust
Company, Royal Bank Of Canada, Union Bank of California.
10.84(20) Registrant's Non-Qualified Deferred Compensation Plan dated July
1, 1995, as amended and restated effective October 1, 1997.
10.85(16) Registrant's Section 162 (m) Executive Officer Performance-Based
Bonus Plan dated August 9, 1995.
10.86(15) First Amendment to Lease Agreement between BNP Leasing
Corporation and Registrant, effective as of September 23, 1994.
10.87(20) The Sun Microsystems, Inc. Equity Compensation Acquisition Plan,
as amended.
10.89(18) Form of Change of Control Agreement executed by each corporate
executive officer of Registrant.
10.90(18) Form of Change of Control Agreement executed by Chief Executive
Officer of Registrant.
10.91(18) Form of Vice President Change of Control Severance Plan.
10.92(18) Form of Director - Level Change of Control Severance Plan.
11(20) Statement of Computation of Earnings per Share.
13.0(20) 1997 Annual Report to Stockholders (to be deemed filed only to
the extent required by the instructions to exhibits for reports
on Form 10-K).
22.0(20) Subsidiaries of Registrant.
21
<PAGE>
23.1 Consent of Ernst & Young LLP, Independent Auditors.
24(20) Power of Attorney (See page 25).
27(20) Financial Data Schedule.
22
<PAGE>
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (No. 33-2897), which became effective March 4, 1986.
(2) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1987.
(3) Incorporated by reference to Exhibits 19.1, 19.3 or 19.4, filed as
Exhibits to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 25, 1987.
(4) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1989.
(5) Not used.
(6) Not used.
(7) Not used.
(8) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1990.
(9) Incorporated by reference to Exhibits 3.1 and 4.1 filed as exhibits to
the Registrant's Report on Form 8-K filed on December 28, 1990.
(10) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1991.
(11) Incorporated by reference to Exhibit 4.0 filed as an exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 27, 1991.
(12) Incorporated by reference to Exhibit 3 filed as an exhibit to the
Registrant's Form 8 Amendment No. 3 to Registration Statement on Form
8-A filed on September 16, 1992.
(13) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1992.
(14) Not used.
(15) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996.
(16) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1995.
(17) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended October 1, 1995.
(18) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Quarterly Report on Form 10-Q for the quarter
ended December 29, 1996.
(19) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 29, 1996.
(20) Previously filed as exhibits to Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1997 filed on September 26, 1997.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SUN MICROSYSTEMS, INC.
Registrant
October 15, 1997
By: /s/ MICHAEL E. LEHMAN
------------------------------------------
Michael E. Lehman
Vice President and Chief Financial Officer
24
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott G. McNealy and Michael E. Lehman jointly
and severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendments to this Report on Form
10-K, and file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, which include the Chief
Executive Officer, the Chief Financial Officer and Corporate Controller and a
majority of the Board of Directors, on behalf of the registrant and in the
capacities and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
SCOTT G. McNEALY* Chairman of the Board of Directors, October 15, 1997
- ---------------------------- President and Chief Executive Officer
(Scott G. McNealy) (Principal Executive Officer)
/s/ MICHAEL E. LEHMAN Vice President and Chief Financial October 15, 1997
- ---------------------------- Officer (Principal Financial Officer)
(Michael E. Lehman)
GEORGE REYES* Vice President and Corporate Controller October 15, 1997
- ---------------------------- (Principal Accounting Officer)
(George Reyes)
L. JOHN DOERR* Director October 15, 1997
- ----------------------------
(L. John Doerr)
JUDITH L. ESTRIN* Director October 15, 1997
- ----------------------------
(Judith L. Estrin )
ROBERT J. FISHER* Director October 15, 1997
- ----------------------------
(Robert J. Fisher)
ROBERT L. LONG* Director October 15, 1997
- ----------------------------
(Robert L. Long)
M. KENNETH OSHMAN* Director October 15, 1997
- ----------------------------
(M. Kenneth Oshman)
A. MICHAEL SPENCE* Director October 15, 1997
- ----------------------------
(A. Michael Spence)
*By: /s/ MICHAEL E. LEHMAN Vice President and Chief Financial
- ---------------------------- Officer (Principal Financial Officer)
(Michael E. Lehman)
</TABLE>
<PAGE>
INDEX to EXHIBITS
Exhibit
Number Description
------ -----------
3.2(9) Bylaws of Registrant, as amended. 3.3(8) Certificate of Amendment
of the Restated Certificate of Incorporation of Registrant.
3.3(19) Registrant's Amended and Restated Certificate of Incorporation
(as amended to date).
4.3(9) First Amended and Restated Common Shares Rights Agreement dated
December 14, 1990, between Registrant and The First National Bank
of Boston.
4.4(11) Amendment dated as of October 28, 1991 to the First Amended and
Restated Common Shares Rights Agreement dated December 14, 1990.
4.5(12) Second Amendment dated as of August 5, 1992 to the First Amended
and Restated Common Shares Rights Agreement dated December 14,
1990.
4.6(17) Third Amendment dated as of November 2, 1994 to First Amended and
Restated Common Shares Rights Agreement dated December 14, 1990.
4.7(17) Fourth Amendment dated as of November 1, 1995 to First Amended
and Restated Common Shares Rights Agreement dated December 14,
1990.
10.1(1) Technology Transfer Agreement dated February 27, 1982, for the
purchase by the Registrant of certain technology for cash, and
related Assumption Agreement dated February 27, 1982.
10.3(1) Form of Founders' Restricted Stock Purchase Agreement.
10.8(1) Registration Rights Agreement dated as of November 26, 1984.
10.8A(1) Amendment to Registration Rights Agreement.
10.9(3) Registrant's 1982 Stock Option Plan, as amended, and
representative forms of Stock Option Agreement.
10.10(3) Registrant's Restricted Stock Plan, as amended, and
representative form of Stock Purchase Agreement.
10.11(10) Registrant's 1984 Employee Stock Purchase Plan, as amended.
10.21(1) License Agreement dated July 26, 1983, by and between Registrant
and The Regents of the University of California.
10.22(1) Software Agreement effective as of April 1, 1982 by and between
Registrant and American Telephone and Telegraph Company, and
Supplemental Agreement dated effective as of May 28, 1983.
10.48(3) Registrant's 1987 Stock Option Plan and representative form of
Stock Option Agreement.
10.56(4) Building Loan Agreement dated May 11, 1989, between Sun
Microsystems Properties, Inc. and the Toyo Trust and Banking
Company Limited, New York Branch and the related Promissory Note;
First Deed of Trust, Assignment of Leases, Rents and Other Income
and Security Agreement; Guaranty of Payment; Guaranty of
Completion (Sun Microsystems Properties, Inc.); Guaranty of
Completion (Sun Microsystems, Inc.; Shortfall Agreement and
Indemnity.
<PAGE>
Exhibit
Number Description
------ -----------
10.64(8) Registrant's 1988 Directors' Stock Option Plan and representative
form of Stock Option Agreement.
10.65(16) Registrant's 1990 Employee Stock Purchase Plan, as amended on
August 9, 1995.
10.66(15) Registrant's 1990 Long-Term Equity Incentive Plan, as amended on
August 15, 1996.
10.66A(10) Representative form of agreement to Registrant's 1990 Long-Term
Equity Incentive Plan.
10.73(10) Representative form of letter dated June 25, 1991 between the
Registrant and the insurance companies who are parties to the
Note and Warrant Purchase Agreements dated September 16, 1986 and
December 15, 1989.
10.74(10) Software Distribution Agreement dated January 28, 1991 by and
between the Registrant and UNIX Systems Laboratories, Inc.
10.77(14) Lease Agreement between BNP Leasing Corporation and Registrant,
effective as of September 25, 1992.
10.82(20) Restated Revolving Credit Agreement dated August 27, 1997,
between the Registrant; Citicorp USA, Inc.; Bank of America
National Trust and Savings Association; ABN AMRO Bank N.V.; The
First National Bank of Boston; Barclays Bank PLC; Morgan Guaranty
Trust Company of New York; The Fuji Bank Limited, San Francisco
Agency: The Toyo Trust and Banking Co. Ltd.: The Sumitomo Bank,
Limited; The Sakura Bank Limited, San Francisco Agency; Banque
Nationale de Paris; Bayerische Vereinsbank AG, Los Angeles
Agency; The Industrial Bank of Japan, Limited, San Francisco
Agency; The Bank of New York; Cariplo - Cassa Di-Risparmio Delle
Provincie Lombade SPA; Corestes Bank NA; The Northern Trust
Company, Royal Bank Of Canada, Union Bank of California.
10.84(20) Registrant's Non-Qualified Deferred Compensation Plan dated July
1, 1995, as amended and restated effective October 1, 1997.
10.85(16) Registrant's Section 162 (m) Executive Officer Performance-Based
Bonus Plan dated August 9, 1995.
10.86(15) First Amendment to Lease Agreement between BNP Leasing
Corporation and Registrant, effective as of September 23, 1994.
10.87(20) The Sun Microsystems, Inc. Equity Compensation Acquisition Plan,
as amended.
10.89(18) Form of Change of Control Agreement executed by each corporate
executive officer of Registrant.
10.90(18) Form of Change of Control Agreement executed by Chief Executive
Officer of Registrant.
10.91(18) Form of Vice President Change of Control Severance Plan.
10.92(18) Form of Director - Level Change of Control Severance Plan.
11(20) Statement of Computation of Earnings per Share.
13.0(20) 1997 Annual Report to Stockholders (to be deemed filed only to
the extent required by the instructions to exhibits for reports
on Form 10-K).
22.0(20) Subsidiaries of Registrant.
<PAGE>
23.1 Consent of Ernst & Young LLP, Independent Auditors.
24(20) Power of Attorney (See page 25).
27(20) Financial Data Schedule.
<PAGE>
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (No. 33-2897), which became effective March 4, 1986.
(2) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1987.
(3) Incorporated by reference to Exhibits 19.1, 19.3 or 19.4, filed as
Exhibits to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 25, 1987.
(4) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1989.
(5) Not used.
(6) Not used.
(7) Not used.
(8) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1990.
(9) Incorporated by reference to Exhibits 3.1 and 4.1 filed as exhibits to
the Registrant's Report on Form 8-K filed on December 28, 1990.
(10) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1991.
(11) Incorporated by reference to Exhibit 4.0 filed as an exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 27, 1991.
(12) Incorporated by reference to Exhibit 3 filed as an exhibit to the
Registrant's Form 8 Amendment No. 3 to Registration Statement on Form
8-A filed on September 16, 1992.
(13) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1992.
(14) Not used.
(15) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996.
(16) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1995.
(17) Incorporated by reference to identically numbered exhibits filed as
exhibits to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended October 1, 1995.
(18) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Quarterly Report on Form 10-Q for the quarter
ended December 29, 1996.
(19) Incorporated by reference to identically numbered exhibits filed as
exhibits to Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 29, 1996.
(20) Previously filed as exhibits to Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1997 filed on September 26, 1997.
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K/A)
of Sun Microsystems, Inc. of our report dated July 16, 1997, included in the
1997 Annual Report to Stockholders of Sun Microsystems, Inc.
Our audits also included the financial statement schedule of Sun Microsystems,
Inc. listed in Item 14(a). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-9293, 33-11154, 33-15271, 33-18602, 33-25860, 33-28505,
33-33344, 33-38220, 33-51129, 33-56577, 333-01459, 333-09867, 333-15179,
333-34543, and 333-34651) pertaining to the 1982 Incentive Stock Option Plan,
the Restricted Stock Plan, the 1984 Employee Stock Purchase Plan, as amended,
the 1987 Stock Option Plan, the 1988 Director Stock Option Plan, the 1989 French
Stock Option Plan, the 1990 Employee Stock Purchase Plan, the 1990 Long-Term
Equity Incentive Plan, the Equity Compensation Acquisition Plan of Sun
Microsystems, Inc., and the U.S. Non-Qualified Deferred Compensation Plan and in
the related Prospectus of our report dated July 16, 1997, with respect to the
consolidated financial statements incorporated herein by reference and our
report included in the preceding paragraph with respect to the financial
statement schedule included in this Annual Report (Form 10-K/A) of Sun
Microsystems, Inc.
Ernst & Young LLP
Palo Alto, California
October 15, 1997
