As filed with the Securities and Exchange Commission on November 20, 1997
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
SUN MICROSYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-2805249
(State of Incorporation) (I.R.S. Employer
Identification Number)
901 San Antonio Road
Palo Alto, CA 94303
(650) 960-1300
(Address and telephone number of Registrant's principal executive offices)
------------------------------
1990 EMPLOYEE STOCK PURCHASE PLAN
1988 DIRECTORS' STOCK OPTION PLAN
(Full Title of the Plans)
------------------------------
Scott G. McNealy
President
SUN MICROSYSTEMS, INC.
901 San Antonio Road
Palo Alto, CA 94303
(650) 960-1300
(Name, address and telephone number of agent for service)
------------------------------
Copy to:
David J. Segre, Esq.
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed
Maximum Proposed
Amount Offering Maximum Amount of
to be Price Per Aggregate Registration
Title of Securities to be Registered Registered Share(l) Offering Price(1) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.00067 par value to be issued under the
1990 Employee Stock Purchase Plan .......................... 10,000,000 $31.375 $313,750,000.00 $95,076
Common Stock, $.00067 par value to be issued upon
exercise of options granted under the 1988
Directors' Stock Option Plan ............................... 600,000 $31.375 $18,825,000.00 $5,705
Total 10,600,000 $31.375 $332,575,000.00 $100,781
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Proposed Maximum Offering Price Per Share was estimated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended (the "Securities Act") solely for the purpose of calculating the registration fee. The average of the high and the low
price as reported on Nasdaq on November 13, 1997, was $31.375.
</FN>
</TABLE>
<PAGE>
The contents of the Registrant's Forms S-8 Registration Statements,
Registration No.'s 33-38220 and 33-56577, 333-01459, 33-25860, 33-51129, dated
December 14, 1990, November 23, 1994 and March 6, 1996, December 1, 1988,
November 22, 1993, respectively, relating to the 1990 Employee Stock Purchase
Plan and the 1988 Directors' Stock Option Plan are incorporated herein by
reference.
PART II: INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 8. Exhibits
Exhibit
Numbers Documents
- ------- ---------
4.1 1990 Employee Stock Purchase Plan
4.2 1988 Directors' Stock Option Plan
5.1 Opinion of Counsel as to legality of securities being registered
23.1 Consent of Counsel (Contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (Contained in page II-3)
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Sun Microsystems, Inc., a corporation organized and existing under the laws of
the State of Delaware, certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, State of California, on this 20th day
of November, 1997.
SUN MICROSYSTEMS, INC.
By: /s/ MICHAEL E. LEHMAN
---------------------------------
Michael E. Lehman, Vice President
and Chief Financial Officer
II-2
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Scott G. McNealy and Michael E. Lehman,
jointly and severally, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8 and to 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 or her substitute or substitutes, may do or cause to
be done by virtue hereof.
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Scott G. McNealy Chairman of the Board of Directors, November 20, 1997
- ----------------------- President and Chief Executive Officer
Scott G. McNealy (Principal Executive Officer)
/s/ Michael E. Lehman Vice President and Chief Financial November 20, 1997
- ----------------------- Officer (Principal Financial Officer)
Michael E. Lehman
/s/ George Reyes Vice President and Corporate Controller November 20, 1997
- ----------------------- (Principal Accounting Officer)
George Reyes
/s/ L. John Doerr Director November 20, 1997
- -----------------------
L. John Doerr
/s/ Judith L. Estrin Director November 20, 1997
- -----------------------
Judith L. Estrin
/s/ Robert J. Fisher Director November 20, 1997
- -----------------------
Robert J. Fisher
/s/ Robert L. Long Director November 20, 1997
- -----------------------
Robert L. Long
/s/ M. Kenneth Oshman Director November 20, 1997
- -----------------------
M. Kenneth Oshman
/s/ A. Michael Spence Director November 20, 1997
- -----------------------
A. Michael Spence
</TABLE>
II-3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
EXHIBITS
------------------
Registration Statement on Form S-8
SUN MICROSYSTEMS, INC.
November 20, 1997
<PAGE>
SUN MICROSYSTEMS, INC.
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
Exhibit
Numbers Description
- ------- -----------
4.1 1990 Employee Stock Purchase Plan
4.2 1988 Directors' Stock Option Plan
5.1 Opinion of Counsel as to legality of securities being registered
23.1 Consent of Counsel (Contained in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (Contained in page II-3)
SUN MICROSYSTEMS, INC.
1990 EMPLOYEE STOCK PURCHASE PLAN
(Last amended August 13, 1997)
The following constitute the provisions of the 1990 Employee Stock Purchase
Plan of Sun Microsystems, Inc.
1. Purpose. The purpose of the Plan is to provide Employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Code. The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of that Section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean a Committee designated by the Board to
administer the Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan shall be exercised by the Board
and any references herein to the Committee shall be construed as references to
the Board.
(d) "Common Stock" shall mean the Common Stock, $0.00067 par value (as
adjusted from time to time), of the Company.
(e) "Company" shall mean Sun Microsystems, Inc., a Delaware
corporation.
(f) "Compensation", unless otherwise determined by the Committee, shall
mean regular straight time gross earnings, variable compensation for field sales
personnel, certain incentive bonuses, payments for overtime, shift premium, lead
pay and automobile allowances, but shall exclude other compensation.
(g) "Designated Subsidiary" shall mean any Subsidiary which has been
designated by the Committee from time to time in its sole discretion as eligible
to participate in the Plan.
(h) "Employee" shall mean any individual whose customary employment
with the Company or any Designated Subsidiary is at least 20 hours per week and
more than five months in any calendar year. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company;
provided that where the period of leave exceeds 90 days and the individual's
right to reemployment is not guaranteed either by statute or by contract, the
employment relationship will be deemed to have terminated on the 91st day of
such leave.
(i) "Enrollment Date" shall mean the first day of each Offering Period.
(j) "Exercise Date" shall mean the last day of each Exercise Period.
(k) "Exercise Period" shall mean a period commencing on an Enrollment
Date or on the day after an Exercise Date and which is of such duration as the
Committee shall determine.
<PAGE>
(1) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:
(i) the last reported sale of the Common Stock of the Company on
the NASDAQ National Market System or, if no such reported sale takes place on
any such day, the average of the closing bid and asked prices, or
(ii) if such Common Stock shall then be listed on a national
securities exchange, the last reported sale price or, if no such reported sale
takes place on any such day, the average of the closing bid and asked prices on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading, or
(iii) if such Common Stock shall not be quoted on such National
Market System nor listed or admitted to trading on a national securities
exchange, then the average of the closing bid and asked prices, as reported by
The Wall Street Journal for the over-the-counter market, or
(iv) if none of the foregoing is applicable, then the fair market
value of a share of Common Stock shall be determined by the Committee in its
discretion.
(m) "Offering Period" shall mean the period beginning with the date an
option is granted under the Plan and ending with the date determined by the
Committee. During the term of the Plan, the duration of each Offering Period
shall be determined from time to time by the Committee, provided that no
Offering Period may exceed 27 months in duration. If determined by the
Committee, an Offering Period may include one or more Exercise Periods.
(n) "Plan" shall mean this 1990 Employee Stock Purchase Plan.
(o) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.
(p) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which has not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
(q) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or by a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or by a Subsidiary.
(r) "Trading Day" shall mean a day on which national stock exchanges
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the total number of shares reserved and available for issuance
pursuant to the Plan shall be 55,800,000. The shares may be either authorized
but unissued or reacquired Common Stock.
4. Eligibility.
(a) Any Employee as defined in Section 2 who shall be employed by the
Company on a given Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent or more
2
<PAGE>
of the total combined voting power or value of all classes of stock of the
Company or of any Subsidiary of the Company, or (ii) which permits his or her
rights to purchase stock in any calendar year under all employee stock purchase
plans of the Company and its Subsidiaries to exceed $25,000 worth of stock
(determined at the Fair Market Value of the shares at the time such option is
granted).
5. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods, each consisting of such number of Exercise Periods as the Committee
shall determine, and shall continue until terminated in accordance with Section
20 hereof. The first Offering Period shall commence on a date to be determined
by the Committee. The Committee shall have the power to change the duration of
Offering Periods and Exercise Periods with respect to future offerings without
stockholder approval if such change is announced at least 15 days prior to the
scheduled beginning of the first Offering Period and Exercise Period to be
affected.
6. Participation.
(a) An eligible Employee may become a participant in any Offering
Period under the Plan only by completing a subscription agreement authorizing
payroll deductions in form and substance satisfactory to the Committee and
filing it with the Company during the open enrollment period prior to the
applicable Enrollment Date, unless a later time for filing the subscription
agreement is set by the Committee for all eligible Employees with respect to a
given Offering Period.
(b) Payroll deductions for a participant shall commence on the first
payday following the Enrollment Date and shall continue until terminated by the
participant as provided in Section 11.
7. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made (under this Plan and all
employee stock purchase plans of the Company) on each payday during the Offering
Period in an amount not exceeding a total of 10% (or such other percentage as
the Committee may determine) of the Compensation which he or she receives on
each payday during the Offering Period, and the aggregate of such payroll
deductions (under this Plan and all employee stock purchase plans of the
Company) during the Offering Period shall not exceed a total of 10% (or such
other percentage as the Committee may determine) of the participant's
Compensation during said Offering Period.
(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and will be withheld in whole percentages
only. A participant may not make any additional payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 11. A participant's subscription agreement shall remain
in effect for successive Offering Periods unless terminated as provided in
Section 11. To increase or decrease the rate of payroll deductions (within the
limitations of Section 7(a)), (i) with respect to the next Offering Period, a
participant must complete and file with the Company during the open enrollment
period prior to the Enrollment Date for such Offering Period, or (ii) with
respect to the next Exercise Period within the same Offering Period, a
participant must complete and file with the Company prior to the commencement of
the new Exercise Period within such Offering Period, a new subscription
agreement authorizing a change in payroll deduction rate. Except in the case of
authorized leaves of absence (which shall be governed by Section 11(c) below),
such change in rate shall be effective at the beginning of the next Offering
Period or Exercise Period, as the case may be, following the Company's receipt
of the new subscription agreement.
3
<PAGE>
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 4(b) herein, a participant's
payroll deductions may be decreased to 0% by the Company at such time during any
Exercise Period which is scheduled to end during the current calendar year (the
"Current Exercise Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan (and any other employee
stock purchase plans of the Company) in a prior Exercise Period which ended
during the current calendar year plus all payroll deductions accumulated with
respect to the Current Exercise Period equals $21,250. Payroll deductions shall
recommence at the rate provided in such participant's subscription agreement at
the beginning of the first Exercise Period which is scheduled to end in a
subsequent calendar year, unless terminated by the participant as provided in
Section 11.
(e) At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is disposed
of by the participant, the participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but will not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefit attributable to sale or
early disposition by the participant of Common Stock under the Plan.
8. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible participant in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period (at the applicable
Purchase Price) up to the number of shares of the Company's Common Stock
determined by dividing such participant's payroll deductions accumulated prior
to or on such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
a participant be permitted to purchase during any Offering Period more than the
number of shares determined to be the maximum permissible number (the "Option
Cap") by the Committee with respect to the Offering Period prior to the
Enrollment Date. In the event that the Committee does not establish an Option
Cap prior to the Enrollment Date, the Option Cap shall be the number of shares
determined by dividing $100,000 by the Fair Market Value of a share of the
Company's Common Stock on the Enrollment Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 4(b), 7(d)
and 13 hereof. Exercise of the option shall occur as provided in Section 9,
unless the participant has withdrawn pursuant to Section 11, and such option
shall expire on the last day of the Offering Period.
9. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 11 below, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased. Any payroll deductions
remaining in a participant's account after an Exercise Date shall be retained in
the participant's account until the next Exercise Date within such Offering
Period, unless an over-subscription exists (as defined in Section 13(a)) or the
Offering Period has terminated with such Exercise Date, in which event such
amount shall be returned to the participant. During a participant's lifetime, a
participant's option to purchase shares hereunder is exercisable only by him or
her.
10. Delivery. As promptly as practicable after each Exercise Date on which
a purchase of shares occurs, the Company shall arrange the delivery to each
participant, as appropriate, of either
4
<PAGE>
a certificate representing the shares purchased upon exercise of his or her
option or other evidence of purchase.
11. Withdrawal; Termination of Employment.
(a) A participant may withdraw all (but not less than all) the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time prior to the close of an Exercise Period
by giving written notice to the Company in form and substance satisfactory to
the Committee. Such notice shall state whether the participant is withdrawing
only from the applicable Exercise Period or entirely from the Offering Period.
All of the participant's payroll deductions credited to his or her account will
be paid to such participant as promptly as practicable after receipt of notice
of withdrawal and such participant's option for the current Offering Period or
Exercise Period (as specified in the notice) will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during
the Offering Period or Exercise Period, as applicable. If a participant
withdraws from an Offering Period, payroll deductions will not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement during the open enrollment period
preceding the commencement of a subsequent Offering Period. If a participant
withdraws from an Exercise Period, payroll deductions will not resume at the
beginning of any succeeding Exercise Period within the same Offering Period
unless written notice is delivered to the Company in form and substance
satisfactory to the Committee within the open enrollment period preceding the
commencement of the Exercise Period directing the Company to resume payroll
deductions.
(b) Upon a participant's ceasing to be an Employee for any reason or
upon termination of a participant's employment relationship (as described in
Section 2(g)), the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option will be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15, and such participant's option will
be automatically terminated.
(c) In the event a participant fails to remain an Employee of the
Company for at least 20 hours per week during an Offering Period in which the
Employee is a participant, he or she will be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to his or her account will be
returned to such participant and such participant's option terminated; provided
that (i) if an Employee shall take an unpaid leave of absence approved by the
Company in accordance with Section 2(g) of this Plan of more than 30 days during
an Offering Period in which the Employee is a participant, he or she will be
deemed to have withdrawn from the applicable Exercise Period on the 31st day of
such leave, and (ii) if an Employee shall take a paid leave of absence approved
by the Company in accordance with Section 2(g) of this Plan of more than 90 days
during an Offering Period in which the Employee is a participant, he or she will
be deemed to have withdrawn from the applicable Exercise Period on the earlier
of (aa) the 91st day if the Employee is paid for the entire 90 day leave, or
(bb) the last day upon which the Employee is paid provided he or she is paid for
at least 30 days. On the date upon which the Employee shall be deemed to have
withdrawn from the applicable Exercise Period, the payroll deductions credited
to his or her account will be returned to him or her, but he or she shall
continue to be a participant in the applicable Offering Period during such
authorized leave of absence until and unless such authorized leave of absence
terminates without his or her returning to his or her employment with the
Company.
(d) A participant's withdrawal from an Exercise Period (but not from
the Offering Period) will not have any effect upon his or her ability to
participate in subsequent Exercise Periods
5
<PAGE>
during the same Offering Period. However, a participant's withdrawal from an
Offering Period makes him or her ineligible for future participation in that
Offering Period. Withdrawal from an Exercise Period or from an Offering Period
will not have any effect upon a participant's eligibility to participate in a
succeeding Offering Period of the Plan or in any similar plan which may
hereafter be adopted by the Company, provided that a participant may elect to
participate in a succeeding Offering Period only during the open enrollment
period for such Offering Period and may not participate concurrently in more
than one Offering Period.
(e) Notwithstanding the foregoing, unless otherwise determined by the
Committee, if the Fair Market Value on the Enrollment Date of an Offering Period
in which a participant is enrolled (the "Current Offering Period") is greater
than the Fair Market Value on the Enrollment Date of a succeeding Offering
Period (the "Succeeding Offering Period"), the participant's enrollment in the
Current Offering Period automatically will be terminated immediately following
the exercise of his or her option under the Current Offering Period on the
Exercise Date that occurs immediately prior to the Enrollment Date of the
Succeeding Offering Period, and the participant automatically will be enrolled
in the Succeeding Offering Period, unless the participant elects to remain in
the former Offering Period by delivery to the Company of a written notice in
form and substance satisfactory to the Committee.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan, as set forth in Section 3
hereof, is subject to adjustment upon changes in capitalization of the Company
as provided in Section 19. If, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds the number of shares
then available under the Plan (an "over-subscription"), the Committee shall make
a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant.
14. Administration. The Plan shall be administered by the Board or a
Committee of members of the Board appointed by the Board, as necessary to comply
with the applicable restrictions of Rule 16b-3, if any. The Board or its
Committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its Committee shall, to the full extent
permitted by law, be final and binding upon all parties.
15. Designation of Beneficial.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option.
6
<PAGE>
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 15 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from an
Offering Period in accordance with Section 11.
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate funds from such payroll deductions.
18. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the Reserves, as well as the price
per share of Common Stock covered by each outstanding option under the Plan
which has not yet been exercised, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Exercise Period and the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, each option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Committee determines, in the exercise of
its sole discretion and in lieu of such assumption or substitution, to shorten
the Offering Period (and, if applicable, the Exercise Period) then in progress
by setting a new Exercise Date (the "New Exercise Date"). If the Committee
shortens the Offering Period (and the Exercise Period, if applicable) then in
progress in lieu of assumption or substitution in the event of a merger or sale
of assets, the Committee shall notify each participant
7
<PAGE>
in writing, at least 10 days prior to the New Exercise Date, that the Exercise
Date for his or her option has been changed to the New Exercise Date and that
his or her option will be exercised automatically on the New Exercise Date,
unless prior to such date he or she has withdrawn from the Offering Period or
the Exercise Period as provided in Section 11. For purposes of this paragraph,
an option granted under the Plan shall be deemed to be assumed if, following the
sale of assets or merger, the option confers the right to purchase, for each
share of stock subject to the option immediately prior to the sale of assets or
merger, the consideration (whether stock, cash or other securities or property)
received in the sale of assets or merger by holders of Common Stock for each
share of Common Stock held on the effective date of the transaction (and if such
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if such consideration received in the sale of assets or
merger was not solely common stock of the successor corporation or its parent
(as defined in Section 424(e) of the Code), the Committee may, with the consent
of the successor corporation and the participant, provide for the consideration
to be received upon exercise of the option to be solely common stock of the
successor corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the sale of assets or
merger.
The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
20. Amendment or Termination.
(a) The Board may at any time and for any reason amend or terminate the
Plan. Except as provided in Section 19, no such termination can affect options
previously granted, provided that the Plan (and any Offering Period thereunder)
may be terminated by the Board on any Exercise Date if the Board determines that
the termination of the Plan is in the best interests of the Company and its
stockholders. Except as provided in Section 19, no amendment may make any change
in any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary and desirable to comply with Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or Section 423 of the
Code (or any successor rule or provision or any other applicable law or
regulation), the Company shall obtain stockholder approval in such a manner and
to such a degree as is required thereby.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Committee shall be entitled to change the Offering Periods, establish the
exchange ratio applicable to amounts withheld in a currency other than United
States dollars, permit payroll withholding in excess of the amount designated by
a participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the
Committee determines in its sole discretion advisable which are consistent with
the Plan.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form
8
<PAGE>
specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law of the United States or other country or jurisdiction,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange or quotation
system upon which the shares may then be listed or quoted, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It shall continue in effect for a term of 20 years unless sooner terminated
under Section 20.
9
SUN MICROSYSTEMS, INC.
1988 DIRECTORS' STOCK OPTION PLAN
(Amended August 13, 1997)
1. Purposes of the Plan. The purposes of this Directors' Stock Option Plan
are to attract and retain the best available personnel for services as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock of the Company.
(c) "Company" shall mean Sun Microsystems, Inc., a Delaware
corporation.
(d) "Continuous Status as a Director" shall mean the absence of any
interruption or termination of service as a Director.
(e) "Director" shall mean a member of the Board.
(f) "Employee" shall mean any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Option" shall mean a stock option granted pursuant to the Plan.
(i) "Optioned Stock" shall mean the Common Stock subject to an Option.
(j) "Optionee" shall mean an Outside Director who receives an Option.
(k) "Outside Director" shall mean a Director who is not an Employee.
(1) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 425(e) of the Internal Revenue Code of
1986.
(m) "Plan" shall mean this 1988 Directors' Stock Option Plan.
(n) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
1
<PAGE>
(o) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Internal Revenue Code of
1986.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,200,000 Shares (the "Pool") of Common Stock. The Shares may
be authorized, but unissued, or required Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, shall become available for
future grant under the Plan. If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not become available for future grant
under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the Plan shall
be administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder shall be
automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director who is a partner, officer or director
of an entity having an equity investment in the Company (or who was so
affiliated with such an entity at the time of his or her initial appointment or
election to the Board) shall be automatically granted an Option to purchase
20,000 Shares (the "First Option") upon the effective date of the Plan, as
determined in accordance with Section 6 hereof, or the date on which such person
first becomes a Director, whether through election by the shareholders of the
Company or appointment by the Board of Directors to fill a vacancy; provided,
however, that no Option shall be issued under the Plan or become exercisable
until shareholder approval of the Plan has been obtained. Each Outside Director
who is not, on the date of his or her initial appointment or election to the
Board, affiliated with an investment entity as described above, shall
automatically be granted a First Option of 80,000 Shares, subject to the above
provision.
(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 20,000 Shares (a "Subsequent Option") on the date of and
immediately following each Annual Meeting of Shareholders of the Company at
which such non-employee director is re-elected, if on such date, he shall have
served on the Board for at least six (6) months.
2
<PAGE>
(iv) Notwithstanding the provisions of subsections (ii) and (iii)
hereof, in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon exercise
of Options to exceed the Pool, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of Shares remaining
available for grant by the number of Directors on the automatic grant date. Any
further grants shall then be deferred until such time, if any, as additional
Shares become available for grant under the Plan of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.
(v) The terms of an Option granted hereunder shall be as follows:
(A) The term of the Option shall be five (5) years.
(B) The Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(C) The exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Option.
(D) The Option shall become exercisable in installments
cumulatively as to twenty-five percent (25%) of the Shares subject to the Option
on each of the first, second, third and fourth anniversaries of the date of
grant of the Option.
(c) Powers of the Board. Subject to the provisions and restrictions of
the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to exercise on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of the Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the Chief Executive Officer
or his designee reasonably believes that an Optionee has committed an act of
misconduct, the Chief Executive Officer may suspend the Optionee's right to
exercise any option pending a determination by the Board of Directors (excluding
the Outside Director accused of such misconduct). If the Board of Directors
(excluding the Outside Director accused of such misconduct) determines an
Optionee has committed an act of embezzlement, fraud, dishonesty, nonpayment of
an obligation owed to the Company, breach of fiduciary duty or
3
<PAGE>
deliberate disregard of the Company rules resulting in loss, damage or injury to
the Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Optionee nor his estate shall be entitled
to exercise any option whatsoever. In making such determination, the Board of
Directors (excluding the Outside Director accused of such misconduct) shall act
fairly and shall give the Optionee an opportunity to appear and present evidence
on Optionee's behalf at a hearing before the Board or committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his directorship at any time.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company. It shall continue in effect until December 31, 2008 unless sooner
terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be five (5) years from the
date of grant thereof.
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option. In the case of an Option granted
to an Optionee who, immediately before the grant of such Option, owns stock
representing more than ten percent (10%) of the voting power or value of all
classes of stock of the Company or its parents or subsidiaries, the per Share
exercise price for the Shares to be issued pursuant to exercise of such Option
shall be at least 110% of the fair market value per Share on the date of grant
of the Option.
(b) Fair Market Value. The fair market value shall be the closing price
of the Common Stock on the date of grant, as reported on the National
Association of Securities Dealers Automated Quotation ("NASDAQ") System or, in
the event the Common Stock is traded on a stock exchange, the fair market value
per Share shall be the closing price on such exchange on the date of grant of
the Option.
4
<PAGE>
(c) Form of Consideration. The consideration to be paid for the Shares
to be issued upon exercise of an Option shall consist entirely of cash, check,
other Shares of Common Stock having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, or any combination of such methods of payment.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times as are set forth in Section 4(b)
hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
(b) Termination of Status as a Director. If an Outside Director ceases
to serve as a Director, he may, but only within ninety (90) days after the date
he ceases to be a Director of the Company, exercise his Option to the extent
that he was entitled to exercise it at the date of such termination.
Notwithstanding the foregoing, in no event may the Option be exercised after its
five (5) year term has expired. To the extent that he was not entitled to
exercise an Option at the date of such termination, or if he does not exercise
such Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event a Director is unable to continue his service as a
Director with the Company as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Internal Revenue Code), he may, but only
within six (6) months from the date of termination, exercise his Option to the
extent he was entitled to exercise it at the date of such termination.
Notwithstanding the foregoing, in no event may the Option be exercised after its
five (5) year
5
<PAGE>
term has expired. To the extend that he was not entitled to exercise the Option
at the date of termination, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) During the term of the Option, Optionee who is, at the time
of his death, a Director of the Company and who shall have been in Continuous
Status as a Director 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 had the Optionee continued living and remained in Continuous
Status as Director for six (6) months after the date of death. Notwithstanding
the foregoing, in no event may the Option be exercised after its five (5) year
term has expired.
(ii) Within one (1) month after the termination of Continuous
Status as a Director, 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 at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
five (5) year term has expired.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title 1 of the Employee
Retirement Income Security Act, or the rules thereunder. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 10.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be
6
<PAGE>
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action. In the event of a proposed sale of all or substantially all of the
assets of the Company or the merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event that such successor corporation refuses to
assume the Option or to substitute an equivalent option, the Board shall, in
lieu of such assumption or substitution, provide for the Optionee to have the
right to exercise the Option as to all of the Optioned Stock, including Shares
as to which the Option would not otherwise be exercisable, in which case, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4(b) hereof. Notice
of the termination shall be given to each Outside Director to whom an Option is
so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 1 6b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the shareholders of the Company of Plan amendments to
the extent and in the manner required by such law or regulation.
Notwithstanding the foregoing, the provisions set forth in Sections
2(k), 4(b), 5, 7 and 8(a) of this Plan (and any other Sections of this Plan that
affect the formula award terms required to be specified in this Plan by Rule 1
6b-3) shall not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder.
(i) any increase in the number of Shares subject to the Plan,
other than in connection with an adjustment under Section 11 of the Plan; or
(ii) any change in the designation of the class of persons
eligible to be granted Options; or
7
<PAGE>
(iii) any material increase in the benefits accruing to
participants under the Plan; or
(iv) any change in the number of shares subject to Options to be
granted hereunder or in the terms thereof as set forth in Section 4(b) hereof.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
17. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports to shareholders, proxy statements and other
information provided to all shareholders of the Company.
8
EXHIBIT 5.1
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Telephone (650) 493-9300 Facsimile (650) 493-6811
www.wsgr.com
November 17, 1997
Sun Microsystems, Inc.
901 San Antonio Road
Palo Alto, CA 94303
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Sun Microsystems, Inc., a Delaware corporation
(the "Company" or "You") and have examined the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by the Company with the
Securities and Exchange Commission on or about November 20, 1997 in connection
with the registration under the Securities Act of 1933, as amended, of (i)
10,000,000 shares of your Common Stock reserved for issuance under the 1990
Employee Stock Purchase Plan (the "Purchase Plan") and (ii) 600,000 shares of
your Common Stock reserved for issuance under the 1988 Directors' Stock Option
Plan (the "Option Plan"). The 10,000,000 shares of Common Stock reserved under
the Purchase Plan and the 600,000 shares of Common Stock reserved under the
Option Plan are referred to collectively hereinafter as the "Shares," and the
Purchase Plan and the Option Plan are referred to hereinafter collectively as
the "Plans." As your legal counsel, we have examined the proceedings taken and
proposed to be taken in connection with the issuance and sale of and payment of
consideration for the Shares to be issued under the Plans.
Based upon the foregoing, it is our opinion that, when issued and sold in
compliance with applicable prospectus delivery requirements and in the manner
referred to in the Plans and pursuant to the agreements which accompany the
Plans, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/WILSON SONSINI GOODRICH & ROSATI
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Sun Microsystems, Inc. 1990 Employee
Stock Purchase Plan and 1988 Directors' Stock Option Plan, of our reports dated
July 16, 1997, with respect to the consolidated financial statements of Sun
Microsystems, Inc. incorporated by reference in its Annual Report (Form 10-K, as
amended on Form 10-K/A) for the year ended June 30, 1997 and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
/s/ERNST & YOUNG LLP
November 19, 1997
Palo Alto, California