<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1999
REGISTRATION NO. ___________
================================================================================
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)
-------------------------------------
SUN MICROSYSTEMS, INC.
1990 LONG-TERM EQUITY INCENTIVE PLAN
(FULL TITLE OF THE PLANS)
-------------------------------------
SCOTT G. MCNEALY
CHIEF EXECUTIVE OFFICER
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, CA 94304
(650) 493-9300
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
to be Price Per Offering Registration
Title of Securities to be Registered Registered Share (1) Price Fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.00067 37,000,000 $109.63 $4,056,310 $1,127,654
per share, pursuant to the 1990
Long-Term Equity Incentive Plan
- -----------------------------------------------------------------------------------------------
</TABLE>
(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 low price on November 5, 1999 was
$109.63.
<PAGE> 3
The contents of the Registrant's Forms S-8 Registration Statements,
Registration No. 33-38220, 33-56577, 333-01459 and 333-67183, dated December 14,
1990, November 23, 1994, March 6, 1996 and November 12, 1998, respectively,
relating to the 1990 Long-Term Equity Incentive Plan are incorporated herein by
reference.
PART II: INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENTS
------- ---------
<S> <C>
4.1 1990 Long-Term Equity Incentive 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)
</TABLE>
II-1
<PAGE> 4
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 10th day of November, 1999.
SUN MICROSYSTEMS, INC.
By: /s/ Michael E. Lehman
-------------------------------------
Michael E. Lehman, Vice President,
Corporate Resources and Chief
Financial Officer
II-2
<PAGE> 5
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.
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Scott G. McNealy Chairman of the Board of Directors, November 10, 1999
- --------------------------------- and Chief Executive Officer
Scott G. McNealy (Principal Executive Officer)
/s/ Michael E. Lehman Vice President, Corporate Resources November 10, 1999
- --------------------------------- and Chief Financial Officer
Michael E. Lehman (Principal Financial Officer)
/s/ Michael L. Popov Vice President and Corporate Controller November 10, 1999
- --------------------------------- (Principal Accounting Officer)
Michael L. Popov
Director November __, 1999
- ---------------------------------
James L. Barksdale
/s/ L. John Doerr Director November 10, 1999
- ---------------------------------
L. John Doerr
/s/ Judith L. Estrin Director November 10, 1999
- ---------------------------------
Judith L. Estrin
/s/ Robert J. Fisher Director November 10, 1999
- ---------------------------------
Robert J. Fisher
/s/ Robert L. Long Director November 10, 1999
- ---------------------------------
Robert L. Long
/s/ M. Kenneth Oshman Director November 10, 1999
- ---------------------------------
M. Kenneth Oshman
</TABLE>
II-3
<PAGE> 6
SUN MICROSYSTEMS, INC.
REGISTRATION STATEMENT ON FORM S-8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4.1 1990 Long-Term Equity Incentive 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)
</TABLE>
II-4
<PAGE> 1
EXHIBIT 4.1
SUN MICROSYSTEMS, INC.
1990 LONG-TERM EQUITY INCENTIVE PLAN
(AMENDED AS OF AUGUST 11, 1999)
1. Purpose of the Plan. The purpose of the Sun Microsystems, Inc.
1990 Long-Term Equity Incentive Plan is to enable Sun Microsystems, Inc. to
provide an incentive to eligible employees, consultants and Officers whose
present and potential contributions are important to the continued success of
the Company, to afford them an opportunity to acquire a proprietary interest in
the Company, and to enable the Company to enlist and retain in its employ the
best available talent for the successful conduct of its business. It is intended
that this purpose will be effected through the granting of (a) stock options,
(b) stock purchase rights, (c) stock appreciation rights, and (d) long-term
performance awards.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Committee" means the Committee or Committees referred
to in Section 5 of 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.
(d) "Common Stock" means the Common Stock, $0.00067 par
value (as adjusted from time to time), of the Company.
(e) "Company" means Sun Microsystems, Inc., a corporation
organized under the laws of the state of Delaware, or any successor corporation.
(f) "Director" means a member of the Board.
(g) "Disability" means a disability, whether temporary or
permanent, partial or total, as determined by the Committee.
(h) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(i) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) the last reported sale price 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 Board in
its discretion.
1
<PAGE> 2
(j) "Incentive Stock Option" means an Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
(k) "Long-Term Performance Award" means an award under
Section 10 below. A Long-Term Performance Award shall permit the recipient to
receive a cash or stock bonus (as determined by the Committee) upon satisfaction
of such performance factors as are set out in the recipient's individual grant.
Long-Term Performance Awards will be based upon the achievement of Company,
Subsidiary and/or individual performance factors or upon such other criteria as
the Committee may deem appropriate.
(l) "Nonstatutory Stock Option" means any Option that is not
an Incentive Stock Option.
(m) "Officer" means an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(n) "Option" means any option to purchase shares of Common
Stock granted pursuant to Section 7 below.
(o) "Plan" means this 1990 Long-Term Equity Incentive Plan,
as hereinafter amended from time to time.
(p) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 9 below.
(q) "Right" means and includes Stock Appreciation Rights and
Stock Purchase Rights granted pursuant to the Plan.
(r) "Special Reserve" means a number of shares reserved and
available for issuance under the terms of the Plan equal to 3% of the total
shares reserved under the Plan as determined by and set forth under Section 4
below as such section may be amended from time to time in accordance with the
terms of this Plan.
(s) "Stock Appreciation Right" means an award made pursuant
to Section 8 below, which right permits the recipient to receive an amount of
Common Stock or cash equal in value to the difference between the Fair Market
Value of Common Stock on the date of grant of the Option and the Fair Market
Value of Common Stock on the date of exercise of the Stock Appreciation Right.
(t) "Stock Purchase Right" means the right to purchase
Common Stock pursuant to a restricted stock purchase agreement entered into
between the Company and the purchaser under Section 9 below.
(u) "Subsidiary" means 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.
In addition, the term "Rule 16b-3", and the term "Performance
Period" shall have the meanings set forth in Section 5(a), and Section 10,
respectively.
3. Eligible Participants. Any Officer, consultant, or other
employee of the Company or of a Subsidiary whom the Committee deems to have the
potential to contribute to the future success of the Company shall be eligible
to receive awards under the Plan; provided, however, that any Options intended
to qualify as Incentive Stock Options shall be granted only to employees of the
Company or its Subsidiaries.
4. Stock Subject to the Plan. Subject to Sections 11 and 12, the
total number of shares of Common Stock reserved and available for distribution
pursuant to the Plan shall be 275,800,000 shares. The shares may be authorized,
but unissued, or reacquired Common Stock.
2
<PAGE> 3
Subject to Sections 11 and 12 below, if any shares of Common Stock that have
been optioned under an Option cease to be subject to such Option (other than
through exercise of the Option), or if any Right, Option or Long-Term
Performance Award granted hereunder is forfeited or any such award otherwise
terminates prior to the issuance to the participant of Common Stock, the shares
(if any) that were reserved for issuance pursuant to such Right, Option or
Long-Term Performance Award shall again be available for distribution in
connection with future awards or Option grants under the Plan; provided,
however, that shares of Common Stock that have actually been issued under the
Plan, whether upon exercise of an Option or Right or in satisfaction of a
Long-Term Performance Award, shall not in any event be returned to the Plan and
shall not become available for future distribution under the Plan.
5. Administration.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of service
providers.
(ii) Section 162(m). To the extent that a Committee
determines it to be desirable to qualify awards granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee consisting solely of two or
more "outside directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3 promulgated under the Exchange
Act ("Rule 16b-3"), the transactions contemplated hereunder shall be structured
to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board, or (B) a Committee,
which committee shall be constituted to satisfy applicable securities laws,
Delaware corporate law and the Code.
(b) Authority. A Committee, if there be one, shall have full
power to implement and carry out the Plan, subject to the general purposes,
terms, and conditions of the Plan and to the direction of the Board (including
the specific duties delegated by the Board to such Committee), which power shall
include, but not be limited to, the following:
(i) to select the Officers, consultants and other
employees of the Company and/or its Subsidiaries to whom Options, Rights and/or
Long-Term Performance Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Options,
Rights and/or Long-Term Performance Awards, or any combination thereof, are
granted hereunder;
(iii) to determine the number of shares of Common
Stock to be covered by each such award granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder
(including, but not limited to, the share price and any restriction or
limitation, or any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or other award and/or the shares of Common Stock relating
thereto, based in each case on such factors as the Committee shall determine, in
its sole discretion);
(vi) to determine whether and under what
circumstances an Option may be settled in cash or Restricted Stock under Section
7(j) instead of Common Stock;
3
<PAGE> 4
(vii) to determine the form of payment that will be
acceptable consideration for exercise of an Option or Right granted under the
Plan;
(viii) to determine whether, to what extent and under
what circumstances Common Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at the election
of the participant (including providing for and determining the amount (if any)
of any deemed earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option or
Right;
(x) to determine the terms and restrictions
applicable to Stock Purchase Rights and the Restricted Stock purchased by
exercising such Rights; and
(xi) to allow participants to satisfy withholding tax
obligations by electing to have the Company withhold from the shares of Common
Stock to be issued upon exercise of an award that number of shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by a participant to have
shares withheld for this purpose shall be made in such form and under such
conditions as the Committee may deem necessary or advisable and shall be subject
to the consent or disapproval of the Committee.
The Committee shall have the authority to construe and interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan.
6. Duration of the Plan. The Plan shall remain in effect until
terminated by the Board under the terms of the Plan, provided that in no event
may Incentive Stock Options be granted under the Plan later than October 15,
2010.
7. Stock Options. The Committee, in its discretion, may grant
Options to eligible participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatutory Stock Options. Each Option shall be
evidenced by a written Option agreement which shall expressly identify the
Option as an Incentive Stock Option or as a Nonstatutory Stock Option, and be in
such form and contain such provisions as the Committee shall from time to time
deem appropriate. Without limiting the foregoing, the Committee may, at any
time, or from time to time, authorize the Company, with the consent of the
respective recipients, to issue new Options including Options in exchange for
the surrender and cancellation of any or all outstanding Options or Rights.
Option agreements shall contain the following terms and conditions:
(a) Exercise Price; Number of Shares. The exercise price of
the Option, which shall be approved by the Committee, must be equal to or
greater than the Fair Market Value of the Common Stock at the time the Option is
granted; provided, however, that in the case of a Nonstatutory Stock Option, the
price may be less than (but no less than 85%) of the Fair Market Value of the
Common Stock on the date the Option is granted, if such Option is granted, in
the discretion of the Board or Committee, as the case may be, expressly in lieu
of a reasonable amount of salary or compensation due the recipient of the
Option. In addition, Nonstatutory Stock Options may be granted at an exercise
price less than Fair Market Value of the Common Stock at the time the Option is
granted, provided that such grant is out of and subject to the limitations of
the Special Reserve and, provided further, that in the case of an individual
subject to Section 16 of the Exchange Act, the exercise price shall be no less
than 50% of the Fair
4
<PAGE> 5
Market Value of the Common Stock on the date the Option is granted.
The Option agreement shall specify the exercise price and the
number of shares of Common Stock to which it pertains.
(b) Waiting Period; Exercise Dates; Term. At the time an
Option is granted, the Committee will determine the terms and conditions to be
satisfied before shares may be purchased, including the dates on which shares
subject to the Option may first be purchased. The Committee may specify that an
Option may not be exercised until the completion of the waiting period specified
at the time of grant. (Any such period is referred to herein as the "waiting
period.") At the time an Option is granted, the Committee shall fix the period
within which such Option may be exercised, which shall not be less than the
waiting period, if any, nor, in the case of an Incentive Stock Option, more than
10 years from the date of grant.
(c) Form of Payment. The consideration to be paid for the
shares of Common Stock to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Committee (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of (i) cash, (ii) certified or cashier's check, (iii)
promissory note, (iv) other shares of Common Stock (including, in the discretion
of the Committee, Restricted Stock) which (x) either have been owned by the
optionee for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have 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, (v) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds required to pay the
exercise price, (vi) delivery of an irrevocable subscription agreement for the
shares which obligates the option holder to take and pay for the shares not more
than 12 months after the date of delivery of the subscription agreement or (vii)
any combination of the foregoing methods of payment.
(d) Effect of Termination of Employment, Retirement or Death
of Employee Participants. In the event that an optionee during his or her
lifetime ceases to be an employee of the Company or of any Subsidiary for any
reason, including retirement, any Option, including any unexercised portion
thereof, which was otherwise exercisable on the date of termination of
employment, shall expire within such time period as is determined by the
Committee; provided, however, that in the case of an Incentive Stock Option the
Option shall expire unless exercised within a period of 90 days from the date on
which the optionee ceased to be an employee, but in no event after the
expiration of the term of such Option as set forth in the Option agreement. If
in any case the Committee shall determine that an employee shall have been
discharged for Just Cause (as defined below) such employee shall not thereafter
have any rights under the Plan or any Option that shall have been granted to him
or her under the Plan. For purposes of this Section, "Just Cause" means the
termination of employment of an employee shall have taken place as a result of
(i) willful breach or neglect of duty; (ii) failure or refusal to work or to
comply with the Company's rules, policies, and practices; (iii) dishonesty; (iv)
insubordination; (v) being under the influence of drugs (except to the extent
medically prescribed) or alcohol while on duty or on Company premises; (vi)
conduct endangering, or likely to endanger, the health or safety of another
employee; or (vii) conviction of a felony. In the event of the death of an
employee optionee, that portion of the Option which had become exercisable on
the date of death shall be exercisable by his or her personal representatives,
heirs, or legatees within six months or such time period as is determined by the
Committee (but in the case of an Incentive
5
<PAGE> 6
Stock Option, in no event after the expiration of the term of such Option as set
forth in the Option agreement). In the event of the death of an optionee within
one month after termination of employment or service, that portion of the Option
which had become exercisable on the date of termination shall be exercisable by
his or her personal representatives, heirs, or legatees within six months or
such time period as is determined by the Committee (but in the case of an
Incentive Stock Option, in no event after the expiration of the term of such
Option as set forth in the Option agreement.) In the event that an optionee
ceases to be an employee of the Company or of any Subsidiary for any reason,
including death or retirement, prior to the lapse of the waiting period, if any,
his or her Option shall terminate and be null and void to the extent unvested.
(e) Leave of Absence. The employment relationship shall not
be considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Committee, provided that such
leave is for a period of not more than 90 days (or not more than 30 days for
unpaid leave), unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing; or (iv) in the case of transfer between
locations of the Company or between the Company, its Subsidiaries or its
successor. In the case of any employee on an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the
Option while on leave from the employ of the Company or a Subsidiary as it may
deem appropriate, except that in no event shall an Option be exercised after the
expiration of the term set forth in the Option agreement.
(f) Acceleration of Exercisability or Waiting Period. The
Committee may accelerate the earliest date on which outstanding Options (or any
installments thereof) are exercisable.
(g) Special Incentive Stock Option Provisions. In addition
to the foregoing, Options granted under the Plan which are intended to be
Incentive Stock Options under Section 422 of the Code shall be subject to the
following terms and conditions:
(i) Dollar Limitation. To the extent that the
aggregate Fair Market Value of the shares of Common Stock with respect to which
Options designated as Incentive Stock Options become exercisable for the first
time by any individual during any calendar year (under all plans of the Company)
exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options.
For purposes of the preceding sentence, (i) Options shall be taken into account
in the order in which they were granted and (ii) the Fair Market Value of the
shares shall be determined as of the time the Option with respect to such shares
is granted.
(ii) 10% Stockholder. If any person to whom an
Incentive Stock Option is to be granted pursuant to the provisions of the Plan
is, on the date of grant, the owner of Common Stock (as determined under Section
424(d) of the Code) possessing more than 10% of the total combined voting power
of all classes of stock of the Company or of any Subsidiary, then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(A) The exercise price per share of the
Common Stock subject to such Incentive Stock Option shall not be less than 110%
of the Fair Market Value of the Common Stock on the date of grant; and
(B) The Option shall not have a term in
excess of five years from
6
<PAGE> 7
the date of grant.
Except as modified by the preceding provisions of this
Subsection 7(g) and except as otherwise required by Section 422 of the Code, all
of the provisions of the Plan shall be applicable to the Incentive Stock Options
granted hereunder.
(h) Other Provisions. Each Option granted under the Plan may
contain such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Committee.
(i) Options to Consultants. Options granted to consultants
shall not be subject to Sections 7(b) and 7(d) of the Plan, but shall have such
terms and conditions pertaining to waiting period (if any), exercise date, and
effect of termination of the consulting relationship as the Committee shall
determine in each case.
(j) Buyout Provisions. The Committee may at any time offer
to buy out, for a payment in cash or Common Stock (including Restricted Stock),
an Option previously granted, based on such terms and conditions as the
Committee shall establish and communicate to the optionee at the time that such
offer is made. Any such offer made to an Officer or Director shall comply with
the applicable provisions of Rule 16b-3. This provision is intended only to
clarify the powers of the Committee and shall not in any way be deemed to create
any rights on the part of optionees to receive buyout offers or payments.
(k) Limitations on Grants to Employees. Notwithstanding
anything to the contrary herein, the following limitations shall apply to grants
of Options:
(i) No eligible participant shall be granted, in any
fiscal year of the Company, Options to purchase more than 1,200,000 shares.
(ii) In connection with his or her initial
employment, an eligible participant may be granted Options to purchase up to an
additional 1,600,000 shares which shall not count against the limit set forth in
subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11.
(iv) If an Option is cancelled (other than in
connection with a transaction described in Section 12), the cancelled Option
will be counted against the limit set forth in this paragraph k. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.
8. Stock Appreciation Rights. Stock Appreciation Rights may be
granted only in connection with an Option, either concurrently with the grant of
the Option or at any time thereafter during the term of the Option. The
following provisions apply to such Stock Appreciation Rights.
(a) Exercise of Right. The Stock Appreciation Right shall
entitle the optionee to exercise the Right by surrendering to the Company
unexercised a portion of the underlying Option as to which Optionee has a right
to exercise. The Optionee shall receive in exchange from the Company an amount
in cash or Common Stock equal in value to the excess of (x) the Fair Market
Value on the date of exercise of the Right of the Common Stock covered by the
surrendered portion of the underlying Option over (y) the exercise price of the
Common Stock covered by the surrendered portion of the underlying Option, as
determined in accordance with Section 7(a) above. Notwithstanding the foregoing,
the Committee may place limits on the amount that may be paid upon exercise of a
Stock Appreciation Right; provided, however, that such limit shall not restrict
the exercisability of the underlying Option.
7
<PAGE> 8
(b) Option Cancelled. When a Stock Appreciation Right is
exercised, the underlying Option, to the extent surrendered, shall no longer be
exercisable.
(c) Exercisability Requirement. A Stock Appreciation Right
shall be exercisable only when and to the extent that the underlying Option is
exercisable and shall expire no later than the date on which the underlying
Option expires.
(d) In-the-Money Requirement. A Stock Appreciation Right may
only be exercised at a time when the Fair Market Value of the Common Stock
covered by the underlying Option exceeds the exercise price of the Common Stock
covered by the underlying Option.
(e) Incentive Stock Option Requirements. In the event that a
Stock Appreciation Right is granted that relates to an Incentive Stock Option,
such Right shall contain such additional or different terms as may be necessary
under applicable regulations to preserve treatment of the Incentive Stock Option
as such under Section 422 of the Code.
(f) Form of Payment. The Company's obligation arising upon
the exercise of a Stock Appreciation Right may be paid currently or on a
deferred basis (with such interest or earnings equivalent as may be determined
by the Committee), and may be paid in Common Stock or in cash, or in any
combination of Common Stock and cash, as the Committee in its sole discretion
may determine. Shares of Common Stock issued upon the exercise of a Stock
Appreciation Right shall be valued at the Fair Market Value of the Common Stock
as of the date of exercise.
9. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Committee determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of shares of Common Stock that such person shall be
entitled to purchase, the price to be paid, which price in the case of
individuals subject to Section 16 of the Exchange Act shall not be more than
$0.00067 per share (the par value of the Company's Common Stock, as adjusted
from time to time, and the minimum price permitted by the Delaware General
Corporation Law), and the time within which such person must accept such offer,
which shall in no event exceed 60 days from the date the Stock Purchase Right
was granted. The offer shall be accepted by execution of a Restricted Stock
purchase agreement in the form determined by the Committee. Shares purchased
pursuant to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock."
(b) Repurchase Option. The Restricted Stock purchase
agreement shall grant the Company a repurchase option exercisable upon the
voluntary or involuntary termination of the purchaser's employment with the
Company for any reason (including death or Disability). The purchase price for
shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
as to not more than 50% of such shares at a date not earlier than 2-1/2 years
from the date of grant of the Restricted Stock and as to the remaining shares at
a date not earlier than 5 years from the date of grant of the Restricted Stock.
The Committee shall exercise its repurchase option in accordance with the above.
Notwithstanding the foregoing, with respect to Restricted Stock granted out of
and subject to the restrictions of the Special Reserve, the Committee may in its
discretion exercise its repurchase option and such repurchase option shall lapse
as to such shares at such a rate as
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the Committee may, in its discretion, determine.
(c) Other Provisions. The Restricted Stock purchase
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Committee in its sole
discretion. In addition, the provisions of Restricted Stock purchase agreements
need not be the same with respect to each purchaser.
10. Long-Term Performance Awards.
(a) Awards. Long-Term Performance Awards are cash or stock
bonus awards that may be granted either alone, in addition to or in tandem with
other awards granted under the Plan and/or awards made outside of the Plan.
Long-Term Performance Awards shall not require payment by the recipient of any
consideration for the Long-Term Performance Award or for the shares of Common
Stock covered by such award. The Committee shall determine the nature, length
and starting date of any performance period (the "Performance Period") for each
Long-Term Performance Award and shall determine the performance and/or
employment factors to be used in the determination of the value of Long-Term
Performance Awards and the extent to which such Long-Term Performance Awards
have been earned. Shares issued pursuant to a Long-Term Performance Award may be
made subject to various conditions, including vesting or forfeiture provisions.
Long-Term Performance Awards may vary from participant to participant and
between groups of participants and shall be based upon the achievement of
Company, Subsidiary and/or individual performance factors or upon such other
criteria as the Committee may deem appropriate. Performance Periods may overlap
and participants may participate simultaneously with respect to Long-Term
Performance Awards that are subject to different Performance Periods and
different performance factors and criteria. Long-Term Performance Awards shall
be confirmed by, and be subject to the terms of, a written Long-Term Performance
Award agreement.
(b) Value of Awards. At the beginning of each Performance
Period, the Committee may determine for each Long-Term Performance Award subject
to such Performance Period the range of dollar values and/or numbers of shares
of Common Stock to be issued to the participant at the end of the Performance
Period if and to the extent that the relevant measures of performance for such
Long-Term Performance Award are met. Such dollar values or numbers of shares of
Common Stock may be fixed or may vary in accordance with such performance or
other criteria as may be determined by the Committee.
(c) Adjustment of Awards. Notwithstanding the provisions of
Section 19 hereof, the Committee may, after the grant of Long-Term Performance
Awards, adjust the performance factors applicable to such Long-Term Performance
Awards to take into account changes in the law or in accounting or tax rules and
to make such adjustments as the Committee deems necessary or appropriate to
reflect the inclusion or exclusion of the impact of extraordinary or unusual
items, events or circumstances in order to avoid windfalls or hardships.
(d) Termination. Unless otherwise provided in the applicable
Long-Term Performance Award agreement, if a participant terminates his or her
employment or his or her consultancy during a Performance Period because of
death or Disability, the Committee may in its discretion provide for an earlier
payment in settlement of such award, which payment may be in such amount and
under such terms and conditions as the Committee deems appropriate.
Unless otherwise provided in the applicable Long-Term
Performance Award agreement, if a participant terminates employment or his or
her consultancy during a Performance Period for any reason other than death or
Disability, then such a participant shall not be entitled
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to any payment with respect to the Long-Term Performance Award subject to such
Performance Period, unless the Committee shall otherwise determine in its
discretion.
(e) Form of Payment. The earned portion of a Long-Term
Performance Award may be paid currently or on a deferred basis (with such
interest or earnings equivalent as may be determined by the Committee). Payment
shall be made in the form of cash or whole shares of Common Stock, including
Restricted Stock, or a combination thereof, either in a lump sum payment or in
installments, all as the Committee shall determine.
(f) Reservation of Shares. In the event that the Committee
grants a Long-Term Performance Award that is payable in cash or Common Stock,
the Committee may (but need not) reserve an appropriate number of shares of
Common Stock under the Plan at the time of grant of the Long-Term Performance
Award. If and to the extent that the full amount reserved is not actually paid
in Common Stock, the shares of Common Stock representing the portion of the
reserve for that Long-Term Performance Award that is not actually issued in
satisfaction of such Long-Term Performance Award shall again become available
for award under the Plan. If shares of Common Stock are not reserved by the
Committee at the time of grant, then (i) no shares shall be deducted from the
number of shares available for grant under the Plan at that time and (ii) at the
time of payment of the Long-Term Performance Award, only the number of shares
actually issued to the participant shall be so deducted. If there are not a
sufficient number of shares available under the Plan for issuance to a
participant at the time of payment of a Long-Term Performance Award, any
shortfall shall be paid by the Company in cash.
11. Recapitalization. In the event that dividends are payable in
Common Stock or in the event there are splits, subdivisions, or combinations of
shares of Common Stock, the number of shares available under the Plan shall be
increased or decreased proportionately, as the case may be, and the number of
shares of Common Stock deliverable in connection with any Option, Right or
Long-Term Performance Award theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price (where applicable).
12. Reorganization. In case the Company is merged or consolidated
with another corporation and the Company is not the surviving corporation, or in
case the property or stock of the Company is acquired by another corporation, or
in case of separation, reorganization, or liquidation of the Company, the
Committee, or the board of directors of any corporation assuming the obligations
of the Company hereunder, shall, as to outstanding Options, Rights or Long-Term
Performance Awards either (a) make appropriate provision for the protection of
any such outstanding Options, Rights or Long-Term Performance Awards by the
assumption or substitution on an equitable basis of appropriate stock of the
Company or of the merged, consolidated, or otherwise reorganized corporation
which will be issuable in respect to the shares of Common Stock, provided that
in the case of Incentive Stock Options, such assumption or substitution comply
with Section 424(a) of the Code, or (b) upon written notice to the participant,
provide that the Option or Right must be exercised within 30 days of the date of
such notice or it will be terminated. In any such case, the Committee may, in
its discretion, advance the lapse of vesting periods, waiting periods, and
exercise dates.
13. Employment or Consulting Relationship. Nothing in the Plan or
any award made hereunder shall interfere with or limit in any way the right of
the Company or of any Subsidiary to terminate any recipient's employment or
consulting relationship at any time, with or without cause, nor confer upon any
recipient any right to continue in the employ or service of the
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Company or any Subsidiary.
14. General Restriction. Each award shall be subject to the
requirement that, if, at any time, the Committee shall determine, in its
discretion, that the listing, quotation, registration, or qualification of the
shares subject to such award upon any securities exchange or quotation system or
under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, such award or the issue or purchase of shares thereunder, such award may
not be exercised in whole or in part unless such listing, quotation,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
15. Rights as a Stockholder. The holder of an Option, Right or
Long-Term Performance Award shall have no rights as a stockholder with respect
to any shares covered by such Option, Right or Long-Term Performance Award until
the date of exercise. Once an Option, Right or Long-Term Performance Award is
exercised by the holder thereof, the participant shall have the rights
equivalent to those of a stockholder, and shall be a stockholder when his or her
holding is entered upon the records of the duly authorized transfer agent of the
Company. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
16. Nonassignability of Awards. No awards made hereunder, including
Options, Rights and Long-Term Performance Awards, shall be assignable or
transferable by the recipient 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 I of the Employee Retirement Income Security Act, or the rules
thereunder, and in no event shall such awards be assigned or transferred in a
manner that is inconsistent with the specific Plan provisions relating thereto.
The designation of a beneficiary by a participant does not constitute a
transfer. During the life of the recipient, an Option, Right or Long-Term
Performance Award shall be exercisable only by him or her or by a transferee
permitted by this Section 16.
17. Withholding Taxes. Whenever, under the Plan, shares are to be
issued in satisfaction of Options, Rights or Long-Term Performance Awards
granted hereunder, the Company shall have the right to require the recipient to
remit to the Company an amount sufficient to satisfy federal, state, and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. Whenever, under the Plan, payments are to be made
to participants in cash, such payments shall be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.
18. Nonexclusivity of the Plan. Neither the adoption or amendment of
the Plan by the Board, the submission of the Plan or any amendments thereto to
the stockholders of the Company for approval, nor any provision of the Plan
shall be construed as creating any limitations on the power of the Board or the
Committee to adopt and implement such additional compensation arrangements as it
may deem desirable, including, without limitation, the awarding of cash or the
granting of stock options, stock appreciation rights, stock purchase rights or
Long-Term Performance awards outside of the Plan, and such arrangements may be
either generally applicable to a class of employees or consultants or applicable
only in specified cases.
19. Amendment, Suspension, or Termination of the Plan. The Board may
at any time amend, alter, suspend, or terminate the Plan, but no amendment,
alteration, suspension, or termination shall be made which would impair the
rights of any grantee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable
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to comply with Rule 16b-3 under the Exchange Act or under Section 422 of the
Code (or any other Applicable Law), the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as is
required by such Applicable Law.
20. Effective Date of the Plan. The Plan shall become effective upon
approval of the Board and shall be subject to stockholder approval within 12
months of adoption by the Board. Options, Rights and Long-Term Performance
Awards may be granted and exercised under the Plan only after there has been
compliance with all applicable federal and state securities laws.
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EXHIBIT 5.1
WILSON SONSINI GOODRICH & ROSATI
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
November 9, 1999
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 15, 1999 in
connection with the registration under the Securities Act of 1933, as amended,
of 37,000,000 additional shares of your Common Stock, par value $0.00067 per
share (the "Shares"), reserved for issuance under the 1990 Long-Term Equity
Incentive Plan.
As your legal counsel, we have examined the proceedings taken and are
familiar with the proceedings to be taken in connection with the sale and
issuance of said Shares under the Plan. It is our opinion that the additional
Shares, when issued and sold in the manner referred to in the Plan and pursuant
to the agreements which accompany the Plan, 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
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EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the 1990 Long-Term Equity Incentive Plan of
Sun Microsystems, Inc., of our reports dated July 21, 1999, with respect to the
consolidated financial statements of Sun Microsystems, Inc. incorporated by
reference in its Annual Report (Form 10-K) for the years ended June 30, 1999 and
1998, and the related financial statement schedule included therein, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ ERNST & YOUNG LLP
Palo Alto, California
November 11, 1999
