<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
COBALT NETWORKS, INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
19074R101
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(CUSIP Number)
MICHAEL H. MORRIS, ESQ.
SUN MICROSYSTEMS, INC.
901 SAN ANTONIO ROAD
PALO ALTO, CALIFORNIA 94303
(650) 960-1300
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
SEPTEMBER 18, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13-1(e), 240.13d-(f) or 240.13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 2 OF 11 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sun Microsystems, Inc. I.R.S. Identification No.: 94-2805249
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not applicable
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
Not applicable
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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7 SOLE VOTING POWER
NUMBER OF - 6,036,386 (See (1) below.)
SHARES --------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY - 3,854,416 (See (2) below.)
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH - 6,036,386 (See (1) below.)
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10 SHARED DISPOSITIVE POWER
Not applicable
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- 9,890,802 (See (1) and (2) below.)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
- Approximately 26.7 percent (See (3) below.)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) In the event that the Option described in Items 3 and 4 below
becomes exercisable, and is exercised in full, Sun Microsystems, Inc., a
Delaware corporation ("Sun"), will have sole voting power with respect to, and
the sole power to dispose of, that number of shares of Common Stock, par value
$0.001 per share, of Cobalt Networks, Inc., a Delaware corporation ("Cobalt"),
equal to 19.9% of the then outstanding shares of Cobalt Common Stock, which,
based upon the 30,333,599 shares of Cobalt Common Stock outstanding as of
September 14, 2000 (as represented by Cobalt in the Merger Agreement described
in Items 3 and 4 below), currently equals 6,036,386 shares of Cobalt Common
Stock. Prior to the exercise of the Option, Sun is not entitled to any rights as
a stockholder of Cobalt as to the shares of Cobalt Common Stock issuable upon
exercise of the Option. The Option may only be exercised upon the occurrence of
certain events described in Item 4 below, none of which has occurred as of the
date hereof. Sun expressly disclaims beneficial ownership of any of the shares
of Cobalt Common Stock which are issuable to Sun upon exercise of the Option
until such time as Sun purchases any such shares of Cobalt Common Stock upon any
such exercise of the Option.
(2) 5,800,828 shares of Cobalt Common Stock are subject to Voting
Agreements between Sun and certain officers, directors and other stockholders of
Cobalt, as described in Items 3 and 4 below, of which 3,854,416 shares are
either outstanding on date hereof or are issuable upon the exercise of
outstanding options which are either vested or will vest within 60 days of
September 18, 2000. Sun expressly disclaims beneficial ownership of any of the
shares of Cobalt Common Stock subject to the Voting Agreements. Based on the
31,050,287 shares of Cobalt Common Stock outstanding after the issuance of
716,688 shares of Cobalt Common Stock upon the exercise of outstanding options
which are either vested or will vest within 60 days of September 18, 2000 (but
excluding the shares of Cobalt Common Stock issuable upon exercise of the
Option), the 3,854,416 shares of Cobalt Common Stock subject to the Voting
Agreements which Sun may be deemed to beneficially own as of September 18, 2000
represent approximately 12.4% of the outstanding Cobalt Common Stock.
(3) Based upon 37,086,673 shares of Cobalt Common Stock outstanding
after the issuance of 6,036,386 shares of Cobalt Common Stock upon the exercise
of the Option described in Items 3 and 4 below, and the issuance of
716,688 shares of Cobalt Common Stock upon the exercise of outstanding options
which are either vested or will vest within 60 days of September 18, 2000.
<PAGE> 3
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 3 OF 11 PAGES
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ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the
Common Stock, par value $0.001 per share, of Cobalt Networks,
Inc., a Delaware corporation ("Cobalt" or "Issuer"). The
principal executive offices of Cobalt are located at 555 Ellis
Avenue, Mountain View, California 94043.
ITEM 2 IDENTITY AND BACKGROUND.
The name of the corporation filing this Statement is Sun
Microsystems, Inc., a Delaware corporation ("Sun"). Sun is a
leading worldwide provider of high-speed microprocessors,
scalable systems, software, network storage, mission-critical
support and professional services. The address of Sun's principal
business is 901 San Antonio Road, Palo Alto, California 94303.
Set forth on Schedule A hereto is (i) the name of each of the
executive officers and directors of Sun, (ii) the residence or
business address of each of the directors of Sun, (iii) present
principal occupation or employment of each of the executive
officers and directors of Sun, and the name, principal business
and address of any corporation or other organization in which
such employment is conducted, in each case as of the date hereof.
The address of the executive offices of Sun is the same as the
address of Sun's principal business.
Neither Sun nor, to the knowledge of Sun, any person named on
Schedule A hereto (i) during the last five years, has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), or (ii) during the last five years, was
a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree, or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, Federal or state securities laws or finding any
violation with respect to such laws.
To the knowledge of Sun, except as set forth on Schedule A
hereto, each of the individuals set forth on Schedule A hereto is
a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Merger and Reorganization,
dated as of September 18, 2000, a copy of which is attached
hereto as Exhibit 1 (the "Merger Agreement"), by and among Sun,
Azure Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Sun ("Merger Sub"), and Cobalt, and
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SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 4 OF 11 PAGES
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subject to the conditions set forth therein (including adoption
and approval of the transactions contemplated thereby by
stockholders of Cobalt and receipt of applicable regulatory
approvals), Merger Sub will merge with and into Cobalt and Cobalt
will become a wholly-owned subsidiary of Sun (such events
constituting the "Merger"). At the effective time of the Merger,
Merger Sub will cease to exist as a corporation and all of the
business, assets, liabilities and obligations of Merger Sub will
be merged with and into Cobalt, with Cobalt remaining as the
surviving corporation (sometimes referred to herein as the
"Surviving Corporation").
As an inducement to Sun to enter into the Merger Agreement and in
consideration thereof, Sun and Cobalt entered into a Stock Option
Agreement, dated as of September 18, 2000, a copy of which is
attached hereto as Exhibit 2 (the "Stock Option Agreement"),
pursuant to which Cobalt granted Sun an irrevocable option (the
"Option") to acquire, subject to certain conditions, up to a
number of shares of Cobalt Common Stock equal to 19.9% of the
issued and outstanding Cobalt Common Stock as of the first date,
if any, upon which an event occurs giving rise to Sun's right to
exercise the Option, for a purchase price of $57.63 per share.
Cobalt's obligation to issue shares to Sun pursuant to the
exercise of the Option is subject to the occurrence of certain
events described in Item 4 below, which may not occur. The
granting of the Option was negotiated as a material term of the
transactions contemplated by the Merger Agreement. Sun did not
pay additional consideration to Cobalt in connection with the
Stock Option Agreement or the granting of the Option by Cobalt.
In the event the Option becomes exercisable, Sun anticipates that
it will use working capital to fund the exercise price of the
Option.
As a further inducement to Sun to enter into the Merger Agreement
and in consideration thereof, certain officers, directors and
other stockholders of Cobalt (collectively, the "Stockholders")
entered into individual Voting Agreements with Sun, a copy of the
form of which is attached hereto as Exhibit 3 (each, a "Voting
Agreement" and, collectively, the "Voting Agreements"), whereby
each Stockholder agreed, severally and not jointly, to vote all
of the shares of Cobalt Common Stock beneficially owned by such
Stockholder in favor of adoption and approval of the Merger
Agreement and approval of the Merger and certain related matters.
Sun did not pay additional consideration to any Stockholder in
connection with the execution and delivery of the Voting
Agreements.
References to, and descriptions of, the Merger, the Merger
Agreement, the Stock Option Agreement and the Voting Agreements
set forth herein are qualified in their entirety by reference to
the copies of the Merger Agreement, the Stock Option Agreement
and the Voting Agreements included as Exhibits 1, 2, and 3,
respectively, to this Statement, which are incorporated by
reference herein in their entirety where such references and
descriptions appear.
<PAGE> 5
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 5 OF 11 PAGES
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ITEM 4. PURPOSE OF TRANSACTION.
(a) - (b) As described in Item 3 above, this Statement relates to
the acquisition of Cobalt by Sun pursuant to a statutory merger
of Merger Sub, a wholly-owned subsidiary of Sun, with and into
Cobalt, pursuant to which, at the effective time of the Merger,
the separate existence of Merger Sub will cease and Cobalt will
continue as the Surviving Corporation and as a wholly-owned
subsidiary of Sun. By virtue of the Merger, each holder of
outstanding shares of Cobalt Common Stock will receive, in
exchange for each share of Cobalt Common Stock held by such
holder, 0.5 shares of Common Stock, par value $0.00067 per share,
of Sun (including, with respect to each such share of Sun Common
Stock, the associated Rights (as defined in that certain Amended
and Restated Rights Agreement, dated as of February 11, 1998, as
amended April 14, 1999 and April 26, 2000, by and between Sun and
BankBoston, N.A., as Rights Agent)) ("Sun Common Stock"). In
connection with the Merger, Sun will also assume each outstanding
option to purchase Cobalt Common Stock under Cobalt's existing
stock option plans, and thereafter, each such option will
represent the right to acquire shares of Sun Common Stock. Also
in connection with the Merger, each purchase right under Cobalt's
Employee Stock Purchase Plan will be exercised, and each share of
Cobalt Common Stock issued as a result thereof will be converted
into the right to receive 0.5 shares of Sun Common Stock.
Pursuant to the Stock Option Agreement, Cobalt granted Sun the
Option to acquire, subject to certain conditions, up to a number
of shares of Cobalt Common Stock equal to 19.9% of the issued and
outstanding Cobalt Common Stock as of the first date, if any,
upon which an event occurs giving rise to Sun's right to exercise
the Option, for a purchase price of $57.63 per share. Cobalt's
obligation to issue shares to Sun pursuant to the exercise of the
Option is subject to the occurrence of certain events (each, an
"Exercise Event"), which may not occur. In general, an Exercise
Event may be deemed to occur if the Merger Agreement is
terminated because: (a) (i) the Board of Directors of Cobalt or
any committee thereof shall for any reason have withdrawn or
shall have amended or modified, in either case, in a manner
adverse to Sun its unanimous recommendation in favor of the
adoption and approval of the Merger Agreement or the approval of
the Merger; (ii) Cobalt shall have failed to include in the proxy
statement/prospectus relating to the Merger the unanimous
recommendation of the Board of Directors of Cobalt in favor of
the adoption and approval of the Merger Agreement and the
approval of the Merger; (iii) the Board of Directors of Cobalt
shall have failed to reaffirm its unanimous recommendation in
favor of the adoption and approval of the Merger Agreement and
the approval of the Merger within 10 business days after Sun
requests in writing that such recommendation be reaffirmed at any
time following the announcement of an Acquisition Proposal (as
defined in the Merger Agreement); (iv) the Board of Directors of
Cobalt or any committee thereof shall have approved or
recommended any Acquisition Proposal; (v) Cobalt shall have
entered into any letter of intent or similar document or any
agreement, contract or commitment accepting any Acquisition
<PAGE> 6
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 6 OF 11 PAGES
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Proposal; (vi) Cobalt shall have breached any of the terms of
Section 5.5 of the Merger Agreement (relating to the solicitation
of alternative transactions); or (vii) a tender or exchange offer
relating to not less than 15% of the then outstanding shares of
capital stock Cobalt shall have been commenced by a person
unaffiliated with Sun, and Cobalt shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the
Securities Act of 1933, as amended, within 10 business days after
such tender or exchange offer is first commenced, a statement
indicating that Cobalt recommends rejection of such tender or
exchange offer; or (b) (i) the Merger shall not have been
consummated by March 16, 2001, or the requisite approval of the
stockholders of Cobalt contemplated by the Merger Agreement shall
not have been obtained by reason of the failure to obtain the
requisite vote at a meeting of the stockholders of Cobalt, (ii)
prior to the date of termination of the Merger Agreement, a third
party shall have announced an Acquisition Proposal, and (iii)
within 12 months following the termination of the Merger
Agreement, (x) a Company Acquisition (as defined in the Merger
Agreement) is consummated or Cobalt enters into an agreement or
letter of intent providing for a Company Acquisition, or (y) a
third party commences a tender or exchange offer for a Company
Acquisition and, at any time thereafter, such Company Acquisition
is consummated.
Pursuant to the Voting Agreements, each of the Stockholders has
irrevocably appointed the directors of Sun as such Stockholder's
lawful attorneys and proxies with respect to certain prescribed
matters related to the Merger. The foregoing proxies give the
directors of Sun the limited right to vote or deliver a consent
with respect to each of the shares of Cobalt Common Stock
beneficially owned by the Stockholders, at every annual, special,
adjourned or postponed meeting of the stockholders of Cobalt and
in every written consent in lieu of such a meeting: (a) in favor
of the approval of the Merger and the adoption and approval of
the Merger Agreement, and in favor of each of the other actions
contemplated by the Merger Agreement and any action required in
furtherance thereof; (b) against approval of any proposal made in
opposition to, or in competition with, consummation of the Merger
and the transactions contemplated by the Merger Agreement; (c)
against any of the following actions (other than those actions
that relate to the Merger and the transactions contemplated by
the Merger Agreement): (i) any merger, consolidation, business
combination, sale of assets, reorganization or recapitalization
of Cobalt or any subsidiary of Cobalt with any party, (ii) any
sale, lease or transfer of any significant part of the assets of
Cobalt or any subsidiary of Cobalt, (iii) any reorganization,
recapitalization, dissolution, liquidation or winding up of
Cobalt or any subsidiary of Cobalt, (iv) any material change in
the capitalization of Cobalt or any subsidiary of Cobalt, or the
corporate structure of Cobalt or any subsidiary of Cobalt, or (v)
any other action that is intended, or could reasonably be
expected to, impede, interfere with, delay, postpone, discourage
<PAGE> 7
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 7 OF 11 PAGES
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or adversely affect the Merger or any of the other transactions
contemplated by the Merger Agreement; and (d) in favor of waiving
any notice that may have been or may be required relating to any
reorganization of Cobalt or any subsidiary of Cobalt, any
reclassification or recapitalization of the capital stock of
Cobalt or any subsidiary of Cobalt, or any sale of assets, change
of control, or acquisition of Cobalt or any subsidiary of Cobalt
by any other person, or any consolidation or merger of Cobalt or
any subsidiary of Cobalt with or into any other person. The
Stockholders may vote their shares of Cobalt Common Stock on all
other matters submitted to the stockholders of Cobalt for their
approval. The Voting Agreements terminate upon the earlier to
occur of (a) such date and time as the Merger Agreement shall
have been validly terminated pursuant to its terms, and (b) such
date and time as the Merger shall become effective in accordance
with the terms and conditions set forth in the Merger Agreement.
The purpose of the Stock Option Agreement and the Voting
Agreements is to enable Sun and Cobalt to consummate the
transactions contemplated under the Merger Agreement.
(c) Not applicable.
(d) Upon the consummation of the Merger, the directors of the
Surviving Corporation will be the directors of Merger Sub
immediately prior to the effective time of the Merger, until
their respective successors are duly elected or appointed and
qualified. Upon consummation of the Merger, the initial officers
of the Surviving Corporation will be the officers of Merger Sub
immediately prior to the effective time of the Merger, until his
respective successor is duly appointed. Sun will appoint each of
the directors and officers of Merger Sub.
(e) Other than as a result of the Merger described in Item 3 and
Item 4 above, not applicable.
(f) Not applicable.
(g) Upon consummation of the Merger, the Certificate of
Incorporation of Cobalt will be amended and restated in its
entirety to be the same as in substance as the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to
the effective time of the Merger (except that the name of Cobalt
will remain Cobalt Networks, Inc.), and such Certificate of
Incorporation of Cobalt, as so amended and restated, will be the
Certificate of Incorporation of the Surviving Corporation until
thereafter amended in accordance with the General Corporation Law
of the State of Delaware and such Certificate of Incorporation.
Upon consummation of the Merger, the Bylaws of Merger Sub, as in
effect immediately prior to the Merger, will be, at
<PAGE> 8
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 8 OF 11 PAGES
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the effective time of the Merger, the Bylaws of the Surviving
Corporation until thereafter amended in accordance with the
General Corporation Law of the State of Delaware, the Certificate
of Incorporation of Cobalt and such Bylaws.
(h) - (i) Upon consummation of the Merger, the Cobalt Common
Stock will be deregistered under the Securities Exchange Act of
1934, as amended, and delisted from the Nasdaq National Market.
(j) Other than described above, Sun currently has no plan or
proposals which relate to, or may result in, any of the matters
listed in Items 4(a) - (j) of Schedule 13D, inclusive, although
Sun reserves the right to develop such plans.
References to, and descriptions of, the Merger, the Merger
Agreement, the Stock Option Agreement and the Voting Agreements
set forth herein are qualified in their entirety by reference to
the copies of the Merger Agreement, the Stock Option Agreement
and the Voting Agreements included as Exhibits 1, 2, and 3,
respectively, to this Statement, which are incorporated by
reference herein in their entirety where such references and
descriptions appear.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) - (b) In the event that the Option becomes exercisable, and
is exercised in full, Sun will have sole voting power with
respect to, and the sole power to dispose of, that number of
shares of Cobalt Common Stock equal to 19.9% of the then
outstanding shares of Cobalt Common Stock, which, based upon the
30,333,599 shares of Cobalt Common Stock outstanding as of
September 14, 2000 (as represented by Cobalt in the Merger
Agreement described in Items 3 and 4 above), currently equals
6,036,386 shares of Cobalt Common Stock. Prior to the exercise of
the Option, Sun is not entitled to any rights as a stockholder of
Cobalt as to the shares of Cobalt Common Stock issuable upon
exercise of the Option. The Option may only be exercised upon the
occurrence of the Exercise Events described in Item 4 above, none
of which has occurred as of the date hereof. Sun expressly
disclaims beneficial ownership of any of the shares of Cobalt
Common Stock which are issuable to Sun upon exercise of the
Option until such time as Sun purchases any such shares of Cobalt
Common Stock upon any such exercise of the Option.
As a result of the Voting Agreements, Sun may be deemed to be the
beneficial owner of at least 3,854,416 shares of Cobalt Common
Stock as of September 18, 2000. Such Cobalt Common Stock
constitutes approximately 12.4% of the issued and outstanding
shares of Cobalt Common Stock, based on the 30,333,599 shares of
Cobalt Common Stock outstanding as of September 14, 2000 (as
represented by Cobalt in the Merger Agreement described in Items
3 and 4 above) and assuming the issuance of 716,688 shares of
Cobalt Common Stock upon the exercise of outstanding options
which are either vested or will vest within 60 days of September
18, 2000. Sun also may be deemed to have shared voting
<PAGE> 9
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 9 OF 11 PAGES
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power with respect to the foregoing shares of Cobalt Common Stock
with respect to those matters described above. However, Sun (a)
is not entitled to any rights as a stockholder of Cobalt as to
the foregoing shares of Cobalt Common Stock, and (b) disclaims
any beneficial ownership of the shares of Cobalt Common Stock
which are covered by the Voting Agreements.
To the knowledge of Sun, other than William N. Joy, the
Co-founder and Chief Scientist of Sun, who held 2,435 shares of
Cobalt Common Stock as of September 18, 2000, no other person
listed on Schedule A hereto has an equity or other ownership
interest in Cobalt.
Set forth on Schedule B hereto is the name of those stockholders
of Cobalt that have entered into a Voting Agreement with Sun, and
to the knowledge of Sun, each of their respective present
principal occupation or employment, including the name, principal
business and address of any corporation or other organization in
which such employment is conducted.
(c) To the knowledge of Sun, no transactions in the class of
securities reported on this Statement have been effected during
the past 60 days by the persons named in response to Item 5(a)
and Item 2.
(d) To the knowledge of Sun, no other person has the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the class of securities reported
on this Statement.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement and the exhibits thereto,
including the Stock Option Agreement and the Voting Agreements,
to the knowledge of Sun, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the
persons named in Item 2 of Schedule 13D and between such persons
and any person with respect to any securities of Cobalt,
including, but not limited to transfer or voting of any of the
class of securities reported on this Statement, finder's fees,
joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits to this Statement:
<PAGE> 10
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 10 OF 11 PAGES
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1. Agreement and Plan of Merger and Reorganization, dated as
of September 18, 2000, by and among Sun Microsystems,
Inc., a Delaware corporation ("Sun"), Azure Acquisition
Corporation, a Delaware corporation and a wholly-owned
subsidiary of Sun, and Cobalt Networks, Inc., a Delaware
corporation.
2. Stock Option Agreement, dated as of September 18, 2000, by
and between Sun Microsystems, Inc., a Delaware
corporation, and Cobalt Networks, Inc., a Delaware
corporation.
3. Form of Voting Agreement, dated as of September 18, 2000,
by and between Sun and certain stockholders of Cobalt set
forth on Schedule B hereto.
<PAGE> 11
SCHEDULE 13D
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CUSIP NO. 19074R101 PAGE 11 OF 11 PAGES
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
SUN MICROSYSTEMS, INC.
September 28, 2000
----------------------------------------
(Date)
/s/ Michael Morris
----------------------------------------
(Signature)
Michael H. Morris
Vice President, General Counsel
and Secretary
----------------------------------------
(Name/Title)
<PAGE> 12
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
SUN MICROSYSTEMS, INC.
The following table sets forth the name, business address and present
principal occupation or employment of each executive officer and director of
Sun. Except as otherwise indicated below, the business address of each person
set forth on this Schedule A is: c/o Sun Microsystems, Inc., 901 San Antonio
Road, Palo Alto, California 94303.
<TABLE>
<CAPTION>
Name of Executive Officer Title and Present Principal Occupation
------------------------- --------------------------------------
<S> <C>
Scott G. McNealy Chairman of the Board of Directors and Chief
Executive Officer
Edward J. Zander President, Chief Operating Officer
William T. Agnello Senior Vice President, Workplace Resources
Crawford W. Beveridge Executive Vice President and Chief Human
Resources Officer
Mel Friedman Senior Vice President, Customer Advocacy
Lawrence W. Hambly Executive Vice President, Enterprise Services
H. William Howard Senior Vice President, Chief Information Officer
Masood A. Jabbar Executive Vice President, Global Sales Operations
William N. Joy Co-Founder and Chief Scientist
Michael E. Lehman Executive Vice President, Corporate Resources
and Chief Financial Officer
John P. Loiacono Senior Vice President, Chief Marketing Officer
John S. McFarlane Executive Vice President, Network Service
Providers
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
Name of Executive Officer Title and Present Principal Occupation
------------------------- --------------------------------------
<S> <C>
Michael H. Morris Senior Vice President, General Counsel
and Secretary
Gregory M. Papadopoulos Senior Vice President and Chief Technology Officer
Michael L. Popov Vice President, Corporate Controller
Janpieter T. Scheerder* Executive Vice President, Storage Products
Jonathan I. Schwartz Senior Vice President, Corporate Strategy
and Planning
John C. Shoemaker Executive Vice President, System Products Group
Patricia C. Sueltz Executive Vice President, Software Systems Group
Mark E. Tolliver Executive Vice President and President, iPlanet,
Sun-Netscape Alliance
</TABLE>
* Citizen of Indonesia.
<PAGE> 14
<TABLE>
<CAPTION>
Name of Director Title and Present Principal Occupation
---------------- --------------------------------------
<S> <C>
Scott G. McNealy Chairman of the Board of Directors and Chief
Executive Officer of Sun
James L. Barksdale Managing Partner, The Barksdale Group
Director 2730 Sand Hill Road, Suite 100
Menlo Park, CA 94025
L. John Doerr General Partner/Managing Director, Kleiner
Director Perkins Caufield & Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Judith L. Estrin Chief Executive Officer, Packet Design, Inc.
Director 66 Willow Place
Menlo Park, CA 94025
Robert J. Fisher Member, Board of Directors, The Gap, Inc.
Director c/o Pisces, Inc.
One Maritime Plaza
Suite 1400
San Francisco, CA 94111
Robert L. Long Independent Management Consultant
Director 220 Glen Garry Avenue
Melbourne Beach, FL 32951
M. Kenneth Oshman Chairman of the Board of Directors, President
Director and Chief Executive Officer
Echelon Corporation
415 Oakmead Parkway
Suite 1400
Sunnyvale, CA 94085
Naomi O. Seligman Senior Partner, Ostriker von Simson, Inc.
Director 152 West 57th Street
35th Floor
New York, NY 10019
</TABLE>
<PAGE> 15
SCHEDULE B
STOCKHOLDERS PARTY TO A VOTING AGREEMENT
WITH SUN MICROSYSTEMS, INC.
The following table sets forth the name and present principal occupation
or employment of each Stockholder of Cobalt that has entered into a Voting
Agreement with Sun in connection with the Merger Agreement, and the aggregate
number of shares of Cobalt Common Stock beneficially owned by each such
Stockholder as of September 18, 2000. Except as otherwise indicated below, the
business address of each Stockholder set forth on this Schedule B is: c/o Cobalt
Networks, Inc., 555 Ellis Avenue, Mountain View, California 94043.
<TABLE>
<CAPTION>
Stockholder Party to Voting Agreement Shares Beneficially Owned
------------------------------------- -------------------------
<S> <C>
Gordon A. Campbell, 699,614
Managing Member of Techfund Capital
111 West Evelyn Avenue, Suite 101
Sunnyvale, California 94086
Techfund Capital, LP 527,149
111 West Evelyn Avenue, Suite 101
Sunnyvale, California 94086
Techfund Capital II, LP 2,364
111 West Evelyn Avenue, Suite 101
Sunnyvale, California 94086
Techfund Capital Management, LLC 200,321
111 West Evelyn Avenue, Suite 101
Sunnyvale, California 94086
Techfund Capital Management II, LLC 10,405
111 West Evelyn Avenue, Suite 101
Sunnyvale, California 94086
Stephen W. DeWitt, 1,061,630(1)
Chief Executive Officer, President and
Director of Cobalt Networks, Inc.
Vivek Mehra, 830,632(2)
Chief Technology Officer and Vice
President, Products of Cobalt Networks,
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
Inc.
Gary A. Martell, 73,968(3)
Chief Operating Officer
Kenton D. Chow, 84,032(4)
Chief Financial Officer, Vice President,
Finance and Secretary of Cobalt Networks,
Inc.
Patrick J. Conte, 32,434(5)
Vice President, Sales, Americas and Asia
Pacific of Cobalt Networks, Inc.
Kelly Herrell, 58,125(6)
Vice President, Marketing of Cobalt
Networks, Inc.
George M. Korchinsky, 98,479(7)
Vice President, EMEA Operations of Cobalt
Networks, Inc.
Sharon McCorkle, 29,049(8)
Vice President, Operations of Cobalt
Networks, Inc.
Christopher W. Hogan, 29,665
Vice President of Cobalt Networks, Inc.
Gary F. Bengier, 12,500(9)
Chief Financial Officer and Vice
President, Operations of eBay Inc.
Stephen J. Luczo, 13,718(10)
Chief Executive Officer and Director of
Seagate Technology, Inc.
Carl F. Pascarella, 12,500(11)
President and Chief Executive Officer of
Vias USA
Mark F. Spagnolo, 13,000(12)
</TABLE>
<PAGE> 17
<TABLE>
<S> <C>
President and Chief Executive officer of
UUNET
Jordon A. Levy, 64,831(13)
Managing Partner of Seed Capital Partners
Total: 3,854,416(14)
</TABLE>
(1) Includes 700,000 outstanding shares of Cobalt Common Stock, and 361,630
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(2) Includes 799,382 outstanding shares of Cobalt Common Stock, and 31,250
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(3) Includes 48,968 outstanding shares of Cobalt Common Stock, and 25,000
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(4) Includes 47,991 outstanding shares of Cobalt Common Stock, and 36,041
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(5) Includes 351 outstanding shares of Cobalt Common Stock, and 32,083 shares of
Cobalt Common Stock issuable upon the exercise of options to purchase Cobalt
Common Stock which are exercisable within 60 days of September 18, 2000.
(6) Includes 20,000 outstanding shares of Cobalt Common Stock, and 38,125 shares
of Cobalt Common Stock issuable upon the exercise of options to purchase Cobalt
Common Stock which are exercisable within 60 days of September 18, 2000.
(7) Includes 9,729 outstanding shares of Cobalt Common Stock, and 88,750
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(8) Includes 240 outstanding shares of Cobalt Common Stock, and 28,809 shares of
Cobalt Common Stock issuable upon the exercise of options to purchase Cobalt
Common Stock which are exercisable within 60 days of September 18, 2000.
<PAGE> 18
(9) Consists of 12,500 shares of Cobalt Common Stock issuable upon the exercise
of options to purchase Cobalt Common Stock which are exercisable within 60 days
of September 18, 2000.
(10) Includes 1,218 outstanding shares of Cobalt Common Stock, and 12,500 shares
of Cobalt Common Stock issuable upon the exercise of options to purchase Cobalt
Common Stock which are exercisable within 60 days of September 18, 2000.
(11) Consists of 12,500 shares of Cobalt Common Stock issuable upon the exercise
of options to purchase Cobalt Common Stock which are exercisable within 60 days
of September 18, 2000.
(12) Includes 500 outstanding shares of Cobalt Common Stock, and 12,500 shares
of Cobalt Common Stock issuable upon the exercise of options to purchase Cobalt
Common Stock which are exercisable within 60 days of September 18, 2000.
(13) Includes 39,831 outstanding shares of Cobalt Common Stock, and 25,000
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
(14) Includes 3,137,728 outstanding shares of Cobalt Common Stock, and 716,688
shares of Cobalt Common Stock issuable upon the exercise of options to purchase
Cobalt Common Stock which are exercisable within 60 days of September 18, 2000.
