FORM OF CHANGE OF CONTROL AGREEMENT

(a)

“Annual Compensation” means the total of:

(i)

one year of base salary, at the highest base salary rate that you were paid by the Company in the 12-month period prior to the date of your Separation from Service (the “Look-Back Period”);

(ii)

100% of the greatest On Target annual bonus target for which you were eligible within the Look-Back Period; and

(iii)

100% of the greatest On Target Commission for which you were eligible within the Look-Back Period.

(b)

“Beneficial Owner” has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

(c)

“Cause” means (i) any act of personal dishonesty taken by you in connection with your responsibilities as an employee and intended to result in substantial personal enrichment to you; (ii) use, possession, sale, or distribution of illegal substances; (iii) your acknowledgment or conviction of, fraud or any crime in which the Board reasonably believes has or could have a material detrimental effect on the Company’s reputation or business; (iv) conduct endangering, or likely to endanger, the health or safety of another employee, or (v) falsifying or misrepresenting information on Company records.

(d)

“Change of Control” of the Company means and includes each and all of the following occurrences:

(i)

The stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent company) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity, or its parent company, outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets.

(ii)

The acquisition by any Person as Beneficial Owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities.

(iii)

A change in the composition of the Board as a result of which fewer than a majority of the directors are “Incumbent Directors.” “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date hereof or (B) are elected, or nominated for election, to the Board with the affirmative votes (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for election as a director without objection to such nomination) of at least three-quarters of the Incumbent Directors at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors of the Company).

(x)

Any transaction, the sole purpose of which is to change the state of the Company’s incorporation; or

(y)

A transaction, the result of which is to sell all or substantially all of the assets of the Company to another corporation (the “surviving corporation”); provided that the surviving corporation is owned directly or indirectly by the stockholders of the Company immediately following such transaction in substantially the same proportions as their ownership of the Company’s Common Stock immediately preceding such transaction; and provided, further, that the surviving corporation expressly assumes this Agreement.

(e)

“Code” means the Internal Revenue Code of 1986, as amended.

(f)

“Company” means Sun Microsystems, Inc., a Delaware corporation, and any successor as provided in Section 8 hereof.

(g)

“Disability” means that, at the time you Separate from Service, you have been unable to perform the duties of your position for a period of 180 consecutive days as the result of your incapacity due to physical or mental illness.

(h)

“Good Reason” means the occurrence of one of the following without your express written consent (i) a significant reduction of your duties, position or responsibilities, or your removal from such position and responsibilities, unless you are offered a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation, title and status); (ii) a reduction by the Company in your base compensation (base salary and target bonus) as in effect immediately prior to such reduction; (iii) a material reduction by the Company in the kind or level of employee benefits to which you are entitled immediately prior to such reduction with the result that your overall benefits package is significantly reduced; (iv) you are requested to relocate (except for office relocations that would not increase your one way commute by more than 50 miles); or (v) the failure of the Company to obtain the assumption of this Agreement pursuant to Section 8.

(i)

“Key Employee” means an employee who is determined by the Company to be a Key Employee in accordance with Section 409A of the Code.

(j)

“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) of the Exchange Act but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as Trustee).

(k)

“Separation from Service” or “Separates from Service” means a termination of employment with Sun that the Company determines is a Separation from Service in accordance with Section 409A of the Code.

(l)

“Severance Payment” means the payment of severance compensation as provided in Section 3 of this Agreement.