Exhibit 10.17
Executive Officer Bonus Terms for
FY09 Under the Section 162(m)
Executive Officer
Performance–Based Bonus Plan
Plan Objective
The Executive Officer Bonus Terms
for fiscal year 2009 under the Sun Microsystems, Inc.
(“Sun” or the “Company”)
Section 162(m) Executive Officer Performance-Based Bonus Plan
(the “Plan”) are designed to compensate the Executive
Officers, other than the Chief Executive Officer, for contributions
to Sun during the Company’s fiscal year 2009. The Plan
provides for quarterly cash bonus compensation based on achievement
of objectively determinable performance goals against the Plan
measures. The Plan is intended to qualify as
“performance-based compensation” within the meaning of
Section 162(m) of the Internal Revenue Code (the
“Code”).
Plan Year/Performance
Periods
The Plan year is the Company’s
fiscal year 2009. The performance periods are each of the
Company’s four fiscal quarters during that fiscal
year.
Eligibility
These terms apply to persons serving
as Sun’s Executive Officers, other than the Chief Executive
Officer, during fiscal year 2009. In order to receive a bonus
payment with respect to any fiscal quarter, the participant must be
serving as an Executive Officer of Sun as of the last business day
of that fiscal quarter, except as provided below.
A participant who retires,
terminates employment due to disability, or dies during any
performance period may receive a prorated bonus (subject to the
sole discretion of the Leadership Development and Compensation
Committee (the “LDCC”)) for the achievement of the
performance goals for the period of time during the fiscal quarter
that the participant provided services to Sun. A participant who
leaves Sun prior to the end of a fiscal quarter for any other
reason, including but not limited to a reduction in force,
voluntary resignation, or termination by Sun will be ineligible for
a bonus payment with respect to that fiscal quarter and any
subsequent fiscal quarter during the Plan year.
Bonus Target
Percentage
The annual bonus targets under the
Plan for Executive Officers, other than the Chief Executive
Officer, range from 45% to 150% (as approved for each individual
based on their role) of the participant’s Eligible Wages (as
defined below) for fiscal year 2009 (the “Bonus
Target”). The Bonus Targets are divided between the four
fiscal quarters of fiscal year 2009 as follows (each, a
“Quarterly Bonus Target”):
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Fiscal Quarter
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Quarterly Bonus
Percentage
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Quarterly Bonus
Target
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FY 09 Q1
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10%
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4.5% to 15%
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FY 09 Q2
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30%
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13.5% to 45%
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FY 09 Q3
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20%
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9% to 30%
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FY 09 Q4
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40%
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18% to 60%
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For example, for Q1 FY09, an
individual with a Bonus Target of 45% would multiply the Bonus
Target by the Quarterly Bonus Percentage of 10%, resulting in a
Quarterly Bonus Target of 4.5% of Eligible Wage for that
quarter.
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Sun
Confidential: Internal Use Only
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Page 1 of 4
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July 2008
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Executive Officer Bonus Terms for
FY09 Under the Section 162(m)
Executive Officer
Performance–Based Bonus Plan
Company Performance Measures
The Plan is based on the
Company’s performance against the following measures (the
“Company Performance Measures”):
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1.
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Q1
FY09-quarterly Revenue (weighted 50%) and quarterly Operating
Income (weighted 50%);
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2.
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Q2
FY09-quarterly Revenue (weighted 50%) and quarterly Operating
Income (weighted 50%);
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3.
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Q3
FY09-quarterly Revenue (weighted 50%) and quarterly Operating
Income (weighted 50%); and
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4.
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Q4
FY09-quarterly Revenue (weighted 50%) and quarterly Operating
Income (weighted 50%).
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Additional funding shall be
allocated to the Q4 bonus payments if the Annual Strategic Goals
are met (Each Goal will be measured and fun
