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Exhibit
10.4
SUN MICROSYSTEMS,
INC.
RESTRICTED STOCK UNIT
AGREEMENT
NOTICE OF
GRANT
Sun Microsystems, Inc.
(“Sun”) is pleased to inform you that you, [
], have been granted the number of restricted stock units
(“Restricted Stock Units”) indicated below under
Sun’s 1990 Long-Term Equity Incentive Plan (the
“Plan”) and the terms of this Restricted Stock Unit
agreement (including the Notice of Grant and Appendices A and B,
all of which are the “Agreement”). Subject to the
provisions of the Agreement and the Plan, the principal features of
this grant are as follows:
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| Grant
Date: |
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[Date] |
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| Total Number
of Restricted Stock Units: |
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[To
come] |
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| Scheduled
Vesting: |
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50% of
total Restricted Stock Units vest 2.5 years after Grant Date;
remaining 50% vest 5 years after Grant Date* |
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| Purchase
Price per Share: |
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$.00067
payable in services rendered by you (no cash payment
required) |
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| Acceptance
Deadline: |
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You must
accept this grant of Restricted Stock Units prior to the Acceptance
Deadline, which is sixty (60) days from the Grant Date. |
| * |
Except as otherwise provided in the Agreement or by the terms
of the Plan, you will not vest in the Restricted Stock Units unless
you remain employed by Sun or one of its Subsidiaries through the
applicable vesting date. |
Your acceptance of this grant
either by signature below or by electronic acceptance indicates
your understanding that this grant is subject to all of the terms
described in this Agreement, including Appendices A and B, and
the Plan. Important additional information on vesting and
forfeiture of the Restricted Stock Units covered by this grant is
contained in paragraphs 4 through 5 and paragraph 7 of
Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A,
WHICH CONTAINS THE SPECIFIC TERMS OF THIS GRANT.
THIS AGREEMENT MUST BE
ACCEPTED BY YOU BY THE ACCEPTANCE DEADLINE, OR THIS GRANT OF
RESTRICTED STOCK UNITS WILL AUTOMATICALLY BE
CANCELED.
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| SUN MICROSYSTEMS, INC. |
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GRANTEE |
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| By: |
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/s/ Michael A.
Dillon
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| Title: |
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Executive
VP, General Counsel |
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[Name] |
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and
Secretary |
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APPENDIX A
TERMS OF RESTRICTED STOCK
UNITS
| 1. |
Grant . Sun hereby grants to you under the Plan at the
per share price of $.00067 (the “Purchase Price”), the
number of Restricted Stock Units indicated in the Notice of Grant,
subject to all of the terms in this Agreement and the Plan. The
Purchase Price equals the par value of a share of Sun Common Stock
(a “Share”). |
| 2. |
Payment of Purchase Price . When Shares are issued to
you in payment for the Restricted Stock Units, the Purchase Price
will be deemed paid through services rendered by you (not in cash),
and will be subject to the appropriate tax
withholdings. |
| 3. |
Sun’s Obligation to Pay . Unless and until the
Restricted Stock Units have vested in the manner set forth in
paragraphs 4 or 5, you will have no right to payment of the
Restricted Stock Units. Until any vested Restricted Stock Units
actually are paid, the Restricted Stock Units will be an unsecured
obligation of Sun. Any vested Restricted Stock Units will be paid
in Shares. Only whole Shares will be issued. |
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(a) |
General . Except as otherwise provided in this paragraph
4 and paragraph 5 of this Agreement, and subject to paragraph
7, the Restricted Stock Units are scheduled to vest in accordance
with the vesting schedule shown in the Notice of Grant. Restricted
Stock Units scheduled to vest on any date actually will vest only
if you continue to be employed by Sun or one of its Subsidiaries
through the applicable vesting date, except to the extent otherwise
provided in this Agreement, by Sun in a written agreement between
you and an authorized officer of Sun or in accordance with the
then-applicable written policies of Sun. In all instances in which
Restricted Stock Units continue to vest after you cease to be
employed by Sun or one of its Subsidiaries, the payment of such
accelerated Restricted Stock Units nevertheless will be made at the
same time or times such Restricted Stock Units would have been paid
had they vested in accordance with the vesting schedule shown in
the Notice of Grant. |
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(b)
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Leave of Absence .
Notwithstanding the above, vesting of the Restricted Stock Units
will be suspended if you take an authorized unpaid leave of absence
(including a leave of absence for military, educational, disability
or personal purposes, but except as may be required by law) of more
than thirty (30) days or an authorized paid leave of absence
of more than ninety (90) days. The vesting schedule shown in
the Notice of Grant will be delayed for the number of days that the
authorized unpaid leave of absence or authorized paid leave of
absence extends beyond the periods set forth above. The suspension
of vesting will commence on the thirty-first (31 st ) day of an authorized unpaid leave
of absence of more than thirty (30) days or, in the case of an
authorized paid leave of absence of more than ninety
(90) days, on the ninety-first (91 st ) day of the leave and the
suspension will end on the earlier of: (i) the last business
day preceding the date on which your leave of absence terminates;
or (ii) a date twelve (12) months after the beginning of
the leave of absence. These vesting suspension provisions will be
applied in compliance with local law. Sun policies on leave of
absence may vary outside the United States, in accordance with
local law. The preceding two sentences will apply only to those
employees who are not subject to United States
taxes.
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April, 2007
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(c) |
Disability . Notwithstanding the above, if your
employment with Sun (or the employing Subsidiary) terminates as a
result of your Disability, during the twelve (12) months
following your termination, you will continue to vest as to the
number of Restricted Stock Units that would have vested if you had
remained an employee of Sun (or the employing Subsidiary) during
that period. For purposes of this Agreement,
“Disability” means your total and permanent disability
as defined in Section 22(e)(3) of the Code. |
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(d) |
Death . Notwithstanding the above, if your employment
with Sun (or the employing Subsidiary) terminates as a result of
your death, the Restricted Stock Units granted under this Agreement
will continue to vest during the twelve (12) months following
your death as to the number of Restricted Stock Units that would
have vested had you remained an employee of Sun (or the employing
Subsidiary) during that period. |
| 5. |
Committee Discretion . The Committee, in its discretion,
may accelerate the vesting of some or all of the Restricted Stock
Units at any time, subject to the terms of the Plan. If so
accelerated, the Restricted Stock Units will be considered as
having vested as of the date specified by the Committee. If the
Committee, in its discretion, accelerates the vesting of any
Restricted Stock Units, the payment of the accelerated Restricted
Stock Units nevertheless will be made at the same time or times as
if the Restricted Stock Units had vested in accordance with the
vesting schedule shown on the Notice of Grant (whether or not you
remain employed by Sun or one of its Subsidiaries). |
| 6. |
Payment after Vesting . Any Restricted Stock Units that
vest while you remain employed by Sun or one of its Subsidiaries in
accordance with paragraph 4 will be paid to you (or in the event of
your death, to your estate) in Shares as soon as administratively
practicable following the date of vesting, subject to
paragraph 9. Any Restricted Stock Units that continue to vest
after you cease to be employed by Sun or one of its Subsidiaries as
provided in paragraph 4 or that vest in accordance with paragraph 5
will be paid to you (or in the event of your death, to your estate)
in Shares in accordance with the provision of such paragraphs,
subject to paragraph 9. For each Restricted Stock Unit that
vests, you will receive one Share. |
| 7. |
Forfeiture . Except as expressly provided herein, any
Restricted Stock Units that have not vested at the time you cease
to be employed by Sun or one of its Subsidiaries will be forfeited
and automatically transferred to and reacquired by Sun at no cost
to Sun. |
| 8. |
Death . Any distribution or delivery to be made to you
under this Agreement will, if you are then deceased, be made to the
administrator or executor of your estate. The administrator or
executor must furnish Sun with (a) written notice of his or
her status as transferee, and (b) evidence satisfactory to Sun
to establish the validity of the transfer and compliance with any
applicable laws or regulations. |
| 9. |
Withholding of Taxes . Regardless of any action Sun or
the company that employs you (the “Employer”) takes
with respect to any or all income tax, social insurance,
payroll |
April, 2007
tax, payment on account or
other tax-related withholding (“Tax-Related Items”),
you acknowledge that the ultimate liability for all Tax-Related
Items legally due by you is and remains your responsibility and
that Sun and/or the Employer (1) make no representations or
undertakings regarding the treatment of any Tax-Related Items in
connection with any aspect of the grant of Restricted Stock Units,
including the grant, vesting and lapse of repurchase rights, the
subsequent sale of Shares and/or the receipt of any dividends; and
(2) do not commit to structure the terms of the grant or any
aspect of the grant of Restricted Stock Units to reduce or
eliminate your liability for Tax-Related Items. When the Shares are
issued as payment for vested Restricted Stock Units, you will
recognize immediate U.S. taxable income if you are a U.S. taxpayer.
If you are a non-U.S. taxpayer, you will be subject to applicable
taxes in your jurisdiction. Sun or the Employer is required to
withhold from you an amount that is sufficient to pay the minimum
federal, state and local income, employment and any other
applicable taxes required to be withheld by Sun or the Employer
with respect to the Shares. Sun or the Employer may, in its
discretion, meet this withholding requirement in any one or more of
the following ways:
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(a) |
by withholding or selling a portion of the Shares that
otherwise would be paid out for your vested Restricted Stock
Units; |
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(b) |
by withholding the amount necessary to pay the applicable taxes
from your paycheck, with no withholding of Shares.; |
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(c) |
by requiring you to make alternate arrangements to meet the
withholding obligation; or |
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(d) |
such other method as Sun or the Committee may elect in
compliance with local law. |
No payment of Shares will be
made to you (or your estate) for Restricted Stock Units unless and
until satisfactory arrangements (as determined by Sun) have been
made by you to fulfill Sun’s (or the Employer’s)
obligation to withhold or collect any income and other taxes with
respect to the Restricted Stock Units. By accepting this grant, you
expressly consent to the withholding of Shares and to any
additional (or alternative) cash withholding as provided for in
this paragraph 9. All income and other taxes related to the
Restricted Stock Unit award and any Shares delivered in payment
thereof are your sole responsibility.
| 10. |
Rights as Stockholder . Neither you nor any person
claiming under or through you will have any of the rights or
privileges of a stockholder of Sun in respect of any Shares
deliverable hereunder unless and until certificates representing
the Shares (which may be in book entry form) have been issued,
recorded on the records of Sun or its transfer agents or
registrars, and delivered to you (including through electronic
delivery to a brokerage account). Notwithstanding any other part of
this Agreement, any quarterly or other regular, periodic dividends
or distributions (as determined by Sun) will not affect unvested
Restricted Stock Units, and no dividends or other distributions
will be paid on unvested Restricted Stock Units. Notwithstanding
any other part of this Agreement, any quarterly or other regular,
periodic dividends or distributions (as determined by Sun) paid on
Shares will accrue with respect to Restricted Stock Units that are
vested but unpaid pursuant to paragraph 4 or 5, and will be
paid out at the same time or time(s) as the underlying Shares on
which such dividends or other distributions have
accrued. |
April, 2007
After the issuance,
recordation and delivery of any shares, you will have all the
rights of a stockholder of Sun with respect to voting the Shares
and receiving dividends and distributions on the Shares.
| 11. |
Nature of Grant. In accepting the offer to acquire
Shares, you acknowledge that: (a) the Plan is established
voluntarily by Sun, it is discretionary in nature and it may be
modified, amended, suspended or terminated by Sun at any time,
unless otherwise provided in the Plan and this Agreement;
(b) the grant of Restricted Stock Units is voluntary and
occasional and does not create any contractual or other right to
receive future grants of restricted stock units, or benefits in
lieu of such grants even if restricted stock units have been
granted repeatedly in the past; (c) all decisions with respect
to future Restricted Stock Unit grants, if any, will be at the sole
discretion of Sun; (d) you are voluntarily participating in
the Plan; (e) the grant of Restricted Stock Units is an
extraordinary item that does not constitute compensation of any
kind for services of any kind rendered to Sun or the Employer, and
which is outside the scope of your employment contract, if any;
(f) the Restricted Stock Units are not part of normal or
expected compensation or salary for any purposes, including, but
not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar
payments; (g) the future value of the Shares is unknown and
cannot be predicted with certainty; (h) in consideration of
the grant of Restricted Stock Units, no claim or entitlement to
compensation or damages will arise from the termination of vesting
or diminution in value of the Shares resulting from termination of
your active employment by Sun or the Employer (for any reason
whatsoever and whether or not in breach of contract or local labor
laws) and you irrevocably release Sun and the Employer from any
such claim that may arise; if, notwithstanding the foregoing, any
such claim is found by a court of competent jurisdiction to have
arisen, then, by signing this Agreement, you will be deemed
irrevocably to have waived your entitlement to pursue such claim;
and (i) notwithstanding any terms or conditions of the Plan to
the contrary, in the event of involuntary termination of your
active employment (whether or not in breach of contract or local
labor laws), your right to continued vesting, if any, will
terminate effective as of the date that you are no longer actively
employed and will not be extended by any notice period mandated
under local law (e.g., active employment would not include a period
of “garden leave” or similar period pursuant to local
law), except as expressly provided herein, and that Sun will have
the exclusive discretion to determine when you are no longer
actively employed for purposes of administering your grant of
Restricted Stock Units. |
| 12. |
Address for Notices . Any notice to be given to Sun
under the terms of this Agreement must be addressed to Sun, in care
of its Secretary, at 4150 Network Circle, Santa Clara, CA 95054, or
at such other address as Sun may hereafter designate in
writing. |
| 13. |
Grant is Not Transferable . Except to the limited extent
provided in paragraph 8 above, this grant (and the associated
rights and privileges) cannot be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise)
and will not be subject to sale under execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or of any
associated right or privilege, or upon any attempted sale under any
execution, attachment or similar process, this grant and the
associated rights and privileges will immediately become null and
void. |
April, 2007
| 14. |
Restrictions on Sale of Securities . The Shares issued
as payment for vested Restricted Stock Units will be registered
under the U.S. federal securities laws and will be freely tradable
upon receipt. However, your subsequent sale of the Shares will be
subject to any market blackout-period that may be imposed by Sun
and must comply with Sun’s insider trading policies, and any
other applicable securities or other laws. |
| 15. |
Delay in Payment . Notwithstanding any other part of
this Agreement, any Restricted Stock Unit otherwise payable to you
pursuant to this Agreement will not be paid during the six-month
period following your termination of employment unless Sun
determines, in its good faith judgment, that the payment would not
cause you to incur an additional tax under Section 409A of the
Code and any |
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