SUN MICROSYSTEMS, INC.
SECTION 162(m) EXECUTIVE OFFICER
PERFORMANCE-BASED BONUS PLAN
(as adopted August 9, 1995)
The purpose of this Plan is to motivate eligible executives to achieve financial performance objectives of Sun
Microsystems, Inc. (the "Company") and to reward them when those objectives are met. The Plan is designed to
reinforce desired management behaviors, such as leadership, teamwork, customer focus, planning and
management. The Plan is also designed to ensure that the annual bonus paid hereunder to such executive officers
of the Company is deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder (the "Code").
2. COVERED INDIVIDUALS
The individuals entitled to bonus payments hereunder shall be certain of the Company's executive officers as
determined by the Committee at the beginning of each fiscal year.
3. THE COMMITTEE
The Committee shall consist of at least two outside directors of the Company that satisfy the requirements of
Code Section 162(m). The Committee shall have the sole discretion and authority to administer and interpret the
Plan in accordance with Code Section 162(m).
4. AMOUNT OF BONUS
Annual bonus payments are made in cash. The Committee shall determine a dollar-denominated target award
opportunity for each participant based on the participant's salary and level of responsibility. Prior to the beginning
of the applicable fiscal year (or prior to such other date as may be permitted under Code Section 162(m)), the
Committee will approve corporate, financial and business performance measures for such fiscal year consistent
with the Company's annual business plan. The Committee shall base its performance measures and targets on one
or more of various financial metrics, including earnings per share, revenue, operating income, profitability, return
on assets (including return on assets before interest and taxes, asset turns and inventory t