SUN MICROSYSTEMS, INC.
1988 DIRECTORS' STOCK OPTION PLAN
(AMENDED AS OF NOVEMBER 11, 1998)
1. Purposes of the Plan. The purposes of this Directors' Stock Option Plan are to attract and retain the best
available personnel for services as Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued service on the Board.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock of the Company.
(c) "Company" shall mean Sun Microsystems, Inc., a Delaware corporation.
(d) "Continuous Status as a Director" shall mean the absence of any interruption or termination of service as a
(e) "Director" shall mean a member of the Board.
(f) "Employee" shall mean any person, including officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company. The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(h) "Option" shall mean a stock option granted pursuant to the Plan.
(i) "Optioned Stock" shall mean the Common Stock subject to an Option.
(j) "Optionee" shall mean an Outside Director who receives an Option.
(k) "Outside Director" shall mean a Director who is not an Employee.
(l) "Parent" shall mean a "parent corporation", whether now or hereafter existing, as defined in Section 425(e) of
the Internal Revenue Code of 1986.
(m) "Plan" shall mean this 1988 Directors' Stock Option Plan.
(n) "Share" shall mean a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan.
(o) "Subsidiary" shall mean a "subsidiary corporation", whether now or hereafter existing, as defined in Section
425(f) of the Internal Revenue Code of 1986.
3. Stock Subject to the Pl