On July 30, 2008, the Leadership Development and Compensation Committee (the "LDCC") of the Board of Directors (the "Board") of Sun Microsystems, Inc. ("Sun") approved the Chief Executive Officer (the "CEO") bonus terms for fiscal year 2009 (the "Terms") under Sun's 162(m) Executive Officer Performance-Based Bonus Plan. The Terms provide for an annual bonus payable to the CEO rather than a quarterly bonus as provided in the bonus terms for fiscal year 2008. The Terms provide for a maximum bonus pool of $4 million, with 50% of the funding based on Sun's annual revenue goal and 50% on Sun's annual operating income goal. The annual target bonus payment is set at 50% of the bonus pool, but may range from 0-100% as determined in the sole discretion of the LDCC. A copy of the Terms, as approved, is attached hereto Exhibit 10.1 and is incorporated herein by reference.

On July 31, 2008, the Board of Sun voted to amend the first paragraph of Section 3.3 of Sun's Bylaws, effective immediately, to revise the majority vote standard for the election of directors to utilize an "against" vote rather than a "withheld" vote in determining whether a director has received the requisite number of votes to remain on the Board under the majority vote standard. A copy of Sun's Bylaws, as amended, is attached hereto as Exhibit 3.2 and is incorporated herein by reference.