SUN MICROSYSTEMS, INC. U.S. VICE PRESIDENT SEVERANCE PLAN

     SUN MICROSYSTEMS, INC. U.S. VICE PRESIDENT SEVERANCE PLAN

The Sun Microsystems, Inc. U.S. Vice President Severance Plan (the "Plan") provides Severance Benefits if your employment terminates because of a Workforce Reduction, Involuntary Termination, Retirement or Mutual Agreement (see Definitions section). This Plan was originally adopted effective July 1, 2005. It was restated effective November 1, 2005 and May 1, 2006. It is now restated again effective January 1, 2009. In this document "Sun" means Sun Microsystems, Inc., its subsidiaries and its successor or successors.

The Plan is intended to comply with Section 409A of the Internal Revenue Code and from its original effective date through December 31, 2008, the Plan has been operated in accordance with a good faith, reasonable interpretation of Section 409A of the Internal Revenue Code.

The Plan is an unfunded welfare benefit plan maintained by Sun for the purpose of providing benefits for a select group of management or highly compensated employees. This document constitutes the official plan document under ERISA.

Under this Plan, you are eligible to receive Severance Benefits.

"Severance Benefits" consist of a lump sum Severance Payment, payment of COBRA Premiums (if eligible), and Employment Transition Services (Employment Transition Services are not provided in the case of Retirement). You will not receive Severance Benefits if you do not sign a Release and Waiver Agreement (other than Employment Transition Services), or if you sign a Release and Waiver Agreement but revoke it within the applicable revocation period.

The amount of Severance Benefits available to you depends on whether you are a member of Sun's Executive Leadership Team (“ELT”) or a Vice President who is not a member of the ELT.

You are an Eligible Employee under the Plan if you are:

· Not considered by Sun to be a Contingent Worker (includes independent contractor, consultant or vendor) as defined in Sun's Headcount Policy (HR209).

If Sun has not classified you as an employee on the date your service with Sun is terminated and, for that reason, has not withheld employment taxes with respect to you, and you are later determined retroactively to have been a common-law employee of Sun, whether by Sun, a governmental agency or a court, you will nevertheless be ineligible to receive Plan benefits.

Conditions For Receiving Plan Benefits

You will receive Plan benefits if you are an Eligible Employee and meet all of the following conditions:

Conditions Under Which You Will Not Receive Plan Benefits

Even if you are an Eligible Employee, you will not receive Plan benefits if any of the following apply:

For purposes of this Plan, a "Temporary Job Assignment" is a job as a Sun employee that is not expected to last more than two years at the time it is offered to you and which is offered to you after you receive a Termination Letter but prior to your employment termination. If you accept a job which, at the time it is offered to you, is expected to last more than two years, you will be treated as a regular Sun employee and will not receive Plan benefits in connection with the Workforce Reduction, Involuntary Termination, Retirement or Mutual Agreement that occurred immediately prior to your acceptance of your new job at Sun.

While you are on a Temporary Job Assignment you will not receive Plan benefits. However, at the end of the Temporary Job Assignment, provided you meet the conditions of the Plan, you will receive Plan benefits in accordance with the terms of the Plan in effect as of the date of the Termination Letter.

If you accept a Temporary Job Assignment and it has not ended after two years, you will be treated as if you are in a regular position and will not be eligible for Plan benefits unless and until the new job is part of a Workforce Reduction or you terminate employment as a result of Involuntary Termination, Retirement or Mutual Agreement. In other words, you will not receive Plan benefits in connection with the Workforce Reduction, Involuntary Termination, Retirement or Mutual Agreement that occurred immediately prior to your acceptance of your new job at Sun.

Additional eligibility requirements apply if your job is eliminated due to outsourcing. Outsourcing is the transfer of work, a function, a group or an organization at Sun to a vendor The vendor (the "Outsourcing Service Provider") may seek to hire Sun employees who were previously performing that function or who were members of the group being outsourced.

If your position is outsourced, you will be able to receive Plan benefits, but only if all the following apply:

You will be ineligible to receive Plan benefits if:

· You receive an offer of a Comparable Outsource Job, which is Regular Employment. A "Comparable Outsource Job" is a job at the Outsourcing Service Provider for which you are qualified, providing the same level of base pay or higher as your Sun job, and which is not anticipated, pursuant to the outsourcing agreement between Sun and the Outsourcing Service Provider, to require you to relocate to a job location more than 50 miles away from your Sun job location within the first 12 months of your employment with the Outsourcing Service Provider. For purposes of the Plan, if you participate in the OpenWork program, Sun job location means your home if you are a home assigned employee or the location of your mailstop if you are a flexible employee. If you work from home or a flexible office based on any arrangement outside of the OpenWork program, your Sun mailstop is your job location. For purposes of the Plan, “Regular Employment” is employment with the Outsourcing Service Provider that is on the same terms and conditions as those provided to their other employees and that is anticipated to be ongoing for an indefinite period. If you are currently working part-time for Sun and you are offered a full-time job by the Outsourcing Service Provider or you are offered a job by the Outsourcing Service Provider that is outside the outsourcing agreement between the Outsourcing Service Provider and Sun (i.e., your job would not support Sun), you will not be considered to have received an offer of a Comparable Outsource Job, which is Regular Employment.

· You accept an offer of a Comparable Outsource Job, which is Short-Term Employment (for purposes of the Plan, Short-Term Employment is employment with the Outsourcing Service Provider that is anticipated, at the time of the job offer, to last less than 12 months), with the Outsourcing Service Provider and the outsourcing agreement between the Outsourcing Service Provider and Sun provides that severance benefits equivalent to the severance benefits under this Plan will be paid by the Outsourcing Service Provider, or· You meet any of the Conditions Under Which You Will Not Receive Plan Benefits (described above).

Additional eligibility requirements apply if your job is eliminated due to a divestiture. A divestiture is the sale, lease, license or transfer of a product, business or technology owned by Sun by way of merger, sale of assets, license with rights equivalent to ownership or other sales transaction to another company, person or other entity (the "Buyer") as determined by Sun's Business Development Group in its sole discretion. The Buyer may seek to hire Sun employees who were previously performing work related to that business, technology or product line.

If your position is eliminated due to a divestiture, you will be able to receive Plan benefits, but only if all the following apply:

You will be ineligible to receive Plan benefits if:

· You receive an offer of a Comparable Divestiture Job, which is Regular Employment. A "Comparable Divestiture Job" is a job at the Buyer for which you are qualified, providing the same level of base pay or higher as your Sun job, and which is not anticipated, pursuant to the agreement between Sun and the Buyer, to require you to relocate to a job location more than 50 miles away from your Sun job location within the first 12 months of your employment with the Buyer. For purposes of the Plan, if you participate in the OpenWork program, Sun job location means your home if you are a home assigned employee or the location of your mailstop if you are a flexible employee. If you work from home or a flexible office based on any arrangement outside of the OpenWork program, your Sun mailstop is your job location. For purposes of the Plan, “Regular Employment” is employment with the Buyer that is on the same terms and conditions as those provided to their other employees and that is anticipated to be ongoing for an indefinite period. If you are currently working part-time for Sun and you are offered a full-time job by the Buyer, you will not be considered to have received an offer of a Comparable Divestiture Job, which is Regular Employment,· You accept an offer of a Comparable Divestiture Job, which is Short-Term Employment (for purposes of the Plan, Short-Term Employment is employment with the Buyer that is anticipated, at the time of the job offer, to last less than 12 months), with the Buyer and the agreement between the Buyer and Sun provides that severance benefits equivalent to the severance benefits under this Plan will be paid by the Buyer, or

· You meet any of the Conditions Under Which You Will Not Receive Plan Benefits (described above).

Under the Plan, you may choose to sign a Release and Waiver Agreement in order to receive Severance Benefits (other than Employment Transition Services). You will have 45 calendar days after your employment termination date to sign the Agreement. If you do not sign and return to Sun a Release and Waiver Agreement within 45 calendar days after your employment termination date or you subsequently revoke the Agreement during the applicable revocation period, you will not be eligible to receive the Severance Payment and the payment of COBRA Premiums described below. You may NOT sign the Release and Waiver Agreement prior to your employment termination date.

In addition, you will receive the following benefit regardless of whether you sign a Release and Waiver Agreement:· Employment Transition Services. You will receive Employment Transition Services (career service assistance) for twelve (12) months (eighteen (18) months if you are a member of the ELT). Employment Transition Services become available to you on the date of your Termination Letter and must be started no later than your employment termination date in order to receive the full benefit. In no event may Employment Transition Services continue beyond December 31 of the second calendar year following the calendar year in which you have a Separation from Service. Employment Transition Services are not available in the case of Retirement.

Example of Calculation of Severance Payment

Assume you are a Vice President with eight years of service. The calculation of your Severance Payment is as follows:

24 weeks Pay based on the Pay you would have received had you worked for those 24 weeks, plus 20 weeks Pay*, for a total of 44 weeks of Pay. *4 weeks Pay per Year of Service x 8 years = 32 weeks but the maximum allowed payment based on Years of Service is 20 weeks Pay. The 24 weeks of Pay is not included in calculating the maximum payment based on Years of Service.

If your employment terminates because of Retirement and you are eligible to receive benefits under the Plan, your stock options that would have vested during the 15 months following your employment termination date will become immediately vested on your employment termination date. Except as provided in the previous sentence, all other terms and conditions of your option agreements remain the same.

Sales-Related Incentive Based Positions

If you are in a sales-related incentive based position, commission earnings end effective the date of your Termination Letter. Base pay will be used to determine the payment of unused, accrued vacation in your final paycheck.

If you are reemployed by Sun (in any capacity) before the end of the number of weeks used to determine your Severance Benefits, you must repay to Sun the portion of your Severance Payment for the period that you have been reemployed.

For example, if you are a Vice President with eight years of service, you would have received 44 weeks of Pay. If you were then reemployed by Sun 4 weeks following your employment termination date, you would be required to repay to Sun an amount calculated as follows:

44 weeks of Severance Payment paid minus 4 weeks of actual

unemployment equals 40 weeks of Severance Payment to be repaid to Sun.

Sun will withhold all appropriate federal, state, local, income and employment taxes from your Plan benefit payments. Contributions to Sun's 401(k) plan and employee stock purchase plan will not be deducted from your Severance Payment paid after your employment termination date.

The Plan does not change the terms of any bonus program for which you may have been eligible at the time of your termination with Sun.

Accordingly, if you are eligible for a bonus payment under a program operated on a quarterly or fiscal year basis (such as SMI Bonus) and terminate employment prior to the last day of a quarter or fiscal year, you will not be eligible to receive the bonus for the quarter or fiscal year in which you terminate employment, except to the extent the bonus program provides otherwise. Unless the bonus program provides otherwise, bonus program payments will not be prorated for a partial quarter's or year's participation.

If you begin a leave of absence after receiving a Termination Letter but before you terminate employment, your employment termination date will not change. You should contact SunDial to discuss disability benefits or workers' compensation benefits for which you may be eligible.

Leaves of Absence Prior to Notification

If you are on a Family Care Leave (HR411), Medical Leave (HR412), or Pregnancy/Disability Leave (HR412A and HR412B) and your job is eliminated during your leave as part of a Workforce Reduction, you will be given your Termination Letter during your leave. Your leave will end early, you will terminate your employment after sixty (60) days, and you will receive the Plan benefits for which you are eligible. You may notify SunDial within seven (7) calendar days of receipt of your Termination Letter that you wish to continue your leave; in which case, you will not be eligible to receive Plan benefits.

“Cause” means misconduct as described in Sun's Misconduct Policy (HR503).

"COBRA Premiums" for purposes of this Plan are the COBRA premiums that you would have to pay to continue for a certain period of time, the medical, dental, vision, and/or EAP coverage you had immediately prior to terminating employment.

“Involuntary Termination” for purposes of this Plan means termination of your employment by Sun for any reason except for Cause.

“Key Employee” means an employee who is determined by Sun to be a Key Employee in accordance with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder.

“Mutual Agreement” for purposes of this Plan means that both you and Sun agree that your employment should terminate.

"Pay" for purposes of this Plan (other than for sales-related incentive based positions) means your base pay as of the date of the Termination Letter. “Pay” for sales-related incentive based positions is based on the On-Target Earnings rate (OTE) effective on the date of the Termination Letter. “Pay” does not include car allowance, draws, spifs, bonuses or any non-base compensation.

“Position” for purposes of this Plan means your position as either a member of the ELT or a Vice President who is not a member of the ELT on the date of the Termination Letter as recorded in Sun's HR Database.

“Retirement” for purposes of this Plan means your voluntary resignation from Sun at or after attaining age 55 and with a number of full years of service with Sun that when added to your age (in full years), the sum equals or exceeds 65. Notwithstanding the foregoing sentence, you must have a minimum of five (5) full years of service in order to qualify for Retirement. Your resignation will not be considered Retirement if you work in the same or similar profession during the six-month period following your Separation from Service. You will be considered to have retired if you perform services for a nonprofit organization following your Separation from Service. Sun shall make the determination of whether you have retired in its sole discretion.

“Separation from Service” means a termination of employment with Sun that Sun determines is a Separation from Service in accordance with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder.

“Workforce Reduction” for purposes of this Plan means your employment is terminated because of the elimination or coordinated reduction of jobs within your group, division, department or branch due to a corporate transaction or reorganization, technology change, funding reduction, reduced workload or similar occurrence (including an outsourcing arrangement or divestiture). A Workforce Reduction also includes changes to your job level and/or salary grade or structure that Sun has determined, in its sole discretion, entitle you to Plan benefits as described in the Global Compensation Treatment for Job Level Changes and Reclassification Policy (HR310).

"Year of Service" for purposes of this Plan means a full or partial year of service with Sun prior to your employment termination date. If you are a rehired employee, prior service at Sun will be counted as Year of Service provided that the prior service period exceeded the period when you were not employed by Sun. Years of Service includes up to seven (7) years of service credit for service with a predecessor employer that was acquired by Sun if you were an employee of the predecessor employer at the time of the acquisition. A partial year of service will be treated as a full year of service.

To receive the Severance Payment and Payment of COBRA Premiums, the Release and Waiver Agreement must be signed and not revoked.

See Important Notes at the end of Summary.

IMPORTANT NOTES TO SUMMARY OF PLAN BENEFITS

Plan Operation, Administration and General Provisions

Your rights and participation in any other Sun benefit plan at termination of employment are governed solely by the terms of those other plans.

Sun reserves the right to modify, suspend or terminate the Plan at any time and for any reason. Any action amending or terminating the Plan shall be in writing and shall be approved by the Leadership and Development Compensation Committee of the Board of Directors of Sun.

All Plan benefits are paid from Sun's general funds, and each participant is an unsecured general creditor of Sun. Nothing contained in the Plan creates a trust fund of any kind for your benefit or creates any fiduciary relationship between you and Sun with respect to any of Sun's assets. Sun is under no obligation to fund the benefits provided under the Plan prior to payment.

The rights of any person to any benefit under the Plan may not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including bankruptcy, garnishment, attachment or other creditor's process. Any act in violation of this rule shall be void.

Nothing in the Plan may be deemed to give any individual a right to remain employed by Sun or affect Sun's right to terminate an individual's employment at any time, with or without cause.

The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and, to the extent not preempted by ERISA, California law. If any provision of the Plan is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of the Plan shall continue to be fully effective.

Sun is the "Plan Administrator" of the Plan as that term is used in ERISA. Sun has full discretionary authority to administer and interpret the Plan, including the exclusive right to adopt rules and procedures to implement the Plan, to interpret in its sole discretion, provisions of the Plan, to decide any questions in connection with the administration of the Plan, or relating to any claim for Plan benefits, including, whether an individual is eligible for Plan benefits and the amount of Plan benefits. Sun may delegate its responsibilities to other persons, which includes delegation of discretion. Subject to the claims and appeal procedures, the decisions of Sun and its delegatees relating to the Plan are final and binding on all persons.

If you disagree with the amount of your benefits or with any other decision Sun may have made regarding your interest in the Plan (including that you are not eligible for benefits under the Plan), you may file a claim with Sun. You must send your claim in writing to: Director, Executive Compensation – U.S. Vice President Severance Plan, Sun Microsystems, Inc., 4160 Network Circle, M/S USCA16-150, Santa Clara, CA 95054. You should file the claim as soon as possible, but no later than one (1) year after the determination /decision.

In the event that your claim for benefits is denied in whole or in part, Sun must provide you written or electronic notification of the denial of the claim, and of your right to appeal the denial. The notice of denial will be set forth in a manner designed to be understood by you, and will include (i) the specific reason or reasons for the denial, (ii) reference to the specific Plan provisions upon which the denial is based, (iii) a description of any information or material that Sun needs to complete the review and an explanation of why such information or material is necessary, and (iv) an explanation of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil action under Section 502(a) of ERISA following a denial on appeal. This notice will be given to you within 90 calendar days after Sun receives the claim, unless special circumstances require an extension of time – in which case Sun has up to an additional 90 calendar days for processing the claim. If an extension of time for processing is required, notice of the extension will be furnished to you before the end of the initial 90-day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which Sun expects to render its decision on the claim.

If your claim for benefits is denied, in whole or in part, you (or your authorized representative) may appeal the denial by submitting a written appeal to the Appeal Committee within 60 calendar days after you receive the denial. Your appeal must be sent to: Appeal Committee – U.S. Vice President Severance Plan, Sun Microsystems, Inc., 4160 Network Circle, M/S USCA16-150, Santa Clara, CA 95054. If you fail to appeal a denial within the 60-day period, Sun’s determination will be final and binding. If you appeal to the Appeal Committee, you (or your authorized representative) may submit comments, documents, records and other information relating to your claim for benefits. You may request (free of charge) reasonable access to, and copies of, all documents, records, and other information relevant to your claim.

The Appeal Committee will make a decision on each appeal no later than 60 calendar days following receipt of the appeal. If special circumstances require an extension of time for processing the appeal, the Appeal Committee will make a decision on the appeal no later than 120 calendar days following receipt of the appeal. If an extension for review is required, notice of the extension will be furnished to you before the extension begins. The extension notice will indicate the special circumstances requiring an extension and the date by which the Appeal Committee expects to render a decision. The Appeal Committee will give written or electronic notice of its decision to you after its decision is made. In the event that the Appeal Committee confirms the denial of the claim for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by you, (i) the specific reason or reasons for the decision, (ii) reference to the

specific Plan provisions upon which the decision is based, (iii) a statement that you may request (free of charge) reasonable access to, and copies of, all documents, records, and all other information relevant to your claim, and (iv) a statement of your right to bring an action under Section 502(a) of ERISA.

No legal action for benefits under the Plan may be brought until you (i) have submitted a written claim for benefits in accordance with the procedures described above, have been notified by Sun that the claim is denied, have filed a written appeal in accordance with the appeal procedures described above, and have been notified that the Appeal Committee has denied the appeal, or (ii) Sun or the Appeal Committee fail to follow these procedures. No legal action may be commenced or maintained against the Plan, Sun or the Appeal Committee more than two (2) years after the Appeal Committee denies your appeal or Sun or the Appeal Committee fail to follow these procedures.

If you wish to take legal action after exhausting the appeal procedures, you may serve process on Sun at the address indicated in the section below entitled “Plan Information.”

The Plan is an employee welfare benefit plan and an employee pension benefit plan subject to ERISA. The Plan is subject to certain provisions of Title I of ERISA (i.e., Part 1 regarding reporting and disclosure, Part 4 regarding fiduciary responsibility, and Part 5 regarding administration and enforcement). However, it is not subject to Title IV of ERISA, which includes the plan termination insurance provisions.

The principal executive office of Sun Microsystems, Inc. is 4150 Network Circle, Santa Clara, California 95054. Its telephone number is ###-###-####.

Sun's Employer Identification Number (EIN) is ###-###-####. The Plan Number assigned to the Plan is 540.

The Plan is a welfare benefit plan providing special severance benefits to eligible employees. All benefits under the Plan are paid directly by Sun from its general assets to participants.

The Plan's agent for service of legal process is:

Statement of ERISA Rights and Protections

As a participant in the Sun Microsystems, Inc. U.S. Vice President Severance Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all plan participants are entitled to:

Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan participants, ERISA imposes obligations on those responsible for the operation of the Plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including Sun or any other individual, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan administrator and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive them, unless the materials were not sent because of reasons beyond the administrator's control. If your claim for benefits is denied or ignored, in whole or in part, and you have been through the Plan's appeal procedures, you may sue in a state or Federal court. If it should happen that plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you sued to pay these legal costs and fees. If you lose, the court may order you to pay these costs and fees (for example, if it finds your claim is frivolous).

Assistance With Your Questions

If you have questions about the Plan, you should contact the plan administrator. If you have questions about this statement or your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C., 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

To record the amendment and restatement of the Plan effective January 1, 2009 as set

forth herein, Sun Microsystems, Inc. has caused its authorized representative to sign this document the ____ day of November, 2008.

Title: Executive Vice President People and Places and Chief Human Resources Officer