2007 OMNIBUSINCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT

Exhibit 10.2

Section 16 Option Agreement

Grant Tracking ID #

SUN MICROSYSTEMS, INC.

2007 OMNIBUS INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

You (“Grantee”) are hereby granted an Option to purchase shares of common stock, $.001 par value per share (the “Stock”), of Sun Microsystems, Inc., a Delaware corporation (“Sun”). The terms and conditions of the Option are set forth in this Award Agreement and in Sun’s 2007 Omnibus Incentive Plan (the “Plan”).

Grant Date:                                 , 200      

Name of Grantee: _________________________________________________

Grantee’s Employee Identification Number: ______________

Number of Shares of Stock Covered by the Option: ______________

Option Price per Share: $            .         (At least 100% of Fair Market Value)

Vesting Start Date: _________________, ____

Vesting Schedule

In the event that the Schedule set forth below would result in the vesting of a fractional number of shares, the number of shares that will vest will be rounded down to the nearest whole share, and the last scheduled vesting tranche will be rounded up, to the extent necessary, so that the full number of shares will have vested.

By signing this Award Agreement below and returning it to:

Global Stock Plan Services

Sun Microsystems

SCA 22-120

4220 Network Circle

Santa Clara, CA 95054

U.S.A.

you agree to all of the terms and conditions described in the Award Agreement, including Appendix A, and in the Plan, a copy of which may be viewed, along with the Plan prospectus, on Sun’s intranet at http://stockplans.central. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Award Agreement should appear to be inconsistent.

This is not a stock certificate or a negotiable instrument.

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SUN MICROSYSTEMS, INC.

2007 OMNIBUS INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

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APPENDIX A

ADDITIONAL TERMS AND CONDITIONS OF THE

SUN MICROSYSTEMS, INC. 2007 OMNIBUS INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR NON U.S.-EMPLOYEES

This Appendix A includes additional terms and conditions that govern the Option granted to you under the Plan if you reside in one of the countries listed below. Certain capitalized terms used but not defined in this Appendix A have the meanings set forth in the Plan and/or the Award Agreement.

This Appendix A also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of July 1, 2008. Such laws are often complex and change frequently. As a result, Sun strongly recommends that you not rely on the information in this Appendix A as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time that you exercise the Option or sell shares of Stock acquired under the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and Sun is not in a position to assure you of a particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

Finally, if you are a citizen or resident of a country other than the one in which you are currently working, the information contained herein may not be applicable to you.

UNITED KINGDOM

Withholding Taxes. This provision supplements the Withholding Taxes section of the Award Agreement.

If payment or withholding of the Tax-Related Items (including the Employer’s Liability, as defined below) is not made within 90 days of the event giving rise to the Tax-Related Items (the “Due Date”) or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the amount of any uncollected Tax-Related Items will constitute a loan owed by you to the Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current Official Rate of Her Majesty’s Revenue and Customs (“HMRC”), it will be immediately due and repayable, and Sun or the Employer may recover it at any time thereafter by any of the means referred to in the Withholding Taxes section of the Award Agreement. Notwithstanding the foregoing, if you are a director or executive officer of Sun (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as

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amended), you will not be eligible for such a loan to cover the Tax-Related Items. In the event that you are a director or executive officer and the Tax-Related Items are not collected from or paid by you by the Due Date, the amount of any uncollected Tax-Related Items will constitute a benefit to you on which additional income tax and national insurance contributions (including the Employer’s Liability, as defined below) will be payable. You will be responsible for reporting and paying any income tax and national insurance contributions (including the Employer’s Liability, as defined below) due on this additional benefit directly to HMRC under the self-assessment regime.

Joint Election. As a condition of your participation in the Plan and the exercise of the Option, you agree to accept any liability for secondary Class 1 national insurance contributions (the “Employer’s Liability”) which may be payable by Sun and/or the Employer in connection with the Option and any event giving rise to Tax-Related Items. To accomplish the foregoing, you agree to execute the following joint election with Sun (the “Election”), the form of such Election being formally approved by HMRC, and any other consent or elections required to accomplish the transfer of the Employer’s Liability to you. You further agree to execute such other joint elections as may be required between yourself and any successor to Sun and/or the Employer. If you do not enter into the Election when you accept the Award Agreement, or if the Election is revoked at any time by HMRC, the Option will cease vesting and become null and void, and no shares of Stock will be acquired under the Plan, without any liability to Sun, the Employer and/or any Affiliate. You further agree that Sun and/or the Employer may collect the Employer’s Liability by any of the means set forth in the Withholding Taxes section of the Award Agreement.

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SUN MICROSYSTEMS, INC.

2007 OMNIBUS INCENTIVE PLAN

Important Note on the Joint Election to Transfer Employer NICs

If you are resident and ordinarily resident in the UK on the date of grant of the Option, you are required to enter into a joint election to transfer to you any liability for employer national insurance contributions (the “Employer’s Liability”) that may arise in connection with the Option granted to you, or in connection with future stock options granted to you, by Sun Microsystems, Inc. (“Sun”) under the Sun Microsystems, Inc. 2007 Omnibus Incentive Plan (the “Election”).

If you do not agree to enter into the Election, the Option will be worthless, as (under the terms of the Award Agreement), you will not be able to exercise the Option or receive any benefit in connection with the Option.

By entering into the Election:

To enter into the Election, please sign the Election below and return it, together with the Award Agreement, to:

Global Stock Plan Services

Sun Microsystems

SCA 22-120

4220 Network Circle

Santa Clara, CA 95054

U.S.A.

Please read the terms of the Election carefully before signing the Award

Agreement and the Election.

Please keep a copy of the Election for your records.

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SUN MICROSYSTEMS, INC.

2007 OMNIBUS INCENTIVE PLAN

Non-Qualified Stock Options

for Employees in the United Kingdom

FORM OF ELECTION TO TRANSFER THE EMPLOYER’S SECONDARY

CLASS 1 NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE

This Election is between:

2.1 This Election relates to the UK Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise on the occurrence of a “Taxable Event” pursuant to section 4(4)(a) of the Social Security Contributions and Benefits Act 1992, including:

(i) the acquisition of securities pursuant to the Options (pursuant to section 477(3)(a) ITEPA); and/or

(ii) the assignment or release of the Options in return for consideration (pursuant to section 477(3)(b) ITEPA); and/or

(iii) the receipt of a benefit in connection with the Options other than a benefit within (i) or (ii) above (pursuant to section 477(3)(c) ITEPA).

In this Election, ITEPA means the Income Tax (Earnings and Pensions) Act 2003.

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2.2 This Election applies to all Options granted to the Employee under the Plan on or after November 8, 2007 up to the termination date of the Plan.

2.3 This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the Social Security Contributions and Benefits Act 1992, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

The Employee and Sun jointly elect that the entire liability of the UK Employer to pay the Employer’s Liability on the Taxable Event is hereby transferred to the Employee. The Employee understands that by signing the Election, he or she will become personally liable for the Employer’s Liability covered by this Election.

4.1 The Employee hereby authorises Sun and/or the UK Employer to collect the Employer’s Liability from the Employee at any time after the Taxable Event:

4.2 Sun hereby reserves for itself and the UK Employer the right to withhold the transfer of any securities to the Employee until full payment of the Employer’s Liability is received.

4.3 Sun agrees to remit the Employer’s Liability to Her Majesty’s Revenue and Customs (“HMRC”) on behalf of the Employee within 14 days after the end of the UK tax month during which the Taxable Event occurs.

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5.1 The Employee and Sun agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the UK Employer on the date on which the Employer’s Liability becomes due.

5.2 This Election will continue in effect until the earliest of the following:

(i) such time as both the Employee and Sun agree in writing that it should cease to have effect;

(ii) the date Sun serves written notice on the Employee terminating its effect;

(iii) the date HMRC withdraws approval of this Form of Election; or

(iv) the date the Election ceases to have effect in accordance with its terms in respect of any outstanding Options granted under the Plan.

Acceptance by the Employee

The Employee acknowledges that by signing this Election, the Employee agrees to be bound by the terms of this Election as stated above.

Acceptance by Sun

Sun acknowledges that by arranging for the scanned signature of an authorised representative to appear on this Election, Sun agrees to be bound by the terms of this Election as stated above.

[INSERT SCANNED SIGNATURE]

Michael A. Dillon

Executive Vice President, General Counsel

and Secretary

Sun Microsystems, Inc.

November 8, 2007

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Schedule to Form of Election – Employing Companies

The Employing Companies to which this Form of Election relates are:

Sun Microsystems Limited

Sun Microsystems Scotland Limited

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