8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 17, 2006

Sun Microsystems, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-15086	94-2805249
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4150 Network Circle Santa Clara, California	95054-1778
(Address of Principal Executive Offices)	(Zip Code)

(650) 960-1300

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On February 21, 2006, Sun Microsystems, Inc. (“Sun”) announced that Michael E. Lehman was appointed to the position of Chief Financial Officer and Executive Vice President, Corporate Resources, of Sun, effective February 22, 2006. The information with respect Mr. Lehman’s compensation provided under Item 5.02 below is incorporated herein by reference.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On February 17, 2006, Mr. Lehman submitted his resignation as a member of Sun’s Board of Directors.

On the same day, upon the recommendation of Sun’s Corporate Governance and Nominating Committee, Sun’s Board elected Robert J. Finocchio, Jr. to fill the vacancy created by the resignation of Mr. Lehman from the Board and to serve as a member of the Board’s Audit Committee.

Also on the same day, upon the recommendation of Sun’s Leadership Development and Compensation Committee, Sun’s Board appointed Mr. Lehman to the position of Chief Financial Officer and Executive Vice President, Corporate Resources, to be effective upon Mr. Lehman’s acceptance of Sun’s employment offer. Mr. Lehman accepted Sun’s employment offer effective February 22, 2006. Mr. Lehman succeeds Stephen T. McGowan, who will now serve as Executive Vice President of Sun. Mr. Lehman, age 55, has served as a self-employed business consultant since September 2002. From July 2002 until his resignation in September 2002, Mr. Lehman served as an Executive Vice President of Sun. From July 2000 to July 2002, he served as Executive Vice President, Corporate Resources and Chief Financial Officer of Sun, and from January 1998 to July 2000, as Vice President, Corporate Resources and Chief Financial Officer of Sun.

Mr. Lehman will receive an annual base salary of $700,000 and his annual bonus target under Sun’s 162(m) Executive Officer Performance-Based Bonus Plan will be 100% of his annual base salary. Mr. Lehman also received an option to purchase 500,000 shares of Sun Common Stock at an exercise price equal to the per-share fair market value on the date of grant and 350,000 restricted stock units, each of which vests at a rate of 50% on the eighteen-month anniversary of the date of grant and 50% on the three-year anniversary of the date of grant. Mr. Lehman will also be eligible to participate in Sun’s employee benefit programs, including Sun’s Amended and Restated U.S. Vice President Severance Plan (the “Severance Plan”). Under the Severance Plan, Mr. Lehman will receive credit for his past years of service as an employee of Sun; provided, however, that Mr. Lehman will not be eligible for the retirement provisions of the Severance Plan until February 22, 2008. Mr. Lehman will also enter into Sun’s standard forms of Change of Control Agreement and Indemnification Agreement.

Copies of press releases issued on February 21, 2006 announcing Mr. Finocchio’s appointment as a director and Mr. Lehman’s appointment as Chief Financial Officer and Executive Vice President, Corporate Resources are attached to this Report as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

The following exhibit is filed herewith:

Exhibit Number	Description
99.1	Text of press release issued by Sun Microsystems, Inc., dated February 21, 2006, titled “Robert Finocchio, Jr. Elected to Sun Microsystems Board of Directors.”
99.2	Text of press release issued by Sun Microsystems, Inc., dated February 21, 2006, titled “Sun Microsystems Appoints Michael Lehman as Chief Financial Officer.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 24, 2006
	SUN MICROSYSTEMS, INC.
	By:	/S/    BRIAN M. MARTIN
		Brian M. Martin
		Vice President, Corporate Law Group

EX-99.1

Exhibit 99.1

Robert Finocchio, Jr. Elected to Sun Microsystems’ Board of Directors

Tuesday February 21, 4:01 pm ET

SANTA CLARA, Calif., Feb. 21 /PRNewswire-FirstCall/ — Sun Microsystems, Inc. (Nasdaq: SUNW - News) today announced that Robert Finocchio has been elected to the company’s board of directors, effective immediately. Finocchio, a 30-year veteran in the financial and high-tech industries, will also join Sun’s audit committee and qualifies as an “audit committee financial expert” under SEC rules. Finocchio joins Sun’s board at the same time Michael Lehman, former executive vice president, Corporate Resources and chief financial officer from 1998 to 2002 and board member since 2002, returns to Sun to replace Steve McGowan. McGowan, Sun’s current chief financial officer who announced his plans to retire from the post in October 2005, will remain at Sun as executive vice president of Finance and will work closely with Lehman to ensure a seamless transition.

“Sun takes great pride in its impeccable reputation as a transparent and compliant organization,” said Scott McNealy, chairman and chief executive officer, Sun Microsystems. “With the addition of Bob to Sun’s board and the appointment of Mike as Sun’s new CFO, I’m 100 percent confident that the strong tradition will continue and I look forward to working with them both in their new roles.”

In addition to becoming a member of Sun’s board of directors, Finocchio also serves on the boards of Altera Corporation, CaseCentral, Echelon Corporation, Intransa and Silver-Peak Systems. Finocchio has also held senior roles at industry-leading companies including chairman, chief executive officer and president of Informix Corporation and president of 3Com Systems, respectively.

Finocchio is also vice-chair of the board of trustees at Santa Clara University and Dean’s Executive Professor at the university’s Leavey School of Business. Finocchio holds a bachelor’s degree in economics from Santa Clara University and a masters degree in business administration from the Harvard Business School.

About Sun Microsystems, Inc.

A singular vision — “The Network Is The Computer”(TM) — guides Sun in the development of technologies that power the world’s most important markets. Sun’s philosophy of sharing innovation and building communities is at the forefront of the next wave of computing: the Participation Age. Sun can be found in more than 100 countries and on the Web at sun.com.

Media Contact:

Stephanie Von Allmen

650-786-8589

stephanie.vonallmen@sun.com

Industry Analyst Contact:

Joanne Masters

650-786-0847

joanne.masters@sun.com

Investor Contact:

Bret Schafer

650-786-0123

bret.schafer@sun.com

EX-99.2

Exhibit 99.2

Sun Microsystems Appoints Michael Lehman as Chief Financial Officer

Tuesday February 21, 4:01 pm ET

Board Member and Former CFO Returns to Sun

SANTA CLARA, Calif., Feb. 21 /PRNewswire-FirstCall/ — Sun Microsystems, Inc. (Nasdaq: SUNW - News) today announced the appointment of Michael Lehman as chief financial officer, replacing current chief financial officer, Steve McGowan, effective February 22, 2006. Sun has been conducting a search for a new CFO since McGowan announced his plans to retire from the post in October 2005. McGowan, who has served as Sun’s CFO and executive vice president of Corporate Resources since July 2002, will remain at Sun as executive vice president of Finance and will work closely with Lehman to ensure a seamless transition. Lehman and McGowan will report directly to Scott McNealy, Sun’s chairman and chief executive officer.

“Mike has been a trusted advisor to Sun during both his tenure on the board and his 15 years of full time service,” said McNealy. “Mike demonstrated the ability to recruit and develop great people and helped manage a tight ship. This is the kind of leader we should all aspire to be.”

Lehman, former executive vice president, Corporate Resources and chief financial officer from 1998 to 2002, returns to Sun after serving on the company’s board of directors in various capacities. Since 2002, he has served as a business consultant while sitting on the boards of Echelon Corporation, MGIC Investment Corporation and NetIQ Corporation. Lehman will maintain his director position on the board of MGIC Investment Corporation.

“Having now tried retirement briefly, I find that I like being involved in leading change and driving the business more directly,” said Lehman. “The strength of the new product lines, the tremendous success of the open and free Solaris 10 operating system coupled with the opportunity within the StorageTek portfolio leads me to believe Sun can deliver more value to customers than HP, IBM and others combined. I believe I can more effectively serve Sun’s shareholders, customers, employees, and other stakeholders by participating directly in day-to-day operations and fiduciary leadership of the company.”

“We have worked hard for the past several years to position Sun for sustained profitability and growth and it is great to see a senior statesman like Mike join the team,” said Jonathan Schwartz, president and chief operating officer. “We are fortunate to be able to tap into Mike’s deep knowledge of the business, his breadth of senior management experience and legendary focus on execution. Mike is well respected by Wall Street, our customers and employees, and maintains the highest standards of integrity.”

Sun also announced today that Robert Finocchio, Jr. has been elected to the company’s board of directors. Finocchio will also join Sun’s audit committee effective immediately and qualifies as an “audit committee financial expert” under SEC rules.

Safe Harbor

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities

Exchange Act of 1934, as amended, including statements regarding Sun delivering more value to customers than HP, IBM and others combined and Sun being positioned for sustained profitability and growth. These forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict and that may cause actual results to differ materially. Factors that could cause actual results to differ materially from those contained in our projections and forward-looking statements include: increased competition; the failure to rapidly and successfully develop and introduce new products; risks associated with Sun’s international customers and operations; delays in product development or customer acceptance and implementation of new products and technologies; pricing pressures; risks associated with Sun’s dependence on significant customers and specific industries; risks associated with Sun’s dependence on channel partners; and the failure to successfully integrate acquisition candidates. These and other risks are detailed from time to time in Sun’s periodic reports that are filed with the Securities and Exchange Commission, including Sun’s annual report on Form 10-K for the fiscal year ended June 30, 2005 and its quarterly reports on Form 10-Q for the fiscal quarters ended September 25, 2005 and December 25, 2005. Sun assumes no obligation to, and currently does not intend to, update these forward-looking statements.

About Sun Microsystems, Inc.

A singular vision — “The Network Is The Computer”(TM) — guides Sun in the development of technologies that power the world’s most important markets. Sun’s philosophy of sharing innovation and building communities is at the forefront of the next wave of computing: the Participation Age. Sun can be found in more than 100 countries and on the Web at sun.com.

FOR MORE INFORMATION

Media Contact:

Stephanie Von Allmen

650-786-8589

stephanie.vonallmen@sun.com

Industry Analyst Contact:

Joanne Masters

650-786-0847

joanne.masters@sun.com

Investor Contact:

Bret Schafer

650-786-0123

bret.schafer@sun.com