SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) __X__Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended December 29, 1996 or _____Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to _______ Commission file number:0-15086 SUN MICROSYSTEMS, INC. (Exact Name of registrant as specified in its charter) Delaware 94-2805249 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2550 Garcia Avenue, Mountain View, CA 94043-1100 (Address of principal executive offices with zip code) Registrant's telephone number, including area code: (415) 960-1300 N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES___X__ NO______ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES______ NO______ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Class Outstanding at December 29, 1996 Common stock - $0.00067 par value 368,084,106
INDEX PAGE ---- COVER PAGE 1 INDEX 2 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition 7 PART II - OTHER INFORMATION Item 5 - Other Information 12 Item 6 - Exhibits and Reports on Form 8 - K 14 SIGNATURES 15 2
PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS SUN MICROSYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 29, June 30, 1996 1996 ----------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 438,083 $ 528,854 Short-term investments 312,657 460,743 Accounts receivable, net 1,392,873 1,206,612 Inventories 394,919 460,914 Deferred tax asset 201,134 177,554 Other current assets 229,224 199,059 ----------- ----------- Total current assets 2,968,890 3,033,736 Property, plant and equipment, at cost 1,549,677 1,282,384 Accumulated depreciation and amortization (848,739) (748,535) ----------- ----------- 700,938 533,849 Other assets, net 196,792 233,324 ----------- ----------- $ 3,866,620 $ 3,800,909 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 26,901 $ 49,161 Accounts payable 383,981 325,067 Accrued liabilities 804,805 801,550 Other current liabilities 265,764 313,491 ----------- ----------- Total current liabilities 1,481,451 1,489,269 Long-term debt and other obligations 81,002 60,154 Stockholders' equity 2,304,167 2,251,486 ----------- ----------- $ 3,866,620 $ 3,800,909 =========== =========== See accompanying notes. 3
<TABLE> SUN MICROSYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts) <CAPTION> Three Months Ended Six Months Ended ---------------------------- ---------------------------- December 29, December 31, December 29, December 31, 1996 1995 1996 1995 ---------- ---------- ---------- ---------- <S> <C> <C> <C> <C> Net revenues $2,081,588 $1,751,383 $3,940,607 $3,236,661 Cost and expenses: Cost of sales 1,033,402 972,665 2,005,503 1,789,498 Research and development 201,010 166,295 387,278 310,380 Selling, general and administrative 591,331 434,452 1,115,997 845,868 ---------- ---------- ---------- ---------- Total costs and expenses 1,825,743 1,573,412 3,508,778 2,945,746 Operating income 255,845 177,971 431,829 290,915 Interest income, net 6,421 7,395 11,893 19,004 ---------- ---------- ---------- ---------- Income before income taxes 262,266 185,366 443,722 309,919 Provision for income taxes 83,925 59,317 141,991 99,174 ---------- ---------- ---------- ---------- Net income $ 178,341 $ 126,049 $ 301,731 $ 210,745 ========== ========== ========== ========== Net income per common and and common-equivalent share $ 0.46 $ 0.32 $ 0.77 $ 0.54 ========== ========== ========== ========== Common and common-equivalent shares used in the calculation of net income per share 388,738 388,600 389,428 393,598 ========== ========== ========== ========== <FN> See accompanying notes. </FN> </TABLE> 4
<TABLE> SUN MICROSYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) <CAPTION> Six Months Ended ------------------------------------ December 29, December 31, 1996 1995 ----------- ----------- <S> <C> <C> Cash flow from operating activities: Net income $ 301,731 $ 210,745 Adjustments to reconcile net income to operating cash flows: Depreciation, amortization and other non-cash items 198,788 172,120 Increase in accounts receivable (186,261) (30,688) Decrease (increase) in inventories 65,995 (60,264) Increase in accounts payable 58,914 40,498 Net increase in other current and non-current assets (37,045) (35,566) Net increase (decrease) in other current and non-current liabilities 12,517 (62,899) ----------- ----------- Net cash provided from operating activities 414,639 233,946 ----------- ----------- Cash flow from investing activities: Acquisition of property, plant and equipment (301,582) (137,380) Acquisition of other assets (22,241) (47,892) Acquisition of short-term investments (221,081) (1,027,664) Maturities of short-term investments 371,676 1,538,666 ----------- ----------- Net cash (used by) provided from investing activities (173,228) 325,730 ----------- ----------- Cash flow from financing activities: Issuance of common stock 18,101 29,814 Acquisition of treasury stock (329,531) (484,047) Proceeds from employee stock purchase plans 37,303 27,770 Reduction of short - term borrowings, net (22,260) (36,909) Reduction of long - term borrowings (35,795) (39,582) ----------- ----------- Net cash used by financing activities (332,182) (502,954) ----------- ----------- Net increase (decrease) in cash and cash equivalents $ (90,771) $ 56,722 =========== =========== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 8,198 $ 9,669 Income taxes $ 122,888 $ 131,396 <FN> See accompanying notes </FN> </TABLE> 5
SUN MICROSYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION The consolidated financial statements include the accounts of Sun Microsystems, Inc. ("Sun" or "the Company") and its wholly - owned subsidiaries. Intercompany accounts and transactions have been eliminated. Certain amounts from prior years have been reclassified to conform to current year presentation. While the quarterly financial information is unaudited, the financial statements included in this report reflect all adjustments (consisting only of normal recurring accruals) that the Company considers necessary for a fair presentation of the results of operations for the interim periods covered and of the financial condition of the Company at the date of the interim balance sheet. The results for the interim periods are not necessarily indicative of the results for the entire year. The information included in this report should be read in conjunction with the 1996 Annual Report to Stockholders which is incorporated by reference in the Company's 1996 Form 10-K. INVENTORIES (in thousands) December 29, 1996 June 30, 1996 ----------------------- ----------------- Raw materials $231,730 $267,811 Work in process 31,081 58,337 Finished goods 132,108 134,766 -------- -------- $394,919 $460,914 ======== ======== INCOME TAXES The Company accounts for income taxes under the liability method of Statement of Financial Accounting Standards No. 109. The provision for income taxes during the interim periods considers anticipated annual income before taxes, earnings of foreign subsidiaries permanently invested in foreign operations, and other differences. STOCK DIVIDEND The Company declared two-for-one stock split (effected in the form of a stock dividend) to stockholders of record as of the close of business on November 18, 1996. Share and per share amounts presented have been adjusted to reflect the stock dividend. 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION <TABLE> The following table sets forth items from the Condensed Consolidated Statements of Income as a percentage of net revenues: <CAPTION> Three Months Ended Six Months Ended ------------------------ ------------------------ December 29, December 31, December 29, December 31, 1996 1995 1996 1995 ------ ------ ------ ------ <S> <C> <C> <C> <C> Net revenues 100.0% 100.0% 100.0% 100.0% Cost of sales 49.6 55.5 50.9 55.3 ------ ------ ------ ------ Gross margin 50.4 44.5 49.1 44.7 Research and development 9.7 9.5 9.8 9.6 Selling, general and administrative 28.4 24.8 28.3 26.0 ------ ------ ------ ------ Operating income 12.3 10.2 11.0 9.1 Interest income, net 0.3 0.4 0.3 0.6 ------ ------ ------ ------ Income before income taxes 12.6 10.6 11.3 9.7 Provision for income taxes 4.0 3.4 3.6 3.1 ------ ------ ------ ------ Net income 8.6% 7.2% 7.7% 6.6% ====== ====== ====== ====== RESULTS OF OPERATIONS </TABLE> Net revenues Net revenues were $2.082 billion for the second quarter and $3.941 billion for the first six months of fiscal 1997, representing increases of 18.9 % and 21.7%, respectively, over the comparable periods of fiscal 1996. Approximately eighty percent of the growth in revenues resulted from increased demand for servers, high-end desktop systems, and from memory, storage options, and accessories shipped as part of system sales. The remaining increase reflects growth in revenues from other Sun businesses, including service, aftermarketing, and microprocessors, as compared with the corresponding periods of fiscal 1996. Domestic net revenues increased by 22.6% and 24.1% while international net revenues (including United States exports) grew 15.4% and 19.5% in the second quarter and first six months of fiscal 1997, respectively, compared with the corresponding periods of fiscal 1996. European net revenues increased 13.9% and 19.3% while net revenues in Rest of World increased 17.3% and 19.6% in the second quarter and first six months of fiscal 1997, respectively, when compared with the same periods of fiscal 1996. These increases are due primarily to continued strengthening of most of the markets in Europe and the expanding markets in Asia. Compared with the second quarter of fiscal 1996, the dollar has weakened against the British pound sterling and strengthened against the Japanese yen, German mark, and French franc. For the six month period ended December 29, 1996, the dollar has strengthened significantly against the Japanese yen and remained relatively 7
consistent against most major European currencies, compared with the corresponding period of fiscal 1996. Management has estimated that the net impact of currency fluctuations on operating results, while slightly favorable, was not significant in the second quarter or the first six months of fiscal 1997. Gross margin Gross margin was 50.4% for the second quarter and 49.1% for the first six months of fiscal 1997, compared with 44.5% and 44.7%, respectively, for the corresponding periods in fiscal 1996. The increase in the gross margin for the periods compared reflects principally the effects of increased revenue generated from higher margin servers and memory storage options and accessories, as well as continued Company cost decreases. The factors described above resulted in a favorable impact on gross margin for the second quarter and first six months of fiscal 1997. Systems repricing actions may be initiated in the future, which could result in downward pressure on gross margins. Sun's future operating results would be adversely affected if such repricing actions were to occur and the Company were unable to mitigate the margin pressure by maintaining a favorable mix of systems, software, service, and other revenues and by achieving component cost reductions and operating efficiencies. Research and development Research and development (R&D) expenses were $201.0 million in the second quarter and $387.3 million for the first six months of fiscal 1997, compared with $166.3 and $310.4 million for the same periods of fiscal 1996. As a percentage of net revenues, R&D expenses increased to 9.7% for the second quarter and 9.8% for the first six months of fiscal 1997, from 9.5% and 9.6% respectively in the comparable periods of fiscal 1996. Slightly less than one-fourth of the dollar increase in the second quarter and the first six months of fiscal 1997 over the comparable periods in fiscal 1996 reflects development of hardware and software products which utilize the Java architecture. The remaining increase for the second quarter and first six months of fiscal 1997 is attributable to continued development of UltraSPARC systems and further development of products acquired through acquisitions of Integrated Micro Products, plc and Cray Business Systems, a division of Cray Research, Inc. and increased compensation as a result of higher levels of staffing. Selling, general and administrative Selling, general and administrative (SG&A) expenses were $591.3 million in the second quarter and $1,116.0 million in the first six months of fiscal 1997, compared with $434.5 and $845.9 million for the same periods of fiscal 1996. As a percentage of net revenues, SG&A expenses were 28.4% and 28.3% in the second quarter and first six months of fiscal 1997, respectively, and 24.8% and 26.0%, respectively in the comparable periods of fiscal 1996. Approximately half of the dollar increases are attributable to increased marketing costs related to new product introductions and other promotional programs, and increases related to compensation resulting from higher levels of headcount. The remaining increases reflect costs incurred in connection with the Company's ongoing efforts to improve business processes and cycle times. The Company expects to continue to invest in efforts to achieve additional operating efficiencies through continual review and improvement of business processes. In addition, the Company expects to continue to hire personnel to further expand its demand creation programs and service support organizations. Interest income, net Net interest income was $6.4 million for the second quarter and $11.9 million for the first six months of fiscal 1997, compared with $7.4 million and $19.0 million, respectively, for the corresponding periods in fiscal 1996. The decrease from the second quarter of fiscal 1997 is primarily the result of lower interest earnings due to a 8
smaller average portfolio of cash and investments offset by interest savings from reduced debt levels, as compared to the corresponding period in fiscal 1996. The decrease for the first six months of fiscal 1997 is primarily the result of lower interest earnings due to a smaller average portfolio of cash and investments as compared to the corresponding period in fiscal 1996. Income taxes The Company's effective income tax rate for the second quarter and the first six months of both fiscal 1997 and 1996 was 32%. FUTURE OPERATING RESULTS This following section contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties so that actual results may vary materially. The future operating results discussed below represent specific risks which could impact the financial condition and results over the next few quarters. This information below should be read in conjunction with the 1996 Annual Report to Stockholders which is incorporated by reference in the Company's 1996 Form 10-K. The market for Sun's products and services is intensely competitive and subject to continuous, rapid technological change, short product life cycles and frequent product performance improvements and price reductions. Due to the breadth of the Company's product lines and the scalability of its products and network computing model, Sun competes in many segments of the network computing market across a broad spectrum of customers. The Company expects the markets for its products and technologies, as well as its competitors within such markets, will continue to change as the rightsizing trend shifts customer buying patterns to network based systems which often employ solutions from multiple vendors. Competition in these markets will also continue to intensify as Sun and its competitors, principally Hewlett-Packard, International Business Machines, Digital Equipment Corporation, and Silicon Graphics, aggressively position themselves to benefit from this shifting of customer buying patterns and demand. The Company is also facing competition from these competitors, as well as other systems manufacturers, such as Compaq Computer Corporation and Dell Computer Corporation, with respect to such competitors products based on microprocessors from Intel Corporation coupled with Windows NT operating system software from Microsoft Corporation. These products demonstrate the viability of certain networked personal computer solutions and have increased the competitive pressure, particularly in the Company's workstation and lower-end server product lines. Finally, the timing of introductions of new products and services by Sun's competitors may negatively impact the future operating results of the Company, particularly when such introductions occur in periods leading up to the Company's introduction of its own new enhanced products. The Company expects this pressure to continue and to intensify throughout the remainder of fiscal 1997. While many other technical, service and support capabilities affect a customer's buying decision, the Company's future operating results will depend, in part, on its ability to compete with these technologies. The Company's future operating results will depend to a considerable extent on its ability to rapidly and continuously develop, introduce, and deliver in quantity new systems, software, and service products, as well as new microprocessor technologies, that offer its customers enhanced performance at competitive prices. The development of new high - performance computer products, such as the Company's recent development of the UltraSPARC is a complex and uncertain process requiring high levels of innovation from the Company's designers and suppliers, as well as accurate anticipation of customer requirements and technological trends. Once a hardware product is developed, the Company must rapidly bring such products to volume manufacturing, a process that requires accurate forecasting of volumes, mix of products and configurations, among other things, in order to achieve acceptable yields and costs. 9
Accordingly, with the introduction of the Company's enhanced server systems during fiscal 1996, future operating results will depend to a considerable extent on the Company's ability to closely manage these product introductions, as well as future product introductions , in order to minimize unfavorable patterns of customer orders, to reduce levels of older inventory and to ensure that adequate supplies of new products can be delivered to meet customer demand. The ability of the Company to match supply and demand is further complicated by the Company's need to adjust prices to reflect changing competitive market conditions as well as the variability and timing of customer orders with respect to the Company's older products. As a result, the Company's operating results could be adversely affected if the Company is not able to correctly anticipate the level of demand for the mix of products. Because the Company is continuously engaged in this product development, introduction, and transition process, its operating results may be subject to considerable fluctuation, particularly when measured on a quarterly basis. The Company is increasingly dependent on the ability of its suppliers to design, manufacture, and deliver advanced components required for the timely introduction of new products. The failure of any of these suppliers to deliver components on time or in sufficient quantities, or the failure of any of the Company's own designers to develop advanced innovative products on a timely basis, could result in a significant adverse impact on the Company's operating results. The inability to secure enough components to build products, including new products, in the quantities and configurations required, or to produce, test and deliver sufficient products to meet demand in a timely manner, would adversely affect the Company's net revenues and operating results. To secure components for development, production, and introduction of new products, the Company frequently makes advanced payments to certain suppliers and often enters into noncancelable purchase commitments with vendors early in the design process. Due to the variability of material requirement specifications during the design process, the Company must closely manage material purchase commitments and respective delivery schedules. In the event of a delay or flaw in the design process, the Company's operating results could be adversely affected due to the Company's obligations to fulfill such noncancelable purchase commitments. Generally, the computer systems sold by Sun, such as the UltraSPARC based products, are the result of hardware and software development, such that delays in the software development can delay the ability of the Company to ship new hardware products. In addition, adoption of a new release of an operating system may require effort on the part of the customer and porting by software vendors providing applications. As a result, the timing of conversion to a new release is inherently unpredictable. Moreover, delays by customers in adopting a new release of an operating system can limit the acceptability of hardware products tied to that release. Such delays could adversely affect the future operating results of the Company. Seasonality also affects the Company's operating results, particularly in the first quarter of each fiscal year. In addition, the Company's operating expenses are increasing as the Company continues to expand its operations, and future operating results will be adversely affected if revenues do not increase accordingly. Additionally, the Company plans to continue to evaluate and, when appropriate, make acquisitions of complementary technologies, products or businesses. As part of this process, the Company will continue to evaluate the changing value of its assets, and when necessary, make adjustments thereto. While the Company cannot predict what effect these various factors may have on its financial results, the aggregate effect of these and other factors could result in significant volatility in the Company's future performance and stock price. 10
LIQUIDITY AND CAPITAL RESOURCES Total assets at December 29, 1996 increased by approximately $66 million from June 30, 1996, due principally to increases in accounts receivable of $186 million, property, plant and equipment-net of $167 million, and other current assets of $30 million, offset by decreases in cash, cash equivalents and short-term investments of $239 million and inventories of $66 million. The increase in accounts receivable reflects a larger percentage of sales occurring near the end of the quarter and the timing of cash receipts. Increase in property, plant and equipment reflects the purchase of Phase II of the campus located in Menlo Park for approximately $100 million and capital additions to support increased headcount, primarily in engineering, service and marketing. Other current assets increased due to the timing of payments for insurance and other taxes. Cash was principally used for the systematic and opportunistic repurchases of 12.1 million shares of common stock for $329 million, capital expenditures of approximately $200 million, purchase of Phase II of the campus located in Menlo Park, and scheduled debt repayments of $40 million, offset by net maturities of short-term investments for $150 million and cash provided from operations. The reduction in inventories reflects improved inventory management. Total current liabilities decreased $8 million from June 30, 1996, due principally to a decrease in other current liabilities of $48 million and short-term borrowings of $22 million, offset by an increase in accounts payable of $59 million. The decrease in other current liabilities and short-term borrowings reflects the final payment related to the Company's senior notes and scheduled debt repayments. The increase in accounts payable reflects increased inventory receipts during the last three weeks of the quarter as compared to the fourth quarter of fiscal 1996. At December 29, 1996, the Company's primary sources of liquidity consisted of cash, cash equivalents and short-term investments of $750 million and a revolving credit facility with banks aggregating $300 million, which was available subject to compliance with certain covenants. The Company believes that the liquidity provided by existing cash and short-term investment balances and the borrowing arrangement described above will be sufficient to meet the Company's capital requirements through fiscal 1997. However, the Company believes the level of financial resources is a significant competitive factor in its industry and may choose at any time to raise additional capital through debt or equity financing to strengthen its financial position, facilitate growth and provide the Company with additional flexibility to take advantage of business opportunities that may arise. The sufficiency of the Company's capital resources are forward looking statements which involve risks and uncertainties and actual results may vary materially. 11
PART II - OTHER INFORMATION ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On November 13, 1996, the Annual Meeting of Stockholders of the Company was held in Menlo Park, California. An election of directors was held with the following individuals being elected to the Board of Directors of the Company: Share Voted For Votes Withheld --------------- -------------- Scott G. McNealy 314,141,304 1,592,750 L. John Doerr 314,200,826 1,533,228 Judith L. Estrin 314,176,294 1,557,760 Robert J. Fisher 314,181,142 1,552,912 Robert L. Long 314,171,094 1,562,960 M. Kenneth Oshman 314,195,994 1,538,060 A. Michael Spence 314,172,572 1,561,482 The seven nominees who received the highest number of votes (all of the above individuals) were elected to the Board of Directors. Votes withheld from any nominee were counted for purposes of determining the presence or absence of a quorum. The stockholders also approved an amendment to the Company's Restated Certificate of Incorporation increasing the number of shares of common stock, par value $0.00067, authorized for issuance thereunder from 300,000,000 to 940,000,000 shares. There were 305,052,626 shares voted for the amendment, 6,386,726 shares voted against the amendment, 918,234 abstentions and 3,376,468 broker non-votes. The affirmative vote of the holders of a majority of the outstanding shares of common stock outstanding on the record date of the Annual Meeting was needed in order to approve the foregoing proposal. Votes cast against the proposal , abstentions and broker non-votes, were counted only for purposes of determining a quorum and were counted as votes against the proposal. 12
ITEM 5 - OTHER INFORMATION SCHEDULE OF SALES BY EXECUTIVE OFFICERS DURING THE QUARTER The following is a summary of all sales of the Company's Common Stock by the Company's executive officers and directors who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, during the fiscal quarter ended December 29, 1996: OFFICER/ DATE PRICE NUMBER OF DIRECTOR SHARES SOLD ========================================================================== William Joy 11/1/96 $30.8906 40,000 11/8/96 $31.937 20,000 11/22/96 $28.75 20,000 11/22/96 $28.7187 20,000 11/25/96 $28.687 20,000 11/25/96 $28.4062 20,000 11/25/96 $28.6562 20,000 11/26/96 $28.2812 40,000 Michael Lehman 11/7/96 $37.7812 8,000 11/7/96 $37.7812 8,000 11/7/96 $37.7812 8,000 Eric Schmidt 11/21/96 $29.687 10,000 11/22/96 $28.937 10,000 John Shoemaker 11/6/96 $31.72 20,000 10/31/96 $30.392 2,000 Chet Silvestri 11/8/96 $32.312 20,000 11/27/96 $28.625 20,000 Michael Spence 11/7/96 $31.9687 20,000 Dorothy Terrell 11/7/96 $32.0312 6,000 11/8/96 $32.5312 6,000 11/7/96 $31.7844 20,000 11/8/96 $32.7085 6,000 Edward Zander 11/27/96 $57.0625 5,000 13
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K a) EXHIBITS 10.89 Form of Change of Control Agreement executed by each corporate executive officer of Registrant. 10.90 Form of Change of Control Agreement executed by Chief Executive Officer of Registrant. 10.91 Form of Vice President Change of Control Severance Plan 10.92 Form of Director-Level Change of Control Severance Plan 11.0 Statement re: Computation of Earnings Per Share 27.0 Financial data for the period ended December 29, 1996 14
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 thereunto duly authorized. SUN MICROSYSTEMS, INC. BY /s/ Michael E. Lehman ------------------------ Michael E. Lehman Vice President and Chief Financial Officer /s/ George Reyes -------------------- George Reyes Vice President and Corporate Controller, Chief Accounting Officer Dated: February 11, 1997 15
EXHIBITS TO REPORT ------------------ ON FORM 10-Q ------------ FOR THE QUARTERLY PERIOD ENDED DECEMBER 29, 1996 ------------------------------------------------