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SALESFORCE COM INC (CRM)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 03/15/2006
Filed Period 01/31/2006

Table of contents

  • Page 1
    SALESFORCE COM INC (CRM) 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/15/2006 Filed Period 01/31/2006

  • Page 2
    ... Suite 300 San Francisco, California 94105 (Address of principal executive offices) Telephone Number (415) 901-7000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, par value $0.001 per share Name of...

  • Page 3
    ...and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related...

  • Page 4
    ... service offering in February 2000. Our principal executive offices are located in San Francisco, California and our website address is www.salesforce.com. Our office address is The Landmark @ One Market, Suite 300, San Francisco, California 94105. We are the leading provider, based on market share...

  • Page 5
    ... High cost of ownership. Enterprise software applications carry a high total cost of ownership. Customers must make significant investments, both initially and on an ongoing basis, in applications and IT infrastructure, including computer systems, networks, software licenses, service and support and...

  • Page 6
    ...enterprise software industry as businesses will be able to replace their purchased software with subscriptions to a wide range of application services. According to an April 2005 report by IDC, 79% of companies surveyed are now purchasing or reviewing on-demand application offerings. The Opportunity...

  • Page 7
    ... with traditional enterprise software CRM applications. We believe that the CRM market is one of the first markets to benefit from the new on-demand application services delivery model. As a result of the high total cost of ownership, low deployment and usage rates, and poor return on investment of...

  • Page 8
    ... Builder (previously called Customforce), our service is highly configurable in a short amount of time, enabling our customers to tailor its appearance, policy settings, language, workflow, reports and other characteristics without the use of significant IT resources or consultants. Secure, scalable...

  • Page 9
    ... application services, which enable customers and subscribers to systematically record, store, and act upon business data and to help businesses manage customer accounts, track sales leads, evaluate marketing campaigns, and provide postsales service. We also enable companies to generate reports...

  • Page 10
    ...deal to providing customer support and service. Team Edition offers access to accounts, contacts, opportunities, cases and reports. It does not include the more advanced customer service and support or marketing automation features such as: campaigns, forecasts, leads, solutions, online case capture...

  • Page 11
    ... the critical information to track and forecast revenue by products. Products & Schedules is included in all Enterprise Edition service subscriptions. Customers of Professional Edition can choose to subscribe as an add-on service. Salesforce Sandbox: Salesforce Sandbox enables customers to test new...

  • Page 12
    ... are billed on a time and materials basis. For many of our small and medium-sized business customers, we also offer for a fixed price certain implementation services that take up to a week to complete. Training We offer a number of traditional classroom and online educational classes that address...

  • Page 13
    ... the Internet and by applications behind customers' firewalls. Through our AppExchange API platform, we allow customers and partners to insert, update, delete and query any of their information in our service. Our full-text search engine, which allows users to perform natural language queries on all...

  • Page 14
    ... and Web-based campaigns targeted at key executives and decision makers within businesses. Our principal marketing initiatives include launch events to publicize our service to existing customers and prospects; direct mail and email campaigns; participation in, and sponsorship of, user conferences...

  • Page 15
    ... Web link exchanges, joint press announcements, joint trade show activities, channel marketing campaigns and joint seminars; using our website to offer free trials of our service and to provide product and company information; and advertising in newspapers, CRM trade magazines, management journals...

  • Page 16
    ... ease of implementation; ease of use and rates of user adoption; low total cost of ownership and demonstrable cost-effective benefits for customers; product functionality; performance, security, scalability, flexibility and reliability of the service; ease of integration with existing applications...

  • Page 17
    ... market acceptance of our service include reluctance by enterprises to migrate to an on-demand application service; a limited number of service offerings and risks associated with developing new service offerings; the price and performance of our service; the level of customization we can offer...

  • Page 18
    Table of Contents • • reluctance by enterprises to trust third parties to store and manage their internal data; and adverse publicity about us, our service or the viability, reliability or security of on-demand application services generally from third party reviews, industry analyst reports ...

  • Page 19
    ... as from enterprise software vendors and online service providers who may develop and/or bundle CRM products with their products in the future. For small business customers, we also face competition from companies whose offering is based on Microsoft Outlook and Excel for limited contact management...

  • Page 20
    ... our limited operating history, our evolving business model and the unpredictability of our emerging industry, we may not be able to accurately forecast our rate of growth. We base our current and future expense levels and our investment plans on estimates of future revenue and future rate of growth...

  • Page 21
    ... our deferred tax assets; general economic conditions in our geographic markets; the timing of additional investments in our on-demand application service and in our consulting service; regulatory compliance costs; payment defaults by customers; costs associated with future acquisitions of companies...

  • Page 22
    ... from expense management to purchasing to recruiting. Although we do not presently charge for use of the AppExchange directory, it is uncertain whether this service will be accepted and adopted by our customers, developers and partners or will increase the demand for subscriptions to our service. We...

  • Page 23
    ... and market acceptance of the feature or edition. Failure in this regard may significantly impair our revenue growth. In addition, because our service is designed to operate on a variety of network hardware and software platforms using a standard browser, we will need to continuously modify and...

  • Page 24
    ... could affect the market price of our stock. Further, if we fail to properly evaluate and execute acquisitions or investments, our business and prospects may be seriously harmed and the value of our common stock may decline. If we fail to develop our brand cost-effectively, our business may suffer...

  • Page 25
    ...growth will be impeded. In addition, we plan to develop and expand our indirect sales channel by engaging third-party resellers. Because of our on-demand service model, the structuring of such relationships is complex and requires the investment of significant business, financial and other resources...

  • Page 26
    ...from executing our business plan and could require us to pay monetary damages or enter into royalty or licensing agreements. In addition, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost...

  • Page 27
    ... the collection, use and disclosure of personal information obtained from consumers and individuals. The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our customers may limit the use and adoption of our service and reduce...

  • Page 28
    ... to support our planned growth. To continue to execute on our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for engineers with high levels of experience in designing and developing software and Internet-related services and...

  • Page 29
    ... common stock has a limited trading history. Factors affecting the trading price of our common stock include variations in our operating results and cash flows; the quarterly net increases in the number of customers and paying subscriptions; announcements of technological innovations, new services...

  • Page 30
    ... of "blank check" preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt; eliminate the ability of our stockholders to call special meetings of stockholders; prohibit stockholder action by written consent, which requires all...

  • Page 31
    ... Company, its Chief Executive Officer and its Chief Financial Officer. The complaint alleged violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), purportedly on behalf of all persons who purchased salesforce.com common stock between June...

  • Page 32
    ....com in February 1999 and has served as Chairman of the Board of Directors since inception. He has served as Chief Executive Officer since November 2001. From 1986 to 1999, Mr. Benioff was employed at Oracle Corporation where he held a number of positions in sales, marketing and product development...

  • Page 33
    ... several technical and management positions, lastly as Senior Technical Program Manager. From June 1991 to December 1994, Mr. Cavalieri worked as a consultant and systems engineer for EDS. Mr. Cavalieri received a B.S. from Cornell University. David Moellenhoff co-founded salesforce.com in February...

  • Page 34
    ...PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our common stock has been quoted on the New York Stock Exchange under the symbol "CRM" since our initial public offering on June 23, 2004. Prior to that time, there was no public market for our common stock. The following table sets...

  • Page 35
    Table of Contents Use of Proceeds from the Initial Public Offering The Securities and Exchange Commission declared our registration statement, filed on Form S-1 (File No. 333-111289) under the Securities Act of 1933 in connection with the initial public offering of our common stock, $0.001 par ...

  • Page 36
    ..., except per share and customer and subscriber data) 2005 2004 2003 2002 Consolidated Statements of Operations: Revenues: Subscription and support Professional services and other Total revenues Cost of revenues (1): Subscription and support Professional services and other Total cost of revenues...

  • Page 37
    ... equivalents and marketable securities includes net proceeds of $113.8 million from our sale of 11,500,000 shares of common stock in June 2004 from our initial public offering. (4) Paying subscriptions are defined as unique user accounts, purchased by customers for use by their employees and other...

  • Page 38
    ... materials basis. We also offer a number of classes on implementing, using and administering our service that are billed on a per person, per class basis. Our typical payment terms provide that our customers pay us within 30 days of invoice. Cost of Revenues and Operating Expenses Cost of Revenues...

  • Page 39
    ..., payments to partners, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications and brand building and product marketing activities. As our revenues increase, we plan to continue to invest heavily in marketing and sales by increasing the...

  • Page 40
    ... dates of each contract. Support revenues from customers who purchase our premium support offerings are recognized similarly over the term of the support contract. As part of their subscription agreements, customers benefit from new features and functionality with each release at no additional cost...

  • Page 41
    ... preferred stock and appraisals performed by an appraisal firm. The fair value of our common stock is now determined by the trading price of our stock on the New York Stock Exchange. We amortize the deferred compensation charges ratably over the four-year vesting period of the underlying option...

  • Page 42
    ... stock during our initial public offering in June 2004. Paying subscriptions are defined as unique user accounts, purchased by customers for use by their employees and other customer-authorized users that have not been suspended for non-payment and for which we are recognizing subscription revenue...

  • Page 43
    ... January 31, 2006 2005 2004 Revenues: Subscription and support Professional services and other Total revenues Cost of revenues: Subscription and support Professional services and other Total cost of revenues Gross profit Operating expenses: Research and development Marketing and sales General...

  • Page 44
    Income before minority interest Minority interest in consolidated joint venture Net income 10 (1) 9% 4 - 4% - 4 4% 40

  • Page 45
    ... of our business. We incurred costs related to adding data center capacity and upgrading our new development and test data center. Additionally, we added sales personnel to focus on adding new customers and increasing the penetration within our existing customer base, professional services personnel...

  • Page 46
    ...service offerings and develop new technologies. During the year ended January 31, 2006, we capitalized $1.4 million in development costs associated with planned releases of our application service. Marketing and Sales. Marketing and sales expenses were $149.6 million, or 48 percent of total revenues...

  • Page 47
    ... support our growth. Lease Recovery. The lease recovery of $285,000, which occurred during the first quarter of fiscal 2006, was due to the reduction in accruals associated with the San Francisco, California office space that we abandoned in December 2001. In March 2005, we entered into an agreement...

  • Page 48
    .... The increase in revenues outside of the Americas was the result of our efforts to expand the number of locations around the world where we conduct business and our international selling and marketing activities. Cost of Revenues. Cost of revenues was $33.5 million, or 19 percent of total revenues...

  • Page 49
    ... from our initial public offering in June 2004. The net cash used in investing activities during the year ended January 31, 2006 primarily related to the changes in restricted cash balances and marketable securities and capital expenditures associated with the purchase of software licenses, computer...

  • Page 50
    ... office space and co-location facilities for additional data center capacity and the new development and test data center, and computer equipment and furniture and fixtures. We also have long-term liabilities related primarily to lease abandonments. At January 31, 2006, the future minimum payments...

  • Page 51
    ..., corporate notes and bonds, government securities and other debt securities with strong credit ratings. The cash, cash equivalents and short-term marketable securities are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Our fixed-income...

  • Page 52
    Table of Contents ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS The following financial statements are filed as part of this Report: Page No. Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of ...

  • Page 53
    ... presents fairly in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of salesforce.com, inc.'s internal control over financial reporting as of January 31...

  • Page 54
    Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of salesforce.com, inc. We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that salesforce.com, inc....

  • Page 55
    ... of Contents salesforce.com, inc. Consolidated Balance Sheets (in thousands, except share and per share data) January 31, January 31, 2006 2005 Assets Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, net of allowance for doubtful accounts of $1,296...

  • Page 56
    Table of Contents salesforce.com, inc. Consolidated Statements of Operations (in thousands, except per share data) Fiscal Year Ended January 31, 2006 2005 2004 Revenues: Subscription and support Professional services and other Total revenues Cost of revenues (1): Subscription and support ...

  • Page 57
    52

  • Page 58
    Table of Contents salesforce.com, inc. Consolidated Statements of Stockholders' Equity (in thousands, except share and per share data) Convertible Preferred Stock Shares Amount Common Stock Notes Accumulated Total Additional Deferred Total Receivables Other Stockholders' Paid-in Stock-Based from ...

  • Page 59
    ... and subsidiary deferred - - - stock-based compensation Exercise of stock options and warrants and stock grants to board members for - - 4,126,845 board services Tax benefits from employee - - - stock plans Repurchase of unvested - - (191,000) shares Fair value of stock awards issued to nonemployees...

  • Page 60
    ... and subsidiary stock options Amortization of Company and subsidiary deferred stock-based compensation Exercise of stock options and warrants and stock grants to board members for board services Tax benefits from employee stock plans Repurchase of unvested shares Fair value of stock awards issued...

  • Page 61
    ... assets Accounts payable Accrued expenses and other current liabilities Income taxes Deferred revenue Net cash provided by operating activities Investing activities Restricted cash Purchases of marketable securities Sales and maturities of marketable securities Capital expenditures Net cash used...

  • Page 62
    See accompanying Notes to Consolidated Financial Statements. 56

  • Page 63
    ... Significant Accounting Policies Description of Business Salesforce.com, inc. (the "Company") is the leading provider, based on market share, of application services that allow organizations to easily share customer information on demand. It provides a comprehensive customer relationship management...

  • Page 64
    ... associated with problem accounts. The Company's accounts receivable and net revenues are derived from a large number of direct customers. No customer accounted for more than 5 percent of accounts receivable at January 31, 2006 and 2005. No single customer accounted for 5 percent or more of total...

  • Page 65
    ... for Web Site Development Costs ("EITF 00-2"), and EITF Issue No. 00-3, Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to Use Software Stored on Another Entity's Hardware ("EITF 00-3"). EITF 00-2 sets forth the accounting for website development costs based...

  • Page 66
    ...'s initial public offering in June 2004, the fair value is determined by the trading price of the Company's common stock on the New York Stock Exchange. Compensation expense is recognized on a straight-line basis over the option-vesting period of four years. The Company accounts for stock issued...

  • Page 67
    ...general market decline in share price volatilities, the Company reduced its volatility assumption from 75% to 50% and applied this estimate in valuing the options awarded during the remainder of fiscal 2006. Had compensation cost for the Company's stock-based compensation plans been determined using...

  • Page 68
    ... of subscription fees from customers accessing its on-demand application service, and from customers purchasing additional support beyond the standard support that is included in the basic subscription fee; and (2) related professional services and other revenue. Other revenues consist primarily...

  • Page 69
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) provides its application as a service, the Company follows the provisions of SEC Staff Accounting Bulletin No. 104, Revenue Recognition and Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements ...

  • Page 70
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) Deferred Revenue Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from the Company's subscription service described above and is recognized as the ...

  • Page 71
    ... variable accounting for this plan, as the number of options awarded is not fixed and no measurement date currently exists. In fiscal 2006, 2005 and 2004, the joint venture granted options to purchase 23,600, 10,000 and 3,000 shares, respectively, to its employees to purchase shares of common stock...

  • Page 72
    ... to purchase all of its shares of the joint venture at a price equal to the then fair value market value. Fair market value is to be determined by mutual agreement of the parties, or if the parties are unable to agree, by an independent appraiser. 3. Balance Sheet Accounts Marketable Securities As...

  • Page 73
    ...,000 for fiscal 2006, 2005 and 2004, respectively. Fixed assets at January 31, 2006 and 2005 included a total of $3,616,000 and $3,487,000, respectively, acquired under capital lease agreements. Accumulated amortization relating to equipment and software under capital leases totaled $2,765,000 and...

  • Page 74
    ... employee stock options Accrued non-income taxes payable Accrued professional costs Accrued rent $ 24,465 $ 10,844 186 229 7,463 1,911 3,684 48,782 $ 16,836 6,560 278 591 5,146 2,241 815 32,467 $ 4. Initial Public Offering In June 2004, the Company completed the sale of 11,500,000 shares...

  • Page 75
    ...): January 31, 2006 2005 Deferred tax assets: Net operating loss carryforwards Deferred stock compensation Tax credits Unrealized losses on marketable securities Other Total deferred tax assets Less valuation allowance Total deferred tax assets Deferred tax liabilities-deferred commissions and...

  • Page 76
    Net deferred tax assets $ 7,225 $ - 69

  • Page 77
    ... Plan, 2004 Employee Stock Purchase Plan and the 2004 Outside Directors Stock Plan. These plans, other than the 2004 Outside Directors Plan, provide for annual automatic increases on February 1 to the shares reserved for issuance based on the lesser of (i) a specific percentage of the total number...

  • Page 78
    ... Financial Statements-(Continued) Options issued under the Company's stock option plans are generally for periods not to exceed 10 years and are issued at fair value of the shares of common stock on the date of grant as determined by the trading price of such stock on the New York Stock Exchange...

  • Page 79
    ... Company's executive officers and one of the Company's board members hold three of the Foundation's nine board seats. The warrants are exercisable for one-year terms beginning on the earlier of the initial public offering of the Company or August 1, 2003, August 1, 2004, August 1, 2005, and August...

  • Page 80
    ... time of the issuances. During fiscal 2006, a board member received stock grants for a total of 20,000 shares of common stock for board services pursuant to the terms described in the 2004 Outside Directors Stock Plan. The expense associated with these share issuances was $389,000 and was expensed...

  • Page 81
    ...rental obligation offset by an estimate of projected subtenant income of $919,000. In March 2005, the Company entered into an agreement with its primary landlord that released it from a portion of the future obligations associated with the remaining 4,000 square feet of San Francisco office space 74

  • Page 82
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) that was abandoned in December 2001 in exchange for an agreement to lease additional space elsewhere in the building at fair value. Accordingly, the Company recorded a $285,000 credit to reflect the ...

  • Page 83
    ...'s Chief Executive Officer, its Chief Financial Officer and members of its Board of Directors alleging breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment under state common law. Subsequently, a substantially similar complaint was filed in...

  • Page 84
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) In addition to the resource sharing with the Foundation, the Company issued the Foundation warrants in August 2002 to purchase 500,000 shares of common stock. Through January 31, 2006, the Foundation has ...

  • Page 85
    ... Evaluation Date that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in periodic SEC reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer...

  • Page 86
    ... because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. ITEM 9B. OTHER INFORMATION Not applicable. 79

  • Page 87
    ..., salesforce.com, inc., The Landmark @ One Market, Suite 300, San Francisco, California 94105 or by calling (415) 901-7000. We plan to post on our Web site at the address described above any future amendments or waivers of our Code of Conduct. ITEM 11. EXECUTIVE COMPENSATION The information required...

  • Page 88
    ... listed below in the accompanying "Index to Exhibits" are filed or incorporated by reference as part of this Annual Report on Form 10-K. (c) Financial Statement Schedules. salesforce.com, inc. Schedule II Valuation and Qualifying Accounts Balance at Beginning of Year Additions Deductions Write...

  • Page 89
    ... Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /S/ MARC BENIOFF Marc Benioff Chairman of the Board of Directors and Chief Executive Officer (Principal...

  • Page 90
    ....com, inc. and CA-One Market Limited Partnership, and amendments thereto Severance and Confidentiality Agreement and General and Special Release by and between salesforce.com and Patricia Sueltz dated May 17, 2005 List of Subsidiaries Consent of Independent Registered Public Accounting Firm...

  • Page 91
    ...'s initial registration statement filing on Form S-1 (No. 333-111289) as filed with the Securities and Exchange Commission on December 18, 2003. Incorporated by reference from the Company's Form 10-Q for the quarterly period ended July 31, 2005 as filed with the Securities and Exchange Commission...

  • Page 92
    ... of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law. (d) "Company" means SalesForce.com, Inc., a Delaware corporation, or any successor corporation thereto.

  • Page 93
    ... the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be...

  • Page 94
    ...a written agreement between the Company and an Optionee setting forth the terms, conditions and restrictions of the Option granted to the Optionee and any shares acquired upon the exercise thereof. (p) "Optionee" means a person who has been granted one or more Options. (q) "Parent Corporation" means...

  • Page 95
    ...other powers set forth in the Plan and subject to the provisions of the Plan, the Board shall have the full and final power and authority, in its discretion: (a) to determine the persons to whom, and the time or times at which, Options shall be granted and the number of shares of Stock to be subject...

  • Page 96
    ...other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan; (e) to approve one or more forms of Option Agreement; (f) to amend, modify, extend, cancel, renew, reprice or otherwise adjust the exercise price of, or grant a new Option in...

  • Page 97
    ... on the date such person commences Service with a Participating Company, with an exercise price determined as of such date in accordance with Section 6.1. 5.3 Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock option plans of the...

  • Page 98
    ... upon the exercise of the Option. 6. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form, as the Board shall from time to time establish. No Option or purported Option shall be a valid and binding...

  • Page 99
    ..., or attestation to the ownership, of shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the...

  • Page 100
    ... of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares acquired upon...

  • Page 101
    ...'s termination of Service, or (iii) the Option Expiration Date. 7. STANDARD FORMS OF OPTION AGREEMENT. 7.1 General. An Option shall comply with and be subject to the terms and conditions set forth in the form of Option Agreement adopted by the Board concurrently with its adoption of the Plan and as...

  • Page 102
    ... Options substantially equivalent options for the Acquiring Corporation's stock. For purposes of this Section 8.2, an Option shall be deemed assumed if, following the Change in Control, the Option confers the right to purchase in accordance with its terms and conditions, for each share of Stock...

  • Page 103
    ... issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Option may be exercised...

  • Page 104
    ... to enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 14. SHAREHOLDER APPROVAL. The Plan or any increase in the maximum aggregate number of shares of Stock issuable thereunder...

  • Page 105
    SALESFORCE.COM, INC. TERMS OF STOCK OPTION AGREEMENT The Company has granted to the Optionee, pursuant to a Stock Option Grant Agreement (the "Grant Agreement") and the Company's 1999 Stock Option Plan (the "Plan"), an Option to purchase certain shares of Stock, upon the terms and conditions set ...

  • Page 106
    ... contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option. 3. EXERCISE OF THE OPTION. 3.1 Right to Exercise. The Option shall be exercisable during its term in accordance with the vesting schedule set out in the Grant Agreement...

  • Page 107
    ...if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be...

  • Page 108
    ...(90) days after the date on which the Optionee's Service as an Employee terminated as a result of a Disability other than a permanent and total disability as defined in Section 22(e)(3) of the Code, the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the...

  • Page 109
    ... Board, in its sole discretion) after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date. 6.2 Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth...

  • Page 110
    ...an option or purchasing shares hereunder). 8. NOTICE OF SALES UPON DISQUALIFYING DISPOSITION. The Optionee shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Agreement. In addition, the Optionee shall promptly notify the Chief Financial Officer...

  • Page 111
    ... writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid...

  • Page 112
    ... assigned such term for the purposes of registration on Form S-8 under the Securities Act. (b) "Award" means any Option, SAR, Restricted Stock Purchase Right, Restricted Stock Bonus, Performance Share, Performance Unit, Restricted Stock Unit or Deferred Compensation Award granted under the Plan.

  • Page 113
    ... setting forth the terms, conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an "Option Agreement," an "SAR Agreement," a "Restricted Stock Purchase Agreement," a "Restricted Stock Bonus Agreement," a "Performance Share Agreement," a "Performance...

  • Page 114
    ... the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be...

  • Page 115
    ... Board as an officer of the Company. (u) "Option" means the right to purchase Stock at a stated price for a specified period of time granted to a Participant pursuant to Section 6 of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. (v) "Parent Corporation...

  • Page 116
    ... the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. (mm) "Section 162(m)" means Section 162(m) of the Code. (nn) "Securities Act" means the Securities Act of 1933, as amended. (oo) "Service" means a Participant's employment or...

  • Page 117
    ... be treated thereafter as a Nonstatutory Stock Option, unless the Participant's right to return to Service with the Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall...

  • Page 118
    ... Award; (b) to determine the type of Award granted and to designate Options as Incentive Stock Options or Nonstatutory Stock Options; (c) to determine the Fair Market Value of shares of Stock or other property; (d) to determine the terms, conditions and restrictions applicable to each Award (which...

  • Page 119
    ... person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 4. SHARES SUBJECT TO PLAN. 4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2 and Section 4.3, the maximum aggregate number of shares of Stock that...

  • Page 120
    ... that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Awards, and in the exercise or purchase price per share under any outstanding Award in order to prevent dilution...

  • Page 121
    ... on the date such person commences Service with an ISO-Qualifying Corporation, with an exercise price determined as of such date in accordance with Section 6.1. (b) Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock option plans of...

  • Page 122
    ...the following terms and conditions: 6.1 Exercise Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective date of grant...

  • Page 123
    ... time as determined by the Board, in its discretion) after the date on which the Participant's Service terminated, but in any event no later than the date of expiration of the Option's term as set forth in the Award Agreement evidencing such Option (the "Option Expiration Date"). (ii) Death. If the...

  • Page 124
    ... the applicable time periods set forth in Section 6.4(a) of shares acquired upon the exercise of the Option would subject the Participant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on...

  • Page 125
    ... SAR shall be the exercise price per share under the related Option and (b) the exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the SAR. 7.3 Exercisability and Term of SARs. (a) Tandem SARs...

  • Page 126
    ... or by the laws of descent and distribution. 8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Restricted Stock Awards shall be evidenced by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a Restricted Stock Purchase Right and the number of shares of Stock subject to...

  • Page 127
    ... Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service. 8.4 Payment of Purchase Price. Except as otherwise provided below, payment of the purchase price for the number of shares of Stock being purchased pursuant...

  • Page 128
    ... shall have the option to repurchase for the purchase price paid by the Participant any shares acquired by the Participant pursuant to a Restricted Stock Purchase Right which remain subject to Vesting Conditions as of the date of the Participant's termination of Service and (b) the Participant...

  • Page 129
    ... Corporation consolidated therewith for financial reporting purposes or such division or other business unit as may be selected by the Committee. For purposes of the Plan, the Performance Measures applicable to a Performance Award shall be calculated in accordance with generally accepted accounting...

  • Page 130
    ...(ix) expenses; (x) the market price of the Stock; (xi) earnings per share; (xii) return on stockholder equity; (xiii) return on capital; (xiv) return on net assets; (xv) economic value added; (xvi) number of customers; and (xvii) market share. (b) Performance Targets. Performance Targets may include...

  • Page 131
    ... Performance Award by the value of a share of Stock determined by the method specified in the Award Agreement. Such methods may include, without limitation, the closing market price on a specified date (such as the settlement date) or an average of market prices over a series of trading days. Shares...

  • Page 132
    ...by dividing (a) the amount of cash dividends paid on such date with respect to the number of shares of Stock represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Dividend Equivalents may be paid currently or may be...

  • Page 133
    ... equivalent to those set forth in Sections 9.3 through 9.5(a). 10.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to...

  • Page 134
    ... with respect to the number of shares of Stock represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled...

  • Page 135
    ... one or more Awards of Stock Units with respect to such numbers of shares of Stock as determined in accordance with the rules of the program established by the Committee and having such other terms and conditions as established by the Committee. (b) Participants designated by the Committee who are...

  • Page 136
    ... of the date of payment of such cash dividends on Stock. The method of determining the number of additional Stock Units to be so credited shall be specified by the Committee and set forth in the Award Agreement. Such additional Stock Units shall be subject to the same terms and conditions and shall...

  • Page 137
    ... and SARs and shares acquired upon the exercise of such Options and SARs upon such conditions and to such extent as the Committee shall determine. (b) Assumption or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent thereof, as the...

  • Page 138
    ... to each vested share of Stock subject to such canceled Option or SAR in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the...

  • Page 139
    ... stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.3), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of...

  • Page 140
    ...entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.3 or another provision of the Plan...

  • Page 141
    .... Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No...

  • Page 142
    ... AGREEMENT Salesforce.com, inc. has granted to the Participant named in the Notice of Grant of Stock Option (the "Grant Notice") to which this Stock Option Agreement (the "Option Agreement") is attached an option (the "Option") to purchase certain shares of Stock upon the terms and conditions set...

  • Page 143
    ... by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you should contact the Chief Financial Officer of the...

  • Page 144
    ... Chief Financial Officer of the Company, or other authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participant's election to exercise the Option, the number of whole shares...

  • Page 145
    ...if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be...

  • Page 146
    ... person empowered to do so under the deceased Participant's will or under the then applicable laws of descent and distribution. 6. TERMINATION OF THE OPTION. The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date...

  • Page 147
    ... received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the...

  • Page 148
    ... Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number, Exercise Price and class of shares subject to the Option, in order to prevent dilution or enlargement of...

  • Page 149
    ... HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE." 13. MISCELLANEOUS PROVISIONS. 13.1 Termination or Amendment. The Board may terminate or amend the Plan or the...

  • Page 150
    ... he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Chief Financial Officer of the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper...

  • Page 151
    ...) Salesforce.com, inc. has granted to the Participant named in the Notice of Grant of Stock Option (the "Grant Notice") to which this Stock Option Agreement (the "Option Agreement") is attached an option (the "Option") to purchase certain shares of Stock upon the terms and conditions set forth...

  • Page 152
    ... The Participant agrees that the Participant will not acquire shares of Stock pursuant to the Option or transfer, assign, sell or otherwise deal with such shares except in compliance with Local Law. 2.2 Employment Conditions. In accepting the Option, the Participant acknowledges that: (a) Any notice...

  • Page 153
    ... obtains shares of Stock, the value of those shares acquired upon exercise may increase or decrease in value, even below the Exercise Price. (i) No claim or entitlement to compensation or damages arises from termination of the Option or diminution in value of the Option or shares of Stock purchased...

  • Page 154
    ... Chief Financial Officer of the Company, or other authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participant's election to exercise the Option, the number of whole shares...

  • Page 155
    ... of this Option Agreement. Further, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be...

  • Page 156
    ... securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable United States federal, state or foreign securities laws, including Local Law, or other law or regulations or the requirements of any stock exchange or market...

  • Page 157
    ... person empowered to do so under the deceased Participant's will or under the then applicable laws of descent and distribution. 6. TERMINATION OF THE OPTION. The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date...

  • Page 158
    ...) the one hundred and ninetieth (190th) day after the Participant's termination of Service, or (iii) the Option Expiration Date. 8. EFFECT OF CHANGE IN CONTROL. In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the...

  • Page 159
    ... Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number, Exercise Price and class of shares subject to the Option, in order to prevent dilution or enlargement of...

  • Page 160
    ...such other address as such party may designate in writing from time to time to the other party. (a) Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Option Agreement, the Plan Prospectus, and any reports of the...

  • Page 161
    ... he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Chief Financial Officer of the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper...

  • Page 162
    ... Date. 2. DEFINITIONS AND CONSTRUCTION. 2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below: (a) "Award" means any Option, Restricted Stock or Restricted Stock Unit granted under the Plan. (b) "Award Agreement" means a written agreement...

  • Page 163
    ... the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be...

  • Page 164
    ... an Employee. (o) "Officer" means any person designated by the Board as an officer of the Company. (p) "Option" means a right to purchase Stock (subject to adjustment as provided in Section 4.2) pursuant to the terms and conditions of the Plan. Each Option shall be a nonstatutory stock option, that...

  • Page 165
    .... Use of the term "or" is not intended to be exclusive, unless the context clearly requires otherwise. 3. ADMINISTRATION. 3.1 Administration by the Board. The Plan shall be administered by the Board, including any duly appointed Committee of the Board. At any time that any class of equity security...

  • Page 166
    ... Market Value of shares of Stock or other property; (d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares purchased pursuant...

  • Page 167
    ... (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Awards, and in the exercise per share under any outstanding Award in order to...

  • Page 168
    ... written notice of such revocation to the Board no later than the day prior to the date such Award would be granted pursuant this Section. 6.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of receiving an Outside Director Stock...

  • Page 169
    ...a fully executed Award Agreement. Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 7.1 Exercise Price. The exercise price for each Option shall be the Fair Market Value of a share of Stock on...

  • Page 170
    ... time as determined by the Board, in its discretion) after the date on which the Participant's Service terminated, but in any event no later than the date of expiration of the Option's term as set forth in the Award Agreement evidencing such Option (the "Option Expiration Date"). (ii) Death. If the...

  • Page 171
    ... to Form S-8 Registration Statement under the Securities Act. 7.6 Automatic Grant of Options. Each Outside Director shall be granted automatically and without further action of the Board an Option to purchase 50,000 shares of Stock on the date on which such person first becomes an Outside Director...

  • Page 172
    ...number of shares of Stock and exercise prices thereof, for Options granted on or after the date the Board determines to make any such change or revision. 8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Restricted Stock Awards shall be evidenced by Award Agreements specifying the number of shares...

  • Page 173
    ... by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 9.1 Purchase Price. No monetary payment (other than applicable tax...

  • Page 174
    ... or additional securities or other property shall be immediately subject to the same Vesting Conditions as are applicable to the Award. 9.4 Effect of Termination of Service. Unless otherwise provided by the Board in the grant of a Restricted Stock Unit Award and set forth in the Award Agreement, if...

  • Page 175
    ... form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan. 11. CHANGE IN CONTROL. 11.1 Definitions. (a) An "Ownership Change Event" shall be deemed to have occurred...

  • Page 176
    ... to the excess of the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control over the exercise price per share under such Option (the "Spread "). In the event such determination is made by the Board, the Spread (reduced by applicable withholding taxes, if any...

  • Page 177
    ... be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.2) and (b) no other amendment of the Plan that would require approval of the Company's stockholders under any applicable law, regulation or...

  • Page 178
    ...entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2 or another provision of the Plan...

  • Page 179
    .... Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No...

  • Page 180
    ...and Address] You have been granted an option to purchase Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows: Grant Number Date of Grant Vesting Commencement Date Exercise Price per Share Total Number of Shares Granted Total Exercise Price Type...

  • Page 181
    ...as Part I of this Agreement (the "Optionee") an option (the "Option") to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the "Exercise Price"), subject to the terms and conditions of the Plan, which is incorporated...

  • Page 182
    ... or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for...

  • Page 183
    ... under and governed by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions...

  • Page 184
    OPTIONEE: Signature Print Name Residence Address SALESFORCE.COM, INC. By Title

  • Page 185
    ...") hereby elects to purchase shares (the "Shares") of the Common Stock of salesforce.com, inc. (the "Company") under and pursuant to the 2004 Outside Directors Stock Plan (the "Plan") and the Stock Option Agreement dated, (the "Option Agreement"). The purchase price for the Shares shall be $ , as...

  • Page 186
    ... is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice will continue in full force and effect. Submitted by: PURCHASER: Signature Print Name Address: Its Address: SALESFORCE.COM, INC. [address] Date Received Accepted by: SALESFORCE.COM, INC. By

  • Page 187
    ... to place Online/Phone Orders who is designated on the Order. 3. Payment Terms and Taxes. a. Unless otherwise agreed between the parties in writing, Service Fees for the Services will begin to accrue on the Billing Commencement Date. If Equinix fails to deliver a Service by the applicable Billing...

  • Page 188
    ...anything to the contrary in this Agreement, including Section 3(b), upon sixty (60) days' prior notice to Customer, Equinix may change the rates and fees for the Power Services at any time after the first year of the Service Term for such Power Services, at a rate not to exceed [***] per year. d. No...

  • Page 189
    ... (excluding amounts for which there is a Billing Dispute). 4. Access and Use of the IBX Centers, and Use of Customer's Equipment. a. Subject to the terms and conditions of this Agreement, Customer will have access to the Licensed Space twenty-four (24) hours per day, three hundred sixty-five (365...

  • Page 190
    ... chooses to employ security measures in addition to those set forth in the IBX Center Policies in effect as of the MSA Effective Date, and such measures have a material impact on Customer, Equinix shall notify Customer at least thirty (30) days prior to employing such security measures. m. In the...

  • Page 191
    ...Agreement will be construed as limiting the liability of either party for personal injury or death or damage to personal property resulting from gross negligence of a party. g. Customer shall have no obligation to pay any Service Fees for the Licensed Space or any portion thereof on any calendar day...

  • Page 192
    ... terms and conditions set forth in this Agreement (which will be the date on which the last Service Term of such last Order expires or is terminated pursuant to the terms and conditions of this Agreement). Unless otherwise agreed to by Equinix and Customer in writing, (i) the initial Services Term...

  • Page 193
    ...are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. Center will end when the initial Service Term of the Licensed Space on the first Sales Order that contains Licensed Space for that IBX Center ends (such Service Term for...

  • Page 194
    ... to continue to receive Services pursuant to the terms and conditions (including the obligation to pay charges for the Services) of this Agreement and to use the Smart Hands Service at Equinix's then-current published list rates minus [***] and shall continue to pay for the Services until the end of...

  • Page 195
    ... attorneys' fees and costs. c. No Party's directors, officers or employees will have any liability to any other Party with respect to this Agreement. Except as may be specifically otherwise consented to in writing by an Affiliate of a Party (and none of the other terms of this Agreement shall be...

  • Page 196
    ... to Customer in this Agreement, including, without limitation, the right (i) of access to and use of the IBX Centers for their own use or the use of others; (ii) to grant additional licenses to other persons or co-location customers for the use of portions of the IBX Centers; and (iii) to exercise...

  • Page 197
    ..., unless the body of this Agreement or the Order states that the conflicting term in the Order controls. p. Unless otherwise expressly agreed to by the parties in writing, Equinix and the applicable Equinix Entities will retain title to all parts and materials used or provided by Equinix or any...

  • Page 198
    ... Policies. Billing Commencement Date: For each Service, unless otherwise agreed to by the parties in writing, (i) for a Service ordered in a Sales Order, the date designated in the Sales Order as the date charges will begin to accrue, and (ii) for a Service ordered in an Online Order or Phone Order...

  • Page 199
    ...the applicable change order, the Order and this Agreement). Online/Phone Order Term: For each Service ordered by an Online Order or Phone Order, the period commencing on the Billing Commencement Date for such Service and ending (i) when the License (as defined in Section 9(l)) for the Licensed Space...

  • Page 200
    ...day Equinix is required to provide such Service pursuant to the terms and conditions set forth in this Agreement or as otherwise agreed to by the parties in the applicable Order. Shipping Policies: The portion of the Policies entitled Shipping Policies. Sublicensed Space: The portion of the Licensed...

  • Page 201
    ... the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. This Master Service Agreement has been entered into between the parties as of the MSA Effective Date...

  • Page 202
    ... the opinion of counsel for such Party, disclosure is advisable under any applicable securities laws regarding public disclosure of business information; or (iii) the disclosure is reasonably necessary and is to that Party's, or its Affiliates', employees, officers, directors, attorneys, accountants...

  • Page 203
    ... Sublicensees will relieve Customer from any liability under this Agreement or any Related Agreements. Without limiting the foregoing, Customer is responsible for paying the Service Fees for all of the Licensed Space (including Sublicensed Space) and the charges for Services for, or relating to, any...

  • Page 204
    ... exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. Exhibit C Service Level Agreement Power Equinix will provide...

  • Page 205
    ... filed separately with the Securities and Exchange Commission. has presented valid identification to the IBX Center security officer, Equinix will provide [***] credit as well as an additional [***] credit for each additional [***] thereafter that such person is denied access to the Licensed Space...

  • Page 206
    ... are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. the Transition Period) in addition to claiming the credits set forth in this SLA, provided that such written notice is provided to Equinix within thirty (30) days of...

  • Page 207
    ... the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. Escalation 2 Customer's Implementation Manager Or Manager Response Center Escalation 3 Manager - IT...

  • Page 208
    ... receipt of acceptance of the other Equinix customer to which the Cross-Connects runs 10 or more Cross- Installation within number of hours agreed to in applicable E-mail Order Connects Exceptions and Conditions Equinix will exercise all reasonable efforts to ensure service level commitments are...

  • Page 209
    ...(6) Core Temperature Control and (7) Core Humidity Control. a. Access to the Customer Care Website Equinix grants each Customer access to the Customer Care Website under the terms and conditions set forth in the Customer Care Website Usage Policies, if any, and the Master Service Agreement with such...

  • Page 210
    ... be present in the IBX Center(s) in question as of the date of termination or expiration of the Customer's Master Service Agreement or the applicable Order. b. Power i. A Customer may order power to the extent offered and approved by Equinix. ii. Redundant Power Circuit Policy: A power circuit is...

  • Page 211
    D-2

  • Page 212
    ... or regular US Mail, notwithstanding anything to the contrary in the Master Service Agreement) and provide Customer with a change order which lists the Unordered Service. If the Customer does not execute such change order and return it to Equinix within ten (10) days of the date of such notification...

  • Page 213
    ... the terms of its Master Service Agreement, the Policies and any rules or signs then posted by Equinix in or near such areas; d. maintain its Licensed Space in an orderly and clean manner and in good repair and condition (reasonable wear and tear only excepted); e. deposit litter in designated trash...

  • Page 214
    ... takes the photographs with Customer's recording equipment, and the Equinix IBX staff member at all times controls the recording equipment while it is inside the IBX Center. n. place furniture in its Licensed Space except as permitted by the IBX Center Site Manager in his/her reasonable discretion...

  • Page 215
    ... may attempt to gain fraudulent access to an IBX Center or any Equinix website. 2. Subject to the terms and conditions of the Customer's Master Service Agreement (including the Policies), a Customer will have access to its Licensed Space twenty-four (24) hours per day, three hundred sixty-five (365...

  • Page 216
    ... at least twenty-four (24) hours in advance (and at least four business days in advance where the IBX Center is in a multi-tenant building). For incoming shipments only, a Customer may also (under the same timeframes set forth above) schedule the shipments by phone through the Equinix Response...

  • Page 217
    ... by Equinix) to Customer's Licensed Space within three (3) business days after notification of arrival (the Equinix Response Center ordinarily will contact a Customer by email and/or phone within twelve (12) hours after arrival, and either e-mail or phone communication by Equinix to the Customer...

  • Page 218
    ...and the building in which, an IBX Center is located. 15. IBX Centers shall mean, for each Customer, the Internet Business Exchange Centers leased or owned by Equinix in which Customer licenses Licensed Spaces or receives Services from Equinix pursuant to an Order. 16. Laws shall mean all applicable...

  • Page 219
    ... to the terms of the Customer's Master Service Agreement. 28. Sublicensee shall mean a customer of a Customer or other third party who sublicenses all or part of the Licensed Space from such Customer. 29. Unordered Service shall mean an Equinix Service used by Customer without an Order for such...

  • Page 220
    ...with the Securities and Exchange Commission. Sales Order Customer Name: Salesforce.com IBX Center: [***] Account Manager: Tom Offenbach For Equinix Use: Sales Order Number: A0Q0A000AC Sales Order Effective Date: 5/24/05 (To be completed by Equnix) Service Term: through 1/31/07 Section A: Space and...

  • Page 221
    ... into a currently effective Agreement under which this Sales Order is executed. Customer agrees to provide Equinix access to its cage, cabinets, racks and/or equipment as necessary for the installation of the Services as set forth in this Sales Order in accordance with this Agreement For purposes of...

  • Page 222
    ... exhibit has been filed separately with the Securities and Exchange Commission. Customer Name: Salesforce.com Account Manager: Tom Offenbach Sales Order Number: A0Q0A000AC Customer agrees to pay the Waiver of Subrogation Fee set forth above in exchange for Equinix's agreement to obtain the waivers...

  • Page 223
    Phone Number: E-mail Address: San Francisco, CA 94105 (415) 901-7000 [email protected] and mail two sets of originals to: Equinix Attn: Contracts 301 Velocity Way, 5th Floor Foster City, CA 94404 Please sign and return all referenced exhibits, addenda and/or policy documents with ...

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    [GRAPHIC 1]

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    [GRAPHIC 2]

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    ... the Securities and Exchange Commission. Sales Order Customer Name: Salesforce.com IBX Center: [***] Account Manager: Tom Offenbach For Equinix Use: Sales Order Number: A0B0A0001T Sales Order Effective Date: 5-24-05 (To be completed by Equinix) Section A: Space and Colocation Services Service Term...

  • Page 227
    ... into a currently effective Agreement under which this Sales Order is executed. Customer agrees to provide Equinix access to its cage, cabinets, racks and/or equipment as necessary for the installation of the Services as set forth in this Sales Order in accordance with this Agreement. Page 1 of 2

  • Page 228
    ... filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. Customer Name: Salesforce.com Account Manager: Tom Offenbach Sales Order Number...

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    [GRAPHIC 3]

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    [GRAPHIC 4]

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    ... to acquire [ ] shares of Common stock, vesting 1/4 at the end of one year, and 1/48 monthly thereafter so long as your employment with the Company continues. The exercise price will be equal to the fair market value of the common stock as determined by the Board. If you choose to accept this offer...

  • Page 232
    We look forward to working with you at Salesforce.com. Welcome aboard! Sincerely, /s/ MARC BENIOFF Marc Benioff Chairman of the Board AGREED TO AND ACCEPTED [NAME]

  • Page 233
    ...terminated within 1st year of employment, he will receive 6 months base compensation and 6 months acceleration of vesting. This provision has expired. This schedule sets forth the material terms of the offer letters with certain executive officers of salesforce.com, inc. The form is filed herewith.

  • Page 234
    ....com, inc. Name Address SFDC Australia Pty. Ltd. Salesforce.com Canada Corporation Salesforce.com Information Technology (Shanghai) Co., Ltd. SFDC (EMEA) Limited Salesforce.com France SAS Salesforce.com Germany GmbH Salesforce.com Hong Kong Ltd. Salesforce.com India Pvt. Ltd. SFDC International...

  • Page 235
    ...inc., salesforce.com management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of salesforce.com, inc. included in this Annual Report (Form 10-K) for the year ended January 31, 2006. /s/ San Francisco...

  • Page 236
    ... financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 15, 2006 /s/ MARC BENIOFF Marc Benioff Chairman of the Board of Directors and Chief...

  • Page 237
    ...summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 15, 2006 /s/ STEVE CAKEBREAD Steve Cakebread Chief Financial Officer

  • Page 238
    ... Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of salesforce.com, inc. /s/ MARC BENIOFF Marc Benioff Chairman of the Board of Directors and Chief Executive Officer Based...