Salesforce.com 2005 Annual Report Download - page 129

9.2 Initial Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance
Award, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided in
Section 4.3, on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial value of one hundred dollars ($100). The
final value payable to the Participant in settlement of a Performance Award determined on the basis of the applicable Performance Award Formula will
depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the
Committee.
9.3 Establishment of Performance Period, Performance Goals and Performance Award Formula. In granting each Performance Award, the
Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when
measured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award to
be paid to the Participant. Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect to "performance-based
compensation," the Committee shall establish the Performance Goal(s) and Performance Award Formula applicable to each Performance Award no later than
the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance
Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established, the
Performance Goals and Performance Award Formula shall not be changed during the Performance Period. The Company shall notify each Participant granted
a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula.
9.4 Measurement of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be attained
("Performance Targets") with respect to one or more measures of business or financial performance (each, a "Performance Measure"), subject to the
following:
(a) Performance Measures. Performance Measures shall have the same meanings as used in the Company's financial statements, or, if
such terms are not used in the Company's financial statements, they shall have the meaning applied pursuant to generally accepted accounting principles, or as
used generally in the Company's industry. Performance Measures shall be calculated with respect to the Company and each Subsidiary 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 principles, but prior to
the accrual or payment of any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) of any change in
accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after the establishment of the
Performance Goals applicable to the Performance Award. Performance Measures may be one or more of the following, as determined by the Committee:
(i) revenue;