Salesforce.com 2005 Annual Report Download - page 143

2. TAX CONSEQUENCES.
2.1 Tax Status of Option. This Option is intended to have the tax status designated in the Grant Notice.
(a) Incentive Stock Option. If the Grant Notice so designates, this Option is intended to be an Incentive Stock Option within the meaning
of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Participant should consult with the
Participant's own tax advisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under
Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO PARTICIPANT: If the Option is exercised more than three
(3) months after the date on which you cease to be an Employee (other than by reason of your death or 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 extent required by
Section 422 of the Code.)
(b) Nonstatutory Stock Option. If the Grant Notice so designates, this Option is intended to be a Nonstatutory Stock Option and shall not
be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.
2.2 ISO Fair Market Value Limitation. If the Grant Notice designates this Option as an Incentive Stock Option, then to the extent that the
Option (together with all Incentive Stock Options granted to the Participant under all stock option plans of the Participating Company Group, including the
Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars
($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options
designated as Incentive Stock Options are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of
the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2,
such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is
treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Participant
may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have
exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the
Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied 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 Company to ascertain whether the entire Option
qualifies as an Incentive Stock Option.)
3. ADMINISTRATION.
All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee
shall be final and binding upon all persons having an interest in the Option. Any Officer shall have the authority to act on