Salesforce.com 2007 Annual Report Download - page 84

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Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
The following table sets forth the lease abandonment activity (in thousands):
Liability balance at January 31, 2005 $ 1,531
Charges utilized, net of subtenant income of $96 (298)
Reversals (285)
Liability balance at January 31, 2006 $ 948
Charges utilized, net of subtenant income of $202 (186)
Liability balance at January 31, 2007 $ 762
Charges utilized, net of subtenant income of $202 (186)
Liability balance at January 31, 2008 $ 576
9. Legal Proceedings
On May 31, 2007, a complaint was filed in the United States District Court for the Eastern District of Texas titled Triton IP, LLC v. salesforce.com,
inc., alleging infringement of a patent held by Triton IP, LLP. In February 2008, in exchange for a cash payment made by the Company, the lawsuit was
settled. The settlement amount, which was accrued as of January 31, 2008, decreased fiscal 2008 diluted earnings per share by approximately $0.02.
Additionally, the Company is involved in various legal proceedings arising from the normal course of business activities. In management's opinion,
resolution of these matters is not expected to have a material adverse impact on the Company's consolidated results of operations, cash flows or its financial
position. However, depending on the nature and timing of any such dispute, an unfavorable resolution of a matter could materially affect the Company's future
results of operations, cash flows or financial position in a particular period.
10. Employee Benefit Plan
The Company has a 401(k) plan covering all eligible employees in the United States. Since January 1, 2006, the Company has been contributing to the
plan. Total contributions during fiscal 2008, 2007 and the last month of fiscal 2006 were $3,865,000, $2,919,000 and $318,000, respectively.
11. Related-Party Transactions
In January 1999, the salesforce.com/foundation, commonly referred to as the Foundation, a non-profit public charity, was chartered to build
philanthropic programs that are particularly focused on youth and technology. The Company's chairman is the chairman of the Foundation. He, one of the
Company's officers and one of the Company's board members hold three of the Foundation's eight board seats. The Company is not the primary beneficiary of
the Foundation's activities, and accordingly, the Company does not consolidate the Foundation's statement of activities with its financial results.
Since the Foundation's inception, the Company has provided at no charge certain resources to Foundation employees such as office space. The value of
these items totals approximately $35,000 per quarter.
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