Salesforce.com 2008 Annual Report Download - page 83

Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
Common Stock
The following number of shares of common stock were reserved and available for future issuance at January 31, 2009:
Options outstanding 14,917,520
Restricted stock units outstanding 2,499,151
Stock available for future grant:
1999 Stock Option Plan —
2004 Equity Incentive Plan 3,382,937
2006 Inducement Equity Incentive Plan 101,705
2004 Employee Stock Purchase Plan 1,000,000
2004 Outside Directors Stock Plan 707,000
22,608,313
During fiscal year 2009 and 2008, certain board members received stock grants totaling 48,000 and 47,500 shares, respectively, of common stock for
board services pursuant to the terms described in the 2004 Outside Directors Plan. The expenses related to these awards, which was expensed immediately at
the time of the issuance, totaled $2.4 million and $2.3 million, in fiscal 2009 and 2008 respectively.
4. Preferred Stock
After the consummation of the initial public offering in June 2004 and the filing of the Company's amended and restated certificate of incorporation, the
Company's board of directors has the authority, without further action by stockholders, to issue up to 5,000,000 shares of preferred stock in one or more
series. The Company's board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and number of shares constituting any series or the
designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the Company's common stock, diluting the voting
power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing a change in control. The ability to issue preferred
stock could delay or impede a change in control. At January 31, 2009 and 2008, no shares of preferred stock were outstanding.
5. Joint Venture
On December 7, 2000, the Company entered into a joint venture agreement with SunBridge, Inc., a Japanese corporation, to establish Salesforce Japan.
During the third quarter of fiscal 2009, the Company increased its ownership interest in the joint venture, from 65 to 72 percent in exchange for a cash
payment of $21.6 million. The Company accounted for this investment as a step acquisition (see Note 6 Acquisitions).
Provided that the Company owns at least 30 percent of the outstanding voting shares of the joint venture, the Company has the right to appoint three of
the six board members of the joint venture, and together with SunBridge, may appoint a fourth director.
The Board of Directors of the joint venture has authorized option plans to purchase shares in Salesforce Japan. One of the option plans includes
antidilution provisions such that the option holders are allowed additional options if the joint venture issues additional stock and the exercise price of their
options is reduced if the additional stock is issued for an amount less than such exercise price.
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