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SALESFORCE COM INC (CRM)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 03/11/2010
Filed Period 01/31/2010

Table of contents

  • Page 1
    SALESFORCE COM INC (CRM) 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/11/2010 Filed Period 01/31/2010

  • Page 2
    ...(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 each exchange on which registered New York...

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

  • Page 4
    ... CRM service and in most cases have been developed on our platform by third parties. Our principal executive offices are located in San Francisco, California and our principal website address is www.salesforce.com. Our office address is The Landmark @ One Market, Suite 300, San Francisco, California...

  • Page 5
    ...a robust, secure, scalable and highly available application at a relatively low cost, without the cost and complexity of managing the application. Our vision of enterprise cloud computing is based on a multi-tenancy technology architecture and a subscription service business model. With multitenancy...

  • Page 6
    ...and less time and resources being available to actually develop applications, with a resulting reduction in innovation and productivity levels. Cloud platforms enable corporate IT developers and ISVs to leverage the benefits of a multi-tenant platform for developing new applications. Cloud platforms...

  • Page 7
    ... accommodate new features and functions. We intend to continue to add CRM features and functionality to our core service that we will make available to customers at no additional charge. We offer advanced editions for an additional subscription fee to customers that require enhanced CRM capabilities...

  • Page 8
    ..., 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. During fiscal 2010, our services were marketed under...

  • Page 9
    ... In addition to all of the functionality available in Professional Edition, Enterprise Edition offers customers advanced CRM functionality, such as territory management that uses a rule-based territory assignment engine to categorize accounts and users into territories, products, and schedules that...

  • Page 10
    ...to create a development environment for building and testing integrations and internally built applications. Additionally, customers may use sandbox as an exact replica of their production Salesforce CRM systems for employee-training purposes. Customers of Professional Edition and Enterprise Edition...

  • Page 11
    ...decisions and product direction. We built our service as a highly scalable, multi-tenant application written in Java and Oracle PL/SQL. We use commercially available hardware and a combination of proprietary and commercially available software, including database software from Oracle Corporation, to...

  • Page 12
    ... service offerings as well as developing new proprietary services such as Force.com. In addition, from time to time we supplement our internal research and development activities with outside development resources and acquired technology. Because of our common, multi-tenant application architecture...

  • Page 13
    ... partners a fee based on the first-year subscription revenue generated by the customers they refer. We expense these fees at the time the customer signs the subscription service contract. We also continue to develop distribution channels for our subscription service. Marketing Our marketing strategy...

  • Page 14
    Table of Contents Web site development to engage and educate prospects and generate interest through product information and demonstrations, free trials, case studies, white papers, and marketing collateral; email, direct mail, and phone campaigns to capture leads that can be funneled into our ...

  • Page 15
    ...; ease of use and rates of user adoption; low total cost of ownership and demonstrable cost-effective benefits for customers; performance, security, scalability, flexibility and reliability of the service; ease of integration with existing applications; quality of customer support; availability and...

  • Page 16
    ...from our Web site at http://www.salesforce.com/company/investor/sec-filings/ as soon as reasonably practicable following our filing of any of these reports with the SEC. You can also obtain copies free of charge by contacting our Investor Relations department at our office address listed above. ITEM...

  • Page 17
    ...our enterprise cloud computing application service, delay prospective customers' purchasing decisions, reduce the value or duration of their subscription contracts, or affect renewal rates, all of which could adversely affect our operating results. Because we recognize revenue from subscriptions for...

  • Page 18
    ... of Contents recognized over the applicable subscription term. In addition, we may be unable to adjust our cost structure to reflect the changes in revenues. We cannot accurately predict subscription renewal or upgrade rates and the impact these rates may have on our future revenue and operating...

  • Page 19
    ... of our business; the number of new employees added; changes in our pricing policies whether initiated by us or as a result of intense competition; the cost, timing and management effort for the introduction of new features to our service; the rate of expansion and productivity of our sales force...

  • Page 20
    ... upgrade their service, or delay a prospective customers' purchasing decision, or reduce the value of new subscription contracts, or affect renewal rates; timing of additional investments in our enterprise cloud computing application service and in our consulting service; changes in deferred revenue...

  • Page 21
    ... and sustain high levels of demand and market acceptance. Our success will depend to a substantial extent on the willingness of enterprises, large and small, to increase their use of enterprise cloud computing application services in general, and for CRM in particular. Many enterprises have invested...

  • Page 22
    ..., our operating results could be harmed. The market for enterprise CRM business applications and development platforms is highly competitive, rapidly evolving and fragmented, and subject to changing technology, shifting customer needs and frequent introductions of new products and services. We...

  • Page 23
    ... the timely completion, introduction 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...

  • Page 24
    ... of our technical and management personnel. If we fail to develop our brands, our business may suffer. We believe that developing and maintaining awareness of the salesforce.com brand and our other brands is critical to achieving widespread acceptance of our existing and future services and is...

  • Page 25
    ...across international borders; foreign currency fluctuations and controls; different pricing environments; difficulties in staffing and managing foreign operations; different or lesser protection of our intellectual property; longer accounts receivable payment cycles and other collection difficulties...

  • Page 26
    ... of our service and technologies. We do not have employment agreements with any of our executive officers, key management, development or operations personnel and, therefore, they could terminate their employment with us at any time. We do not maintain key person life insurance policies on any...

  • Page 27
    ... general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new...

  • Page 28
    ...; changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock; announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors...

  • Page 29
    ... to service our debt. If we fail to make a payment on our debt, we could be in default on such debt. We expect that the trading price of the Notes will be significantly affected by the market price of our common stock, which may be volatile, the general level of interest rates and our credit quality...

  • Page 30
    ... affect prevailing market price of our common stock. In addition, the anticipated conversion of the Notes could depress the market price of our common stock. The Notes and the indenture that will govern the Notes contain limited protections against certain types of important corporate events and...

  • Page 31
    ... their hedge positions from time to time by entering into or unwinding various overthe-counter derivative transactions with respect to our common stock, and/or by purchasing or selling shares of our common stock or the Notes in privately negotiated transactions and/or open market transactions, their...

  • Page 32
    .... ITEM 2. PROPERTIES UNRESOLVED STAFF COMMENTS Our executive offices and principal office for domestic marketing, sales, professional services and development occupy over 400,000 square feet in San Francisco, California under leases that expire at various times through November 2017. We also lease...

  • Page 33
    ... Hu David Schellhase Graham Smith Jim Steele Polly Sumner Frank van Veenendaal 45 43 35 46 50 54 55 50 Chairman of the Board of Directors and Chief Executive Officer Executive Vice President, Technology Executive Vice President, Marketing and Alliances Executive Vice President and General Counsel...

  • Page 34
    ..., Ms. Sumner was an independent consultant working with Warburg Pincus as an advisor on new and existing investments, board relations, and management team development from July 2003 to January 2006. Ms. Sumner also served as president of Alphablox Corporation, an analytics software company, from...

  • Page 35
    Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER 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." The following table sets forth ...

  • Page 36
    ... Processing Index for the period beginning on June 23, 2004 (the date our common stock commenced trading on the New York Stock Exchange) through January 31, 2010, assuming an initial investment of $100. Data for the Standard & Poor's 500 Index and the Nasdaq Computer & Data Processing Index assume...

  • Page 37
    ...and support Professional services and other Total revenues Cost of revenues (1): Subscription and support Professional services and other Total cost of revenues Gross profit Operating expenses (1): Research and development Marketing and sales General and administrative Lease recovery Total operating...

  • Page 38
    Table of Contents (1) Cost of revenues and operating expenses include stock-based expenses, consisting of: Fiscal Year Ended January 31, 2010 2009 2008 2007 2006 Cost of revenues Research and development Marketing and sales General and administrative (2) $ 12,570 $ 13,129 39,722 23,471 11,051 ...

  • Page 39
    ... of our service; acceptance of our service in markets where we have few customers; the emergence of additional competitors in our market and improved product offerings by existing and new competitors; the location of new data centers; thirdparty developers' willingness to develop applications on our...

  • Page 40
    ... within 30 days of invoice. We generally recognize revenue ratably over the contract terms beginning on the commencement date of each contract. In determining whether professional services can be accounted for separately from subscription and support revenues, we consider a number of factors, which...

  • Page 41
    ... of the value of our billings to customers is for our subscription and support service. We generally invoice our customers in either quarterly or annual cycles, with a disproportionate weighting towards annual billings in the fourth quarter, primarily as a result of large enterprise account buying...

  • Page 42
    ... we upgrade and extend our service offerings and develop new technologies. Marketing and Sales. Marketing and sales expenses are our largest cost and consist primarily of salaries and related expenses, including stock-based expenses, for our sales and marketing staff, referral fees paid to partners...

  • Page 43
    ... 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 generally benefit from new features and functionality with each release at no additional cost...

  • Page 44
    ... employees, the total number of stock awards granted, the fair value of the stock awards at the time of grant, changes in estimated forfeiture assumption rates and the tax benefit that we may or may not receive from stock-based expenses. Additionally, we are required to use an option-pricing model...

  • Page 45
    ... 31, 2010 2009 (2) 2008 (2) 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 and...

  • Page 46
    ... 31, 2010(2) 2009(2) 2008(2) 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 and...

  • Page 47
    ...: Cost of revenues Research and development Marketing and sales General and administrative Fiscal Years Ended January 31, 2010 and 2009 Revenues. 1% 1 3 2 1% 1 3 2 1% 1 3 2 Fiscal Year Ended January 31, (In thousands) 2010 2009 Dollars Variance Percent Subscription and support Professional...

  • Page 48
    ... application service. Additionally, as more professional service arrangements are accounted for as a single unit of accounting with the related subscription service and recognized ratably over the term of the subscription contract, our costs of professional services will exceed the related revenue...

  • Page 49
    ...-related costs, and $10.1 million in professional and outside service costs. Our general and administrative headcount increased by 12 percent since January 31, 2009 as we added personnel to support our growth. Income from operations. Fiscal Year Ended January 31, (In thousands) 2010 2009...

  • Page 50
    ... As a result, we re-valued the anticipated future tax effects of our California temporary differences including stock-based compensation and purchased intangibles. Accordingly, we recorded an income tax expense of $2.7 million during the fiscal 2010 related to this tax law change. Fiscal Years Ended...

  • Page 51
    ...related costs, an increase of $3.5 million in stock-based expenses, and an increase in allocated overhead. We increased our research and development headcount by 61 percent between January 31, 2008 and January 31, 2009 in order to upgrade and extend our service offerings and develop new technologies...

  • Page 52
    ...16 percent of total revenues, during fiscal 2008, an increase of $42.1 million. The increase was primarily due to increases in employee-related costs, stock-based expenses, infrastructure-related costs, and professional and outside service costs. Our general and administrative headcount increased by...

  • Page 53
    ... sales of subscriptions and support and professional services, changes in working capital accounts, particularly increases and seasonality in accounts receivable and deferred revenue as described above, and the timing of commission and bonus payments, collections from large enterprise customers, and...

  • Page 54
    ... securities, U.S. agency obligations, time deposits, money market mutual funds. As of January 31, 2010, we have a total of $10.6 million in letters of credit outstanding in favor of our landlords for office space in San Francisco, California, New York City, Singapore, Sweden and Switzerland. To date...

  • Page 55
    ... the need for objective and reliable evidence of the fair value for the undelivered element in order for a delivered item to be treated as a separate unit of accounting, and 2) requires the use of the relative selling price method to allocate the entire arrangement consideration. In addition, the...

  • Page 56
    ... rate risk. Generally, the fair market value of our fixed interest rate Notes will increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of our Notes is affected by our stock price. The carrying value of our Notes was $450.2 million as of January 31, 2010...

  • Page 57
    ... 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 January 31, 2010 and 2009 Consolidated Statements of Operations for each of the three years in...

  • Page 58
    ... based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and schedule are free...

  • Page 59
    ... on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about...

  • Page 60
    Table of Contents salesforce.com, inc. Consolidated Balance Sheets (in thousands, except share and per share data) January 31, 2010 January 31, 2009 Assets Current assets: Cash and cash equivalents $1,011,306 $ 483,834 Short-term marketable securities 230,659 213,769 Accounts receivable, net of ...

  • Page 61
    ... of Contents salesforce.com, inc. Consolidated Statements of Operations (in thousands, except per share data) Fiscal Year Ended January 31, 2010 2009 2008 Revenues: Subscription and support Professional services and other Total revenues Cost of revenues (1): Subscription and support Professional...

  • Page 62
    ... for new tax guidance related to uncertain - tax positions Balances at January 31, 2008 119,305,013 Exercise of stock options and stock grants to board members for board 3,009,276 services Vested restricted stock units converted to shares 535,773 Tax benefits from employee stock plans - Stock-based...

  • Page 63
    ...allowance Expense related to stock-based awards Excess tax benefits from employee stock plans Loss on securities Gain on sale of investment Changes in assets and liabilities: Accounts receivable, net Deferred commissions Prepaid expenses and other current assets Other assets Accounts payable Accrued...

  • Page 64
    ... salesforce.com, inc. (the "Company") is a leading provider of enterprise cloud computing applications. The Company provides a comprehensive customer and collaboration relationship management ("CRM") service to businesses of all sizes and industries worldwide and provides a technology platform...

  • Page 65
    ..., its deposits, at times, may exceed federally insured limits. Collateral is not required for accounts receivable. The Company maintains an allowance for doubtful accounts receivable balances. The allowance is based upon historical loss patterns, the number of days that billings are past due and...

  • Page 66
    ... and marketable securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company's foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable...

  • Page 67
    ... Prices in Active Markets for Identical Assets (Level 1) Significant Unobservable Inputs (Level 3) Description Significant Other Observable Inputs (Level 2) Balances as of January 31, 2009 Cash equivalents (1): Time deposits Money market mutual funds Corporate notes and obligations U.S. agency...

  • Page 68
    ... of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) The Company has certain investments in privately-held companies. Management evaluated the financial results, earnings trends, and subsequent financing of these companies, as well as general market conditions...

  • Page 69
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) The Company's fair value of our outstanding derivative instruments are summarized below (in thousands): Fair Value of Derivative Instruments Balance Sheet Location As of January 31, 2010 As of January 31, ...

  • Page 70
    ... during fiscal 2010 and 2009 and 2008. Capitalized Software Costs For its website development costs and the development costs related to its enterprise cloud computing application service, the company capitalizes costs incurred during the application development stage. Costs related to preliminary...

  • Page 71
    ...dilutive impact. The dilutive securities are excluded when, for example, their exercise prices, unrecognized compensation and tax benefits are greater than the average fair values of the Company's common stock (in thousands). Fiscal Year Ended January 31, 2010 2009 2008 Stock awards Warrants Income...

  • Page 72
    ... accessing its enterprise cloud computing 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 of training fees...

  • Page 73
    ... Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) agreements. Deferred revenue also includes certain deferred professional services fees which are recognized as revenue ratably over the subscription contract term. The Company defers the professional service fees...

  • Page 74
    ... evaluated subsequent events through the date this Annual Report on Form 10-K was filed with the SEC. New Accounting Pronouncements In September 2009, the FASB issued Update No. 2009-13, "Multiple-Deliverable Revenue Arrangements-a consensus of the FASB Emerging Issues Task Force" (ASU 2009-13). It...

  • Page 75
    ... of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) 2. Balance Sheet Accounts Marketable Securities At January 31, 2010, marketable securities consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate...

  • Page 76
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): As of January 31, 2010 2009 Deferred professional services costs Prepaid ...

  • Page 77
    ... following (in thousands): As of January 31, 2010 2009 Deferred professional services costs, noncurrent portion Long-term deposits Purchased intangible assets, net of accumulated amortization of $5,815 and $2,573, respectively Investments in privately-held companies Other $ $ Goodwill 5,639 $ 11...

  • Page 78
    ..., 2010, the Notes are not yet convertible into 6.7 million shares of the Company's common stock. Holders of the Notes have the right to require the Company to purchase with cash all or a portion of the Notes upon the occurrence of a fundamental change, such as a change of control at a purchase price...

  • Page 79
    ... were netted with the equity component in additional paid-in capital. Debt issuance costs, net of amortization, were $7.1 million as of January 31, 2010 and equity issuance costs were $1.8 million. Additionally, the Company recorded a deferred tax liability of $51.1 million in connection with...

  • Page 80
    ...the Company's stock option plans were generally for periods not to exceed 10 years and were 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. After February 1, 2006, options issued to employees are...

  • Page 81
    ... Increase in shares authorized: 2004 Equity Incentive Plan Inducement Plan Options granted under all plans Restricted stock unit activity Stock grants to board members for board services and advisory board members Exercised 1999 Plan shares expired Cancelled Balance as of January 31, 2010 Vested or...

  • Page 82
    ... following number of shares of common stock were reserved and available for future issuance at January 31, 2010: Options outstanding Restricted stock units outstanding Stock available for future grant: 2004 Equity Incentive Plan 2006 Inducement Equity Incentive Plan 2004 Employee Stock Purchase Plan...

  • Page 83
    ..., which are not cured in a timely manner, SunBridge can require the Company to purchase all of its shares in the joint venture. The purchase price for SunBridge's shares would be the then fair market value plus a specified premium. In the event that SunBridge commits a breach of, or if it fails to...

  • Page 84
    ... costs. InStranet offers a knowledge management application for business to consumer call centers. The Company acquired InStranet for its developed technology in order to expand its CRM customer service and support offerings in the customer service and support market. The Company accounted...

  • Page 85
    ... from the acquisitions described above as of January 31, 2010 are as follows (in thousands): Accumulated Gross Fair Value Amortization Net Book Value Weighted Average Remaining Useful Life Developed technology Territory rights Customer relationships $ $ 8,610 $ 2,196 7,869 18,675 $ (4,185...

  • Page 86
    Table of Contents salesforce.com, inc. Notes to Consolidated Financial Statements-(Continued) The provision for income taxes consisted of the following (in thousands): Fiscal Year Ended January 31, 2010 2009 2008 Current: Federal State Foreign Total Deferred: Federal State Foreign Total Provision ...

  • Page 87
    ... and $2.4 million of state enterprise zone tax credits, which do not expire. Utilization of the Company's net operating loss carryforwards may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such...

  • Page 88
    ...where the Company operates, including Canada, United Kingdom, and Australia generally remain open to examination for all tax years, while for Japan, the statute of limitations currently remains open for tax years after fiscal year 2003. Management does not believe that it is reasonably possible that...

  • Page 89
    ...divert management attention from executing the Company's business plan and could require the Company to change the Company's technology, change the Company's business practices and/or pay monetary damages or enter into short- or long-term royalty or licensing agreements which may not be available in...

  • Page 90
    ...,500 shares of salesforce.com common stock. Additionally, the Company has donated subscriptions to the Company's service to other qualified non-profit organizations. The fair value of these donated subscriptions were in excess of $3.7 million per month during fiscal 2010. The Company currently plans...

  • Page 91
    ... thousands, except per share data) Fiscal 2010 Revenues Gross profit Income from operations Net income attributable to salesforce.com Basic net income per share attributable to salesforce.com common shareholders Diluted net income per share attributable to salesforce.com common shareholders Fiscal...

  • Page 92
    ...Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. (b) Management's Report on Internal Control...

  • Page 93
    ... potential future conditions; over time, controls may become inadequate 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...

  • Page 94
    ..., Graham Smith, and all other executive officers. The Code of Conduct is available on our Web site at http://www.salesforce.com/company/ investor/governance/. A copy may also be obtained without charge by contacting Investor Relations, salesforce.com, inc., The Landmark @ One Market, Suite 300, San...

  • Page 95
    ...Qualifying Accounts is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements and Notes thereto. The Financial Statement Schedules not listed have been omitted because they are not applicable or are not required or the information required to be set...

  • Page 96
    ... of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 11, 2010 salesforce.com, inc. /s/ GRAHAM SMITH Graham...

  • Page 97
    ...Harris, George Hu, Graham Smith, Jim Steele, Polly Sumner and Frank van Veenendaal Form of Change of Control and Retention Agreement as entered into with David Schellhase Separation Agreement and Release dated November 25, 2010 between salesforce.com, inc. and Kenneth Juster Purchase Agreement dated...

  • Page 98
    ...and these are not the official publicly filed financial statements of salesforce.com, inc. The purpose of submitting these XBRL documents is to test the related format and technology, and, as a result, investors should continue to rely on the official filed version of the furnished documents and not...

  • Page 99
    .... To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records. You will be required to sign an Employee Inventions and Proprietary Rights Assignment Agreement as a condition of...

  • Page 100
    ... This schedule sets forth the material terms of the offer letters and compensation packages with certain executive officers of salesforce.com, inc. The form is filed herewith. Current annual salary of Mr. Benioff is eligible to receive an annual discretionary bonus of 100% of his annual base salary...

  • Page 101
    ... in Exchange for Release of Claims Contained in This Agreement. The Company shall pay Executive the sum of ten thousand dollars ($10,000) less applicable withholdings, within ten (10) business days after the Effective Date of this Agreement. The Company will include this payment on a Form W-2 issued...

  • Page 102
    ... all claims relating to, or arising from, Executive's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud...

  • Page 103
    ... and officers insurance policies, (ii) to any defense or payment under any insurance policy or otherwise, (iii) to Executive's accrued vacation and salary, (iv) in and to Executive's Change of Control and Retention Agreement, (v) to continuing coverage under any Company employee welfare benefit plan...

  • Page 104
    ...'s short-term disability plan. 4. California Civil Code Section 1542. Executive acknowledges that he has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which...

  • Page 105
    ... recoveries by any government agency against the Company for any amounts claimed due on account of (a) Executive's failure to pay or Executive's delayed payment of Executive's personal federal or personal state taxes, or (b) damages sustained by the Company by reason of any claims, specifically set...

  • Page 106
    ... Exhibit A, Executive's Change of Control and Retention Agreement and the Company's policies, including without limitation, its employee benefit policies, shall also continue to govern and apply to the terms and conditions of Executive's employment with the Company until the Separation Date. 16. No...

  • Page 107
    ...not executed by him within seven (7) days from November 24, 2009. This Agreement shall become effective on the date it is signed by Executive (the "Effective Date"). 22. Counterparts. This Agreement may be executed in counterparts and by facsimile signature or by signing, scanning, and emailing, and...

  • Page 108
    ..., the Parties have executed this Agreement on the respective dates set forth below. Dated: November 25, 2009 Dated: November 25, 2009 By By /s/ Kenneth I. Juster Kenneth I. Juster, an individual /s/ David R. Schellhase David R. Schellhase Senior Vice President & General Counsel Salesforce.com, Inc.

  • Page 109
    ...,750) less applicable withholdings (the "Severance Payment"), subject in all cases to the terms described in subsection (d) below. The Company will report this Severance Payment on a Form W-2 issued to Executive for the year of payment. Executive's FY 2010 bonus payment (payable in 2010) is included...

  • Page 110
    ... as required by the applicable stock plan and equity agreement governing documents, Executive acknowledges that, as of the Separation Date all restricted stock units, performance shares and performance units ("Stock Units") granted to Executive, have been cancelled or settled and Executive has...

  • Page 111
    ...the Effective Date of this Supplemental Agreement. 3. Payment of Salary. Except as specifically described in a Schedule of Outstanding Compensation that is attached by Executive to this Supplemental Agreement at the time of Executive's execution of this Supplemental Agreement, Executive acknowledges...

  • Page 112
    ... all claims relating to, or arising from, Executive's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud...

  • Page 113
    ... or state or federal law or insurance policy, including without limitation, the Indemnity Agreement and the Company's directors and officers insurance policies, (ii) to any defense or payment under any insurance policy, (iii) to Executive's accrued vacation and salary, (iv) to reimbursement for all...

  • Page 114
    ... business on the seventh day from the date that Executive signs this Supplemental Agreement. 6. Civil Code Section 1542. Executive represents that he is not aware of any claims against the Company other than the claims that are released by this Supplemental Agreement. Executive acknowledges that he...

  • Page 115
    ...under this paragraph extend only to the Company's current and future executive officers and members of its Board of Directors, and only for so long as each officer or member is an Executive or Director of the Company, as applicable. 12. Golden Parachute Excise Tax Best Results. In the event that the...

  • Page 116
    ... designated as an Amendment to this Agreement and manually signed by Executive and the Company's Chairman of the Board and/or Chief Executive Officer. 20. Governing Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California. 21...

  • Page 117
    ... on the eighth (8th) day after Executive signs this Agreement, so long it has not been revoked by Executive before that date (the "Effective Date"). 24. Counterparts. This Supplemental Agreement may be executed by facsimile signature and/or by signing, scanning and emailing and in counterparts, and...

  • Page 118
    IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. Dated: Dated: By Kenneth I. Juster, an individual By David R. Schellhase Senior Vice President & General Counsel Salesforce.com, Inc.

  • Page 119
    .... Salesforce.com Canada Corporation Salesforce.com Information Technology (Shanghai) Co., Ltd. Salesforce.com France SAS Salesforce.com Germany GmbH Salesforce.com Hong Kong Ltd. Salesforce.com India Private Limited SFDC (EMEA) Limited SFDC International Limited SFDC Ireland Limited Salesforce.com...

  • Page 120
    ... Plan, 2006 Inducement Equity Incentive Plan; of our reports dated March 11, 2010, with respect to the consolidated financial statements and schedule of salesforce.com, inc., and the effectiveness of internal control over financial reporting of salesforce.com, inc., included in this Annual Report...

  • Page 121
    ...; 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 11, 2010 /S/ MARC BENIOFF Marc Benioff Chairman of the Board of Directors and Chief Executive Officer

  • Page 122
    ... to record, process, 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 11, 2010 /S/ GRAHAM SMITH Graham Smith Chief...

  • Page 123
    ... operations of salesforce.com, inc. /S/ MARC BENIOFF Marc Benioff Chairman of the Board of Directors and Chief Executive Officer Based on my knowledge, I, Graham Smith, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual...