Salesforce.com 2011 Annual Report Download - page 95

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Many of the Company’s subscription agreements require the Company to indemnify its customers for third-
party intellectual property infringement claims, which could increase the cost to the Company of an adverse
ruling on such a claim. Any adverse determination related to intellectual property claims or litigation could
prevent the Company from offering its service to others, could be material to the Company’s net income or cash
flows or both or could otherwise adversely affect the Company’s operating results.
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 Company contributions during fiscal 2011, 2010 and 2009,
were $11.0 million, $8.5 million and $6.7 million, respectively.
11. Related-Party Transactions
In January 1999, the salesforce.com/foundation, also referred to as the Foundation, a non-profit public
charity, was chartered to build philanthropic programs that are focused on youth and technology. The Company’s
chairman is the chairman of the Foundation. He, one of the Company’s employees and one of the Company’s
board members hold three of the Foundation’s seven 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 were in excess of $90,000 per quarter during fiscal year
2011.
In addition to the resource sharing with the Foundation, the Company issued the Foundation warrants in
August 2002 to purchase shares of the Company’s common stock. All of the warrants were exercised in prior
years. As of January 31, 2011, the Foundation held 121,000 shares of salesforce.com common stock.
Additionally, the Company has donated subscriptions to the Company’s service to other qualified non-profit
organizations. The Company also allows an affiliate of the Foundation to resell the Company’s service to large
non-profit organizations. The Company does not charge the affiliate for the subscriptions. The fair value of these
and the subscriptions were in excess of $3.6 million per month during fiscal 2011. The Company currently plans
to continue these programs.
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