Salesforce.com 2014 Annual Report Download - page 30

• authorize the issuance of “blank check” preferred stock that our board could use to implement a
stockholder rights plan (also known as a “poison pill”);
• eliminate the ability of our stockholders to call special meetings of stockholders;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a
meeting of our stockholders;
• provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and
• establish advance notice requirements for nominations for election to our board or for proposing
matters that can be acted upon by stockholders at annual stockholder meetings.
In addition, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a
change in control of our company. Section 203 imposes certain restrictions on merger, business combinations
and other transactions between us and holders of 15 percent or more of our common stock.
In addition, the fundamental change purchase rights applicable to the notes, which will allow note holders to
require us to purchase all or a portion of their notes upon the occurrence of a fundamental change, and the
provisions requiring an increase to the conversion rate for conversions in connection with a make-whole
fundamental change may in certain circumstances delay or prevent a takeover of us and the removal of
incumbent management that might otherwise be beneficial to investors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
As of January 31, 2014, our executive offices and principal offices for domestic marketing, sales, professional
services and development consist of over 1.1 million square feet of leased space in the San Francisco Bay Area. We
also lease space in various locations throughout the United States for local sales and professional services personnel.
Our foreign subsidiaries lease office space for their operations including local sales and professional services
personnel.
We also own approximately 14 acres of undeveloped real estate in San Francisco, California, including
entitlements and improvements associated with the land. We continue to evaluate our future needs for office
facilities space and its options for the undeveloped real estate, which may include selling a portion of or all the
real estate holdings, or suspending pre-construction activity for several more years.
We believe that our existing facilities and offices are adequate to meet our current requirements. See
Note 10, “Commitments,” in the Notes to the Consolidated Financial Statements for more information about our
lease commitments. If we require additional space, we believe that we will be able to obtain such space on
acceptable, commercially reasonable terms.
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of business, we are involved in various legal proceedings and claims related to alleged
infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor
and employment, wage and hour, and other claims. We have been, and may in the future be, put on notice and/or
sued by third parties for alleged infringement of their proprietary rights, including patent infringement.
We evaluate all claims and lawsuits with respect to their potential merits, our potential defenses and
counterclaims, settlement or litigation potential and the expected effect on us. Our technologies may be subject to
injunction if they are found to infringe the rights of a third party. In addition, many of our subscription
agreements require us to indemnify our customers for third-party intellectual property infringement claims,
which could increase the cost to us of an adverse ruling on such a claim.
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