Salesforce.com 2004 Annual Report Download - page 96

of five (5) years after the effective date of grant of such Option, (c) no Option granted to a prospective Employee, prospective Consultant or prospective
Director may become exercisable prior to the date on which such person commences Service with a Participating Company, and (d) with the exception
of an Option granted to an officer, Director or Consultant, no Option shall become exercisable at a rate less than twenty percent (20%) per year over a
period of five (5) years from the effective date of grant of such Option, subject to the Optionee's continued Service. Subject to the foregoing, unless
otherwise specified by the Board in the grant of an Option, any Option granted hereunder shall have a term of ten (10) years from the effective date of
grant of the Option.
6.3 Payment of Exercise Price.
(a)Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of shares of
Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation
to the ownership, of shares of Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard to any
restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the
Company) not less than the exercise price, (iii) by the assignment of the proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve System) (a "Cashless Exercise"), (iv) by the Optionee's
promissory note in a form approved by the Company, (v) by such other consideration as may be approved by the Board from time to time to the
extent permitted by applicable law, or (vi) by any combination thereof. The Board may at any time or from time to time, by adoption of or by
amendment to the standard forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.
(b) Limitations on Forms of Consideration.
(i) Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to
the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock. Unless otherwise provided by the Board, an Option may not
be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by
the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company.
(ii) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.
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